Economic Efficiency
Right now, we are seeing the beginning of the rollout of Obamacare, the kludge solution to America's broken health care system. The Affordable Care Act is a suite of laws and regulations that are designed to improve access to health care services in the United States, and the rollout has been spaced out over the course of a few years. Right now, the rollout is intensifying but the most significant elements will not arrive until 2014. As with any major policy change, there are myriad criticisms, and in this case one of those criticisms is the impact that Obamacare will have on the economics of health care in the United States. This paper will examine the effect of the law from the perspective of allocative efficiency.
Background
The key concept here is allocative efficiency. When a market operates under the condition of allocative efficiency, "the value consumers place on a good or service (reflected in the price they are willing to pay) equals the cost of the resources used up in the production" (Tutor2U.net, 2013). Thus, the price equals the marginal cost. When that condition is satisfied, total economic welfare is maximized (Ibid). There are a number of preconditions to allocative efficiency, none of which are present in the current health care market, and none of which are likely to be present under the Affordable Care Act either.
The Affordable Care Act does a number of different things that draw away from allocative efficiency. It proposes mandatory buy-in of insurance wherein one's health care consumption is not matched by costs out of pocket at least in the short run (Fisher, 2012), places caps on insurance rates, negotiates lower drug payments, and establishes funds to help consumers pay for their insurance (HHS.gov, 2012). Pre-existing issues drawing away from allocative efficiency include differential bargaining power between buyers and suppliers,...
It would have repeated the 1986 bill, though on a grand scale -- ten million illegals granted amnesty -- another magnet for yet another increase in the rate of illegal immigration into this country? The purpose of the bill, as with IRCA was to eliminate immigration, but, as with IRCA, no wording or regulations contained in the bill would have accomplished this goal (Rector). There is little reason to believe,
Background Passion Home Health is a provider of home health care services in Camarillo, CA. The company`s challenge typically revolves around a shortage of care workers given the number of clients. There are two sides to this issue - one is the demand side. That challenge can be addressed in a different ways, but ultimately the goal of management is to have as many clients as possible for the capacity that
Tail Economics Book Analysis: The long tail. How endless choice is creating unlimited demand In the past, economics' was dominated by vendors that sold a large quantity of only one or two items. The Internet has changed the shape of product offerings. The new economic model, first made popular by Chris Anderson in an article published in Wired magazine, examines the new economic model. This model is based on each vendor
Introduction As rising health care costs continue to pose problems for stakeholders in the health care industry, the question of just how to solve this dilemma remains an elusive one. The trouble is that it is not just a question of cost—but also a question of how to balance quality care with efficiency of care in an industry where for-profit facilities seem more and more to put profits before people, as
Significance of the Study This study is significant because it sheds light on a very important contributor to local and international trade. Trade fairs have a long history in providing a meeting place for buyers and sellers. They are an important channel of communication for B2B buyers and sellers. This is a significant area for study because there are limited channels of communication between B2B buyers and sellers. The previous sections
Financial Development Every country has a different level of financial development. The World Bank uses four measures of banking development: depth, access, efficiency and stability. An international banking conglomerate considering expansion will want to understand a country's local banking conditions in order to have the most informed view, to help with making the expansion decision. In this scenario, the countries being evaluated are the United States, Saudi Arabia, Brazil, India, South
Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.
Get Started Now