1. Read article on Opportunity costs in healthcare and give an example of opportunity costs in your related healthcare field. Please explain
What are opportunity costs of health care_ _ Viewpoints _ qconline.com.pdf download
2. Explain the circular flow model as it pertains to your healthcare field
3. Consider the following events: Scientists reveal that consumption of oranges decreases the risk of diabetes and, at the same time, farmers use a new fertilizer that makes orange trees more productive. Explain what effect these changes have on the equilibrium price and quantity of oranges (supply demand)
4. If demand for toothbrushes is elastic, how will an increase in price change total revenue for your toothbrush business
5. If you were hired as a consultant to increase Revenue for a Medical supply store, what would you do ? (Choose one answer below and explain why)
Decrease costs across the board
Find out the elasticities of the products and increase the price on the inelastic items
Find out the elasticities of the products and increase the price on the elastic items
Increase the price on all items
Article:https://qconline.com/opinion/what-are-opportunity-costs-of-health-care/article_ec87c802-d6aa-51be-9b77-a672f0974147.html
What are opportunity costs of health care?By Jim NowlanMar 22, 2015SUBSCRIBE FOR JUST $3When I was a boy in the 1950s, health care was simple. If you got sick, you went to the family doctor. I you were really sick, you went to the local hospital and stayed until you got better, or died. If you could afford it, you might go to Mayo Clinic for the latest in care. Most costs came out of a family’s pocketbook.Today, especially as one ages, health care involves a cavalcade of trips to specialists,hands full of daily pills and robotic-driven surgeries to exorcise diseased growths. As relatively little of the costs now come directly out of our pockets, we insist on the late stand best care and technologies, and right away.
8/17/2019What are opportunity costs of health care? | Viewpoints | qconline.comhttps://qconline.com/opinion/what-are-opportunity-costs-of-health-care/article_ec87c802-d6aa-51be-9b77-a672f0974147.html2/5As a result, health care costs have gone through the roof and are expected to keepclimbing.According to the Center for American Progress, health care spending in the U.S.,adjusted for inflation, increased by 818 percent between 1960 and 2010 while wageswere going up just 16 percent. Per capita spending on health care is about $8,000 peryear.Economist William Baumol contends that we can afford the high costs of health carebecause of productivity increases elsewhere that bring the costs of other goods andservices down.Yet because about half of all health care costs are now borne by government viaMedicare, Medicaid and government employee health plans, the costs to government ofhealth care have been squeezing spending for other programs such as education, socialservices and, especially in Illinois, pensions. Economists call these “opportunity costs” — if you spend lots more on one program, theopportunity to spend those same dollars elsewhere is foregone.I took a look at old Illinois budget books and found that between 1989 and 2009, statespending for education in Illinois did increase, even in inflation-adjusted terms, butspending for Medicaid increased four times as fast as that for the schools anduniversities.
8/17/2019What are opportunity costs of health care? | Viewpoints | qconline.comhttps://qconline.com/opinion/what-are-opportunity-costs-of-health-care/article_ec87c802-d6aa-51be-9b77-a672f0974147.html3/5In that period, spending Illinois Medicaid went from two-thirds of that for K-12education to much more than for the school kids.I also recall that in the same 20-year period, the state was socking away less than itshould have been for its pension obligations.Can anything be done to slow spending on the state’s Medicaid program significantly?Robert Kaestner, an economist at the University of Illinois at Chicago who focuses onhealth care, is not optimistic.First, the Illinois program is relatively low cost. According to data gathered by theKaiser Foundation, in 2011 Illinois spent $4,477 per Medicaid enrollee, far less than the$5,790 average for the states, and among the lowest in the nation.Kaestner says costs could be lowered by having patients pay something, by payingdoctors less, and by using health care services less.“The people in the program are poor by definition,” observes Kaestner, “and cannot paymuch.”Some states are, however, experimenting with requiring small co-pays by Medicaidpatients, which could reduce use of services.Doctors in Illinois are already paid much less by Medicaid than by Medicare and privateinsurers, so Kaestner doesn’t see much potential here, as many doctors would simplystop seeing Medicaid patients if their reimbursements were cut.Sponsored By Fortify ProbioticsFind The Right ProbioticWith so many strains – comprised of so many syllables– it can be tough to find the one for your health needs.We can help!See More
8/17/2019What are opportunity costs of health care? | Viewpoints | qconline.comhttps://qconline.com/opinion/what-are-opportunity-costs-of-health-care/article_ec87c802-d6aa-51be-9b77-a672f0974147.html4/5Kaestner does see potential in moving more enrollees to risk-based managed, orcoordinated, care. At present, much spending goes to pay a fee for each individualservice provided, without coordination of care among providers that might reduce costs.This could save up to 5 percent per enrollee, says Kaestner. As about half of Illinois’s 3million Medicaid enrollees are still not on managed care, this could potentially generate$300 million or so in savings.Yet there is “no way,” says Kaestner, that the Rauner administration will be able toachieve the $1 billion in savings projected in the state budget for the coming year.Kaestner does think significant money could be saved in the state’s expensive healthcare program for its own employees and retirees, which costs almost $3 billion a year,all state money.The economist says a high deductible, consumer-driven health care program as inIndiana could save much. But Kaestner doesn’t expect the change to be made because ofopposition to the idea from strong public employee unions in Illinois.Across the nation, health care costs are expected to continue to outpace the rate ofgrowth in gross domestic product. These increases will be driven largely bytechnological advances and the aging of the Baby Boom generation.Serious demands to constrain health care costs will only come when we in the bodypolitic come to realize that the opportunity costs of ever more spending on health careare greater than the benefits. But that is the subject of another column.
8/17/2019What are opportunity costs of health care? | Viewpoints | qconline.comhttps://qconline.com/opinion/what-are-opportunity-costs-of-health-care/article_ec87c802-d6aa-51be-9b77-a672f0974147.html5/5Jim Nowlan is a former Illinois legislator and state agency director. He is a retired senior fellow at the University ofIllinois Institute of Government and Public Affairs.
book:Course Required Texts and Materials:
Health Economics and Financing 5th, Thomas E. Getzen
