Donna L. Jones-Bryant
May 4, 2015
Dr. Merle Point-Johnson
Implications of Health Economic Concepts for Health Care
“The discipline of health economics was believed to have been launched by economist Kenneth Arrow. Arrow, a Nobel Memorial Prize recipient in Economics, published an article roughly forty years ago entitled "Uncertainty and the Welfare Economics of Medical Care" in the American Economic Review. In the article, Arrow looks at to what extent market and non-market institutions play roles in the allocation of healthcare. This article forever changed the way people view economics as it relates to the medical profession (Savedoff, 2004)”.
In conjunction with an environment of escalating burdens on constrained resources, health economics is wielding an impact on decision making at all degrees of health care. Health economics strives to facilitate decision making by offering an uninhibited decision making outline centered on the principle of efficiency. It is not the only consideration but it is an important one and practitioners will need to have an understanding of its basic principles and how it can impact clinical decision making (Kernick, 2003). This paper will assess the value of health care professionals and decision makers understanding the discipline of health economics, critique the importance of considering the complex nature of health and healthcare when examining the economic principles related to health care delivery, and analyze the primary potential benefits of learning about health economics related to government and private involvement in health care economic, finance, and delivery.
Understanding the Discipline of Health Economics
“Health economics is essentially the study of healthcare and healthcare-related resources and their allocation amongst the people of a society. It also studies the continual function of the healthcare system as a whole, as well as the social and private impacts of health-affecting behaviors like smoking. The discipline of health economics is traditionally broken down into eight distinct disciplines: What influences health, what is health and its value, the demand for healthcare, the supply of healthcare, micro-economics evaluation at the treatment level, market equilibrium, evaluation of the whole system, and planning, budgeting and monitoring mechanisms. The demand for healthcare, that fuels this discipline, is a demand by people to consume and produce health through allocated funds and resources. Generally speaking, health economics takes a costing look at healthcare, its improvements and its outcomes (Health Economics, 2015)”.
The importance of healthcare professionals and decision makers, often administration, understanding the discipline of health economics lies in the ability to make the right decisions for the current environment and circumstances. This process can be simplified with a structured plan in place. The discipline of health economics affords beneficial insights into how health care can be molded and funded and offers a core method to address an extensive array of concerns in a graphic and consistent approach.
Health professionals and decision makers must utilize the discipline of health economics to develop and implement an economics and research strategy that supports the goals of the healthcare organization. Decision makers must lead efforts in conducting policy-related economic evaluations and encounter tasks related to cost studies, economic and statistical analysis, and quantitative decision modeling. Sound financial decisions will be the mainstay for any successful healthcare organization.
Complex Nature of Health and Health Care
A complex adaptive system is a collection of individual agents with freedom to act in ways that are not always totally predictable, and whose actions are interconnected so that one agent's actions change the context for other agents. Across…