Economics in the Healthcare Sector

Economics in the Healthcare Sector

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Economics in the Healthcare Sector

Economics has a vital role to play in healthcare. Stakeholders including the government, policy makers, and healthcare workers are interested in finding a way of reducing the healthcare costs while at the same time ensuring that quality care is provided. They work to ensure that the consumers get value for their money. Health care economics deals with diverse interests such as controlling expenditure and determining the allocation of resources. Healthcare resources include personnel, medical supplies, and capital inputs (Santerre & Neun, 2012). Applying an economic perspective of healthcare will enable better designing of policies. The economic demands of supply and demand have an impact on healthcare resources. Applying economics in this sector also leads to a clearer understanding of how the availability or lack of healthcare resources affects people. Healthcare economics will enable effective distribution of resources to ensure that most people benefit from them. It will be possible to determine the medical goods and services that will be produced and the people who should benefit from them.

Economic efficiency in medical care enables the stakeholders to determine the most appropriate way to allocate resources based on the needs of the consumers. It involves determining the amount that needs to be allocated to meet the healthcare costs. The scarce nature of resource means that the government has to determine the best allocation mix of non-medical and medical goods and services. It has to determine how to divide the available funds to meet the healthcare demands and other needs that people have (Santerre & Neun, 2012). Economic efficiency also deals with determining how the health sector will divide the available resource to meet all its needs. There are different markets within the medical sector, and each of them has to be efficient to allow for affordable costs. Inefficiency in some of the markets leads to an increase in medical costs.

Reference

Santerre, R., & Neun, S. (2012). Health Economics. New, York, NY: Cengage Learning