Question

Medical vs. Economic Waste (Inefficiency)

a.   What is the definition of wasteful spending according to the medical profession?

b.   What is the economic definition of waste?

c.   Relate the idea of opportunity cost to these two definitions of waste.

d.   Provide a discussion of how an economist could conclude that a procedure was wasteful, that the medical profession would determine is not wasteful.

Answer 1

a) In medical profession, healthcare provided with higher cost or volume than that it requires is deemed wasteful. In most countries a significant amount of health spending is ineffective and overpriced than they usually should be. This is why they are wasteful spending. Wasteful spending in medical profession occurs in many ways :

• In clinics wasteful services are repeatedly provided to patients.
• Unnecessary administrative processes add to this wasteful spending.
• Excess costs what can be avoided
• Services that are harmful.

b) In economics , waste is a material that does not add value to a good or a service and is something that does not have any market value. This material will be unwanted and inefficiently consumed.