YPC INTERNATIONAL COLLEGE
Programme: BSc. (Hons) E-business Technology and ManagementThe Global Marketplace
Subject Title: The Global Marketplace
Subject Code: 4602TECYPC
Lecturer: Mr Mohanan Nair
YPC ID: BEM 174111
LJMU ID: 824496
Table of content TOC o “1-3” h z u 1.0 Introduction PAGEREF _Toc500006305 h 22.0 Healthcare in United Kingdom PAGEREF _Toc500006306 h 32.1 Health care provided through government action PAGEREF _Toc500006307 h 32.2 Advantage of allocating resources PAGEREF _Toc500006308 h 42.3 Reason of some countries choose market over mechanism PAGEREF _Toc500006309 h 53.0 Definition of inflation PAGEREF _Toc500006310 h 63.1 Problem of inflation PAGEREF _Toc500006311 h 63.2 Method of government control inflation PAGEREF _Toc500006312 h 84.0 Conclusion PAGEREF _Toc500006313 h 105.0 Appendix PAGEREF _Toc500006314 h 11References PAGEREF _Toc500006315 h 0
IntroductionThis report is written to show the UK health care system to distribute the majority of its resources between geographical area in relation to population need, the national health services has been described by writer of the resource allocation. For deeper understanding of the criteria above toward the role of firms, consumers and government in market. Understand market concentration and power related to economic growth, business cycles, inflation, balance of payments, exchange rates, currencies and deficit correction. Overall, the aim of this paper is to demonstrate the complexity of resource allocation in modern health systems, by presenting a brief overview of needs based resource allocation in integrated health systems and inflation problem with the role of government to control the rate of inflation.
Healthcare in United KingdomNational Health Services provides free healthcare to all people which is funded by taxes and national insurance contributions to improve the health outcomes for people in England. NHS ensure that public resource is used effectively to deliver higher standard of care CITATION eur17 l 1033 (europe-cities, 2017). The costs of all local health care are met from within the local PCT’s fixed budget, set by the national ministry CITATION Pet17 l 1033 (Smith, 2017). The NHS putting patient at first priority and pursuits high quality health care and professionalism focused on patient experience CITATION The15 l 1033 (The NHS Constitution, 2015). The NHS is divided into primary care provided by professional, secondary refer to hospital and communities care and tertiary care refer to highly specialized CITATION NHS17 l 1033 (Providers, 2017).
2.1 Health care provided through government actionRole of government intervention in market because of free market resource allocation usually combination influenced by firm, consumers and government. Countries can choose to directly produce goods and services themselves not by the production of private companies CITATION Chr121 l 1033 (Mulhearn, 2012). NHS can be run by private sector the private sector has established and public-private partnership to provide support services CITATION JRS10 l 1033 (Med., 2010). Besides, the countries control market but would not produce goods and services directly. Agricultural production is subsidies paid by European government to farmers, they want transformed to NHSCITATION Chr16 l 1033 (Christopher, 2016). NHS is the most significant public good provide by government and government want every people to share responsibilities of taking care with their own welfare in healthcare. In 2000, government promised will spending in healthcare in order to make NHS better and increase people’s contribution to national insurance on finance NHS CITATION Goh08 l 1033 (Yee, 2008).
2.2 Advantage of allocating resources
All health care systems in the world must design effective allocative mechanisms and available scarce healthcare resources CITATION Aoi10 l 1033 (Brick, 2010). The NHS is largely funded using money from taxation. The government choose how many health professionals to recruit, how many hospitals to build and how long waiting list for treatment can be acceptable. However, government allow private sector to intervention to take up any opportunities for healthcare services CITATION Goh08 l 1033 (Yee, 2008).
Advantage of allocation resources in healthcare introduced policy of privatization within the NHS to reduce the government subsidies, save cost and make NHS more efficient. NHS provide quality service increase government spending aim to offering patients more convenient services by using facilities in private hospital. Besides, NHS can be saving £2 billion of saving by reducing waste of medicines and improving clinical practice can be reinvested to enhance care standards CITATION Smi14 l 1033 (Smith, 2014).
Moreover, in 1999 UK government conducted a new objective for the allocation of resources in the NHS to contribute the reduction in avoidable health inequalities in poor area. NHS are free to use these additional resources to purchase primary and secondary medical or public health services. Policies that use resource allocation to reduce health inequality on the assumption that additional healthcare expenditure to developed population health outcomes. This obviously depends on the quality and effectiveness of care delivery CITATION bmj14 l 1033 (bmj, 2014).
