Health Care Economics
Mechanics usually have better information about how to fix automobiles than their customers. What sort of problems does this advantage create?
Mechanics are trained to diagnose a specific problem quickly and efficiently for customers. A problem that this advantage would create is information asymmetry. According to our text, “Information asymmetry occurs when one party in a transaction has less information than the other party” (Lee, 2009, p. 6). In this situation, the mechanic has an opportunity to take advantage of the customer that lacks information about automobile repairs. However, if the consumer recognizes that he/she is not receiving the adequate amount of information, they can become skeptical of the mechanic and decline repair services that have been suggested to he/she.
Overall, as a manager I must remember that consumers are usually overwhelmed with information that is provided to them. Therefore, ensuring that gathered facts are given to patient’s to decrease confusion or deceitful behavior about their treatment plans or cost for services are very important.
Identify a product that is one organization’s output and another organization’s input.
According to our text, “Healthcare products are inputs into health and outputs of the healthcare sector. Therefore, the input view, emphasizes healthcare’s contribution to the public’s well-being, and the output view, emphasizes goods and services the healthcare sector produces” (Lee, 2009, pp.17-18). For example, a surgical tool is an input into a surgery and an output of a surgical tool company. Overall, the surgical tool itself could be considered an output of the surgical team or an input into the health of the patient.
Similarly, money is one critical element of input for business organizations, which may take the form of a bank loan or the sale of ownership shares. Consequently, a bank loan (input) provides money to purchase raw…