Analyzing the Economics of Healthcare

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Health Economics
Health economics is one of the significant entities used to evaluate and define the value of the healthcare industry. It is an analytical tool that is used to assess the progress of health care research. Additionally, it is used to determine whether the set objectives in healthcare have been met. The aspect of spending and allocation of funds in research and development in the healthcare industry is usually solved using health economics principles. Healthcare economics helps maximize health benefits by providing sufficient information on consumption, demand, and supply of health products. This paper will discuss the models used by the government and healthcare providers to make substantive decisions in providing quality health services.
Analyzing the Economics of Healthcare
Most people in America die due to alcohol-related diseases. High consumption of alcohol translates to an increased cost of providing quality healthcare services. For example, high consumption of alcohol can lead to high blood pressure and diabetes. The cost of diagnosing and treating diabetes in America is relatively high despite being a developed country. In America, the purchasing power parities (PPP) stood at 168 compared to other developed countries. Notably, more than 20 years ago, the cost of alcohol abuse in America was more than 180 billion dollars (200). As the consumption of alcohol increases, the rate of spending on medical products increases. Currently, the rate of spending to treat alcohol-related diseases is directly proportional to the rate of alcohol consumption in the country.
Economists in the healthcare industry show that spending in the American healthcare system increases substantially every day (196). Is there any way a government can regulate the consumption of drugs to cut expenses in the medical field? Other healthcare areas require more attention other than spending much money on diseases caused by drugs. The issue of legalizing drugs in the country is another problematic case to handle. For example, healthcare economists argue that there is no defined law to control drugs. Furthermore, other drugs are more severe to human health than alcohol. It all depends on the individual who is consuming the product. Drugs such as heroin and cocaine have severe health consequences to the users, and just like alcohol, the rate of consumption for illicit drugs is accelerating fast. There is a need to construct more rehabilitation centers in America, and all the rehabilitation centers require healthcare facilities and health practitioners (extra spending).
From an economist’s point of view, the consumptions of drugs increase government spending. The issue of taxation and drugs is another case. Government cannot survive without taxes; otherwise, it would be difficult to run its daily operations. The demand for drugs will always be inelastic, and it does not matter the benefits to both parties. The supply and demand curve for drugs will always be at competition due to needs and spending in the industry. Consumption is also another factor to consider in implementing health decisions. What are the consequences of banning some particular products such as alcohol and cigarettes? In most ca...