Health Policy and Economics
Health care products are complex nature, since they are not normally picked from shelves as other products, hence making it hard to understand their economic behavior. There is thus no guaranteed satisfaction in their consumption. This is solely based on the fact that no one can ascertain the expectations and fulfillment the person seeking health care will get.
Human beings have desires that will lead them to try and get the maximum from any resource that is available to them (Mankiw, 1998). This has an economic implication as behavioral science has proved beyond doubt that as much as the desires are unlimited, the resources will always be limited. For someone to choose a health care product to remedy his/her condition, be it illness, any form of injury or even for physical fitness, it is inevitable to consider the economic concept of opportunity costs which has been proven to have a direct influence on the choice of health care product.
The fact that there is no predetermined market price for delivering healthcare greatly affects the choices made in health care products. This leads to many people especially in middle class opting to buy medicine from pharmaceutical shops. Many of them do not even visit any physician before hand to obtain a prescription. This has created a debate on whether shops or chemists should sell drugs to patients who have not being pre-examined by a physician. On the other hand, there are the rich who can not only choose from top renowned healthcare facilities and physicians to get examinations by the qualified professionals but also in most cases have medical covers for their family members.
Apart from the seeking health care in regard to illness or any form of injury, it is now common for people to seek other forms of health care for normal body fitness; like getting into shape or as a form of relaxation. This is considered by many as leisure owing to the amount of money spent on such activities and the opportunity costs they imply on other products perceived to be necessities. These activities are however a core factor in maintaining the normal well being of individuals, both mentally and physically.
The principles of demand and supply that illustrate how producers and suppliers of a commodity increase the supply as the demand for the same increases has raised a lot of debate in heath care provision (Mankiw, 1998). A perfect example is the use of antibiotics. There are fears that agents that can counter the resistance of antibiotics may be introduced to render them ineffective and hence create a need and subsequently a demand for a new drug to replace the obsolete one. Since this favors the new producers as their new product is more likely to sell than the original, it has cost implications to the consumer who buy new drugs at higher prices. This greatly affects the lower and middle class as they may not be able to afford the new drug and will opt for the cheaper one which will not be as effective due to the agents introduced to lower their effectiveness and therefore affect the health of those who consume it. This is more realistically depicted in the choice of using either a generic drug or a brand name drug. Since the former is cheaper, the middle and lower classes will opt for it but it would not be as effective as the original brand name drug.
It is therefore clear that the choices one ends up making in regard to health care will reflect on such principles of economics as how much one is willing to spend on healthcare, the opportunity cost to be foregone as well as how one perceives the importance of healthcare to themselves and their loved ones (Mankiw, 1998). This can also be in terms of not just money but the time factor involved in getting the health care product especially for those that might be in the upper class but are too busy in their work to spare even a small part of their time to seek health care. This in most cases happens in regard to fitness which may in turn have consequences on overall health.
The choices we make in regard to health and healthcare are more similar to many other choices in lives. For example, the choice to purchase a house through a mortgage plan has its short term and long term implications.
In the short term, it is perceived that we are paying less for the house we are already living in since the repayments are normally spread over a long period of time. The mortgagee ends up feeling comfortable and will have money left to spend on other needs which may initially have been used to make the full purchase of house. The opportunity cost of buying the house in cash, a one huge expenditure is the foregone pleasure of enjoying other facilities at the same time, but the amount of interest that one will have incurred when they finish repaying will reflect a larger amount than the original price (Mankiw, 1998). Therefore, just as in health, it is important to have both short term and long term plans in one’s choices despite the economic effects.
References
Mankiw, N.G. (1998). Principles of Economics. New York: Dryden Press
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