Chapter 9 Health Economics in a Health Policy Context Chapter OverviewProvides a basic overview of economics and why it is important for health policymakers to be familiar with basic economic conceptsFocuses on:How economists make decisionsSupplyDemandMarkets * Economic Decision MakingEconomists believe that people are rational actors who will never purposely choose to make themselves worse off.People seek to maximize utility.Given the scarcity of resources, decisions need to be made about the production, distribution, and consumption of healthcare resources.Consider individual preference and efficiency. * Demand (1 of 2)Demand—the quantity of goods and services that a consumer is willing and able to purchase over a specified timeCommon demand shiftersPrice of the original good, price of a substitute good, and price of a complementary goodIncomeQuality (actual or perceived) Demand (2 of 2)Price elasticity of demand—the percentage change in the quantity demanded resulting from a 1% change in priceIf a product is elastic, a change in price will result in an equivalent or greater change in demand.If a product is inelastic, demand for the good is not sensitive to a change in price. * Health Insurance and DemandHealth insurance acts as a buffer between the consumer and cost of healthcare goods and services.Goods and services cost the consumer less than the charged price because of the presence of health insurance.Moral hazardBecause a consumer does not pay the full cost of a good, the consumer may purchase more goods than he or she would otherwise purchase without insurance. * Supply (1 of 3)Supply—the amount of goods and services that producers are able and willing to sell at a given price over a given period of time.Common supply shiftersInput costsSale priceNumber of sellersChange in technology Supply (2 of 3)Supply elasticity—the percentage change in quantity supplied resulting from a 1% increase in the price (or other variables, such as inputs) of buying the good.If a product is elastic, a change in price (or other variables) will result in an equivalent or greater change in supply.If a product is inelastic, supply of the good is not sensitive to a change in price (or other variables). * Supply (3 of 3)Suppliers are driven to maximize profit.In a competitive market, profit is maximized at the level of output where marginal cost equals price.Equilibrium exists in the market when there is a balance between the quantity supplied and the quantity demanded. Health Insurance and SupplyThe presence of health insurance may impact a provider’s willingness to supply goods and services.Competing concernsProviders act as patient’s agent and act in patient’s best interest.Providers may have a financial incentive to act or refrain from acting in a certain way due to insurance arrangements or the lack of insurance.Supplier-induced demand is the provider version of moral hazard.Providers create a demand beyond .

1. Chapter 9
Health Economics in a Health Policy Context
Chapter OverviewProvides a basic overview of economics and
why it is important for health policymakers to be familiar with
basic economic conceptsFocuses on:How economists make
decisionsSupplyDemandMarkets
*
Economic Decision MakingEconomists believe that people are
rational actors who will never purposely choose to make
themselves worse off.People seek to maximize utility.Given the
scarcity of resources, decisions need to be made about the
production, distribution, and consumption of healthcare
resources.Consider individual preference and efficiency.
*
Demand

2. (1 of 2)Demand—the quantity of goods and services that a
consumer is willing and able to purchase over a specified
timeCommon demand shiftersPrice of the original good, price of
a substitute good, and price of a complementary
goodIncomeQuality (actual or perceived)
Demand
(2 of 2)Price elasticity of demand—the percentage change in the
quantity demanded resulting from a 1% change in priceIf a
product is elastic, a change in price will result in an equivalent
or greater change in demand.If a product is inelastic, demand
for the good is not sensitive to a change in price.
*
Health Insurance and DemandHealth insurance acts as a buffer
between the consumer and cost of healthcare goods and
services.Goods and services cost the consumer less than the
charged price because of the presence of health insurance.Moral
hazardBecause a consumer does not pay the full cost of a good,
the consumer may purchase more goods than he or she would
otherwise purchase without insurance.
*

3. Supply
(1 of 3)Supply—the amount of goods and services that
producers are able and willing to sell at a given price over a
given period of time.Common supply shiftersInput costsSale
priceNumber of sellersChange in technology
Supply
(2 of 3)Supply elasticity—the percentage change in quantity
supplied resulting from a 1% increase in the price (or other
variables, such as inputs) of buying the good.If a product is
elastic, a change in price (or other variables) will result in an
equivalent or greater change in supply.If a product is inelastic,
supply of the good is not sensitive to a change in price (or other
variables).
*
Supply
(3 of 3)Suppliers are driven to maximize profit.In a competitive
market, profit is maximized at the level of output where
marginal cost equals price.Equilibrium exists in the market
when there is a balance between the quantity supplied and the
quantity demanded.

4. Health Insurance and SupplyThe presence of health insurance
may impact a provider’s willingness to supply goods and
services.Competing concernsProviders act as patient’s agent and
act in patient’s best interest.Providers may have a financial
incentive to act or refrain from acting in a certain way due to
insurance arrangements or the lack of insurance.Supplier-
induced demand is the provider version of moral
hazard.Providers create a demand beyond the amount the well-
informed consumer would have chosen.It is debated whether
supplier-induced demand actually occurs.
MarketsMarket structuresPerfectly competitive market should
efficiently allocate resourcesMonopolies—single seller controls
marketOligopolies—few dominant firms, substantial barriers to
entryMonopsonies—few consumers who control price paid to
sellersHealthcare is a monopolistically competitive market.Few
dominant firms with significant market power and many smaller
firms without market power
*
Health Insurance and MarketsA typical market transaction
involves two parties.Consumer and supplierHealthcare
transaction with an insured patient involves three
parties.Consumer (patient)Supplier (provider)InsurersPresence
of third party (insurers) changes consumer and supplier analysis
of costs and benefits of each transaction.

