Externalities In Healthcare

In recent studies, the shortage of primary care physicians has captured the attention of many stakeholders who fear that without more primary care practitioners, more communities will become increasingly underserved. As the demand for health care services increases with a growing and aging population, many policymakers are working diligently to help solve this looming issue. Recently, lawmakers have made progress in addressing the provider shortage in Central Texas, but the estimated number of new primary care physicians and other health specialists are not sufficient enough to sustain the growing demands of an increasing and aging population. This study is intended to address the importance of establishing a prestigious medical school in …show more content…
Externalities occur when the decisions and actions of others contribute and benefit a third party. The goods and services that benefit the third party are known as positive externalities. In health care, the external benefits in most systems is the care provided to others by the medical staff at these facilities. We aim to present a perspective on market failures caused by these externalities and evaluate the presence and degree of these market failures within the health care delivery system. This next section discusses the theoretical and empirical models, variables needed for this study, and the outcomes of this …show more content…
Our theoretical model suggests that the length of stay for patients with critical illnesses are much more improved at teaching hospitals than in non-teaching hospitals. This metric is typically reported as an average since it assumes that all patients are equally ill. As a matter of fact, every patient is unique and may require specialized or advanced care and surgeries. The ability to predict length of stay can substantially improve a teaching hospital's capacity utilization, while ensuring that resources are available to meet the health care needs of the community (Omachonu VK) . Undoubtedly, teaching hospitals outrival the competition when it comes to treating the most critical patients. As healthcare costs increase each year, hospital officials and policymakers are highly motivated to search for ways to increase patient care and efficiency while continuing to find new innovative initiatives to keep costs