Posted: September 13th, 2017

Economic Essay: Two readings provide the necessary background information pertaining to this essay question. Note that we do not consider GP services in remote or rural areas here.

Economic Essay: Two readings provide the necessary background information pertaining to this essay question. Note that we do not consider GP services in remote or

rural areas here.

Economic Essay: Two readings provide the necessary background information pertaining to this essay question. Note that we do not consider GP services in remote or

rural areas here.

The above two readings provide the necessary background information pertaining to this essay question. Note that we do not consider GP services in remote or rural

areas here.

a) How would you describe the market structure for GPs in Perth metropolitan area? Explain your reasoning.

b) Explain how GPs can charge different prices for different patients, and why GPs in western suburbs charge more for their services compared to GPs in eastern

suburbs.

c) Explain why we have sufficient GPs in the western suburb but not enough in the eastern suburbs. Specifically: contrast a representative individual GP surgery in

an eastern and western suburb to show why GPs may choose to move toward western and away from eastern suburbs.

d) How would the standard theory of resource allocation propose that the market eventually will self-correct and that the problem explained in (c) will be solved

in the long-run without the need for further government intervention? If the market does not self-correct, can you think of any strategy the government might implement

to help lessen the problem?

Please read through the attachments and follow the instructions

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Keep your diagrams as neat as possible, and draw them on your computer. We find the easiest way to do this is to create it in Powerpoint on a slide, then convert

to a jpg, and then insert it into your Word document. If you really can’t do this, you can scan the hand-drawn diagrams, convert them to jpg files or similar, and

paste them into your essay where required. However, this will make your essay look less professional and polished, so you really should try doing them on computer.

The market for General Practitioners in Perth Metro Area
Reading 1: Abstract from research article
Johar, Jones & Savage (2013) Market power and the quality of primary care. [unpublished manuscript]
In Australia patients are free to consult any doctor they choose, and doctors, as in General Practitioners (GPs), are free to set fees at any level, accommodating GPs’

desire to exercise their market power. This system is partly based on the belief that this would give GPs a financial incentive to offer higher quality services. To

enable access to health care for all, the government provides a 100% rebate for fees up to the “scheduled fee”, which is $34.90 for a level B consultation (the most

common consultation; scheduled fees are lower for a shorter level A consultation, and more expensive for longer or more complex services). Essentially, this provides a

price floor for GP services. GPs can then charge more than this base price, and they often do, but if so patients will need to cover the gap as an out-of-pocket cost.

Johar, Jones and Savage (2013) find considerable variation in fees across GPs, for the same type of services (e.g. a standard level B consultation). They suggest this

reflects variation in GP market power: “Given that fees are unbounded above, GPs with higher market power will be able to charge higher fees. Such market power derives

from variation in patients’ ability to pay. There has been evidence that GPs charge high income patients more” (p.3).
This heterogeneity in pricing appears to occur also within the Perth metropolitan area.
Reading 2: Article from WAToday
(Available online: http://www.watoday.com.au/wa-news/wa-doctor-shortage-becomes-election-issue-20130814-2rw0l.html)
Title: WA doctor shortage becomes election issue
Date: August 14, 2013
Tony Abbott is expecting to announce support for more doctors in WA on his next visit. West Australian Premier Colin Barnett says a shortage of doctors in the state is

a “critical issue” in the federal election. The WA government has committed to spending $22 million to help Curtin University establish a campus at Midland in Perth’s

east. But the project still requires the federal government to approve funding for places to run the university’s medical school, which would be the state’s second.

Federal Liberal leader Tony Abbott is expected to announce support for more GPs in WA when he next visits Perth. “I hope he does because Western Australia is the most

disadvantaged in terms of doctors. The need is greatest here,” Mr Barnett told Radio 6PR on Wednesday. He said it was “wrong” the western suburbs had four times the

number of doctors per head of population compared to the eastern suburbs. “It is wrong. Doctors tend to congregate around higher income areas,” he said. “They also

tend to congregate around hospitals too.” The premier said the lack of doctors in outer metropolitan areas and country areas was a concern. “We need to train more

doctors, particularly to be GPs and to work in outer metropolitan and country areas.”
1
Essay Question:
The above two readings provide the necessary background information pertaining to this essay question. Note that we do not consider GP services in remote or rural

areas here.
a) How would you describe the market structure for GPs in Perth metropolitan area? Explain your reasoning.
b) Explain how GPs can charge different prices for different patients, and why GPs in western suburbs charge more for their services compared to GPs in eastern

suburbs.
c) Explain why we have sufficient GPs in the western suburb but not enough in the eastern suburbs. Specifically: contrast a representative individual GP surgery in an

eastern and western suburb to show why GPs may choose to move toward western and away from eastern suburbs.
d) How would the standard theory of resource allocation propose that the market eventually will self-correct and that the problem explained in (c) will be solved in

the long-run without the need for further government intervention? If the market does not self-correct, can you think of any strategy the government might implement to

help lessen the problem?
Information about the essay

• A special topic is created on LMS, which will include all information related to the essay.
• Note that your tutors (including MyGuru Matt) will be told specifically NOT to discuss the essay with students. All questions must be directed to the unit

coordinator (Inga), who will respond as appropriate. This is important to ensure everyone is given the same information.
• In terms of structure, you should be able to write your essay as a continuous, ‘logical’ story. In a reasonably clear essay your market will be able to tell what

