Essay about Health Economics - 741 Words

MEMORANDUM To: Professor Sherry Glied From: Shraddha Kothari Re: Using Grossman’s model to evaluate how NYC’s new sick leave law will affect emergency room use Date: February 10, 2015 This memorandum will use Grossman’s model of production of health to evaluate how New York City’s new sick leave law will affect emergency room use. Grossman’s model states that a person utility is based on health (H) and other non-health related goods (Z) that the person consumes. The production possibility frontier for Grossman model shows the tradeoff between home good production (Z) and health (H). Unlike usual production possibility frontiers, an individual needs an optimal level of H to maximize consumption of Z goods. New York City’s new sick†¦show more content†¦The individual’s health is a stock variable which changes over time. Hence, health decisions in one period not only impact that period but also impact subsequent periods. With paid sick leave, it is easier for an individual can take time off work to recuperate. This has multiple benefits. Firstly, it allows the individual to recuperate before health levels become extremely low. Extremely low levels of health will result in more ER visits and a longer recovery period. Secondly, if the individual has an infectious disease then paid sick leave allows the individual to recover and it prevents the infection from spreading to other people in the organization. Lastly, the improved health (due to recuperation) will increase employee productivity in subsequent periods at work. Hence paid sick leave will reduce ER visits over the course of the individual’s life. 3) A study shows that availability of after-hours care by primary physicians reduces emergency room visits. Based on this study we can infer that it is likely that some of these individuals are forced to visit emergency rooms due the unavailability of after-hours care by primary physicians and lack of paid sick leave to reach the primary care physician during regular work hours. Paid sick leave will reduce the emergency room visits as employees can now contact their primary care physicians during work hours. 4) With the new paid sick leave law, anShow MoreRelatedEconomics and Health Care1520 Words   |  7 Pagesturn leads to market failure. * Third-party payers is another reason because inefficiencies arise as a result of consumers not spending their own money. The majority of the expenses are paid by third parties, primarily health insurance companies and the government since health costs are usually too expensive for the middle to lower class who are usually more likely to become ill. 1B. In the real world, a perfectly competitive market rarely exists. One or more assumptions are violated in mostRead MoreEssay Health Economics2827 Words   |  12 Pagesforms of economic evaluation which are useful in health economics for comparing costs and allocating resources. Health economics is widely relevant to governments and the health sector in implementation of new policy, as it concerns the allocation of resources in the context of a limited budget, or scarcity. Economic evaluation is a potential tool for setting priorities in health, though it is only one of many potential criteria, including overall budget and public attitudes and wants. Economic evaluationRead MoreHealth Economics1683 Words   |  7 PagesHSA 500 Health Services Organization Janeen Whiteside-Harris Professor: Dr. Maryjane Granoff October 24, 2012 United States (U.S.) Health Care System (HCS) Requirements are to write a three to four page paper covering the following: 1. 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