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As consumers cannot assume that all healthcare professionals and agencies provide quality care, it is important for healthcare consumers, in order to assure that they receive the best possible care, to understand not only what quality healthcare is, but also how to determine if the healthcare they are receiving is quality care.

AHCPR recommends that consumers consult consumer ratings of healthcare professionals before deciding on a provider.

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AHCPR suggests that consumers consult ratings such as the Consumer Assessment of Health Plans which measure how well doctors communicate and the overall satisfaction of patients with the healthcare services provided.

There are also clinical measures, which are technical methods that determine how well healthcare organizations treat and prevent illnesses. By reviewing consumer ratings and by talking to others who have used a particular provider, consumers can determine if particular healthcare professionals will not only address their medical needs, but also their emotional needs as patients.

By familiarizing themselves with both methods, consumers are more likely to receive quality care. Only then a consistent result would come out that would ultimately help the consumer in the long run. The research objective is to formulate a method that juxtaposes the theory of agency in a hospital setting in the context of elasticity principals.

Introduction:

As consumers cannot assume that all healthcare professionals and agencies provide quality care, it is important for healthcare consumers, in order to assure that they receive the best possible care, to understand not only what quality healthcare is, but also how to determine if the healthcare they are receiving is quality care. As quality in healthcare can vary for numerous reasons, it is important that both the consumer and the oversight agencies involved have methods by which to measure the quality of healthcare.

According to the AHCPR, there are several things the consumer can do when seeking healthcare to locate quality care. AHCPR recommends that consumers consult consumer ratings of healthcare professionals before deciding on a provider.

AHCPR suggests that consumers consult ratings such as the Consumer Assessment of Health Plans which measure how well doctors communicate and the overall satisfaction of patients with the healthcare services provided.

There are also clinical measures, which are technical methods that determine how well healthcare organizations treat and prevent illnesses. According to AHCPR, clinical methods also examine issues such as safety, efficiency, timeliness of treatment, and scientific effectiveness of treatment. (Agency for Healthcare Research and Quality, 2006)

Obviously, when consumers seek healthcare, they are putting their health and perhaps their lives in the hands of the healthcare providers; therefore, it is necessary to assure the quality of these agencies. Logically, the best measures of quality should be a combination of both the consumer and the clinical measures. By reviewing consumer ratings and by talking to others who have used a particular provider, consumers can determine if particular healthcare professionals will not only address their medical needs, but also their emotional needs as patients.

However, it is equally as important to examine the ratings provided by the experts in clinical measurement as these examine aspects of medical care that are unfamiliar to the lay person. By familiarizing themselves with both methods, consumers are more likely to receive quality care. Finally, the informed consumer can access the National Health Information Center of the Department of Health and Human Services to view the ratings of healthcare providers and organizations.

Not only does this agency give consumers the ability to view consumer and clinical measurements, but also the opportunity to rate their own providers. Thus a formulation of theory of agency in a hospital setting should be implemented in the context of elasticity principals. Only then a consistent result would come out that would ultimately help the consumer in the long run. (US department of Health and Human Services, 2007)

Background

The theory of agency refers to a situation in which a particular individual (called agent) with technical know-how is allowed to take important decisions on behalf of another individual who is less knowledgeable (called principal).

In a hospital setting the theory of agency often comes into play when a doctor (who is usually more informed regarding medical matters and is therefore the agent) takes crucial, often life altering decisions for their patients (who know less about medicine and are therefore the principal).

In fact as healthcare economics often acknowledges there are perhaps very few other spheres of life outside healthcare where a person of knowledge can similarly transfer the financial and even life related risks on the shoulders of the less knowledgeable principal and yet maintain their own profit margin.

Economists draw our attention to the fact that such a situation creates a chance for supplier induced demand, wherein the doctor (who is also the supplier, of knowledge as well as medical facilities) also creates the demand (be it for tests or medical facilities) and thereby impacts their own earnings.

In financial terms the principal in the above mentioned situation can never milk out a profit from the circumstances he is stuck in, although he may not necessarily have to bear the costs of the facilities advised by the agent (the physician) since a number of insurance companies often take this load of the shoulders of the patient’s. (Kar, 2006) To illustrate the theory of agency as it appears in the hospital setting we will take a close look at a specific case.

Patient X has recently been admitted to the hospital we are dealing with at present. Patient X is 65 and is suffering from lung cancer. Although doctors are reluctant to let his friends and family is hopeful regarding his health they have suggested regular chemotherapy and a series of weekly tests, to help monitor the patient’s condition on a regular basis. The tests have also been ordered in order to help the doctor look further into the nature of the cancerous growth, which they say, is unique and therefore something they have little or no real idea about.

Like most doctors everywhere else physicians in this hospital too insist that the tests be conducted in the hospital’s very own laboratory. Patient X has been living in the hospital for over a month now, how long he will have to live here is something that physician’s are either unwilling to talk about or simply ignorant regarding. (Anand, 2006)

Patient X is being charged $500/day by the hospital. This amount increases obscenely once the charge for the numerous tests conducted regularly and the superbly expensive chemotherapy is added to it.

Despite being unable to pay this amount comfortably Patient X cannot choose to stop his treatment since his demand for medical help is inelastic (see above for definition of inelasticity) and will have to therefore continue living in the hospital and taking the tests his physician advises him to, regardless of how much he’ll have to pay for all of it. (Deb, 2006)

As mentioned before the doctors are not particularly optimistic about Patient X’s life, however despite their doubts they have kept up his treatment and advised more tests.

Many of these and especially the chemotherapy are both physically as well as monetarily taxing. Even if Patient X were to die tomorrow the doctor’s treating him and the hospital he presently resides at will still have to be paid the obscene amount his bill will certainly add up to. (King, 2006)

Reference:

Agency for Healthcare Research and Quality; (2006); A quick look at quality; Retrieved February 26, 2008, from http://www.ahcpr.gov/consumer/qnt/qntlook.htm

Anand, V; (2006); The Process of Thought and Perception in Economics; Auckland:  HDT Ltd.

Berkowitz, L., (2004); Economic Aggression: Its Causes, Consequences, and Control; New Haven and London: Yale University Press

Border, S; (2002); Fire of the Mind; Wellington: National Book Trust

Cook, V. I; (1998); Being Personal: The Family Showcase; Albany: Large Alliance Publishers;

Deb, J; (2006); Introduction to Health Economics; Bloemfontein: ABP Ltd

Dos, M; (2006); Future of Thought Process: Management Gurus; Christchurch: Alliance Publications

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