Health Care: Economic v. Political Forces

[This post is part of several that are my lay attempts at applying the economic and social interest theories to my assumptions, and pragmatically evaluating the options.]

As GDP increases, medical care will undoubtedly increase as well.  So it’s apt time that we take a look at health care reform.

What motivates government?  Why do we have the health policies that we have? How likely is it that we’ll have a different health policy in the future?

I think these are points that we don’t consider everyday, and understanding how we got to where we are today is important.  And part of understanding history is knowing about the factors that fall under the two largest forces driving the debate  – economic and political interests.

Economic Forces include:

• Demands for care.  The demands are dependent on prices of services, insurance costs and the economy.
• Costs for providing care.  For example, as technology increases, costs will increase too.
• Market structure. Competitive markets = lower price increases and more choices. Antitrust policy is important here.
• Incentives. Depending on the types of economic incentives available, all of the above are affected.

Political Forces also include:

• Demands for care.
• Costs for providing care.
• Market structure.
• Incentives.

In an economic market, companies compete against other similar companies.  Under political influence, these competitors become allies because collectively companies want to make sure that public policy does not increase costs. These public policies affects both finance and regulations.