Healthcare Economics

Course Objectives for Assignment:

• Explain the basic terminologies of healthcare economics and analyze how healthcare supply and healthcare demand work to construct a model of the fundamental economic factors that impact the delivery of healthcare.
• Assess the key economic drivers that impact the delivery of healthcare in order to inform effective future decision-making.

Assume that you just started working as a Health Service Manager within one of the following healthcare industries. First,

(A) choose a healthcare entity below to discuss the questions that follow:

1. Ambulatory Surgery center
2. Pharmacy
3. Physician’s Office
4. Cosmetic Surgery Center
5. Laser Eye Center
6. Dental Office

(B) Your boss has asked you to write a memo (not an essay) detailing how the demand for your products or services may be impacted by various economic factors.

In writing your memo, be sure to include your name and in the subject line identify the health care entity you chose above. For your boss to easily review your memo, please include section headers corresponding to the sections of the questions in the assignment instructions below.

Answer the following questions relying primarily on the course readings and other resource material presented in this class (do not use or cite any other sources).

1. Describe a product or service your company provides to your patients.
2. Evaluate the demand curve for your product and the relationship between the price of your service/product and the quantity demanded. In this evaluation, be sure to identify:

1. 1. whether demand is sensitive (e.g. price elastic) or less sensitive (e.g. price inelastic) to changes in the price.
   2. evaluate why this elasticity of demand relationship might occur.
   3. include a discussion of how the existence of health insurance would impact the elasticity of demand.

1. Define “substitute” goods and identify potential “substitutes” for your product/service. Evaluate how the existence of such substitutes may impact the demand for your product/service.
2. Define “complement” goods and identify potential complements for your product/service. Evaluate how does the existence of such complement goods may impact the demand for your product/service.
3. Identify and discuss at least two economic factors that might lead to a shift in the demand curve for your product/service?