1.
Knowledge is power, especially when directors and managers have the most complete and accurate data. Perfect information is making decisions when the buyer manages all the data available of the product provided by the seller. So imperfect information will be the opposite; lack of knowledge of the service and product and not enough data (Cox & Swarthout, 2006.)
How accurate do you think this data is? And would it tailor his need? Is the health insurance company getting a positive outcome out of this situation? Healthcare companies are aware of these obstacles, and hoping for honesty is all they can do because they cannot push people to tell them the truth. It affects them significantly because they have to work in top of those things to bring better outcomes and establish a much more trusting patient-health personnel relationship.
Thanks
Reference
Cox, J., & Swarthout, T. (2006). Imperfect Information. Retrieved from http://www.econport.org/content/handbook/Imperfect-Information.html
2.
What is the information imperfection in health care and how does it impact the efficiency of the market?
Health care is considered an imperfect market, because not enough information is given to know the outcomes. A buyer or a seller in most markets know many details, for example, for it to be perfect, insurance providers would have a lot of information on the status of their client's health and respond according to their health knowing the expected costs. However, often the opposite is true and there is little information known. The party that may have the correct information is the one that benefits, the market however can suffer or even fail. (Pragya)
The other side of the coin is the lack of information on the part of the patient. What treatments are there available? Lack of knowledge can dissuade some. Without enough information a patient cannot choose the best treatment and the outcome of this lack of knowledge can be possibly misinformation and maltreatment leading to more potential hazards in the market place. Often, when people are unsure of things they do nothing at all. The market is confusing and unsure, and it is a vicious cycle due to the fact that there really needs to be more information on both sides of the aisle, especially though on the side of the health insurance side because this is how markets can be prosperous (Pragya)
Basically, the market is as accurate as the information it has, and since the data from health care is so wishy washy, the market is very imperfect.
Pragya. (n.d.). The Impact of Imperfect Information on Health Insurance Choice, Health Outcomes, and Expenditures of the Elderly. Retrieved July 05, 2019, from https://ashecon.confex.com/ashecon/2019/webprogram/Paper7059.html
3.
This discussion question revolves around having all the necessary information available to make appropriate coverage or treatment decisions. In a successfully implemented system all the information needed would be available for providers and consumers to make appropriate choices. In an information imperfect system however, key information is missing. A great example of this is the approximately 41 million Americans with inadequate healthcare coverage (The Commonwealth Fund, 2017). Some of these individuals may have simply purchased minimal plans due to the individual health mandate, however we now know it was very unsuccessful in driving people to the market place. This means individuals chose healthcare plans based on what they felt was appropriate for their current health conditions. If an aid was provided by the insurance company allowing the individual to input their information and inadequate coverage was recommended, an information imperfect system was utilized in guiding the individual. Had all the necessary information been requested a plan that covered all of the individuals needs and some would have been recommended. This causes a great deal of inefficiency because individuals forgo treatment until symptoms become so bad treatment is required. When they reach this point treatment often is far more difficult, consumes more supplies, and costs much more.
As mentioned above information imperfection can impact treatment, and likely a driving force behind the requirement of Electronic Health Records (HER’s). Between 2009-2013 nearly 30% of all malpractice claims revolved around miscommunication, resulting in a cost of $510 million for the industry (Kern, 2016). Anytime a malpractice complaint is filed the efficiency of the system erodes as the attention to medical services is slightly diverted in dealing with legal matters. Furthermore, failing to communicate properly can increase medical waste and cause unforeseen complications with procedures.
Whether it’s an insurer or medical provider information imperfections within healthcare can be costly and have a negative impact on the efficiency of the industry as a whole.
Kern, C. (2016, February 11). Healthcare Miscommunication Costs 2,000 Lives And $1.7 Billion. Retrieved July 6, 2019, from https://www.healthitoutcomes.com/doc/healthcare-miscommunication-costs-lives-and-billion-0001
The Commonwealth Fund. (2017, October 30). Number of Americans with Inadequate Health Insurance Coverage Rose Sharply in 2016. Retrieved July 6, 2019, from https://www.commonwealthfund.org/publications/newsletter-article/2017/oct/number-americans-inadequate-health-insurance-coverage-rose
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