5. Market Failure
(1 of 2)Market failure—resources are not produced or allocated
efficientlyTraditionally, inequitable distribution of resources
does not equal a market failureCommon reasons for market
failuresImperfect informationConcentration of market
powerConsumption of public goodsPresence of externalities
*
Market Failure
(2 of 2)Ways to address market failureDo nothingGovernment
finances or directly provides public goodsGovernment increases
taxes, tax deductions, subsidiesGovernment issues regulatory
mandates.Government prohibitionsRedistribution of income
*
Residency Assignment – Network Security Plan
Course
ISOL532 - Telecommunications and Network Security
Deliverable
Prepare a report to address all aspects of the case
study/assignment. This report should be no less than 15 pages
of content (not including title and reference pages). You need
to include outside sources and properly cite and reference your
sources. You must have at least 5 scholarly resources. In
addition to the 15 pages of content, you will want a title page

6. and a reference sheet. This report needs to be in proper APA
format.
Be prepared to present a 15-20 minute presentation on this
assignment.
Students must submit both written assignment (Word doc) and
presentation slides (PowerPoint) in your iLearn course.
Assignment
Introduction
The growth and explosion of the internet has led to a global
market place. Companies can sell products all over the world
and never have to leave the bounds of their physically secure
location. With this move to a global economy we see an
increase in security threats to organizations, individuals and
agencies. All these models must have an information system to
process, store, and retrieve information for their internal
stakeholders, customers, and external users. Information
systems have inherent risks and vulnerabilities to attacks from
internal users, external customers, hackers and criminals.
Organizations must have a robust security program in place to
meet these attacks and be proactive in their security stance.
Your group has the responsibility of creating a robust security
policy that covers all the needs of the organization. The
security policy identifies administrative, physical, and technical
controls that must be in place to identify security risks and
develop mitigation strategies to minimize the effects of these
risks. You will evaluate the IT infrastructure of Solomon
Enterprises and its global business model.
Organizational structure
Solomon Enterprises employees 500 people in five different
locations throughout the domestic United States. Solomon
Enterprises generates $200 million in annual revenue through
its business model so they would be a huge target for hackers or
criminals. Their business products can be purchased through an

7. online web site. They have one central database/data center
located in West Virginia and regional offices in Florida, Texas,
Arizona, Montana, and Missouri. Customers, clients, and users
have access via the Internet throughout the world. The
company has a disaster recovery site located in Billings,
Montana. Solomon Enterprises users can work remotely or
within one of the regional offices. They have a VPN connection
that ensures that their connection is encrypted. The central data
center has a firewall and each regional office has a firewall to
monitor traffic and keep unauthorized access from the facility.
They have company issues devices located within the office and
laptops that can be taken for remote access. All these devices
are running Windows 7 and their server is running Windows
Server 2016.
Objective
The goal of your group is to develop a plan that evaluates the
current security posture of the organization of the company and
what controls need to be put into place to safeguard their
information. You only have the brief synopsis for guidance so
if something is not identified either it is not being done or they
do not have enough information to provide you. Use your text
as the key source when determining what security controls need
to be in place for your company. Ensure that you cover each
component that we have discussed within our classroom videos
in order to increase the security posture of your organization.
Minimum components that must be covered
1. Introduction
Introduce your organization, security posture and business
model
2. Administrative controls
i.e., Backgrounding employees/training employees/any
agreements
3. Physical Controls

8. Physical protection of the facility
4. Technical Controls
i.e., firewall, IDPS, encryption, etc.
5. Security Policies
What security policies will need to be built into your company’s
overall existing security program to ensure that data is
safeguarded?
6. Legislation/Regulations
How do legislation and regulations affect and govern your
company? Identify at least one federal legislative component
and one regulation that could impact your company.
7. Network Security Tools
What tools are instrumental in monitoring, detecting, and
alerting your company when an someone is trying to gain
unauthorized access to your organizations network?
8. Conclusion
Paper formatting requirements
Your paper must be submitted as a Microsoft Word document
with double spacing, 12-point Times New Roman font, and one-
inch margins. You should have at least 15 pages, not including
Title and Reference pages. Please include appropriate diagrams
and images for your network security plan. All academic
sources must be cited using the latest APA guidelines. Section
and Sub-section headings should be used throughout the paper.
Please review APA guidelines here:
https://owl.english.purdue.edu/owl/resource/560/01/ for
reference.
· For in-text citations, the citation needs to go inside the end of
the sentence. For example: This is my sentence on APA
formatting (APA, 2016).
· For references, this list should start on a new page at the end
of your document with a hanging indent (the title of the page
should be References). You do not need to include the retrieved
date. Here are some examples:

9. Smyth, A. M., Parker, A. L., & Pease, D. L. (2002). A study of
enjoyment of peas. Journal of Abnormal Eating, 8(3), 120-125.
Retrieved from http://www.articlehomepage.com/full/url/
Bernstein, M. (2002). 10 tips on writing the living Web. A List
Apart: For People Who Make Websites, 149. Retrieved from
http://www.alistapart.com/articles/writeliving
De Huff, E. W. (n.d.). Taytay’s tales: Traditional Pueblo Indian
tales. University of Pennsylvania. Retrieved from
http://digital.library.upenn.edu/women/dehuff/taytay/taytay.htm
l
· Start your paragraph with an indent (tab).
· Use section and sub-section headings