Posted by Melissa on .
identify and describe three causes for the increasing costs of health care. What impact does each of these causes have on socitey?
Health care -
Reasons why the cost of health care raises faster than most everything else includes:
1) aging population.
2) Increasing sophistication of medical equipment,
3) Large number of people with uncompensated care (i.e., people without insurance getting care and not being able to pay for it. The uncompensated costs are passed on to others with insurance.
4) Rising medical malpractice insurance,
5) Possibly slower growth in productivity by medical providers,
6) Unlike other markets, prices do not drive the demand for medical services. Most medical services are covered by insurance; so the quantity of medical services demanded are not affected by price changes.
7) even if medical markets were just like other markets and quantity was driven by price, I suspect that the demand for medical services would be highly inelastic.
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