Economics and Healthcare Delivery Systems has a direct affect on society;
because health, like any other good or service, is desired because it generates
utility. The Health Production Theory explains the role of the making, or
production, of health and its influence by a variety of factors, including the
amount of medical care consumed. Also, there’s a direct relationship between
healthcare economics and societies access to health insurance.

Rising incomes mean more disposable income for health services, both basic
and optional. Because health insurance continues to offer narrow ranges of
benefits for small monthly fees, many people pay directly for optional health
services. The first to notice this trend are entrepreneurs, both physicians and
businessmen who come from the resource side. These entrepreneurs have led in the
most noticeable physical and organizational restructuring of health care: the
decentralization of hospital and physician services to single-specialty or
single-patient-type "institutes" that offer all services in an
integrated form. Institutes now house women and children\'s services, cancer,
orthopedics, eye, diabetes, renal and stroke services, asthma and allergies,
heart and fitness, along the lines of existing infertility institutes. The task
of tying these disparate institutes together falls to the regional health care
system where the links are financial and information systems, not geographic or

Physicians, many of whom prove to be not only surplus under managed care but
whose skills have not kept up with advances in medical science. At the same
time, doctors trained in genetics find they cannot afford to practice
independently, since health plans are reluctant to open the gate to what they
perceive as expensive services that will not prove out for years. Manpower
surplus gives the advantage to health plans, which can pick and choose. IPA’s
are a low-involvement framework for physicians who only want to contract
together. Medical groups can not only contract but enhance the practice
experience, and health plans tend to like them.

Health Insurance: As the country enjoys the "long boom" produced by
the leveraging of knowledge into wealth, there are actually two pathways
emerging in payment:

 One pathway is mediated by insurance, still related to
individuals through work or through government. Mandates have stair-stepped most
employers into mandated coverage, leaving out small rural businesses where no
managed care plan exists, or certain other exceptions. Unfortunately, Congress
has been unable to reduce fully the 17 percent of the population without
insurance, since small business growth, immigration and premium increases offset
any gain. Universal coverage mandates await the political maturation of minority
groups into both elected leadership positions, and voter participation.

 The second pathway is payment arranged outside of insurance.
This is the fastest-growing form at present. Direct consumer payment covers most
self-care, alternative health services, "nutraceuticals," cosmetic
surgery, much nonorganic mental health, non-Medicaid long-term care and physical
therapy past approved limits. For seniors and even families, some health
services are built into housing costs. Foundations and not-for-profits cover
problems not easily handled by insurance, such as migrant worker care or
open-door clinics for the inner city. Health insurance depresses innovation, as
providers tend to give only the care that is, in fact, "covered." It
does so by excluding "experimental" procedures, by underpaying for new
services so providers are reluctant to commit the resources, and by restricting
by underpaying for new services so providers are reluctant to commit the
resources, and by restricting patients\' access on a per-case basis. (Examples:
bone marrow transplants for third-stage breast cancer, testing of family members
at risk for cancer, etc.) Prevention efforts are artificially limited as they
can be paid for only if delivered to covered individuals in their role as
patients, when prevention at the family or community levels may be called for.

 Insurance related to individuals does not work for people who
lack the competence to manage it or their health care. Open-access services,
instead, should be subsidized. Note the untenable economics of emergency rooms,
the safety net for people who are outside the formal system. Insurers,
particularly government plans, could stimulate such innovation by offering
budget subsidies for services that are meant to reach the uninsurable.

Category: Business