Every management decision such as the health policy decision has a financial implication (Dunham-Taylor & Pinczuk. 2014). For instance, the proposition of exercise tax on cigarette has helped reduce the consumption of the same resulting in improved health conditions. On a short term, this has led to an increase in revenue collection, as higher taxes are imposed on the manufacturers, which trickles down to the retailers of the same. However, on a long term, the increase in the prices of cigarettes will trigger the reduction in, and withdrawal from the consumption of cigarettes due to high prices, and this could impact negatively on revenue collection. Another consumer health behavior is the use of alcohol, which has been influenced significantly by taxation (Buse et al., 2012). Most governments have pushed for the imposition of excise tax on alcohol, and this has helped reduce alcohol consumption. An example is the government of Zimbabwe that raised the excise tax on alcohol in 1995.

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The health policy decision is advantageous in various ways. An advantage of the health policy decision is evident in the fact that there has been a significant reduction in drunk-driving incidences, fatalities related to alcohol consumption, and hospital admissions for victims. Besides, the imposition of excise tax on alcohol has plummeted revenue collection, which has been directed to the development of other sectors. From a long-term perspective, the increase in the prices of alcohol products as a result of the imposition of excise tax will influence a reduction in or withdrawal from alcohol consumption. This could have negative financial implications for governments when it comes to revenue collection, and this is one of the disadvantages of the health policy decision. Another disadvantage of the policy is that it could result in the increase of tax evasion and smuggling incidences, which could impact negatively on governments’ revenue collection.

References

  • Buse, K., Mays, N., & Walt, G. (2012). Making health policy. McGraw-Hill Education (UK).

  • Dunham-Taylor, J., & Pinczuk, J. Z. (2014). Financial management for nurse managers: Merging the heart with the dollar. Jones & Bartlett Publishers.