Read the passage and answer the following questions:
The health-care economy is replete with unusual and even unique economic relationships.
One of the least understood involves the peculiar roles of producer or? provider? and the purchaser or? consumer? in the typical doctor-patient relationship. In most sectors of the economy, it is the seller who attempts to attract a potential buyer with various inducements of price, quality, and utility, and it is the buyer who makes the decision. Where circumstances permit the buyer no choice because there is effectively only one seller and the product is relatively essential, the government usually asserts monopoly and places the industry under price and other regulations. Neither of these conditions prevails in most of the health-care industry. In the health-care industry, the doctor-patient relationship is the mirror image of the ordinary relationship between producer and consumer. Once an individual has chosen to see a physician—and even then there may be no real choice—it is the physician who usually makes all significant purchasing decisions: whether the patient should return ? next Wednesday, whether X-rays are needed, whether drugs should be prescribed, etc. It is a rare and sophisticated patient who will challenge such professional decisions or raise in advance questions about price, especially when the ailment is regarded as serious.
This is particularly significant in relation to hospital care. The physician must certify the
need for hospitalization, determine what procedures will be performed, and announce when the patient may be discharged. The patient may be consulted about some of these decisions, but in the main, it is the doctor‘s judgments that are final. Little wonder then that in the eyes of the hospital it is the physician who is the real? consumer.? As a consequence, the medical staff represents the? power centre? in hospital policy and decision-making, not the administration.
Although usually there are in this situation four identifiable participants—the physician, the hospital, the patient, and the payer (generally an insurance carrier or government)—the physician makes the essential decisions for all of them. The hospital becomes an extension of the physician; the payer generally meets most of the bona fide bills generated by the physician/ hospital, and for the most part, the patient plays a passive role. In routine or minor illnesses, or just plain worries, the patient‘s options are, of course, much greater with respect to use and price. In illnesses that are of some significance, however, such choices tend to evaporate, and it is for these illnesses that the bulk of the health-care dollar is spent. We estimate that about 75-80 per cent of health-care expenditures are determined by physicians, not patients. For this reason, economy measures directed at patients or the general public are relatively ineffective.