Healthcare Concepts, Research Paper Example


Healthcare and economics have a corollary function in determining health of an individual, group and nation.  The healthier the group of individuals the less costs is incurred for healthcare.  This drives behavior of consumers to either take preventative measures or invest in their healthcare options to fortify their financial needs to fund future healthcare actions.  The rise and fall for the demand of health care is a pull function related to the demand for health of the individual or group.  The investment in health care is looking for a return on investment on the overall health of the individual that could yield in more productivity, less downtime due to illness and a standard for the quality of life.  The investment in healthcare encapsulates more than the health insurance purchased through the employee’s organization but it is also the allotments of limited resources to maintain or increase the person’s physical, mental and spiritual well-being.  A healthier individual who is more productive in their workplace environment could also benefit financially on their investment through greater opportunities and advancements.  This economic view of demand on healthcare also points out an interesting factor of health care economics in which the demand is derived from an outside need but the funding portion of healthcare is used to produce health as well as consumed by the level of health.

Healthcare is also viewed as a consumer good in which the healthcare options are viewed, reviewed and funded by the consumer.  The choices in which the product is selected revolve around cost, risk aversion and quality.  The healthcare companies offering options to prevent, treat or enhance factors impacting healthcare are driven by the consumer’s choices and product selections. Just as consumers search for new appliances and homes, these same consumers are driving the market to provide consumer driven choices in healthcare.  On the other side healthcare is seen as a public good.  This is where healthcare provides a view into a dynamic economic model with variables that are not necessarily seen in other models.  There are multiple factors that play into the dynamics of healthcare which separates the consumer good and the public good.  Health economics has extensive and integral influence and tactical interactions with the government, large barriers to enter the market for new companies, multiple parties with disparate interest and lack of visibility into the cost or quality of the healthcare services.  The interactions of the government lean toward a public good while the focus on driving cost out and providing only what the consumer wants or perceives what they want is consumer based healthcare.


The investment in healthcare plays a role on multiple different levels.  The macro level of healthcare investment resides on the government which wants to promote health throughout their country in order to create a quality of life that is increasing year over year.  This also promotes productivity, which will be a common theme among investments of all groups, within the economy of the nation (Herzlinger, 2004).  Healthier people can produce more goods and services which allow for the growth of a nation and increased opportunities for prosperity.  The investment in healthcare ranges on the macro level drastically.  In some countries a fully funded and supported healthcare system is present and on the other side of the matrix there are the countries that cannot afford nor have the operational, technical or logistical resources to provide the basic necessities of healthcare so they must rely on organization within their borders or from outside entities to support their healthcare needs.  The return on investment on this level is to ultimately increase the quality of life standards and create an environment for productivity that is not hindered by the health of the people.

As the view becomes more granular and focuses on the organizations and the individual interacting in the provision, purchase and utilization of healthcare options it becomes investments both short-term and long-term.  The organization providing the healthcare options focuses on providing the core options needed by the individual without allocating too many resources on this function.  The purpose of limiting the resources used is based in the core operating model of the organization.  Healthcare is an overhead cost that directly impacts the amount of limited resources that can be invested in other areas of the business.  The move toward preventative healthcare options is seen as a way to mitigate the larger costs of healthcare costs for larger and more complex issues.  This type of investment is risk mitigation on large expenditures (Cooper, Grey, Raymond, & Walker, 2005).  The individual is driving toward an investment in overall quality of life and the potential for increased earning capacity in the future.  By staying healthy the individual will experience less downtime due to illness and a higher rate of recovery for the instances in which they do fall victim to an illness or accident.  The investment by the individual drives one of the key points that is molding healthcare options and that is the consumer driven healthcare options in which the consumer knows what they want and does not want to expend their resources on services or goods that may not be utilized in their healthcare options.

Consumer and Public Goods

Healthcare is seen as both a consumer and public good but they both have disparate definitions.  The consumer based healthcare choices revolves around the allocation of the limited resources to obtain exactly what the consumer needs and nothing that they do not.  This type of healthcare economic choice puts more pressure on the consumer to understand their healthcare needs and options but it also drives healthcare provides to increase transparency to their services and better allocate their costs (Borislow & Gaunya, 2009).  This forces the pressure to not place the burdens on those selecting and paying for healthcare as opposed to those that are relying on the public good aspect and utilizing the healthcare but not necessarily paying the premiums associated with those services.

The consumer goods creates a dynamic in the market that shifts the responsibilities but also creates a higher need for the consumer to understand what they are purchasing upfront as opposed to haggling with the insurance companies after the fact regarding cost and services provided.  There is also a focus on shifting the economic burden from the reactive healthcare options to a more preventative and proactive approach to overall health.  This shift in demand also plays into the role of what options are chosen by the consumer.

The public good is viewed as a healthcare service that is provisioned by the macro-economic entity such as the government to intervene and allocate the healthcare options.  The public good of healthcare promotes the equal distribution of healthcare opportunities in an effort to raise the entire communities’ quality of life and not just those that can afford the high quality or preventative measures to eliminate the risks of detrimental health factors.

Healthcare is an investment by multiple levels of the economic environment ranging from the government down to the individual using the healthcare options.  The investments range from prevention to reactive measures for health maintenance and support.  Executing the consumption and utilization is seen as a consumer good but also as a public good.  The unique mixture of both consumer driven choices with that of a public service creates an economic model that experiences variables that are not necessarily experienced in other areas.


Borislow, J. & Gaunya, M. (2009). Bend the healthcare trend: how consumer-driven health and wellness plans lower insurance costs. (1st ed.). Methuen, MA: Strategic Vision Publishing, LLC.

Cooper, D. F., Grey, S., Raymond, G., & Walker, P. (2005). Project risk management guidelines, managing risk in large projects and complex procurements. John Wiley & Sons

Herzlinger, R. (2004). Consumer-driven health care: implications for providers, payers, and policymakers. (1st ed.). Indianapolis, IN: John Wiley & Sons.