moral hazard and health disparities

Moral Hazards and Health Disparities
Name.
Institution.

Moral Hazards and Health Disparities
Moral Hazards
Moral hazards occur when a party gets involved if is risky knowing they are protected, and in case of any danger, the other party will be responsible for all the cost. Both the parties associated have incomplete information regarding the other. It occurs when the borrowing party knows that someone will take care of their mistakes. In health, it refers to added health care given when a person is insured.
An example of moral hazards is when a patient purchases some medicine that is not necessarily important or spends extra days or hours in the hospital voluntarily since they are aware of their insurance. These moral hazards disadvantage the insurers since they are forced to pay more than is expected from them and which premiums had not been set. Economists do not support the Moral hazards since it leads to a welfare loss in society. Insurers aim at reducing the health care price to Zero, but when they reduce the price consumers pay more for health care than they would have paid in the moral costs. The health care value offered to tend to be less as compared to the price. (John, 2014)
Health Disparities and Their Determinants
These are the inequalities, which occur when providing health care to different economic groups. Different ethnic and racial group access different types of health care. Some of the health disparities include,
Environmental Problems, some areas are at high risk of being infected by certain diseases.

An example is a region where the weather is freezing; residents are more likely to get colds and flu.
Low level of education is also a determinant of health disparities. Where people are not educated, and they do not know how to handle cases of risk or how t prevent themselves from certain diseases.
Poverty is the main determinant of health disparity. People living under poor conditions are at high risk of getting sick since most of them do not afford proper health care. They mostly live in slums that are congested, and when a person is infected, most of the people there will contract the disease.
To reduce this risks that arise due to this determinants, the society should aim at raising awareness on the determinants of health disparities and training of how to prevent themselves from certain risks. The government should also aim at improving the living conditions of its citizens to avoid health risks. (Steven, 2011.)

ReferencesJohn, A. (2004) Is ‘Moral Hazard’ Inefficient. The policy Implication of a new theory Retrieved on October 2004 from, https://www.healthaffairs.org/doi/10.1377/hlthaff.23.5.194.
Steven, H. et, al. (2011) Where Health Disparities Begin: The Role of Social and Economic Determinants Retrieved on October, 1 2011 from, https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2011.0685