Health Economics & Financial Management: A Broad Overview Denise Hancock, RN, MS, LCCE
Transcript
1. Health Economics & Financial Management: A Broad
Overview Denise Hancock, RN, MS, LCCE
2. Economics Social science which studies production,
distribution, and consumption of goods and services. Key
assumptions in classical economic theory: 1. Resources are scarce
in relation to human wants. 2. Resources have alternative uses. 3.
Humans have different wants and priorities. Basic problem: How
should resources be allocated to best satisfy human wants? (Fuchs,
2011)
3. Two alternative views to classical economic assumptions
Romantic view Denies scarcity of resources and inevitable need for
choice. Monotechnic view A paternalistic approach, denying diverse
human wants and priorities. (Fuchs, 2011)
4. Macroeconomics Scientific study of the behavior of the
economy as a whole. Some examples: national income rate of growth
gross domestic product inflation price levels labor market
(unemployment) markets for health insurance, drugs, services and
products
5. Microeconomics Scientific study of factors that affect the
decisions and actions of individuals, families, and organizations.
Health care providers Hospitals
6. Economics Social science Theory Politics Process of
allocating scarce resources Policy End result of political process
Finance Determined by policy Economics & Finance are related,
but not the same. (Milstead, 2016)
7. Finance vs. Accounting Finance is the study of how to
optimally allocate assets. Finance is fundamentally a
forward-looking field, concerned with future values. Accounting is
the process of communicating financial information about a
business. Accounting is fundamentally a backward-looking
field.
8. Management Process of planning, directing, controlling, and
evaluating people and resources to achieve established outcomes
(Yoder-Wise, 2015) Management theories and concepts covered in
other courses.
9. Financial Management Managerial activity which is concerned
with the planning and controlling of the firm's financial resources
TYPICAL GOALS 1. Maximize profit / shareholder value If non-profit,
to meet some socially desirable need 2. Minimize costs 3. Maintain
market share
10. Health Economics Branch of economics concerned with issues
related to efficiency, effectiveness, value and behavior in the
production and consumption of health and healthcare. Helps to:
Understand behaviors and decisions Evaluate options Inform policy
Promote health
11. A few economic terms to know, important to healthcare &
health markets Opportunity cost Information assymmetry Adverse
selection Moral hazard (Milstead, 2016)
12. Health economics is a tool for solving problems. Three of
our biggest problems in US Healthcare today. 1. High and growing
costs 2. Lack of access to healthcare 3. Quality (Disparity of
health levels) (Fuchs, 2011)
13. The COST problem: economics offers some solutions Increase
supply of services Excess hospitals & physicians drive down
price through competition Reduce demand for services service
utilization by improving population health (public health) Improve
consumer cost-consciousness Change physician behaviors Market
regulation Administrative controls & planning (Fuchs,
2011)
14. The ACCESS problem is more complex no simple solutions.
General Access Issue Access to type of care when and where wanted
(primary care, ER, home care & care outside of working hours)
Special Access Issues Poverty Rural areas Racial minorities (Fuchs,
2011)
15. QUALITY Also a complex problem, what really determines
outcomes? Evidence points to socioeconomic & cultural factors
as cause of disparities, not quantity or quality of healthcare
Chief killers in US are heart disease, cancer, accidents and
violence Healthcare services have not been successful at changing
behaviors (Fuchs, 2011)
16. Rational resource allocation decisions require considering
the relative prices of various healthcare services with respective
marginal benefit to health.
17. Health economics is a useful tool, but we have to determine
values. Economics can tell us how to maximize values using
information about technological means and ends, inputs and
constraints. Economics cannot define our values. Economics cannot
tell us what we want. Once we determine our most important values
and wants, economics can help us get desired outcomes.
18. References Fuchs, V.R. (2011). Who shall live? Health,
economics and social choices (2nd ed.). Hackensack, NJ: World
Scientific Publishing Co. Milstead, J.A.( 2016) Health policy and
politics: A nurses guide (5th ed.). Burlington, MA: Jones &
Baker. Yoder-Wise, P. S. (2015). Leading and managing in nursing
(6th ed.). St. Louis, MO: Elsevier.