Question

How is the “product” of health care and the “business” of health care different from other commodities? Do consumers follow the same principles for health care as they do for other purchases? Do normal market forces apply to health care?

Answer 1

Health care business is different from other enterprises. The health care product is ill defined and outcome of care is uncertain as well large segments of the sector are dominated with non profit organizations, payments are also made by third parties and private insurances. Therefore, the product and business of healthcare is different from other commodities.

Consumer do not follow same principles to health care services that they follow to other services and product purchases. This is because of the uncertain nature of the sector with different compensation methods used byt eh consumer.

Standard market forces do not apply to health care. As pooir quality hjospitals do not feel pressure from the patient to enahcne their services but the high quality hospitals ensure better quality practices.