TAILIEUCHUNG - Microeconomics for MBAs 33

Microeconomics for MBAs 33. The Economic Way of Thinking for Managers. Microeconomics for MBAs develops the economic way of thinking through problems that MBA students will find relevant to their career goals. Maths is kept simple and the theory is illustrated with real-life scenarios | Chapter 9 Production Costs and Business Decisions 17 How can the so-called crisis be solved at least partially We don t intend to offer a detailed set of public policy solutions here. Other specialists in the field have done We only point out here that many of the supply and demand forces listed above are beyond the control of individual businesses. There is simply not much most individual businesses can do to affect the broad sweep of social attitudes and government tax and expenditure policies. We only note however that the demand for healthcare services can be lowered by reducing at least marginally government subsidies for the healthcare of many Americans. This can be accomplished by lowering Medicare and Medicaid expenditures and by eliminating all or a part of the tax deductibility of health insurance. The cost of healthcare can also be lowered by reducing the rewards from suing doctors or by giving patients the right to a greater or lesser degree to absolve doctors of liability for problems that they may encounter while the patients are in the doctors care. Frankly making those recommendations is much easier than getting them passed. They are too politically painful for voters although we suggest that voters should also consider the gains to everyone from getting healthcare costs under control . Barring changes in public policies what can businesses themselves do to ameliorate their own healthcare costs Many businesses have done what has come naturally they have tried to select workers who are not likely to have medical problems and therefore drive up the firms insurance costs. This is we remind you a solution that can benefit both owners and many workers given that healthier workers can mean lower labor costs for firms and lower health insurance premiums. While people might object to this solution on fairness grounds we stress that it is the type of discriminatory hiring policy that is likely to emerge when health insurance costs have been distorted

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