The Cost & Revenue Of Health And The Action Selection Of Health Producers

Health is an important part of human capital, an existence of property. The increase of health stock will enhance the quality of people's lives and career competition, and accelerate the economic growth. In the health production, the government should not be default. The health production is often being processed passively, can't be stopped for less effect. The health production has opportunity cost, is taking more and more resources, which make it worth to research how to allot the resources. The health production has political cost too, for example, falungong is one results of health's political cost.Medical service, drug, nutrition, and fitness are factors of health production. These factors' marginal health product is on decline, this why the output of health production is so less while we put more and more resources into health production. Medical service is a kind of goods of low price elasticity of demand. Some medical service has so strong externality that government should play a vital role in its consumption. The market failure of medical service calls for government's intervention into it, but sometimes there is government failure that is why SARS is at large in China now.Since reform and opening, our government put so much stress on efficiency on economic growth, count so much on market to allocate resources. The direct result of these is inadequate medical ser vice supply and the decrease of people's health. Then SARS is in on its way nationwide.In order to alleviate the economic burden on patients, the government is put a tight sting on medical service prices, but let the prices of drugs free, to survive, the hospital has to make a huge profit on drugs' sale, so drugs save hospital comes into being, and red packet is in existence.The relationship between doctor and patient is a typical agent-principle, the doctor is medical service supplier and patient's advisor at the same time. There is incentive incompatibility between them, doctor may impart patient's interest to increase his benefit.