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A Study of Macroeconomics in Relation to Supply and Demand of Health Insurance

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Introduction

“Macroeconomics” can be best defined as, “the part of a countries economy which is primarily concerned with large-scale or general economic factors, such as interest rates as well as national productivity, national income, &gross domestic product” (Kaplan, J. (2002). Specifically, as the topic of Macroeconomics pertains directly to both the “Supply as well as Demand for Health Insurance” it is especially vital to acknowledge that “Macroeconomics” is a phenomena which also effects our countries (United States) inflation range, price levels, rate of growth, & massive changes in unemployment”(Staff, I. (2016, September 07). This essay will effectively highlight the overall extent in which Macroeconomics effects both the “Supply” as well as overall “Demand” of Health Insurance within the United States, including why the Macroeconomics system is not the “preferred” method system to apply in relation to our nation’s healthcare system. Lastly, this essay will thoroughly highlight the overall effects of America’s Inflation Rate, Price levels of Insurance/Premiums, as well as massive changes in the rate of employment as they effect both the “Supply” as well as “Demand” of Healthcare Insurance

The Overall Extent to Which Macroeconomics Effects Both the “Supply” as well as “Demand” for Health Insurance

When it comes to the Macroeconomics system, there can be no doubt of the sheer importance of this particular discipline however, in order to more actively explore both the massive healthcare system in relation to the Macroeconomics system as a whole, we must come to a completely absolute and rather disappointing fact! And the fact of the matter is that, despite the Macroeconomics system working well for a vast majority of our current society’s needs, it still doesn’t work well nor efficiently for our Nation’s most basic “Healthcare System” needs, despite having some rather noteworthy and rather “specific areas of research including both the researching of “Business Cycles” & the “economic growth” aspect of the discipline.

At large, “The demand for healthcare really sees no limit, especially if cost is not a factor for the consumer, and that is the case, of course, in most third-party payment situations” (Christensen, T. (2010, October 23). As a result, prices will steadily rise overtime and without stopping! Furthermore, when it comes to taking care of sick people as well as others in need of the “basic medical services”, it is important to mention that, in many cases, when it comes to both the “supply” and “demand” within the field of healthcare, it’s almost, if not practically impossible for healthcare workers, fellow hospital staff, the facilities Human Resource Management Departments and even fellow nurses and physicians alike to absolutely know exactly how much “demand” they should expect to plan for on a daily basis. Thus, rather medical professionals are in a private practice or working in the Emergency Room, issues involving both the “Supply” as well as “Demand” within the Healthcare Industry effects all medical professionals as well as ER’s, Hospital and other various medical facilities on an operative level. Unfortunately, due to the circumstances, the “supply” can become an issue when “demand” is not accurately known.

In this case as well as others like it, the much needed numbers/statistics will not be “present” to report accurately back to governmental officials nor to state departments and other respective governmental agencies. Lastly we must take into account that, “the supply of physicians and providers is not driven by normal market forces. We see a lot of increasing specialization for reasons that aren’t necessarily fitting with the supply-demand curve” (Christensen, T. (2010, October 23). The latter reason is because, when doctors attend medical schooling, they are free to choose their chose their medical “specialty”. Consequently, most doctors tend to pursue the healthcare professional “specialties ” which pay the most in salaries (financial compensation) as well as have the most benefits associated with them. It is because of this “Freedom of Choice” amongst doctors as it pertains to their preferred medical “specialty” that the costs for such medical treatment and consequently healthcare professional services varies by such staggering amounts Nevertheless, the latter issues also effects both the primary Doctors and their Nursing staff .members as well as those medical doctors whom chose to become “specialized because, most “specialized physicians” get compensated more than the average “traditional” family practice doctors. Subsequently, due to such a drastic increase in doctor specialization the supply demand curve is highly insufficient, to say the least in field of healthcare and medicine.

