Economic Theories and Models in Health Care Essay Example Paper
NUR-621 Economic Theories and Models in Health Care
Theories/Models |
Description/Definition | Example Related to Health Care | Components |
| 1. Efficiency | Efficiency refers to an economic situation in which every resource is utilized adequately to best benefit the organization or person while reducing inefficiencies and waste. Simply defined, efficiency refers to how well a company uses its resources to achieve outcomes (Cylus, Papanicolas & Smith, 2017) Economic Theories and Models in Health Care Essay Example Paper.
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In healthcare, efficiency implies that there are no other inputs or input combinations that might generate the same degree of products and services at a lower cost (Cylus, Papanicolas & Smith, 2017). To put it another way, it is about comparing the delivery system’s outcomes, including doctors, value-based healthcare units, or other health outputs, with inputs like healthcare costs, duration of treatment, and resources. | Efficiency is made up: of two aspects:
1) Technical efficiency, in which health-care treatments for specific health conditions are carried out with the fewest possible inputs. 2) Allocative efficiency, in which a group of technically effective interventions is selected to generate the highest level of health benefits achievable (Cylus, Papanicolas & Smith, 2017). |
| 2. Supply and Demand | The connection between sellers and buyers is defined by the supply and demand economic paradigm. It establishes a link between the amount of a product that sellers want to sell at a particular price and the amount that buyers want to purchase at that same price (Folland, Goodman & Stano, 2016). | The greater the availability of various healthcare elements in a given area, the cheaper the cost of healthcare in that area. On the other hand, demand reflects the population’s desire for a certain level of health care. | Staffing, equipment, beds available, and budget are all elements of supply measures that reflect the quantity of care that may be provided.
Demand indicators show how much health care the general public wants. Inpatient admissions, hospital catchment population, average length of stay, and waiting times are all factors in play Economic Theories and Models in Health Care Essay Example Paper. |
| 3. Economies of Scale
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Economies of scale theories are being used to describe the result and effectiveness of production processes. Fundamentally, economies of scale suggests that as the volume of product increases, the unit cost drops (Folland, Goodman & Stano, 2016). | In healthcare, economies of scale suggest that volume per given operation is associated to better results. Purchasing additional healthcare equipment when real demand is lower than what is necessary for high use is a good example Economic Theories and Models in Health Care Essay Example Paper. | Internal and external economies of scale are the two basic forms of economies of scale. Because internal economies are internal to the organization, management may control them. External organizations are reliant on external influences. The industry, geographical area, and government are examples of these influences. |
| 4. Market Failure | The economic situation characterized by an uneven allocation of services and goods in a market system is known as market failure. When externalities are present, market results may be ineffective Economic Theories and Models in Health Care Essay Example Paper. | The failure of competition in the hospital business, which is extremely centralized in many parts despite more competition for healthcare services, is an example of market failure.
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Markets adapt to failures by establishing mechanisms to cover the gaps left by these failures. This is in line with the economic theory (Folland, Goodman & Stano, 2016).Independent doctors, cost-based compensation for health facilities, and managed care are elements of such arrangements. Health insurance is a financial framework that protects against market failure caused by substantial, inevitable health risks. Taxes, subsidies, restrictions, and direct provision of services are all ways that governments engage in markets to address market failure. |
References
Cylus, J., Papanicolas, I., & Smith, P. C. (2017). How to make sense of health system efficiency comparisons?. Copenhagen: World Health Organization, Regional Office for Europe.
Folland, S., Goodman, A. C., & Stano, M. (2016). The Economics of Health and Health Care: Pearson New International Edition. Routledge Economic Theories and Models in Health Care Essay Example Paper
Complete the “NUR-621 Economic Theories and Models in Health Care” worksheet. This assignment explores the efficiency and components of current health care models. Your responses should be based on evidence. Include references to your textbook and one scholarly article. While APA style is not required for the body of this assignment, solid academic writing is expected, and documentation of sources should be presented using APA formatting guidelines, which can be found in the APA Style Guide, located in the Student Success Center.