You just started working as a Health Service Manager at a major hospital. The CEO thinks he has a great idea, and wants your opinion on the following: Expand health insurance coverage to all US citizens (similar to Medicaid) and the federal government will pay the entire cost of coverage.
Write a 4 to 5 page report (double-spaced) on the economic implications of his idea. In discussing the issue, identify at least 3 economic concepts (discussed in Week1 and Week 2’s class content) when discussing whether or not (from an economic perspective) this idea is sustainable in the long-run. Rely on material in the course readings and summary slides to make your case. NOTE: THIS IS NOT A DISCUSSION OF THE CURRENT AFFORDABLE CARE ACT, IT IS A CONCEPTUAL PAPER APPLYING ECONOMIC CONCEPTS LEARNED IN THE FIRST TWO WEEKS OF CLASS.
**WILL ATTACH COURSE REEADINGS AND SLIDES***
textbook is: Economic Theory Through Application
And can be found at:
https://saylordotorg.github.io/text_economics-theory-through-applications/
( try googling it) let me know if you have issues
1)Mayer Chapter 6: Supply and Demand
2) Economic Theory Through Application Chapter 4: Everyday Decisions (p. 54-90)
3) Economic Theory Through Application- Chapter 6.3 Supply and Demand (p. 202-213)
Chapter 7.2: Revenues of A Firm (p. 244- 62)
Monitoring Health Spending Increases: Incremental Budget Analyses Reveal Challenging Tradeoffs
1) Mayer Chapter 1: What is Economics?
2) Mayer Chapter 13: Keeping Score: The Gross Domestic Product
3) Economic Theory Through Applications Chapter 1: What is Economics? (p. 6-18)
https://saylordotorg.github.io/text_economics-theory-through-applications/
4) Economic Theory Through Applications Chapter 2: Microeconomics in Action (p. 19-32)
5) Glossary of Health Economics Key Terms
6) National Health Expenditures 2015 HIghlights
7) What Do We Spend on Healthcare: National Health Accounts Forecast:
See Forecast Summary link and Tables 1, 2, and 3 in detailed data files:
Expert Solution Preview
Introduction: The proposal to expand health insurance coverage to all US citizens with the federal government paying the entire cost of coverage raises a significant economic concern. In this report, we will assess the proposal’s economic implications using three economic concepts learned in the first two weeks of class. We will rely on material from the textbook “Economic Theory Through Application,” Mayer’s “The Everything Economics Book: From Theory to Practice,” and other course materials.
Answer: The proposal to expand health insurance coverage to all US citizens raises the question of whether this policy is sustainable in the long-run. The proposal has significant economic implications that require assessment, using three economic concepts: supply and demand, fiscal policy, and government intervention in markets.
First, the supply and demand economic concept suggests that government intervention in markets can lead to unintended consequences, including shortages, surpluses, and market failures. The government’s intervention in the healthcare market by paying the entire cost of coverage may lead to an increase in demand for healthcare services, leading to a shortage of physicians, nurses, and other healthcare professionals. This shortage will lead to longer waiting times, a decline in healthcare quality, and higher healthcare costs.
Second, fiscal policy suggests that government spending affects the economy’s overall performance, including economic growth, employment, and inflation. The expansion of health insurance coverage to all US citizens may lead to an increase in government spending. If the government does not offset this spending by increasing taxes or reducing spending in other areas, it may lead to a higher budget deficit, inflation, and a decline in economic growth.
Finally, government intervention in markets can lead to market distortions, including misallocation of resources, inefficiencies, and deadweight losses. The government’s intervention in the healthcare market by paying the entire cost of coverage may lead to a misallocation of resources, as some individuals may consume healthcare services that they would not have done so without government intervention. This creates an inefficiency and a deadweight loss, resulting in an increase in healthcare costs.
In conclusion, the proposal to expand health insurance coverage to all US citizens with the federal government paying the entire cost of coverage has significant economic implications. The economic concepts discussed in this report suggest that the proposal may lead to unintended consequences, including shortages, surpluses, inflation, and market distortions. Therefore, it is essential to assess the proposal’s long-term sustainability before implementing it.
