Hi, could someone give me a rough idea on how many marks this essay would get?? ASWatch
my teacher appears to be marking very harshly and my essay although very similar to my friends received a much lower mark.
How many marks out of 25 would you give this roughly ?
Should the provision of healthcare be left to the market forces?
I did 2 diagrams... I thought this essay would score highly.
Market forces is when demand,supply and the price mechanism dictate the price and quantity sold of each good without government intervention.When judging market forces we can refer to the the micro 3- Productive efficiency, equity and allocative efficiency. Leaving the provision of healthcare to the market forces can arguably lead to greater productive efficiency.Productive efficiency can be achieved when the good/service is being produced at the lowest average cost.If there is lots of competition in the market or an ‘oligopoly’ (fewer substitutes and often fairer on consumers) then the firms will aim to be ‘dynamically’ productive efficient thus they will increase spending on research and development with the incentive of reducing their average cost (AC1-2).
Through evaluation, it could be argued that this argument is a strong one in terms of productivity.If firms increase spending on R&D, it is likely they will see a positive correlation with an increase in the quality of their resources.As a result of this, firms will be operating more productively.Ergo, a reduction in AC would take place making the firm more competitive.Yet, through method of contradiction, it could be argued that some healthcare firms, although may have an incentive to be productive efficient, may not have the financial stability to allow them to do this.Therefore, not all healthcare firms would be able to compete and this could lead to a monopolistic market and thus government provision of healthcare may avoid this issue.
Furthermore, an advantage of leaving the provision of healthcare to the market forces is that it can be equitable for the consumers. ‘Equity’ can be achieved when the costs and benefits of a system are equally shared amongst different people e.g consumers.If there is lots of competition within the market, supply for healthcare is likely to be price elastic thus firms are likely to drive down prices (p1 to p2) in order to remain competitive.
It could be concluded that this argument hold strength because not only would this be equitable for consumers it may also be equitable for workers and firm owners.Due to high competition, successful firms will receive higher profit/income thus more productive workers will be payed higher than less productive ones.This inequality is unfair and thus on terms of equity it could be concluded that leaving healthcare to the market forces would be an advantage.Yet, although a reduction in price will have taken, some people will still not be able to afford the price.As a result of this not everyone will be able to demand healthcare.Ergo, in relation to the question it could be concluded that government provision of healthcare would be fairer on the whole of society inc minorities.
Moreover, it is assumed that leaving the provision of good/services inc healthcare would mean that ‘Allocative Efficiency’ would not be achieved.Allocative efficiency is achieved by producing the best quantity for society that maximises ‘welfare’.We can measure the level of welfare by subtracting the social costs (private costs + external costs) from the social benefits (private benefits + social benefits).In terms of resources, it is assumed that an efficient allocation of resources has taken place.Healthcare, is often referred to as being a ‘merit good’ which means that it offer large external benefits to society and this is where the main problem of offering healthcare through the market forces is raised.It is assumed that the market forces’ main aim is profit maximisation thus only considering the private costs and benefits whilst excluding external factors such as the external costs and benefits.Ergo, this leads to a market failure as the firm will be achieving ‘allocative inefficiency’ as they are ignoring the social factors.Therefore, it could be argued that leaving it to the government would be the most appropriate solution as they consider both private and external factors.
Through evaluation, it could be concluded that this argument is a strong one because if a misallocation of resources took place due to allocative inefficiency being achieved, government may deem it necessary to intervene within the market, thus a maximisation of welfare is likely to take place as they consider both the social and the private costs and benefits.However, if there are no external benefits then the total social benefit is equal to the total private benefit.This means that by firms/consumers considering the private costs and benefits they are considering the social costs and benefits of the project thus maximising welfare.
My final conclusion is that leaving the provision of healthcare to the market forces would not be a good policy as the strongest argument is that it would be unequitable for the minority with whom wouldn't be able to demand healthcare due to the prices still being too high. Thus, government intervention would be needed because healthcare is a merit good which everyone should have a right to have not just those who are financially better off.Therefore, i believe the disadvantages of leaving the provision of healthcare to the market forces outweigh the disadvantages.However some people may disagree with the valid of my conclusion because the government can provide welfare and benefit to those less financially stable thus minimising the issue of minorities not being able to demand healthcare.Furthermore, new data and evidence may change this judgement.