Economics is a social science that focuses primarily on the human environment. Economics helps organizations and individuals to predict market trends. Economics applies graphs and equations to explain variables. Such calculations may be helpful in understanding and predicting market trends that are likely to affect the health sector. Health care management has changed drastically over the decades. Nowadays, everything is determined by the economic trends. The health care systems used today are based on both the medical and business models. According to these models, treating the patients’ diseases is the most crucial aspect and they do not encourage any further follow-up. They lay greater emphasis on the economic impact of procedures rather than the welfare of the patient. Today, healthcare providers are not only expected to treat patients, but they also must receive income in order to maintain their employees (Shi & Singh, 2012).
Healthcare management is constantly changing as a result of the medical models incorporation into this field. These medical models, as a result, affect the reimbursement changes. Today, the definition, management, treatment modes and ethics of health care have been transformed. The greatest problem is that the founding vision of healthcare has been challenged by the current era of healthcare reforms. Hence, there exists a conflict between the traditional health care mode of treating patients and the reductionist, medical and business models. (Schwartz, 2009). All aspects of health care management, including reimbursements, have been constrained within these two models.
The poor in the society are subjected to low quality health care as they lack medical insurance whereas the rich receive the best possible health care. This has resulted into a lot of deaths among the poor people. The cost of acquiring medical services has risen tremendously over the past decades. The aspects that have resulted in the high cost of health services are fraud and corruption by those in authority. Insurance companies have taken advantage of the peoples’ desperation, and they exploit them maximally. Thus, economics has equipped me with the knowledge required to understand how funds allocated are used and distributed within the health sector. By means of economics we can adequately predict the market trends – a factor that will enable health care managers to plan sufficiently (Andersen & Kominski, 2007). For instance, research proves that over $1.2 trillion of funds allocated to hospitals are wasted on other projects. When applying economics’ techniques, this squandering can be reduced significantly.
Studying economics has given me a greater understanding of what goes on in the health sector. Due to the study of financial statement analysis I can now understand how the funds in the health sector are allocated. Health care funding is extremely complex; however, economics has helped me understand how percentage of total healthcare expenses changes over time. It also helps me to make adequate calculations regarding the future values of assets. One vital aspect that raises the cost of health care is the acquisition of equipment required to carry out tests and research. Thus, with proper experience concerning economics, I can adequately make sound investment decisions based on the depreciation values of machinery, the available funds, and the salvage value among other variables (Shi & Singh, 2012).
Economics also covers the issues of insurance and how insurers make their profits. If one is armed with relevant knowledge, it is easy to understand how companies trick clients into paying for hefty insurance covers but do not match up to the expectations when they are needed. Health care should be free to everyone; however, those in authority take advantage of the many health care providers’ ignorance and exploit both their employees and clients. For instance, health care providers get low salaries while those in management get rather high salaries at the expense of others. The health sector has been transformed into a business where profits and losses are considered of primary importance. Hospital management tends to lay great emphasis on the economic aspect of procedures rather than saving lives. This has resulted in several lawsuits where patients sue hospitals and insurance companies for refusing to cover certain procedures that might save their lives. This is becoming a common trend and serves as a clear indication of how severely health care has been reduced to a profit making organization which is aimed at making the rich richer and the poor poorer (Andersen & Kominski, 2007).
In my opinion economics should be incorporated in every college degree or diploma course. Many people are ignorant of budgetary allocations which directly influence their lives. With regards to health care management, knowledge in economics has proved to be enlightening as it has helped me immensely to be more conscious of the way funds in my department are allocated and utilized.