Healthcare professionals who treat patients as unqualified agents create the principal-agent problem. Patients expect high-quality services and the agents must fulfill their fiduciary duties. However, care providers have been giving substandard treatment, which exposes patients to a higher risk of developing medical issues (Broughton & Marquez, 2016). Healthcare providers have profited from the principle that patients demand more medicine than any public service provider. Private healthcare providers provide more medication than is necessary to convince the principle of great care. Many healthcare professionals, especially those that treat patients with chronic illnesses, believe their patients are capable of paying for expensive treatment. This practice causes a large number of patients to try and avoid hospitals, which can damage the brand value of the institution. As an alternative to other more cost-effective options, injectable medication is prescribed to patients in order for them trust the hospital. A healthcare professional might give an injection in order to win a patient’s trust. In order to take advantage of this principle, care providers may not record long-line consults (especially in telemedicine) and then pocket the money. This is where the care provider makes use of the agent’s name and facility to provide treatment for virtual patients. But, they do not transfer the funds to the institution. Patients can instead pay directly out of their personal accounts.
Pre-existing illnesses are not covered by most health insurance companies. Some patients may hide details about their medical coverage. (Mühlbacher et al., 2018) Healthcare providers prefer to avoid chronically ill individuals without medical insurance owing to the high treatment expenses and prescription medication prices. The first time healthcare transactions could fail is when patients don’t disclose their chronic illnesses while applying for medical coverage. In this situation, care providers may not be able to provide services due to fear that they will get underpaid by their insurance companies. Affordable Care Act forbids insurance companies from asking about the lifestyles of their customers. It is possible for insurance companies to not pay all the costs of chronic sick care. This could limit the patient’s ability to afford treatment (Krockow, et. al. 2019, 2019). Healthcare transactions can also fail if an insurer refuses to pay for treatment because the policy does not cover certain diseases. Insurers only sell products they are familiar with on the market for health insurance, and health anomalies are common.
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