parts of your essay pertains to what part of the question, so there is no need to write it in marked sections. Part (a) can be written such that it provides a natural

introduction to the essay, in which case you don’t need a separate introduction (which just uses up your word-count anyway). Likewise, part (d) can be written such

that it provides a natural conclusion to the essay. 2
• There is no particular split in the total mark between the questions asked here. This is not a short-answer question after all – it’s an essay question. I could have

written the essay question as one big question, but I thought splitting it into some parts might make it a bit clearer for you. However, parts (b) and (c) should

provide the focus of the essay. Part (a) should be quite short and to-the point, essentially providing an introduction to your essay, while part (d) will provide a

nice ending to your essay. Part (b) is your opportunity to show your prowess in economic analytical thinking, to really use the nuts and bolts you’ve been given in the

unit so far, and develop sound economic arguments. So it’s an important part of the essay – and I invite you to treat it as the most important part. Part (c) involves

diagrams with explanations, and the key point here is to show that you can identify the correct diagrams to use, and that you know how to work them. Basically, a top-

notch essay will cover the essential point of all parts well: (a) providing the natural and clear introduction, a brilliant and sharp discussion for (b), clear and

well explained diagrams for part (c), and a neat and concise discussion for (d) which wraps the whole thing up nicely. The fact that I don’t want to specify a set

number of marks allocated to each part is supposed to be a help to you, rather than obscuring our intentions: it will allow us some flexibility when marking your work.

After all, what we are trying to do is reward good economic thinking and analytical skills as much as we can, and having a very strict marks allocation may hinder

this.
• Keep your diagrams as neat as possible, and draw them on your computer. We find the easiest way to do this is to create it in Powerpoint on a slide, then convert to

a jpg, and then insert it into your Word document. If you really can’t do this, you can scan the hand-drawn diagrams, convert them to jpg files or similar, and paste

them into your essay where required. However, this will make your essay look less professional and polished, so you really should try doing them on computer.
• Note the word limit – in order to write a really good essay you need to write very succinctly, to- the-point, and with no waffle. If your draft ends up 3 times too

long the first time you write it down it doesn’t matter: just keep going through it, condensing everything, until it’s the right length. Penalties are imposed on

over-length essays (1 mark per 100 words over 1,500. Please note that 1,501 words = 1 mark deducted).
• A good mark will have the following characteristics:
i. Clarity: the reader should never be in any doubt about what you mean and that you know what you’re talking about. Every sentence should convey something important.
ii. Flow: The essay needs to read well, and flow from beginning to end.
iii. Good economic arguments and logic: The economic reasoning must be good.
iv. Good diagrams: Diagrams need to be neatly laid out, easy to follow and obviously correct
v. Good presentation: Minimum spelling and grammatical errors. Proof read!! Neat font, reasonable margins and either 1.5 or double line spacing. That is, you need to

make sure there is space for your marker to write some comments.
• You should not need to use many resources beyond the articles/abstracts listed above, and the course material. However, if you do use other sources you need to

reference these 3
properly according to the UWA Business School referencing standards. These can be found on the UWA Library web site. Please note that we use the Harvard style of

referencing in economics.
• Do NOT reference the lecture notes. These are essentially summaries of the textbook, and so you should cite the textbook.
• Plagiarism: All forms of plagiarism, copying and cheating are condemned by the University as unacceptable behaviour. Plagiarism means copying the words of others

from books, web sites etc and claiming them as your own. It is a form of cheating. Extensive plagiarism will find you up before the Sub-Dean, and the penalties can be

severe. Many new students plagiarise extensively, either inadvertently through not referencing their material adequately, or because they are under the mistaken belief

that the author has expressed an idea so well that it would be impossible to better it. Regardless of the reason, there are two basic ways to avoid plagiarising

material.
a) Reinterpret the author’s text in your own words.
b) If you do use someone else’s words, make sure you place them in quotation marks and reference appropriately. ie acknowledge sources.
• Appeals: All appeals against your essay mark must be submitted to the course co-ordinator in writing (not email) within 4 working days of you receiving it. Your

letter must give the specific grounds on which you are making your appeal. Please ensure you check the latest updates on appeals, as some changes to the process may be

required.
Uploading the essay:
• The essay needs to be uploaded to Uniprint by 12 noon on Monday 14th October. NO EXCUSES. Please note that this is a pre-set deadline, and Uniprint notes the exact

time of submission. Also bear in mind that there are over 600 students taking this unit. If everyone tries to upload their essay at 11.55am, the system won’t be able

to handle it, and you will almost certainly not be able to submit before the deadline. Therefore it is imperative that you complete your essay well before 12 noon. You

are free to submit any time before 12 noon, and so we suggest you aim to have it finished the day before, and submit soon after. Please note that if you have trouble

uploading your essay a few minutes before the deadline you will not be given any leeway, and you will have to accept the penalty for it being one day late (that is, it

will eventually upload, but the time will be after the deadline, and so you will be penalised). Reasons like “my internet stopped working” or “I accidentally squirted

red-bull in my eye” or “the dog ate my memory-stick” will not help you. Take responsibility!
• An essay sub-topic has been created on LMS, with a link to further information about how to upload your essay.

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