The Overall Effects of America’s Inflation Rate, on the Supply & Demand of Health Insurance

By its very definition an “Inflation Rate” is the overall, “Rate at which the general level of prices for goods and services are rising and, consequently, the purchasing power of currency is falling” (Financial-dictionary. (2013). This means that when an individual sees both the prices for goods (such as food water, shelter, and all store purchased items) As well as services (such as the ability to be both seen and treated by a doctor (not to mention any other service) will be effected. As briefly mentioned previously, both primary care physicians as well as their specialist Physician (Doctor) counterparts most often chose their “specialty” based on their potential salary and offered benefits package. This is makes perfect sense when prices for such services grow exponentially. Unfortunately when it comes to inflation, Healthcare, in addition to other vital needs, goods and services are oftentimes the first expenses to increase exponentially as inflation rates begin to rise. The increase for medical insurance companies, including their billing and collection departments as well as volume and case load also increases leading to more work for less money (and an overall decrease in purchasing power). As reported by Forbes Magazine, additional costs are due to several different reasons, and can include but may not notably be restricted to, “political decisions such as additional taxes and increased regulations which can impact health care costs” (Patton, M. (2015, June 29). In addition to the amount the steadily increase in hospital/physician lawsuits, and consequently increased medical malpractice coverage.

Macroeconomics – The Price Levels of Insurance/Premiums

Unfortunately, since these changes are yet to be corrected by “The System” nor our elected representatives (politicians), as healthcare prices continue to soar and both medical insurance companies in addition to patients/clients and healthcare providers still continue to deal with the crunch. “According to the November 2013 issue of the Journal of the American Medical Association (JAMA), the primary reason for the rise in health care costs between 2000 and 2011 accounting for 91%, was an increase in the price of drugs, medical devices, and hospital care” (Compassphs. (2015, September 18). Nevertheless, it has also been revealed that, out of these costs that Administrative cost make up approximately, “5.6%/year, and are mainly health insurance costs, while the prices of health services is expected to increase by a massive 4.2% yearly, drugs & medical devices another 4% yearly and Professional service fees for doctors to increase by 3.6% each year”(Compassphs. (2015, September 18). Highly depressing figures to look forward to as well as “cope with” in the near future!

How Macroeconomics effects Massive Changes in the Rate of Employment

As it pertains to (Macroeconomics) the “Supply & Demand for Health Insurance” can and does effect massive changes in the overall Rate of Employment. As revealed by the “Employment Policies Institute” “The cost of this insurance has increased by more than 59 percent since 2000, with no accompanying increase in the scale or scope of benefits” (Employment Institute Policies (2017, February). Unfortunately, as this happens, “significant effects on both health insurance markets and labor markets, including changes in the number of jobs, hours worked per employee, wages, and compensation packages” (Employment Institute Policies (2017, February) can and often do occur. As this happens, more and more individuals and their families find themselves spending more money as well as being essentially limited to which doctor practices they can see ( as per coverage). Lastly, the “unemployment rates” as well as the amount of Americans living without health insurance could drastically increase and cause a massive economic disaster as more and more employers (business owners) would be forced to “lay off” employees in order to save money or discontinue the standard work week so that the employer no longer has to pay for their employee’s “health insurance coverage”.

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A Study of Macroeconomics in Relation to Supply and Demand of Health Insurance. (2018, October 26). GradesFixer. Retrieved December 1, 2021, from https://gradesfixer.com/free-essay-examples/a-study-of-macroeconomics-in-relation-to-supply-and-demand-2/
“A Study of Macroeconomics in Relation to Supply and Demand of Health Insurance.” GradesFixer, 26 Oct. 2018, gradesfixer.com/free-essay-examples/a-study-of-macroeconomics-in-relation-to-supply-and-demand-2/
A Study of Macroeconomics in Relation to Supply and Demand of Health Insurance. [online]. Available at: <https://gradesfixer.com/free-essay-examples/a-study-of-macroeconomics-in-relation-to-supply-and-demand-2/> [Accessed 1 Dec. 2021].
A Study of Macroeconomics in Relation to Supply and Demand of Health Insurance [Internet]. GradesFixer. 2018 Oct 26 [cited 2021 Dec 1]. Available from: https://gradesfixer.com/free-essay-examples/a-study-of-macroeconomics-in-relation-to-supply-and-demand-2/
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