The Economics of Health and Healthcare

The Economics of Health and Healthcare

November 2, 2014

There exists what has been termed the triangle of healthcare. The three sides are: (a) cost, (b) access, and (c) quality. This paper will discuss this triangle and the relationship of the three aspects and how each one dramatically influences the others.

"The Iron Triangle" is a term coined to describe the relationship between cost, quality, and access in all sorts of institutions such as policy making, healthcare, and businesses. You can't affect one aspect without affecting the other two aspects, it is a concept full of trade-offs. Being that the relationship is reciprocal it is difficult to have any significant change in either cost, quality, or access. The problem with this is that they are in competition with each other ("The Iron Triangle", http://healthinformatics.wikispaces.com/The+Iron+Triangle, accessed November 2, 2014). To make healthcare more affordable would increase access to it but most likely decrease the quality of care. You might increase the quality of the healthcare, but that will increase costs and limit access to it. You could also increase access to the healthcare, but that will cost money, or result in lower quality care.

Quality is the value, efficacy, reliability, and outcome of the care being delivered. Quality to the average patient usually suggests the quality of service; however, it may also suggest competency.

We know patients forgive disappointing outcomes if the quality of service has satisfied. Health policy experts are looking for reliable, measurable, verifiable outcomes like the number of patients in a practice getting required childhood vaccinations, the number of diabetics having tests showing good blood sugar control, the number of post-operative complications, etc. Numbers attach easily to these measures as does monetary reward (Godfrey, Tom. "What is the Iron Triangle of Health Care," Penn Square Post, March 3, 2012).

In addition, access is not as straightforward as it seems. Researchers look at who can get the care when it is needed, not how long it took to get an appointment or how long a patient spent in the waiting room with a cold. Experts are measuring systems, not personal experiences. The Health Reform Bill of 2010 largely tried to improve access to care for Americans by opening the doors to insurance coverage for more of them (Godfrey, Tom. "What is the

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