Market Failures in UAE Healthcare System

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Table of Contents

Growing Percentage of C-Sections
Admissions for Minor Ailments
The Culture of Overprescribing
Hiding Performance Indicators
Work Cited

Growing Percentage of C-Sections

C-section as an incomplete market failure type
The given failure affects education and healthcare
Reducing C-sections would lead to significant economy
Annual savings would rise to Dh305 million
Figures prove C-sections to be market failure
Governmental interference would change the occurring situation
Policy fail could result in cost implications

C-section belongs to the kind of failure named an incomplete market, which affects education and healthcare due to the lack of governmental control. As stated in the article, national savings would grow up to Dh305 million annually if hospitals reduced the rates of C-sections to at least 18% compared to the current 25% (Webster). It is expected that the government provides regulations forcing clinics to prioritize natural births and avoid unnecessary intervention. If this policy fails, cost implications and readmissions will show much higher figures.

Admissions for Minor Ailments

Admissions for minor ailments are negative externalities
Negative externalities usually affect the third parties
Patients with serious illnesses receive insufficient treatment
Reducing such admissions results in medication savings
Overtime costs and staff payments would diminish
Strict governmental regulations could resolve the issue
Demographic situation depends on the government’s decision

Admissions for minor ailments can be referred to negative externalities. Failures of this kind tend to affect the third parties, which are usually patients who require hospitalization but cannot be hospitalized due to a clinical department being overwhelmed. From the economic point of view, reducing such admissions would lead to savings on medication and overtime costs. The government could provide regulations stating which symptoms prove or do not prove the practicality of admission. If measures are not taken, mortality rates can lead to demographic issues.

The Culture of Overprescribing

Overprescribing is treated as a monopoly power
Unrestricted selling of medications increases hospitals’ profits
Excessive prescriptions have led to inflation growth
Overprescribing made medical inflation rise to 25%
Increased taxation of pharmaceutical business is required
Price regulation would contribute to problem elimination
Incorrect tax index could dramatize the issue

While UAE clinics top up their profits through the unrestricted selling of medications, overprescribing can be viewed as a monopoly power kind of a failure. Webster stresses that “a culture of overprescribing by incentivized doctors and pharmacists has led medical inflation to spiral to 25 per cent.” The increase of taxation of pharmaceutical business combined with price regulation would allow the government to eliminate the problem. However, if state organizations fail to calculate the tax index correctly, medication sales will drop to an intolerable level.

Hiding Performance Indicators

Clinics prefer to hide performance related information
Intentional data concealment is called informational failure
Incidents of care should be discussed openly
Unveiling treatment costs stimulates medical insurance changes
The government’s silence contributes to financial losses
Renovated insurance program is the key directive
Postponing the initiative leads to further decline

Intentional concealment of data to protect an organization’s interests is often called in business an informational failure. Webster believes that by letting people understand the cost of every incident of care hospitals would stimulate positive changes in an insurance branch of economy. As long as the government ignores the situation, the state treasury faces financial losses. Introducing a renovated medical insurance program would make this issue resolved. Meanwhile, postponing the initiative will only result in the lack of patients’ trust and the further decline in healthcare.

Work Cited

Webster, Nick. “New Cost Controls to Clean Up ‘Wild West’ UAE Healthcare Market.”The National, 2017.

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Market Failures in UAE Healthcare System

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