WEEK 1 MHA5030 CURRENT ECONOMICS IN HEALTHCARE– DISCUSSION AND PROJECT INSTRUCTIONS
This week will take a brief look at utility and demand production costs and supply, which is microeconomics as it relates to healthcare. Let’s take a look at the economy as a whole, where you will discuss the market versus the government as a leader or regulator of healthcare. You will further discuss the assumptions underlying the competitive model and its implications for markets and the government. With this brief background into the economics of healthcare, the learner will be prepared to delve deeper into the economics of healthcare as it is in the twenty-first century.
Your Learning Objectives for the Week:
- Assess the U.S. Health Care System in terms of the business enterprise, economic systems, and basic economic principles.
- Evaluate economic issues relevant to the healthcare policy debate.
- Interpret the factors that affect the supply and demand for and health services in order to predict responses price, quality, and other factors commonly influenced by health policies.
MHA5030 Week 1 Discussion Instructions
Discussion Questions
Before beginning work on this discussion forum, please review the link
Doing Discussion Questions Right,
the expanded grading rubric for the forum, and any specific instructions for this topic.
Before the end of the week, begin commenting on at least two of your peers’ responses. You can ask technical questions or respond generally to the overall experience. Be objective, clear, and concise. Always use constructive language, even in criticism, to work toward the goal of positive progress. Submit your responses to the Discussion Area.
One of the major assumptions in an efficient marketplace is that people have equal information concerning an item that they wish to purchase. We wish to know the quality of an item before buying it and certainly the price we will pay. Hidden factors such as annual license fees or hidden taxes not stated in the advertisement give one party an advantage over the other. For example, when you sign up for cable TV, the price quoted does not often include a near doubling of the final cost due to taxes and fees added after the sale. In healthcare, such items as quality of an implant and expected life are not something that the average patient is aware of, and he or she is then unaware that the price may differ on the basis of these factors. Stainless steel hip joints may be less expensive than titanium ones but may not last as long, for example. Information asymmetry is common in healthcare as you, as a patient, are perhaps dealing with someone with decades of training in a field you are not knowledgeable about. This may make the market assumption invalid.
Tasks:
One of the major assumptions in the free-market model is that consumers and providers have all the information that is needed to make decisions on purchases:
· Discuss areas of information that a prospective patient might need concerning a surgical procedure at a surgical center.
· Discuss whether that information is available.
· Discuss how that information might be made available.
To support your work, use your course and textbook readings
and also use the
South University Online Library
. As in all assignments, cite your sources in your work and provide references for the citations in APA format.
Your initial posting should be addressed at 300–500 words as noted in the attached PDF. Submit your document to this Discussion Area by the due date assigned. Be sure to cite your sources using APA format.
TEXTBOOK INFORMATION
Rice, T. (2015). The Economics of Health Reconsidered. [VitalSource Bookshelf]. Retrieved from
https://bookshelf.vitalsource.com/#/books/9781567937237/
Log in is the same and you should see continue reading for the book when you log in.
1/12/2021 Rubric Assessment – MHA5030-Current Economics in Healthcare SU01 – South University
https://myclasses.southuniversity.edu/d2l/lms/competencies/rubric/rubrics_assessment_results.d2l?ou=74312&evalObjectId=359327&evalObjectType=5&userId=4901&groupId=0&rubricId=29&d2l_bod… 1/3
Criteria
Unacceptable
0 points
Emerging (F
through D
Range)
27 points
Satisfactory (C Range)
31 points
Above Average (B
Range)
35 points
Exemplary (A
Range)
40 points
Criterion
Score
Quality
of
Initial
Posting
/ 40No initial posting to
evaluate
The information
provided is
inaccurate, not
focused on the
assignment’s topic,
and/or does not
answer the
question(s) fully.
Response
demonstrates
incomplete
understanding of the
topic and/or
inadequate
preparation.
The information provided is
accurate, giving a basic
understanding of the
topic(s) covered. A basic
understanding is when you
are able to describe the
terms and concepts
covered. Despite this basic
understanding, initial
posting may not include
complete development of
all aspects of the
assignment.
The information provided is
accurate, displaying a good
understanding of the topic(s)
covered. A good
understanding is when you
are able to explain the terms
and topics covered. Initial
posting demonstrates sincere
reflection and addresses
most aspects of the
assignment, although all
concepts may not be fully
developed.
The information
provided is accurate,
providing an in-depth,
well thought-out
understanding of the
topic(s) covered. An in-
depth understanding
provides an analysis of
the information,
synthesizing what is
learned from the
course/assigned
readings.
