Markets in hospitals have captured the attention of many organizations and specialized areas of the economy because they have seen market failure in those markets. Therefore, Economists use the term market failure to categorize situations or conditions that cause the observed equilibrium to deviate. The health department in Dubai experiences many problems in the emergency department, one of which is the hospital failed in the market. Overcrowding the emergency department is one of the major problems that is facing the health department in Dubai. The problem of overcrowded emergencies has led to a significant market failure in the healthcare department.
An overcrowded emergency department causes delayed treatment, stretches resources, and leads to poor patient outcomes. Also, it may lead to ambulance diversion because patients may leave before being checked by the physician. Again, an overcrowded emergency creates a high risk of medical errors that threaten the patient’s safety. Critically ill patients have to wait for long hours in the overcrowded emergency departments where they are boarded therefore deteriorating their conditions (Arnould & DeBrock, 1986, p. 288). For this reason, the hospital markets fail due to the stiff competition implied by the other hospitals. Due to the poor services, patients will choose better hospitals that do not have overcrowded emergencies, reducing the hospital’s economic status because the occupancy level will reduce and minimize output.
Therefore, market failures are the primary reasons the government intervenes in the healthcare market (Nichols, 2012, p. 555). The government can intervene by providing services and direct funding to healthcare services (Wallis & Dollery, 1999, p. 9). Besides, the hospital should use the funds provided by the government to expand its capacity. Secondly, avoiding boarding patients admitted to the emergency department, providing alternatives for primary care, and providing care to patients with emergency cases will reduce overcrowding in the emergency department, hence improving the hospital’s market.
References
Arnould, R. J., & DeBrock, L. M. (1986). Competition and market failure in the hospital industry: A review of the evidence.Medical Care Review, 43(2), 253-292.
Nichols, L. M. (2012). Government intervention in healthcare markets is practical, necessary, and morally sound. The Journal of Law, Medicine & Ethics, 40(3), 547-557.
Wallis, J., & Dollery, B. (1999). Market failure and government intervention.Market Failure, Government Failure, Leadership and Public Policy, 9-31.