Opportunity Cost in Healthcare
The health of an individual is a critical issue that requires attention and investment. Due to the scarcity of resources and time, people lack better understanding of the need to have regular check-ups. The productivity and lifespan of individuals require close monitoring to prevent massive financial losses. The opportunity cost in health helps in understanding the various factors in life and the different ways to improve lifestyle (Spiller, 2011).
The economists consider opportunity cost as a fundamental aspect that guides in understanding and analyzing cost effectiveness in achieving objectives. In the healthcare sector, the opportunity cost is evident in assessing the benefits obtained for obtaining medical attention versus the money that a person could spend on an alternative action (Palmer & Raftery, 1999). The financial differences are clearly illustrated when comparing the limited resources and the time they take to acquire services to the duration they incur to raise funds. The decision on an option has its cost impacts thus the people aim at using the best alternative and save time.
The opportunity cost of health care incorporates the hidden costs such as the time for waiting, traveling and meeting a doctor, and the monetary charges incurred versus the revenue that one can make within that period. Therefore, the care benefits are compared to income ratio to make a decision. The cost of acquiring healthcare services may not be same, and the duration may vary depending on the region, distance, and origin or financial class. The value of 1.1 billion hour spent seeking medical services is equivalent to 52 billion dollars thus hourly rate is 47.27 dollars per hour (Miller, 2017). However, the estimated duration of the medical visit is average 121 minutes. Therefore, the cost per visit is approximately 47 dollars while the income of a person forgone is 43 dollars thus it’s expensive to acquire healthcare services hourly compared to income ratio. The difference is 4 dollars per hour making it costly to obtain medical services and the opportunity cost will be 86 dollars in two hours.
Miller, J. (2017). Paying for health care with time. Harvard Gazette. Retrieved from https://news.harvard.edu/gazette/story/2015/10/paying-for-health-care-with-time/
Palmer, S. & Raftery, J. (1999). Economics notes: Opportunity cost. BMJ, 318(7197), 1551-1552. http://dx.doi.org/10.1136/bmj.318.7197.1551
Spiller, S. (2011). Opportunity cost consideration. Journal of Consumer Research, 38(4), 595-610. http://dx.doi.org/10.1086/660045