The History and Evolution of Healthcare Economics

The History and Evolution of Healthcare Economics |

|

By: Morgan PenceHCS/440 Tina Rivenbark, B.S., M.H.A. |

|

Today’s health care industry is constantly changing in order to meet the demands of the ever changing economy. Financing, organizational structure, and the delivery of medical services to patients must all be looked over and changes made if necessary to meet the demands of the patients.

Economics, according to Getzen and Moore (2007), is the science that deals with the production, distribution, and consumption of goods and services, or the material welfare of humankind. Economics is concerned with the financial aspects of the patient care and the aspects of the health care system finances. According to Scott, Solomon, and McGowan, “Two basic points are 1)economics is a bout resource allocation, and 2)efficiency in resource use (getting the most from available resources) in health care can be understood by identifying production functions representing health-care services.” (CDC, 2001). It is also important that the health care managers not take advantage of the resources that are available to them due they are not limitless and require the use of money or services.

With talking about how the resources that are available should not be overlooked and over used leads into the explanation of microeconomics. This is the branch of economics that deals with a certain aspect of an economy. Microeconomics is focused on individual product costs in any market. On the other hand there is macroeconomics which concerns the health care system as whole rather than individual consumers. This helps to break down and explain the prices of the supplies and services that are provided to the patients. Both microeconomics and macroeconomics have an impact on the other, such as if each individual or organization has reached a point when the demands are no longer being paid then there is a strain on the entire system.

When dealing with microeconomics and...