Free Essay On Health Economice

- The market of new patented drugs does not have price takers as is present in perfect competition. The companies that make the braded drugs are price makers. The consumers have to buy the specific drugs from them because there are no other manufacturers of the same. The market is characterized by barriers to entry. This is because the manufacturers have to develop, brand their products, apply for patents and meet many other regulations. The patent drugs market does not operate on perfect information. Information failure and time lags during communication are characteristic features.
- The consumer’s perspective of the optimal choice of treatment may differ from that of the physician’s because the consumer considers different factors compared to the physician. The consumer will consider affordability, availability and at times, preferences. While the physician will consider the most effective treatment.
- Availability of genomic information will inform patients of any illnesses to expect in the future. It will also guide them on what proactive actions to take towards preventing the diseases. It may also affect them negatively by causing them to miss being covered with insurers who decline based on negative results of the tests. It is a positive to the insurers because they can predict with a level of accuracy the possibility of their clients developing certain diseases. It is a negative to them because they might know, but depending on the existing laws be forced to insure the patient without discrimination.
- Moral hazard is a positive effect from the patient’s perspective because he can take risks without worrying about the costs that may result as they are borne by the insurer. The patient does not have to act cautiously or take care of his health because the potential costs and burdens are the responsibility of the health insurer.
- The risk of illness in the elderly and the disabled is very high. Private health insurance is a business and therefore profit oriented, causing them to avoid high risk ventures such as insuring the elderly and disabled. This necessitated the need to have Medicare, which is a government’s effort to provide medical cover for all the citizens including the elderly and the disabled.