Sample Healthcare Economics on Healthcare Resources

Healthcare Economics


Health demand and supply is the balance between care provision and supply provided to the targeted population. The evaluation of supply and demand variance is determined by factors such as available healthcare providers, equipment, and budget for care delivery, waiting time readmissions, and ALOS (Average Length of Stay). The increased emphasis on patient-centered care has shifted the demand and supply curve for the delivery. However, since most facilities depend on government funding and third party payment systems, the supply of service and the products is getting even slimmer with time. The inadequate staff in many hospitals contributes largely to increased patient dissatisfaction and reduced trust in the care system since the shortage creates leeway for medical errors (Aiken, et al., 2018).

Elasticity as an economic concept relates to the highly responsive action of a market/ industry in relation to the changes in pricing. In a healthcare setting, elasticity is the change in pricing/costs of care. In the past five to ten years, costs of care have increasingly risen with services gradually becoming expensive. Patients, on the other hand, are switching to cheaper options as a way of getting the balance between their everyday expenses and attainment of care. As a result, there has been an increase in sales of over-the-counter drugs such as opioids in the streets as a quick fix for health issues without considering the huge side effects including addiction that they pose to the users (Stopka et al., 2017).

Healthcare resources is an inclusive concept that includes the care providers, the facilities, medication, follow-up systems, and supplement organizations that offer both patient awareness and research for different populations. The increased patient-based care approaches have made it more critical for care providers to be in the lead in enhancing the type of care they are offering their patients (Mandelblatt et al., 2017). As such, more resources have been disposed at the convenience of the public to increase both accessibility and awareness. For instance, most healthcare facilities have divulged into social media as a way of providing on-time consults and recommendations for patients irrespective of their location. As a result, the healthcare industry is forced to establish a balance between on-site care provision and virtual care assistance to different populations.

The healthcare measures are programs instituted under the healthcare industry to evaluate performance, efficiency, and quality service delivery. For all the American care facilities that are public, after the passing of the ACA (Affordable Care Act), two programs were instituted under the CMS (Centers for Medicare and Medicaid). These are the ALOS and the MSPB (Medicare Spending per Beneficiary). The use of ALOS helps the CMS rate care facilities based on the quality of their services and ability to offer the best care to the patients (Bowers & Cheyne, 2015). For instance, the average ALOS for the country as a whole is 5.5 days, which is used as a benchmark to determine the ability of care facilities to offer the best of services. The integration of these programs has forced care facilities to change their approach to care delivery, which defines operations and policies.

The cost of care also is continuously shaping the delivery of care and the operation of the healthcare industry. Delivery of care is categorized into different stages as a way of ensuring that patients get the best services. However, this also increases the costs of delivery; every stage of care a patient has to pay for the services rendered. Coupled with the huge costs of getting medication, the overall costs of care continue to rise. For patients under an insurance cover, the same impact is felt especially in situations where a patient has to pay cash rather than use the health coverage for settling the costs.



Health economics offers a diversified approach to learning about the balance between costs and quality of service offered to patients. For healthcare professionals, understanding this balance helps them determine the value given to their service and ways that an imbalance can also affect them in terms of remuneration, they get for services rendered (Swan et al., 2015). The MSPB is one of the tools used in calculating the remuneration offered to care providers in American public care facilities. As a result, failure to understand that maintaining the balance guarantees them good payment could also affect their ability to commit to their jobs. On the other hand, decision-makers have to draw a line between the values of the services offered to the public and efficiency in the use of funds to enhance care delivery. As a result, understanding the concept of health economics helps increase the ability of decision-makers to know the areas that need to be developed to guarantee quality service and good standards of work setting for care providers.


The involvement of the government in the balance and shifts in health economics helps to define the central role that it plays in the success and growth of the industry as a whole (Smith et al., 2016). One potential benefit is determining the transfer of funds from one sector to another under the direction and oversight committees under the government. This helps evaluate the transparency and channeling of funds from the federal government to the individual facilities (Shin & Choi, 2015). Another potential benefit is getting to learn how regulations imposed by both the federal and state governments are shaping the way the healthcare industry is structured and is progressing. Some of the functions and changes within the healthcare facilities as influenced by the government regulations help to learn about how the government is involved in maintaining the balance in quality and costs of care delivery.


The involvement of the private sector government in the formulation and implementation of healthcare regulations is researched by Torchia, Calabrò, and Morner (2015). In their research, they conclude that the private sector government takes a strategic position in the determination of some of the critical elements of healthcare functionality/ operations in sectors such as the pharmaceutical industry. Their involvement in health economics, delivery, and financing helps in the determination of the percentage of the healthcare sector, which falls under their control. The main benefit of learning about their involvement is getting to distinguish the services they are offering and the benefits they offer in the attainment of quality services intended for the public. Another main potential benefit is getting to review the performance of the private sector in the establishment of a balance in public care delivery. Many of the high class consider best services that they can afford and that which they can be offered specialized care as per the amount they are willing to pay. Determining the number of patients cared for in the private sector helps to see the balance the private sector government is bringing to the delivery of quality service.



Aiken, L. H., Cerón, C., Simonetti, M., Lake, E. T., Galiano, A., Garbarini, A., . . . Smith, H. L. (2018). Hospital nurse staffing and patient outcomes. Revista Médica Clínica Las Condes, 29(3), 322-327.

Bowers, J., & Cheyne, H. (2015). Reducing the length of postnatal hospital stay: implications for cost and quality of care. BMC health services research, 16(1), 16.

Mandelblatt, J. S., Ramsey, S. D., Lieu, T. A., & Phelps, C. E. (2017). Evaluating frameworks that provide value measures for health care interventions. Value in Health, 20(2), 185-192.

Shin, D. H., & Choi, M. J. (2015). Ecological views of big data: Perspectives and issues. Telematics and Informatics, 32(2), 311-320.

Smith, J., Andersson, G., Gourlay, R., Karner, S., Mikkelsen, B. E., Sonnino, R., & Barling, D. (2016). Balancing competing policy demands: the case of sustainable public sector food procurement. Journal of Cleaner Production, 112, 249-256.

Stopka, T. J., Donahue, A., Hutcheson, M., & Green, T. C. (2017). Nonprescription naloxone and syringe sales in the midst of opioid overdose and hepatitis C virus epidemics: Massachusetts, 2015. Journal of the American Pharmacists Association, 57(2), S34 – S44.

Swan, M., Ferguson, S., Chang, A., Larson, E., & Smaldone, A. (2015). Quality of primary care by advanced practice nurses: a systematic review. International Journal for Quality in Health Care, 27(5), 396-404.

Torchia, M., Calabrò, A., & Morner, M. (2015). Public–private partnerships in the health care sector: A systematic review of the literature. Public Management Review, 17(2), 236-261