Hospital revenues are down dramatically due to the increase of patients struggling to pay off medical bills and more people are putting off surgery considered elective. Additionally, some hospitals are delaying facility expansions, consolidating jobs, and not filling vacated positions (Darcé, 2009). We will examine how the economy affects the health care industry, identify shifts in price elasticity of supply and demand within the health care sector, and look for positive and negative externalities that affect health care. Additionally, we will look at wage inequalities of primary care physicians versus specialists, examine the monetary and fiscal policies of health care reform under debate in Congress, and consider influences that affect the health care industry in a negative way. Shifts and Price Elasticity of Supply and Demand Health care is subject to price elasticity of supply and demand similar to other products and services. Consumers respond directly to price changes in health care by the decisions they make when seeking treatment. Elasticity measures a consumer's respon......

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