Opportunity Cost of Going to a Doctor to be examined for Skin Cancer
Opportunity cost refers to the benefits business, or an individual misses out when selecting one alternative over the other. When assessing the potential profitability of any business, one has to look for the best choice that is likely to produce the most significant return (Kennon, 2018). When one goes to a doctor to be examined for skin cancer, the individual gives up his/her time in traveling to the doctor, waiting to be tested, getting treatment and taking prescriptions, as well as paying the bills. On average, an individual in the USA spends 1.1 hours a week to get health care.
Diamonds– Water Paradox in Medicine
Diamond- water paradox, also referred to the puzzle of value, is the deceptive illogicality that, although water is more beneficial regarding survival when compared to diamonds, diamonds command higher prices in the market. Typically, it is very cheap to get enough water to sustain life than to get a piece of jewelry (Welker, 2018). Some examples of a diamonds– water paradox in medicine, in which the undoubtedly more valuable service is provided at a much lower price are the labor doctors, and hospitals do. Doctors, as well as hospitals, offer a wide range of services. Medications that are amazingly valuable to a couple of chosen patients get supplied to such a large number of individuals that the framework is moved down the marginal benefit curve, and in the long run, the central part of the work is being done on conditions for which specialists can do little good.
Delegate your assignment to our experts and they will do the rest.
What determines the value of a cure for acne? For ALS (lateral amyloid sclerosis, or Lou Gehrig’s disease)? For Alzheimer’s disease? Which discovery is worth more to a pharmaceutical firm that can patent a cure?
The cost for the cure of cancer, ALS, Alzheimer, Lou Gehrig, as well as Acne is very high. In his book, Getzen states that book “Economists do not put a value on life or illness; they measure the value that consumers put on life and illness as shown by their behavior” (2012). Companies that deal in pharmaceuticals can come up with new medications that can provide cure to diseases or extending life. These pharmaceutical companies profit from research and development. Finding a treatment for illness would be priceless.
When medical care is reimbursed through employer-provided insurance, whose welfare is ultimately affected when the cost of medical care rises: the owners of the firm that pays the premiums (employer), the government whose revenues are reduced because insurance benefits are not taxable as wages, or the public in their roles as workers, consumers, and taxpayers? Is there any difference between short- term and long- term effects?
In the short run, the company that is providing the reimbursement would suffer a loss. This is because the cost is not shared between the company and the clients in the short run. However, in the long term, the public is the one that would suffer a loss. As the medical care rises, the company will pass the extra costs incurred to its clients. This is because the company would want to maximize its profits. “
Which government insurance program is more affected by adverse selection: Medicare or Medicaid?
Medicare is affected more by adverse selection. Medicare, which is the most influential program funded by the government, pays for the health care of the elderly (Ridic, Gleason, and Ridic, 2012). The government pays roughly 48% of all medical care, and this makes it be the largest insurer. However, the federal Medicaid program leads to long-term compensation. Revenues generated from tax have cultivated the development of medical coverage as an employee benefit. Private medical coverage covers 60% of the populace, however, pays just 34% of the aggregate bills. Around 12% is paid for out of pocket by patients or their families. (Getzen, 2013).
References
Getzen, T. E. (2013). Health Economics and Financing , 5th Ed. Wiley Publishing, ISBN: 978-1-118-54534-8.
Kennon, J. (2018). What is Opportunity Cost? [Online]. Available at: https://www.thebalance.com/what-is-opportunity-cost-357200 . Accessed 21 st Aug 2018.
Ridic, G., Gleason, S., and Ridic, Ognjen. (2012). Comparisons of Health Care Systems in the United States, Germany, and Canada. [Online]. Available at: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3633404/ . Accessed 21 st Aug 2018.
Welker, J. (2018). Diamond and Water Paradox. [Online]. Available at: https://econclassroom.com/glossary/diamond-and-water-paradox/ . Accessed 21 st Aug 2018.
