The Price Of Medical Services The Economics Of Government Regulation Paradox

The aim to health regulation of government is to maintain the basic health supply on high level, while in our country the result is high health fees, the decreasing scope of health service and more and more people can not afford the health service. Why there is a dilemma between the government regulation and high health fees? Is it that the regulation is wrong or there are some problems on health market? Which way is the health service? This paper will answer all these problems.This paper firstly studies the development of Health Economics and Economic Regulation. The study of health service price is scarce because of the different health institution. In the Economic Regulation, Capture Theory of Regulation has studied the failure of government regulation, is it is the same as that of our country?Because health service relates to the people's health, so it has some special capabilities besides the common goods, for example, dissymmetric information, externality, public goods, inducement demand, monopoly. All of these make the health market fail. The economics theory tells us, the government regulation is the effective key to the market failure. In our country, our government restricts the price of health service. Due to the failure health market, doctors can make excess rent through supplying more than service than patients demand. This paper describes the health environment of our country, where there is scarce health supplying and unreasonable pricing institution. Then it analyzes the acting model of doctors, patients and government. Through the lemon game between patients and patients, the acting-do game between doctors and patients, this paper studies the reason of government regulation failure. This has become an indirect pricing institution. Different with the Capture Theory of Regulation, the failure of government regulation is the wrong regulation means.There are some key reasons contribute to our government failure, those are: the scarce supplying, the wrong regulation means and the low pricing. So there are some settlements to this problem, for example, remanding fee according to the ill kind, and to...