Hence, funds are allocated to primary care that takes account of age, health need, socioeconomic factors and the local cost of providing care. In this case NHS committee’s responsibility to allocate the budget to the new organisation, the Clinical Trials Unit. Therefore, these are opportunities to make more unforeseen changes. Resource allocation to ensure that patients have NHS equivalent access to services and public health funding taking into account indicator of poverty CITATION Nig12 l 1033 (Hawkes, 2012).
2.3 Reason of some countries choose market over mechanismThe healthcare resource allocation system is a significant means of financial health care needs in many countries. The allocation resources based on direct needs is a complex process, recently developed medical allocation resources market mechanism CITATION Gug07 l 1033 (Gugushvili, 2007). Healthcare is the largest sector in developing country, because the cost of health is gradually increase due to medical technology changes and change in population. Healthcare is limited lead to government are unable to provide universal care CITATION Joh98 l 1033 (Wright, 1998). Market power in the purchase of health care inputs can lead to welfare loss and monopolized by insurance companies CITATION Tow12 l 1033 (Town, 2012).
In addition, the private market is more capable of encouraging cheaper and cost-effective decisions CITATION Gug07 l 1033 (Gugushvili, 2007). The market mechanism and its efficient result was reinforced in welfare economics. After World War II, healthcare progress such innovations in antibiotics show that people medical care was valuable. In NHS’ health economic research methods to enhance the supply of health care resources and improve the productivity of resources CITATION And16 l 1033 (Klonschinski, 2016).
Lastly, drugs wastage is a serious cost for NHS making quantification difficult. The department introduced medicines to evaluate patients’ long-term conditions and repeat allocation program allowing patients to collect repeat prescription directly from pharmacists to resolve the wastageCITATION Emi12 l 1033 (Bourn, 2007). Furthermore, it is also acknowledged that the costs of subsidies derived from the social welfare is the simplest way to meet the inability of the poor to provide comprehensive services. The reduced costs will have to be unaffordable to the poor, but at least benefits are enough for them CITATION And16 l 1033 (Klonschinski, 2016).
Definition of inflationInflation is a process of continually rising process. The inflation rate in an economy at which the prices of goods and services on average has risen over a given period of time. Inflation is measured by reference to movement in price index (CPI) CITATION Chr121 l 1033 (Mulhearn, 2012).
Problem of inflation
Inflation can be a biggest issue affecting the consumers when it is unexpected value of money, this may lead economic instability, consumers worry to spend their money. Prices, taxes, interest rates, wages and other nominal values that enter into business, consumer, and government planning decisions can be significantly affected by inflation CITATION web17 l 1033 (web.pedia, 2017). An important fact about business cycle during economic expansion, the inflation rate increase. While during recession inflation rate usually decrease CITATION Hub06 l 1033 (Hubbard, 2006).
Moreover, inflation creates uncertainly this make difficult to differentiate between changes in general price level and relative prices of different goods and services. Consumers and producers dislike inflation because risk hostile and they prefer a predictable and stable life. However, this makes long-term planning extremely difficult. The consequences increased uncertainty by higher rates of inflation make economic agents reluctant to take assumption and investment decision CITATION Chr12 l 1033 (Chris Mulhearn, 2012).
Hyperinflation happened when government starts printing money to pay for spending. As the money supply increases, prices rise because of regular inflation CITATION Kim17 l 1033 (Amadeo, 2017). The extreme distortion of higher inflation-cumulated rates is direct challenge to the integrity of the capitalist system itself. In particular, if value of money continues to rapidly disappear, consumer purchasing power will automatically fall. Eventually, the payments system would collapse and the exchange is coordinated by the exchange process CITATION Chr12 l 1033 (Chris Mulhearn, 2012).
Furthermore, the main issue related to high rates of inflation to damage caused by international competitiveness. The trading partner more enjoy moderate rate of inflation, which can be difficult to deal successfully if the price increase. This means that balance of trade in goods and services for more inflationary economy will weaken and cause trade deficits. If imports surge beyond exports, medium and long term cannot be sustained. CITATION Chr12 l 1033 (Chris Mulhearn, 2012).
Lastly, when inflation is imperfectly anticipated it will cause redistributive problem because of its differing impacts upon different groups of people in society. In financial market, inflation helps borrowers but disciplines lenders, just as inflation drains money of its value, so it reduces the real value of debt. In contrast, the expected real value of the interest paid on debt will be weakened when inflation rises above expectation. Overall then, inflation has the effect of redistributing income from lenders to borrows CITATION Chr12 l 1033 (Chris Mulhearn, 2012).