Criteria
Unacceptable
0 points
Emerging (F
through D
Range)
13 points
Satisfactory (C
Range)
15 points
Satisfactory (C
Range)
17 points
Exemplary (A
Range)
20 points
Criterion
Score
Participation
in
Discussion
/ 20No responses to
other classmates in
this discussion forum
May include one or
more of the
following:
*Comments to only
one other student’s
post.
*Comments are not
substantive, such as
Comments to two or
more classmates’ initial
posts but only on one
day of the week.
Comments are
substantive, meaning
they reflect and expand
Comments to two or
more classmates’ initial
posts on more than one
day. Comments are
substantive, meaning
they reflect and expand
on what the other
student wrote.
Comments to two or
more classmates’ initial
posts and to the
instructor’s comment (if
applicable) on two or
more days. Responses
demonstrate an analysis
of peers’ comments,
1/12/2021 Rubric Assessment – MHA5030-Current Economics in Healthcare SU01 – South University
https://myclasses.southuniversity.edu/d2l/lms/competencies/rubric/rubrics_assessment_results.d2l?ou=74312&evalObjectId=359327&evalObjectType=5&userId=4901&groupId=0&rubricId=29&d2l_bod… 2/3
Total / 80
Overall Score
Writing
Mechanics
(Spelling,
Grammar,
APA) and
Information
Literacy
/ 20
just one line or
saying, “Good job” or
“I agree.
*Comments are off
topic.
on what the other
student wrote.
building on previous
posts. Comments extend
and deepen meaningful
conversation and may
include a follow-up
question.
No postings for
which to evaluate
language and
grammar
Numerous issues in
any of the following:
grammar, mechanics,
spelling, use of slang,
and incomplete or
missing APA
citations and
references. If
required for the
assignment, did not
use course, text,
and/or outside
readings (where
relevant) to support
work.
Some spelling,
grammatical, and/or
structural errors. Some
errors in APA
formatting (citations
and references). If
required for the
assignment, utilizes
sources to support
work for initial post but
not
comments to other
students. Sources
include course/text
readings but outside
sources (when relevant)
include non-
academic/authoritative,
such as Wikis and .com
resources.
Minor errors in grammar,
mechanics, or spelling in
the initial posting. Minor
errors in APA formatting
(citations and references).
If required for the
assignment, utilizes
sources to support work
for both the initial post
and some of the
comments to other
students. Sources include
course and text readings
as well as outside sources
(when
relevant) that are
academic and
authoritative (e.g., journal
articles, other text books,
.gov web sites,
professional organization
web sites).
Minor to no errors in
grammar, mechanics, or
spelling in both the initial
post and comments to
others. APA formatting is
correct. If required for
the assignment, utilizes
sources to support work
for both the initial post
and the comments to
other students. Sources
include course and text
readings as well as
outside sources (when
relevant) that are
academic and
authoritative (e.g.,
journal articles, other
text books, .gov web
sites, professional
organization web sites).
1/12/2021 Rubric Assessment – MHA5030-Current Economics in Healthcare SU01 – South University
https://myclasses.southuniversity.edu/d2l/lms/competencies/rubric/rubrics_assessment_results.d2l?ou=74312&evalObjectId=359327&evalObjectType=5&userId=4901&groupId=0&rubricId=29&d2l_bod… 3/3
Close
Unacceptable
0 points
minimum
Emerging (F through D
Range)
1 point minimum
Satisfactory (C
Range)
54 points minimum
Above Average (B
Range)
62 points minimum
Exemplary (A
Range)
70 points minimum
MHA5030 Week 1 Project Instructions
Introduction
The Affordable Care Act of 2010 is perhaps the largest act passed by the government in regard to healthcare. Its impact is financially in the trillions of dollars and is designed to improve the health of millions of residents of the United States.
There has been and continues to be much controversy about the scope of the act and how it is financed. For this project, explore the economic theory of the government in regard to the act and apply the concepts of microeconomics to support your assertions.
Tasks:
· Discuss the use of economic theory by the government in creation of the Affordable Care Act of 2010.
· Use microeconomics as the basis for analysis and describe areas where the theory agrees or disagrees with the act.
Submission Details:
· The project should be 500 words or more and contain at least three references from peer-reviewed articles written in a Microsoft Word document and saved as SU_MHA5030_ W1_Project_LastName_FirstName
· By the due date assigned, submit it to the Submissions Area.
· Cite any sources you use in APA format on a separate page.
