Health Care Economics free essay sample

This paper will discuss how economics apply to the health care industry and what tools can be used to get a better understanding of what the patients’ needs and wants are. Debate Whether or Not Economics Apply to Health Care. Economics is the study of how individuals and societies choose to employ those resources: what goods and services will be produced, how they will be produced, and how they will be distributed among the members of society (Merriam-Webster, 2013). This theory applies to every industry and business. The health care industry would be no different. There are still goods and services that will need to be produced, management will still have to figure out how those goods and services will be produced, and how the goods and services will be distributed amongst society. Health economics are defined by who economists are, and what they do (Folland, Goodman, Stano, 2013). Health economics is broken into 3 categories of importance: the size of the contribution of the health sector to the overall economy, the national policy concerns resulting from the importance many people attach to the economic problems they face in pursuing and maintaining their health and the many issues that have a substantial economic element. We will write a custom essay sample on Health Care Economics or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page It is known that the health economy has a large share of GDP in the US. It represents a substantial capital investment and a large and growing share of the labor force. People are buying more health services and they are consulting with health care providers more frequently, doctors may be ordering more tests or prescribing more drugs. The services that they are buying are higher-quality that includes products like laser surgery, organ transplants, measles, and new treatments for burn victims. Economic theory suggests that people are willing to pay more for better quality. Prices have increased significantly. Higher incomes and with over 40 million people with insurance, health care inflation may be higher than the general inflation. The importance attached to economic problems of health care delivery is that it comes at a cost. Some problems that can affect the delivery of health care are the actual quality, access to health care and inflation. To increase the quality of care means to increase the spending of obtaining these things, which in the long run costs the price of the service to increase as well. Professionals may have to seek licensure and certification to provide some of these services. They may also have to provide training for their staff. Another problem that may affect health care delivery is actual access to health case. Because costs are constantly rising, this reduces the accessibility to health care. Financial affordability influences demand for most goods and services. Because of high costs and high numbers uninsured people, is the reason why there are proposals for some form of national health insurance. Inflation is the third reason why health care delivery can be affected. Medical price inflation is a common problem for maintaining health programs, and it has spurred numerous cost-containment efforts by the government (Folland, Goodman, Stano, 2013). Evaluate the impact of economics on the health care system and the implications of a poor health care system on a nation. The health care industry is a critical component of the national, and most regional and local economies in the United States. Cyclical economic contractions, innovations in medical technology, shifts in public policy, and local market factors can result in different, and sometimes contradictory, pressures on the supply and organization of health care delivery systems, suppliers, and practitioners (Bernstein, 2009). Effects in the economy include shifts in the demand for or access to healthcare, but it also affects health care facilities finances. Revenues are decreasing because of the increased demand for less non-urgent care, more patients aren’t able to pay their bills; there is a loss in investment income, less charitable giving and a lot of cuts in health care funding. The economy now in health care can also cause a slow growth in health care jobs. Cost cutting by hospitals and other medical facilities that have trouble with their budgets could be the reason for the slower growth. Economics can also impact the health care industry because it causes pressure on health care professionals to revise their careers and retirement plans. Some physicians may wait to retire later if they cannot meet the needs on their community. If the have lost significant amounts of their investment portfolios, they may continue to work in their practice longer, or either work in another medical facility to try to gain some of their money back. Nurses and other medical personnel may be laid off if their facility doesn’t submit to their community needs as well. In a poor health system, unemployment, lower income, or losing insurance coverage in economic downturns can result in reduced access to health services. Economic uncertainty itself also affects people’s behavior, including how they spend money on health care and on other commodities or activities that can affect their health and health outcomes (Bernstein, 2009). This is why there are over 40 million people in the U. S. right now who do not have any current health insurance. People just can’t afford to pay for insurance. So when they do not have the coverage that they need, they don’t seek the proper medical attention. They in turn wait until they need to be hospitalized and create a large bill that cannot be paid. In 2014, Obamacare is supposed to help all Americans receive some type of health care insurance so that people can be preventative with their health and life. Hopefully this will work so that America can be a healthy place to live. Select a statistical tool used to measure health economics and the significance of this tool and how this tool could be used to make decisions regarding health care. The law of supply and demand in health economics is simple and but can also be very complicated. The supply-and-demand analysis of competitive markets provides insights that extend beyond the theoretical, perfectly competitive markets. Supply reflects sellers’ offers as a function of price. The intersection of the demand and supply describes the market equilibrium (Folland, Goodmanm Stano, 2013). In other words, the demand for certain goods should be met with the supply in order for goods to be at an equilibrium price. In health care, this would tool would be used to help solve personnel concerns such as sufficient numbers of doctors, nurses, nurses’ aides, med techs, pharmacists and physical therapist. For economics to be successful concerning health personnel, ways and means should be adapted to maximize whatever number of personnel available. Cost is also an important factor in this tool. For cost to be properly appropriated there should be proper planning and implementation. Technology should only be purchased if that particular area needs them. Machines and technology should be relevant to the needs of that area; it would be wasted money if the technology was not used (Gaces, 2010). The law of supply and demand is very important and critical to the health care industry because in order for this industry to survive, it has to be able to meet the needs and wants of its community. With this tool, they can get a better understanding of that concept and learn the costs that people are willing to pay for that good or service. The relationship between this tool and economic efficiency . The supply and demand tool provides the most efficient economic outcomes possible. Investopedia defines economic efficiency as an economic state in which every resource is optimally allocated to serve each person in the best way while minimizing waste and inefficiency. With the supply and demand tool, satisfaction for society is maximized, at minimum cost. The market mechanism’s efficiency outcome is always located on the production possibility curves frontier, where all resources are fully utilized. Supply and demand explains why economists usually favor market results, and seldom wishes to interfere with price. In conclusion, economics apply to health care industry as well as it does any other industry. It is important to have because it helps economist and management to help understand the needs of their communities better. The law of supply and demand helps them to achieve that understanding. With this law, they can provide maximum satisfaction for society at a minimum cost. Without this theory, it would be hard for the health care industry to survive.