Method of government control inflationFiscal policy refers the use of taxation and public spending has implications for public sectors budget. Fiscal policy is the effective that allow government to evaluation the impact change in government spending and taxation CITATION col02 l 1033 (bamford, 2002).
According to Friedman argued that inflation is essentially determined by the rate of monetary growth relative to the real output growth and need monetary control to fight inflation CITATION Chr121 l 1033 (Mulhearn, 2012). Government implement power to reduce inflation through monetary contraction. In the short run government may seek to reduced demand-pull inflation by implementing fiscal and monetary policy raise its income taxes, reducing social benefits and cutting government spending are politically unpopular, but often been used CITATION Chr121 l 1033 (Mulhearn, 2012).
Demand-side policy to control demand pull inflation. Fiscal policy involves an increase taxes and reducing government spending to reduce aggregate demand. Moreover, increasing taxes will result in decline in corporate profits, resulting in a reduction in corporate investment and decreasing household’s disposable income. Keynesian economists argue that demand-pull inflation is cause by excess of aggregate demand over aggregate supply. It can be controlled by cutting down public expenditure reduces government demand for goods and servicesCITATION DND11 l 1033 (Dwivedi, 2011).
In addition, monetary policy is set by MPC England’s Bank to manage money to meet specific economic goals CITATION DrA12 l 1033 (Dr. Abata, 2012). Raising interest rates and reducing the money supply can lead to borrowing costs eventually hindering spending. If the target MPC higher than inflation will likely raise interest rates. This will discourage households and firms to borrow, leading fall in consumption and investment CITATION Tej17 l 1033 (Pettinger, 2017). A higher interest rate also leads to higher exchange rate, this helps to reduce the pressure of inflation by making imports cheaper, reduce export demand and increase the incentive for exporters to reduce costsCITATION 201ge l 1033 (Pettinge, 2017)Furthermore, supply side policies to control cost push inflation. Policies aim at improving effective supply of goods and services and increasing long-term competitiveness may help to reduce business costs and thus reduce the rate of inflation. It helps to reduce cost and increase productivity also help the balance of payment. If frim become more competitive then goods will more demand and also increasing export to improving current account deficit CITATION Tej17 l 1033 (Pettinger, 2017).
Lastly, one popular method of controlling inflation is through contractionary monetary policy to reduce inflation which decreasing the money supply by decrease the government bonds and increase interest rate, in order to increase the cost of borrowing which in turn decrease GDP and eradicate inflation CITATION oba15 l 1033 (Jan, 2015). Reducing spending is important during inflation because it helps hold economic growth and the rate of inflation.
ConclusionThis report can be concluded that efficiency to allocating resource is a goal that every health care organisation want to achieve. Economic study fundamentally resource use and can reserve a significant role in health care decision making. Allocating resources in effective way will lead the healthcare operate well and the problem that face by healthcare will ultimately be resolve CITATION RDo01 l 1033 (Scott, 2001). Inflation is a phenomenon thoroughly linked to the economic policy of developed countries and institutions that control and regulate the global economy. It is clear that within the national economy and effectiveness capacity of successive governments to manage the economy through laws and decisions, is the key to the inflexibility and welfare of the peoples. Government play a vital role to control the inflation because without proper way to control the economic problem will lead value currency of countries’ and economic drop.
154432085725000The appendix 1 show that the full healthcare coverage common to advanced countries does not mean that have high quality services on healthcare. Services are the most effective in healthcare CITATION And17 l 1033 (Chipman, 2017).
Appendix 2 shows the inverse trade-off between inflation and unemployment. This image, an economy can either experience 3% unemployment at the cost of 6% of inflation, or increase unemployment to 5% to bring down the inflation levels to 2% CITATION Lum17 l 1033 (Lumen, 2017).
Appendix 3 diagram above show with a tight monetary and fiscal policy, Aggregate Demand shifts from AD1 to AD*, instead of AD2 (a higher rate of inflation). This leads to an equilibrium price level of P* and output Y*, instead of P2 and Y2 CITATION PRA17 l 1033 (AGARWAL, 2017).
Appendix 4 diagram show cost push demand. There is leftward shift in the aggregate supply curve: from AS1 to AS2. This cause the price level rise to P3 and the level of output fall to Y3
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