TEXTBOOK INFORMATION
Rice, T. (2015). The Economics of Health Reconsidered. [VitalSource Bookshelf]. Retrieved from
https://bookshelf.vitalsource.com/#/books/9781567937237/
1/12/2021 Rubric Assessment – MHA5030-Current Economics in Healthcare SU01 – South University
https://myclasses.southuniversity.edu/d2l/lms/competencies/rubric/rubrics_assessment_results.d2l?ou=74312&evalObjectId=363098&evalObjectType=1&userId=4901&viewTypeId=3&rubricId=218315&… 1/3
Criteria
No Submission
0 points
Emerging (F
through D
Range) (1-10)
10 points
Satisfactory (C
Range) (11-12)
12 points
Proficient (B
Range)
13 points
Exemplary (A
Range) (14-15)
15 points
Criterion
Score
Researched
the
changes needed to
the organization
structure i.e.
reporting
structures,
information
and
communication
structures, HR
management
policies, locations
and facilities etc.
/ 15Student did not
submit
assignment
Work minimally
meets
assignment
expectations. No
purpose
statement is
provided.
Assignment
meets some
expectations
with minimal
depth and
breath.
Purpose
statement is
vague.
Assignment
meets most of
expectations
with all
components
being addressed
in good depth
and breadth.
Purpose
statement is
present and
appropriate for
the
assignment.
Assignment
meets all
expectations
with exceptional
depth and
breath. A
comprehensive
purpose
statement
delineates all
requirements of
the assignment.
Criteria
No Submission
0 points
Emerging (F
through D
Range) (1-10)
10 points
Satisfactory (C
Range) (11-12)
12 points
Proficient (B
Range)
13 points
Exemplary (A Range)
(14-15)
15 points
Criterion
Score
Integrates and
understands
assignments
concepts and
topics.
/ 15Student did not
submit
assignment
Shows some
degree of
understanding of
assignment
concepts.
Demonstrates a
clear
understanding of
assignment
concepts.
Demonstrates the
ability to evaluate
and apply key
assignment
concepts.
Demonstrates the
ability to evaluate,
apply and integrate
key assignment
concepts.
Criteria No Submission
0 points
Emerging (F
through D
Satisfactory (C
Range) (11-12)
Proficient (B
Range)
Exemplary (A Range)
(14-15)
Criterion
Score
1/12/2021 Rubric Assessment – MHA5030-Current Economics in Healthcare SU01 – South University
https://myclasses.southuniversity.edu/d2l/lms/competencies/rubric/rubrics_assessment_results.d2l?ou=74312&evalObjectId=363098&evalObjectType=1&userId=4901&viewTypeId=3&rubricId=218315&… 2/3
Total / 50
Range) (1-10)
10 points
12 points 13 points 15 points
Synthesizes,
analyses,
and
evaluates
resources
to apply
concepts in
the
assignment.
/ 15Student did not
submit
assignment
Does not
interpret, apply,
and synthesize
concepts, and/or
strategies.
Summarizes
information
gleaned from
sources to support
major points, but
does not
synthesize.
Provides minimal
justification to
support major
topics. Uses 1
credible resource
in the assignment.
Synthesizes and
justifies (defends,
explains, validates,
confirms)
information
gleaned from
sources to support
major points
presented. Uses a
minimum of 2
credible resources
in the assignment.
Synthesizes and
justifies (defends,
explains, validates,
confirms) information
gleaned from sources
to support major
points presented.
Uses 3 credible
resources for the
assignment, including
at least 1 scholarly
peer-reviewed
resource.
Criteria
No Submission
0 points
Emerging (F
through D Range)
(1-2)
2 points
Satisfactory (C
Range)
3 points
Proficient (B
Range)
4 points
Exemplary (A
Range)
5 points
Criterion
Score
Uses correct
spelling,
grammar,
and professional
vocabulary.
Provides credible
resources using
correct APA
format.
/ 5Student did not
submit
assignment
Contains many (≥
5) grammar,
spelling,
punctuation and
APA errors that
interfere with the
reader’s
understanding.
Contains a few
(3–4) grammar,
spelling,
punctuation and
APA
errors.
Uses correct
grammar,
spelling, and
punctuation with
no errors.
Contains a few
(1–2) APA
format errors.
Uses correct
grammar,
spelling, and
punctuation with
no errors. Uses
correct APA
format with no
errors.
1/12/2021 Rubric Assessment – MHA5030-Current Economics in Healthcare SU01 – South University
https://myclasses.southuniversity.edu/d2l/lms/competencies/rubric/rubrics_assessment_results.d2l?ou=74312&evalObjectId=363098&evalObjectType=1&userId=4901&viewTypeId=3&rubricId=218315&… 3/3
Overall Score
Close
No Submission
0 points
minimum
Emerging (F through D
Range)
1 point minimum
Satisfactory (C
Range)
35 points minimum
Proficient (B
Range)
40 points minimum
Exemplary (A
Range)
45 points minimum
2
MHA5030 CURRENT ECONOMICS IN HEALTHCARE Week 1 LECTURE
Economics of Healthcare
Economic theory holds the view that a free market is superior to a government-regulated system that mandates prices through controls on supply. The Affordable Care Act of 2010 is a mixture of controls and bows to the free market in some ways. It can be argued that the government’s role in healthcare should be to ensure a fair marketplace and ensure access to the market for all. The government does much more than this, as it is also involved in the finance of many other healthcare activities. Over the past few decades, the government has been viewed by some as an inefficient means to provide widespread healthcare in the country.
