Application: Implications of Regulation in Health Care

Many economists argue that health care in the United States could not operate well according to a purely competitive model and that some kind of government regulation of the industry is necessary. A crucial question, then, is how best to balance and blend competition and regulation. Certain areas of the U.S. health care industry may operate better under competition, and others may need more regulation. In addition to regulatory functions, the government also is involved in other important ways—financing medical care services for specific populations, for instance. To prepare for this Application: Review the list of submarkets below, and select one to focus on for this Application. (You may not select the same submarket you analyzed during previous weeks of this course.) Physician services Nursing services Medical technician services Physical facilities (e.g., hospitals, specialized, imaging, long-term care) Medical technology Pharmaceuticals Review the Learning Resources (from this week and previous weeks) on the economic nature of this submarket. Do additional research to assess regulation and/or government involvement in this submarket. What are the pros and cons of regulation or government involvement in this area? Identify particular problems that have arisen as a result of regulation or lack thereof. Think through specific ways of improving the submarket by increasing, decreasing, or otherwise modifying regulation and/or government involvement. Consider possible positive and negative consequences of these changes, such as potential effects on pricing, workforce issues, quality and safety, and public welfare. Write a 2- to 3-page paper in which you address the following: Describe your selected submarket in terms of how regulated it currently is. Do you think this current state of regulation is appropriate? Why or why not? What problems have arisen because of regulation or the lack thereof? What specific proposals do you have to increase, decrease, or otherwise modify regulation or government involvement within this submarket? What should the government’s role be in addressing issues of concern? What would be some potential consequences of these solutions? Who would most benefit from this change? Who might suffer negative consequences? Your written assignment must follow APA guidelines. Be sure to support