How Economic Forces Have Affected Healthcare

Unit 5 Assignment

Sam Sewell

Healthcare Finance and Economics

Matthew Caines, D.H.Ed., M.P.H.

Kaplan University

November 16, 2010

Today’s economic forces have affected the healthcare industry and healthcare management in several ways. Loss of jobs, lack of funding, and spending cutbacks are examples of increasing trends seen across the healthcare landscape. In this report we will take a closer look at how economic forces are impacting several areas of healthcare and the management of healthcare. First we must look at what are the economic forces.

Economic forces are defined as factors such as level of employment, rate of inflation, rates of interest, demographic changes, and fiscal and monetary policies. These factors or forces determine the state of competitive environment in which a firm or organization operates. The economic forces also affect the outcome of the organization’s marketing activities, by determining the volume and strength if demand for the product or service provided.

One of the most immediate, and obvious impacts of the financial crisis is the availability of student loans. Student loans will become increasingly difficult, if not impossible, for many prospective healthcare professionals to obtain. Because the average physician graduates with about $156,000 in school loans, the pipeline of prospective physicians will surely shrink if students are unable to borrow money to fund their extensive education costs. (Ama.org)

A decrease in potential physicians could be a huge strain on the healthcare industry, as many analysts were already predicting a severe physician shortage in the future. Other highly educated healthcare roles will also be affected, such as advanced practice nurses, pharmacists, or PhD researchers.

Clinical research for new technologies, treatments and medications: In a financial crisis, funding for research could be much more difficult to obtain, which could impact...