The Healthcare Market


People in the world today view health in many different ways, especially when sometimes it is hard to distinguish what is being healthy and unhealthy. Many do not enjoy the visit to the doctor office, but know it is a mandatory treatment for the well-being of a person. Being healthy has many different ways of being defined, but can be a difficult way to be explained. According to the article, healthy is “considered all the things that can be wrong with you even while you say you are healthy” (Zuger, 2008). My definition is when your spiritual, social, physical, or mental being is not constant. Anything that is being altered in your daily routine differently is considered unhealthy. You can be diagnosed with anything and you still can be just fine, it is certainly cane be caused as a mind thing. What determines a person health depends on the person themselves and the world can play a significant part in it. When trying to understand how health economics plays a part in today’s America, first health economics can be classified as a branch of economics as it relates to the healthcare system by economists can view problems in health care by being a good health policy analyst and by making all the right decisions. The value of health can be referred by the micro economic evaluation at their treatment levels by looking at cost effectiveness of delivering care in all phases. Also by the demand for health care by the influences at occupational hazards, education, and income plus the perceived attributes of health and value of life on health care seeking behavior. Barriers can be accessed by the pricing and time. The need for a market equilibrium or supply of the health care shows an example of money and time prices, being on a waiting list, and non-price rating systems whereas supply of health care will show a cost of production and markets for inputs such as the workforce, equipments and drugs. (Teitelbaum & Wilensky, 2007).

Analyze the current health care delivery structure in your state. Compare and contrast the major determinants of healthcare market power.

There are many issues that are causing changings in the healthcare system.   Population aging, rapidly increasing costs of healthcare and the growing burden of chronic disease are challenges to health systems worldwide. To meet these challenges will require new approaches to healthcare delivery and comprehensive population health management.   Many states are not prepared to tackle this issue yet.   The US has the most expensive healthcare system in the world with health status indicators that are only average in comparison with the less costly health systems of other countries. The pressure to provide more cost-effective care is particularly intense in the US, as it attempts to expand health insurance coverage and address serious cost and quality issues. (Shortell, 2010)
In the state of North Carolina, there is a group called NCHQA (North Carolina Healthcare Quality Alliance).   Their mission is to dramatically improve the delivery of health care in North Carolina and the health of all North Carolinians.   NCHQA is a collaboration of virtually all the leaders in the delivery of medical care in North Carolina.   The Board of Directors consists of members appointed by the Governor and other public officials, various medical societies, insurers, the state hospital association, the North Carolina Foundation for Advanced Health Programs, and Community Care of North Carolina. It also includes representatives of academic medical centers, business, consumers, and other key players dedicated to improving care. NCHQA was initially organized under the auspices of the Governor, and now operates as an independent non-profit organization. NCHQA has three goals:
    • Provide leadership for the improvement of health care delivery in North Carolina.
    • Promote and facilitate transparency and public accountability.
    • Foster innovative and sustainable activities and interventions that improve the quality and value of health care.

The best health care systems in the world offer integrated care. Systems like the Mayo Clinic and Geisinger Health System own hospitals and labs and employ all the physicians and nurses a patient is likely to see, so they can easily integrate a patient’s care. In contrast, patients in North Carolina and throughout America typically obtain their care from a variety of independent providers. Health care expenses are paid by a variety of sources including private insurers, employers, the government and patients themselves. But unlike any other state, or even any large geographic area, North Carolina has the capacity to create a “virtually” integrated system, one that can provide the same integrated care but across an entire state. When patients’ transition between provider and health care settings, the result is often poor health outcomes, medical errors and costly duplication of tests and procedures. Through partnerships with other organizations and providers, NCHQA is seeking ways to better coordinate care and address systemic problems that cause dangerous and costly gaps in care.   (NCHQA, 2014)
North Carolina in particular has extraordinarily well qualified physicians and world-class hospitals. The problem is the structure of the American health care system.   Our health care system is based around treating the problem of the moment. A patient is ill and so goes to the doctor. In many cases, patient and physicians meet for the first time in the examining room. The physician is typically compensated only for providing specific services, not for taking time to learn about the needs of the patient.   Many times, this is where the patient feels as though they are not being treated properly and being heard.   The physicians do not take the time to get to know the new patient and their background information for them to make the correct diagnosis or treatment plan suitable for the patient.   The system is not designed to engage patient and physician in an ongoing relationship to promote health.   It is designed to treat them and get them on their way.   There is not time set aside to get to know the patient and give the information of a healthy lifestyle.   Some people have never been taught the correct healthy lifestyle of eating or exercising; all they may need is some guidance and a little motivation to change that part of their lives.   Healthier lifestyle would lead to less time at the doctor’s office.

