U.S. health care system

Topics: Moral hazard, Insurance, Free will Pages: 2 (508 words) Published: May 12, 2014
The United States
It is desirable to learn lessons from abroad, but well noted that it would be impossible to simply transfer policies from one country to the other. There is no such thing as a perfect finance model. There are many calls to move towards contemporary American free insurance and service market system6. It is argued that if there is no competition, the consumer will continue to be poorly served and second-class treatment will remain. However, many responses listed out the sophisticated problems that have arisen from the American healthcare system. Patient Choice One of the important justifications of the system in the US is greater patient choice. Under the concept of “money following the patient”, patients would not be constrained by cost considerations when choosing services between private sector providers and public sector providers6. Americans are free in the selection of doctors, standards of services as well as service providers. From the experience of the US, voluntary private insurance permits doctors to offer more expensive services beyond the basic provision. Patients are required to pay out-of-pocket for any extra charges. This kind of rigid payment system actually constrains rather than expands freedom of choice of patients6. Patient choice is expensive and thus is more likely to be restricted, especially when there is cost containment. It is the situation in the US that one of the main functions of HMOs was to introduce a gate-keeping role for GPs and limit the wide choices of specialists inherent in the traditional insurance mechanism11. Efficiency With free choice and free market, people have the incentive for enjoying maximum services and claiming full benefits offered by the insurance scheme. It leads to a demand side moral hazard problem for over-consumption of services which causes market inefficiency12. Under the insurance market, hospitals are economic agents that aim at maximizing profits and it will create the...
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