In responding to your classmates, do you agree or disagree with their conclusions on how economic principles should be balanced in healthcare decision making? Are there some industries, such as healthcare, where market principles should not apply?
Post # 1 :
My name is Eric and I am from Long Island, New York. My background is in exercise science, however I currently work in the pharmaceutical industry as a sales and service representative for a company that handles expired medication returns and controlled substance destruction for pharmacies, hospitals, and other clinics. I hope to gain a strong understanding of how the healthcare industry functions to be a profitable business throughout this course.
Applying these principles to the healthcare industry is important and comes with both positive and negative impacts. Scarcity is a situation that arises when the demand for goods or services is exceeded by what is actually available (Henderson, 2019). High-quality medical resources are mainly concentrated in large hospitals in big cities, making it difficult for patients in rural and remote areas to access them. Medical resources of high value are relatively scarce, presenting the problem of unbalanced supply and demand (Ye, et al 2019). This intense competition for high-value medical resources has been shown to have a significant positive impact on the adoption of telehealth (2019). This increases the availability of some medical resources to anyone with the means to access them virtually.
Supply and demand in healthcare serves as its economic foundation. The goal is to reach equilibrium which would maximize access to healthcare services at a price consumers and suppliers have a willingness to use. If a gap exists between supply and demand that disrupts equilibrium, it is not only contributing to a delay in meeting patients’ needs, but it can also be expensive and generate waste in the system (Institute for Healthcare Improvement). Since March 2020, the demand for many goods and services in hospitals plummeted due to voluntary social distancing and mandatory stay-at-home orders (Roberts, 2020). Discharge volume decreased across which increased the demand for beds however it actually prevented new patients from being seen due to the lack of supply. The sudden increase in demand for a hospital bed and the decrease in supply is related to a decrease in revenue in hospitals throughout the United States (2020). Under normal circumstances, supply and demand can be anticipated though.
I think that there are difficult situations in healthcare when attempting to apply economic principles to it. The market characteristics of healthcare are different from a perfectly competitive market. In healthcare, the product is heterogeneous, meaning the consumer could experience a range of outcomes (Scott, Solomon, & McGowan, 2001). There is also a lack of a market price and the insured have third-party payers covering their direct medical expenses (2001). When engaging in healthcare policy making and strategic planning, policy makers and decision makers should seek equilibrium among issues of health, life, and death as they pertain to policy decisions and strategic planning. Although I do not believe you can put a monetary value on a life, healthcare resources should be allocated in a way that benefits the health and life of the overall population rather than an individual.
Measure and Understand Supply and Demand. (n.d.). Retrieved February 17, 2021, from http://www.ihi.org/resources/Pages/Changes/MeasureandUnderstandSupplyandDemand.aspx
Roberts, J. (2020, June 24). Supply and demand shocks in health care due to COVID-19: Part 1 – Hospitals. Retrieved February 17, 2021, from https://www.johnlocke.org/update/supply-and-demand-shocks-in-health-care-due-to-covid-19-part-1-hospitals/
Scott, R. D., Solomon, S. L., & McGowan, J. E. (2001). Applying Economic Principles to Health Care. Emerging Infectious Diseases, 7(2), 282-285. https://dx.doi.org/10.3201/eid0702.700282.
Ye, Q., Deng, Z., Chen, Y., Liao, J., Li, G., & Lu, Y. (2019). How Resource Scarcity and Accessibility Affect Patients’ Usage of Mobile Health in China: Resource Competition Perspective. JMIR mHealth and uHealth, 7(8), e13491. https://doi.org/10.2196/13491
My name is Donna Coleman, I live in Wesley Chapel FL. I am married with a total of 5 children and 6 grandchildren. I enjoy shopping, fellowshipping at church, and watching movies. I have been working in the medical field for over 25 years. I currently work as a practice administrator for one of the largest healthcare systems in the State of Florida, which makes my job challenging at times, but I enjoy what I do. I am pursuing a degree in healthcare administration to excel in the healthcare industry. I hope to understand the impact of economic principles on the delivery of healthcare and healthcare management from this course. Specifically, to learn how to plan strategically to overcome the challenges of healthcare cost and other economic factors that can affect patient care.
After reviewing the economic concepts in this week’s module, I developed a clear understanding of health economics and how each concept impacts the healthcare industry. Healthcare economics allows healthcare leaders to understand how economic and social issues impact patient care and health decision-making (Henderson, 2018). For example, how cost, scarcity, choice, trade, opportunity, and the law of demand can influence healthcare and health outcomes. Healthcare costs are major concerns for patients to obtain the care they need. As the costs of healthcare products and services increase, patients can be negatively impacted because they cannot afford to pay for care, insurance premiums, prescriptions, and out-of-pocket expenses. This can impact their health as they could refrain from following up with their medical appointments and completing prescription regimens. These are some of the ways that cost can affect healthcare delivery. Learning how to manage or control costs and leverage budgets to create affordable services to meet the needs of patients. This could help healthcare organizations and leaders to make the best decisions about the cost of products, services, and service delivery. The same with the concepts of choice, and scarcity which addresses the issue of limited resources to meet the medical needs of the population (Henderson, 2018). One area of scarcity that limits healthcare delivery to patients as well as their choices is provider scarcity. Different factors that can lead to the doctor shortage in some areas such as inconvenient office hours, limited primary care providers, and insurance reimbursement for services (Kerns & Willis, 2020). These issues create scarcity and could negatively impact care delivery, public health, and the growth of many healthcare organizations.
I believe that healthcare organizations should balance these concepts in order of how they relate or impact health, life, and death s they make major decisions and planning in these areas of healthcare. If healthcare is affordable and accessible, the opportunity to develop, supply, and deliver quality care is attainable, then the concept of the law of demand comes into play and allows organizations and consumers to make choices on services and healthcare (Henderson, 2018). For example, when people have adequate income, they can afford the best insurance plans and obtain the best care. They can have preferences in what they desire, unlike those who have low income who cannot make desirable choices.
While I do not believe that we can place a monetary value on life, I believe that there is a price to pay to obtain quality care to obtain good health and have good health outcomes. I believe that all the economical concepts are equally important to healthcare delivery and the industry. As a healthcare leader and a patient, I see the value of applying these concepts for the benefit of all.
Henderson, J. (2018). Health Economics and Policy (7th ed.). Cengage Learning. https://bookshelf.vitalsource.com/#/
Kerns, C., & Willis, D. (2020, March 16). The Problem with U.S. Health Care Isn’t a Shortage of Doctors. Harvard Business Review. https://hbr.org/2020/03/the-problem-with-u-s-health-care-isnt-a-shortage-of-doctors