Price control of either good or service is a government’s function that involves setting a minimum and a maximum price of a commodity or a service. In many healthcare organizations, hospitals make and maintain huge returns as a result of offering their services at high prices. Hospitals have consolidated through mergers and acquisitions, and as a result, market power for few health organizations have significantly increased their competitive advantage such that they can charge high prices for their services without losing the customers. However, the pricing of health services varies with the geographical area where health organizations are located. Although health care organizations may charge high prices, the prices usually do not reflect the quality of services that they provide but instead mask inefficiencies within the health system. That is why the government needs to control prices and ensure citizens are not exploited.
Government control in the health system refers to maximum and minimum expenditure that federal or state government sets to spend by Medicare beneficiaries. Both utilization and regional costs determine the amount that the government sets for Medicare beneficiaries. Private and commercial insurers cater to the other additional cost of health care for patients.
Redistribution in health care is the process of redistributing the wealth between the rich and the poor and less fortunate. The healthcare funding plans do this by allocating more health care resources to the poorer and less fortunate than they allocate to the richer in society. Medicare and Medicaid’s current plans are redistribution as they are funded by taxpayers to support programs that they taxpayers will not qualify for.
Global warming is a classic example of a public good.