With markets and the political will of the country moving toward a more traditional, competitive marketplace, it is critical to take a look at how this works in the healthcare marketplace. Central to this discussion is whether the assumptions of the free-market theory are being met.
Additional Materials
From your course textbook, The Economics of Health Reconsidered, read the following chapter:
· Why Should the Economics of Healthcare Be Reconsidered?
From the South University Online Library, read the following articles:
·
Can Efficiency in Health Care Be Left to the Market?
·
Uncertainty and the Welfare Economics of Medical Care
·
Why Is a Systemic View of Health Financing Necessary?
The Traditional Competitive Model
The traditional model of competition relies on two basic principles: The first is that an individual is free to buy or sell as he or she wishes in the marketplace; the second is that when a person stops buying or selling, it is because he or she is satisfied with the market as it exists. This situation is called equilibrium.
Microeconomics focuses mainly on supply and demand and how they affect the price of an item in the marketplace. For example, take nurses in a hospital. If a hospital has 600 beds and there is a 6:1 ratio of patients to nurses, then it takes 100 nurses to care for the patients in the hospital. Since the hospital is operating 24–7, it takes 300 nurses, but to cover vacations and holidays and sick time, it will take at least 500 nurses to fully staff the hospital when it is full. If the average nurse makes $20 an hour and there are a little over 500 nurses available for work in this town, then supply and demand are in equilibrium and we have a price. If there’s a nursing school in this town and 50 nurses graduate next month, what do you suppose happens to the equilibrium? How about if a new hospital opens up nearby that needs several hundred nurses? In the traditional model of competition, these types of issues happen constantly in the marketplace, and exposure to this type of analysis is essential for managers in healthcare.
The second consideration concerns the incremental value of each additional item acquired. For example, if you are in a candy store, the first piece of candy you buy is the one you really want. The fifth piece that you buy will not have the same value as the first had. This is called diminishing marginal utility. A simple supply and demand chart will show us each of these concepts. Notice how the supply-demand curve tapers as the volumes increase in either direction.
A third consideration concerns elasticities of demand. If prices are determined by the demand for a particular item, it is good to consider that there may be substitutes for that item that satisfy purchasers at a lower price. When reviewing the price of an item, it is good to consider whether substitutes are available, whether this is a high-priced item that would encourage a purchaser to seek a lower-priced similar item, and what the time frame is for purchasing this item, which could be a simple drink at a ballgame or a major surgery in the near future.
Additional Materials
From your course textbook, The Economics of Health Reconsidered, read the following chapter:
· The Traditional Competitive Model
From the South University Online Library, read the following article:
·
Acquisition of MRI Equipment by Doctors Drives Up Imaging Use and Spending
From the Internet, read the following articles:
· Neumann, P. J. (2004). Why don’t Americans use cost-effectiveness analysis? American Journal of Managed Care, 10, 308–312. Retrieved from http://www.ajmc.com/journals/issue/2004/2004-05-vol10-n5/May04-1788p308-312
· Rand Corporation. (n.d.). The Health Insurance Experiment: A classic RAND study speaks to the current health care reform debate. Retrieved from http://www.rand.org/content/dam/rand/pubs/research_briefs/2006/RAND_RB9174
Assumptions of the Competitive Market
An Introduction to the Assumptions of the Competitive Market
To address the assumptions of a free-market system in a meaningful way, it is important to review why they are important. In a few words, market failure is the downside to not meeting the assumptions. Market failure is a situation in which the market has reduced allocative efficiency. That means the market uses scarce resources to make the products and provide the services that society demands and desires. When these scarce resources are not used in optimal ways to improve the health of the population, we have market failure.
Market failure will be the subject of much of this course through a look at the assumptions of a free market that create a market that avoids failure. Note that market failure is also a feature of a government-run system, but that is the reason for the current drive to move to a market-driven system, and another story.
Additional Materials
From your course textbook, The Economics of Health Reconsidered, read the following chapter:
· Assumptions Underlying the Competitive Model and Implications for Markets and Government
From the South University Online Library, read the following article:
·
Some Simple Economics of Mandated Benefits
From the Internet, read the following article:
· Posner, R. A. (n.d.). Theories of economic regulation. The Bell Journal of Economics and Management Science, 5(2). Retrieved from pascal.iseg.utl.pt/~carlosfr/ses/Posner