Analyze the main competitive forces in the your healthcare delivery system in your state, and compare the major factors that influence the fundamental manner in which these competitive forces determine prices, supply and demand, quality of care, consumerism, and providers’ compensation.

In North Carolina, there are a lot of hospitals and large healthcare facilities that are starting to merge.   With this merger, it brings along a lot of concerns for everyone.   Across North Carolina and the country, community-based hospitals are building partnerships with larger health care systems as a way to help offset rising medical costs and to better navigate changes under the Affordable Care Act.   The Federal Trade Commission and the Department of Justice contend that some of these hospital consolidations violate antitrust laws, causing some proposed hospital mergers in North Carolina to come under increased scrutiny.   The FTC believes it needs to step up enforcement because hospitals are hiding behind their nonprofit status to miss the antitrust laws. Also recent studies show that when large health systems gain a greater market share, their power allows them to increase costs for patients.   In the state of North Carolina, the rate of unemployment and poverty level affects the costs of medical care.   Most individuals fall into a category because they are poor to qualify for affordable health insurance in North Carolina, because they’re in what’s called the coverage gap.   They don’t earn enough to qualify for a subsidy under the health law, and they can’t get Medicaid because North Carolina is one of the states that decided not to expand the program under the health law. The expansion in other places covers childless, low-income adults who previously didn’t get qualified for Medicaid.   This is also a downfall for individuals that work, but do not make enough money to cover insurance.   For an example, a teacher that has been in her profession for 18 years will have to pay over $600 a month for a family of 5 and her husband is in law enforcement.   She is now being forced to figure out how to pay for insurance and their mortgage because of the “Affordable Health Care Act”.   This doesn’t help patients or the economy, it only makes things worse because now they have to decide which is more important to pay for and what taxes and fines they will have to pay if they do not have insurance.   With paying extra for insurance, that means no extra funds or money going into the local economy for anything extra, all in all this hurts the economy across the United States.

Evaluate the positive benefits and negative aspects, respectively, of HMO managed care from the provider’s point of view—i.e., a physician and a healthcare facility—and from a patient’s point of view. Provide a rationale for your response.

