Quality and their healthcare provides higher life expectancies,

Quality and efficiency are critical aspects of successful healthcare delivery.

Complete this lesson to learn more about the healthcare economics of the United States and how the U.S. compares to other countries around the world.

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Economics & Healthcare

Always troubled with the sight of blood but inspired by his parents in the medical field, Jay is pursuing a degree in healthcare economics. Economics, or the study of how goods and services are created, provided, and delivered, continues to be a topic of interesting family discussions.When applied to healthcare services around the world, Jay begins to learn of the disproportionate and uneven level of quality regarding healthcare in class.

For his next group project, his team must identify a foreign country similar to the United States and compare the two in terms of the quality and efficiency of their healthcare.

Healthcare Economics

Jay understands healthcare economics to be the study of the creation, delivery, and distribution of healthcare services and medical supplies. To better understand his assigned project, he looks deeper into the meaning of quality and health efficiency as defined by the Institute of Medicine, a national foundation focused on improving healthcare. He finds the following definitions useful:

  • Quality of healthcare refers to the efforts and results impacting care or health outcomes; for example, decreased lung cancer rates related to increased smoking cessation education efforts
  • Health efficiency refers to using all available health resources cautiously and wisely to promote a level of health

As Jay learns from his parents, the importance of healthcare economics, or the value of care services and supplies, is becoming increasingly more important to individuals. This means that consumers, or healthcare customers, are expecting to get high quality services and supplies at an affordable price.

Healthcare Within the U.S.

Consumer expectations are rapidly changing, along with legislation aimed at advancing access to care, enabling more people to benefit from healthcare within the United States. As his parents have served as traveling missionaries in different parts of the world, Jay frequently hears them discussing the fact that if the U.S. considered more efficient ways to maximize available resources, the quality of care would increase while keeping costs stable.To best compare the U.

S. healthcare system with other similarly developed countries, Jay consults reputable government sources. To his surprise, he finds that despite the U.S.’s positive reputation as an economic powerhouse, his country ranks low in terms of healthcare quality and efficiency, despite the shockingly high cost of care.

Countries Similar to the U.


Jay determines that comparing similarly developed and industrialized countries will effectively gauge the status of the U.S. healthcare system. The team chooses to compare the U.

S. with Canada and Singapore to illustrate key differences.


Although Canada is on the northern U.S.

border, the differences in healthcare between the two countries are profound. In terms of gross national income per capita, or income per person, Canada falls short of the U.S., meaning individual Americans are making an average of $10,000 more per year. However, Canadians spend close to 30% less on healthcare and have higher life expectancies and resource utilization rates. Jay is impressed to find that Canada accomplishes this high level of quality, all with less physicians and less spending when compared with the U.S.


Although Singapore is so far away from the United States, its recent advancement and economic growth requires the team’s attention – and they’re impressed with their findings. On average, a worker in Singapore now makes over $20,000 more per year in terms of gross national income per capita than the average American worker, and their healthcare provides higher life expectancies, utilization rates, and lowered health risks for substantially less than the Unites States. Singapore manages their high quality of care for, on average, less than 3% of their income, compared to the U.

S.’s average rate of around 16%.Due to the critical nature of good healthcare, avoiding good principles of healthcare economics can have serious long-term consequences, including:

  • High costs of individual and population health
  • Strain on resources
  • Imbalanced supply and demand
  • Limited access to goods and services

Jay looks forward to exposing the rest of his class to this important information. Although Jay is shocked to learn of his country’s status in terms of healthcare economics, he’s hopeful that he can educate others to help make positive changes.

Lesson Summary

to recap, even though the U.

S. has over twice as many practicing physicians and healthcare providers, three times the number of acute inpatient hospital beds, and spends three times the money of other similar countries, it ranks comparatively low in terms of healthcare quality and efficiency. Healthcare consumers have high expectations and desire quality care at an affordable cost. In terms of healthcare economics, or the system of creation, delivery, and distribution of health services and medical supplies, efficiency of services and goods must be optimized to prevent waste and overspending. If changes aren’t made to curb spending and increase efficiency, the U.

S. may potentially fall behind in other areas of economic growth while it continues to spend so much gross national income on healthcare.


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