MICROECONOMICS

ASSIGNMENT

By:

 Gitanjoli Borah
 Vinayak Capoor
 Masoom Mittal
 Paridhi Joshi
 Varsha Yadav
Incentives for doctors to be employed in hospitals.

 Cost – Doctors with private practice will incur additional cost in:
- Installation: New technology, licensing cost, testing, approval, and
verification
- Maintenance: Money is spent in hiring people with apt knowledge that
will take care of the proper functioning of the installed technologies.
- Upgradation: With the rapid change in technology, upgradation has
become very frequent adding to the cost.
 Initially only a few companies will be able to produce the right technology
and will have a market monopoly. This will lead to very high prices.
 In the hospital’s doctors will have fixed working hours and lesser workload.
Also, here the doctors will be less liable to any medical negligence and
malpractices which will wave off responsibility from the doctors.
 Customer satisfaction – For patients going to the hospital rather than to
private practitioners the effective system with reduced cost keeps them
happy.
 Insurance – Patients are provided with insurance cover with improved
amenities in the hospital. However, this insurance cover does not function
fully at the same cost with private practitioners unless and until they are
affiliated to a hospital. This further increase the insurance cost with private
practitioners.
Economic Model
Steps involved:
1. Hypothesis – The efficiency will increase from the change in
technology used in the doctor’s office.
2. Marginal Analysis – Doctors think of the marginal benefit and
marginal cost and not ethics. Due to this, patients are being
given lesser time by the doctor because of which ~ 20% of
adults in the US are miss diagnosed and ~66 % require some
changes in the initial diagnoses.
3. The cost spent on technological infrastructure is not fully
utilized as to a greater extent, the online health portals cater
to the needs of the patients reducing the number of those who
show up at the hospital.

Result: The efficiency will initially increase however, after a

point, change in technology will have a negative impact on the
efficiency.

Efficiency in Long Run

Efficiency

Technology