The positive and negative aspects of HMO managed care can be evaluated from the physician and healthcare facility in several ways.  Research show that the positive aspects are as follows:  One of the benefits of this being managed is the monthly fee that is pain into the system, so you are almost guaranteed money each money from the patient who is enrolled in this program.  The patient still has a co-pay but it is just a little less than what the other co-pays might be.  Another positive benefit for this, when the patient comes to the doctors office or the healthcare facility, they only have to present the HMO Card provided and that takes place of the insurance card.  The reason this is a benefit, that if the patient stays in the program, you are not going to have to worry about them being dropped by there provider or even changing insurance companies and having more issues with filing and knowing who to charge for services rendered.   Another positive that can be looked at like a negative is the patient giving up the right to choose his or her physician.   With this being the case, it does help the physician if they have a large patient load and wish not to take on new patients.  This can help them when it comes to having a certain patient list and they are happy with this.  Having monthly payments coming in from the HMO and when patients arrive they still receive a small co-payment.   The negative for the physicians is they are not receiving monthly payments from the HMO and they are missing out on what could be considered guaranteed money.  You still get your co-pay, but at the end of the day you are missing out on that money that is paid into the program each and every month.  Another negative is a patient who will not be assigned to your office.  Depending on where you might be located and if you are a new doctor or healthcare facility it would be nice to have patients who are assigned to your office who are in the HMO program.  If you have good customer service, it is very possible that those patients will end up talking about your facility and how much they enjoyed it or felt like it had a home setting.   You are now missing out on potential new customers.   For your patients the positive and negative can be as they are.  Depending on how you look or prefer picking your PCP or paying into the system is totally up to you.  But with that being said you cannot have the best of both worlds.   Benefits for the HMO Program for the patients is that they do not have to fill out a claim form for doctors during hospital stays.  They also enjoy the fact they only have to present a card at the hospital or doctors office to show proof of insurance.  They also enjoy the fact that they have a fixed month payment into the program.  This is a relief for many who are in the program because they can budget what they need to without being surprised if they become sick and have to pay money out that they might now have or take money out of savings they did not want to touch but only in case of an emergency.  One of the last advantages of an HMO is that the cost out of pocket is normally low compared to having your traditional insurance coverage.   Some of the negative for patients in an HMO managed program would be, they do not have the freedom of choice when it comes to picking the healthcare facility or doctor that they want to see.  Also another disadvantage, it is hard to get specialized care because you have to get a referral.  If you do not get a referral or seek emergency care it is not covered. (Rose, 2013)

Assess the efficiency of the types of economic incentives available to providers in the delivery of healthcare services in your own state.

Healthcare providers, physicians and hospitals, use the term “reimbursement” for their services. Reimbursement actually refers to situations in which one is paid back for money spent on an official or approved purpose.   Medical facilities use this word because when they file insurance companies that they have a contract with or that the physician or health care facility is in network, they receive a certain amount allotted by the insurance company.   This is there reimbursement for the services they provided to the patient or “customer”.   This is where shopping around for health care services can be beneficial.   Just because a physician or facility charges a price for a surgery or procedure doesn’t mean all health care places charge the same.   You do not have to accept the amount; a patient can call and ask what the prices are for such services before they have them done.   Fees for service generates some revenue for nearly every service provided; depending on the costs of delivering those services, the providers may make or lose money. There are some variable costs involved such as buying supplies, but medical practice has substantial fixed costs, rent, as well as malpractice insurance, office staff, and operations. The individual physician has his or her income based on what is left after all the costs are subtracted from the revenue received. High fixed costs mean additional services rendered are likely to be profitable even if on average the revenue received is less than the average cost.

Propose who bears the financial risk of a capitation payment system: the provider, the patient, or the consumer-driven health plan itself.

The consumer driven health plan itself should bear the financial risk of the capitation payment.  But if this is the case, the program needs to be managed closely by someone with a financial background and quarterly audits executed to ensure how this program is operated.  I believe that if this is the case, you will see a drop in visits to healthcare facilities and even doctor office visits.   When you look at something being driven by the consumer you know it can easily get out of control.  One of the biggest issues that have lead up to the cost of healthcare being driven up over the years.  People wanting to seek medical attention when they could have waited for a few hours or even a day to see their primary care physician.  But going to the ER or seeking medical attention from a specialized physician when the PCP could had taken care of the issue ends up running up the cost to us all and makes it even harder for us to lower the cost all together.


Advantages and Disadvantages of HMO.   Retrieved from . Htm

Gold, Marsha, 1999.   Financial Incentives.   Retrieved from http://www.ncbi.nlm.nih. gov/pmc/articles/PMC1496870/

Hoban, Rose 2013.   NC Hospital Mergers.   Retrieved from http://www.northcarolina
NCHQA, 2014.  

North Carolina Healthcare Quality Alliance.   Retrieved from improving_quality

Shortell, Steve, 2010. United States Innovations in Healthcare Delivery.   Retrieved from, 2014.  

Tietelbaum. J. B. & Wilensky. S. E. (2007). Essentials Of Health Policy And Law. Sudbury. MA: Jones And Barlett