Terms Comparison Of Health Care Economics
Running Head: Terms Comparison
Terms Comparison
Heena Patel
University of Phoenix
Health Care Economics (HCS/552)
Cornelius Cash, DBA
October 4, 2010
Terms Comparison Economics is a study of supply and demand and the affect that these interactions have on resource allocation (Getzen, 2007). Economists study the factors effecting the allocation of limited resources. Mosby’s medical encyclopedia defines health economics as “a social system that studies the supply and demand of health care resources and the effect of health services on a population” (2009). The field of economics can be further broken down into two separate divisions, microeconomics and macroeconomics. Macroeconomics is concerned with the economy as a whole. …show more content…
In health care, resources include medical supplies, medical personnel, and capital inputs. Medical supplies consist of items such as patient gowns, medications, and syringes. Medical personnel include physicians, nurses, administrative staff, and technicians. Hospitals, ambulatory surgery centers, other health care facilities, and medical equipment can be categorized as capital inputs. The patients are the consumers who need health care services offered by the physicians, the producers. The goal of efficient resource allocation is to meet the infinite demands of the consumers with limited supplies. Economics allocates resources in a perfectly competitive market. However, health care operates in an imperfect market, one in which there is an offering of a diverse product with no fixed market price. The cost of services varies for consumers, suppliers, and third-party payers. The goal of health care economics and economics is the same, to obtain the most from available resources (Scott II, Solomon, & McGowan, …show more content…
Opportunity cost refers to the value of an opportunity that is passed on to engage the limited resources in an alternative activity. For example, pharmaceutical research is imperative in health care to afford consumers improved medications. The opportunity cost of no research would be to remain stagnant and have patient build up immunity to the existing medications with no alternatives. An additional example of opportunity cost would be when a hospital administrator decides to move nurses from one department that is not as productive to one that is very busy. The non-productive department’s output is the opportunity cost for allocating resources to the busier department. Opportunity cost is fundamental in understanding microeconomics and the resource allocation
Terms Comparison
Heena Patel
University of Phoenix
Health Care Economics (HCS/552)
Cornelius Cash, DBA
October 4, 2010
Terms Comparison Economics is a study of supply and demand and the affect that these interactions have on resource allocation (Getzen, 2007). Economists study the factors effecting the allocation of limited resources. Mosby’s medical encyclopedia defines health economics as “a social system that studies the supply and demand of health care resources and the effect of health services on a population” (2009). The field of economics can be further broken down into two separate divisions, microeconomics and macroeconomics. Macroeconomics is concerned with the economy as a whole. …show more content…
In health care, resources include medical supplies, medical personnel, and capital inputs. Medical supplies consist of items such as patient gowns, medications, and syringes. Medical personnel include physicians, nurses, administrative staff, and technicians. Hospitals, ambulatory surgery centers, other health care facilities, and medical equipment can be categorized as capital inputs. The patients are the consumers who need health care services offered by the physicians, the producers. The goal of efficient resource allocation is to meet the infinite demands of the consumers with limited supplies. Economics allocates resources in a perfectly competitive market. However, health care operates in an imperfect market, one in which there is an offering of a diverse product with no fixed market price. The cost of services varies for consumers, suppliers, and third-party payers. The goal of health care economics and economics is the same, to obtain the most from available resources (Scott II, Solomon, & McGowan, …show more content…
Opportunity cost refers to the value of an opportunity that is passed on to engage the limited resources in an alternative activity. For example, pharmaceutical research is imperative in health care to afford consumers improved medications. The opportunity cost of no research would be to remain stagnant and have patient build up immunity to the existing medications with no alternatives. An additional example of opportunity cost would be when a hospital administrator decides to move nurses from one department that is not as productive to one that is very busy. The non-productive department’s output is the opportunity cost for allocating resources to the busier department. Opportunity cost is fundamental in understanding microeconomics and the resource allocation