FINALS Economic Perspective of Health Caresqdfwgrhtjk | Labour Economics | Home Care

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Economic perspective of Health Care The economic way of looking at the financing and delivery of health services Three Fundamental Observations a. Resources are scarce in relation to the consumption that we wish b. Resources have alternative uses c. Individuals also want different things or have different perspectives The economic perspective explains how resources have alternative uses can be employed by individuals and organizations to deal with and overcome the problem of scarcity

Components 1. Scarce health resources  Three Choices resulting from Scarce Health resources i. The amount spent on health care services and the composition of those services ii. The method of producing those services iii. The method of distribution of health care, which influences the equity of these services iv. To various people within the population  Personal health care expenditures Includes all purchased services and products that are associated with the individual health care such as hospital, physician, dental services, nursing – home services, drugs, and medical supplies i. Hospital expenditures ii. Physician expenditures iii. Pharmacy expenditures iv. Extended care and home care expenditures  Scarcity in Health care: Unmet Needs Individuals experience unmet health care needs when they lack health insurance, or their coverage is not sufficient for their needs, or when they lack other financial resources i. The uninsured  The major source of insurance is from employer insurance  Employer insurance is health insurance provided as an employee benefit  Factors affecting insurance coverage o Low income individuals and family

This active participation would then result in a greater health care responsiveness to consumers 3. 2. and what co – payments and deductibles are required. Thus when choosing among alternative uses of the same resources. The uncovered services and out of pocket cost results in barriers to service. delaying obtaining health care. Consumer information: The process of informed choice would encourage health plans to be responsive to consumer’s needs and compete for enrollees based on both cost and performance. and being unable to implement the prescribed treatment regimen  All people with insurance have some needs that are not met by insurance.ii. Each policy specifies which services are or are not covered. what amounts will be paid for service. Alternative use of resources  Opportunity cost is the values of the alternative resource use that was not selected  When resources are used for one product or service. o Jobs that do not provide health insurance o Those without family coverage o Those who do not meet the criteria for public insurance o Age – young adults o Race o Education o Status of employment o Foreign birth The underinsured  Limitations in the insurance results in consumers making choices among themselves. they are not available for other products or services. Consumer values and preferences  Value is the relative importance of health compared to other choices  Preference refers to the selection of specific health care services among the variety available  Factor affecting Values and Preferences i. the value of the choice not selected is the opportunity cost .

Application of economic principles to nursing 1. and increasing the cost of nursing education and training. However. Economic Model of the labor market The nursing labor market and the market for health care are closely related. The former increases employment while the latter decreases  An increase in the demand for nursing workforce usually originates from an increase in the consumer demand for health care that the nurses participate in producing and delivering  A decrease in the supply of workforce can be accomplished by tightening up immigration laws. they create jobs and tend to pay more to achieve the desired size of their work force c) Law of diminishing returns The Law of diminishing returns describes the phenomenon in production whereby adding units of an input causes the contribution of the additional input to eventually decline d) Labor market equilibrium  The competitive forces of supply and demand determine the market wage rates for nurses  Nursing wage rates can rise with either an increase in the demand for nursing labor or a decrease in the supply of labor. a decrease in the supply of labor has the effect of lowering the number of nurses employed e) Work force planning . Economic Model of the labor market  The demand for labor as a derived demand  An employer’s decision to hire  Law of diminishing returns B.2. The demand for nursing labor is derived from the demand for general health a) The demand for labor as a derived demand Derived demand: the demand for labor that is derived from the demand for the final product that labor helps to produce b) An employer’s decision to hire When employers hire more workers. closing down nursing schools. With fewer nurses available to meet the needs of the patient’s wages tend to move up.

Basis: medical needs 3. Strength:  the market is more efficient than the government in allocating resources since it responds quickly to disturbance and resulting labor market imbalances  it defines labor shortage and suggest alternative solutions 3. Weakness:  Markets do not work as competitively or smoothly 2. it looks at the market forces to determine the wage rates and employment levels 2. Need – based approach/Expert determination approach 1. where the work force shortage is a labor supply problem alone  Expert recommendations can be different ii. Economic approach 1. Weakness:  Supply side approach. Supply and demand concepts applied to nursing Nurses value increase when nurses provide services at a lower cost or increase in quality of both a) Demand for nursing services . Then experts estimate the quantities of the various types of health services needed and of the health care workers required at a particular point in time 2. Approach: Economist rely on the concept of supply and demand.It is the concerted effort of the government agencies and professional organizations to bring supply of health care personnel in line with the anticipated demand to ensure adequate supply of health care workers i. It links workforce planning and allocation of human resources to meaningful and measureable health outcomes of the general population 4. Approach: This approach includes a panel of experts rendering informed opinion on the health care needs of a given population. Strength: it sets a clear national work force planning goals that are consistent with the overall health objectives of the country.

Demand for nurses and nursing care is derived from the broader demand for health care. Demographic features of the population: age. benefits. including all educational levels 3. kinds of health care employee. Health care system: services provided. Nursing education: the number and types of programs. Nursing workforce: the predicted number of nurses to provide desired services Supply factors in the Workforce 1. technology. and the amount of funding of nursing education 3. which affect the demand of faculty 3. Market equilibrium: the point at which the supply and demand for nurses to meet 4. which must be matched within the supply of nurses Demand Factors for Nurses 1. Health care system: wages. family constellation and work satisfaction Source of nursing workforce . number of graduates. Nursing education: the number and types of programs. Aggregate supply of nurses: total number of nurses available for employment. potential for employee substitution 2. Demographic features of nurses: age. Contextual factors: the socio-cultural values and government philosophy that surround health care needs 2. geographic distribution. and price control 4. gender. and work opportunities 2. Economic system: inflation and unemployment in the general economy 4. Economic system: reimbursement for services. Demand for nursing care is the need for services. and epidemiology b) Supply of nurses The nursing workforce is the predicted number of working nurses required to meet the needs of nursing services Factors in Nursing workforce 1. race.

Existing nurses who work for longer hours c) Nursing Demand and supply issues  Decrease in the number of hospital days  Slowing of the growth rate for acute care nursing employment  Health care systems change. They can increase the supply if they return to the profession when pay or working conditions improve Factors that affect decisions of nurses to return to the profession i. Supply of new nurses 2. Supply and wages 1.1. Factors affecting nursing salaries a) Experience b) Breaks in service . The nursing Labor market: Demand. Job opportunities in other professions in which nurses can participate iii. Nurses returning to the workforce Inactive nurses are source of nursing supply. with an increase use of assistive personnel to substitute nurses and expansion of hospital nursing practice  Adaptation of educational institutions can adapt to supply nurses prepared to meet the existing and emerging practice needs  Supply timing is important for meeting demand needs when they occur  Nurses can provide services that substitute for services while providing unique nursing services that complement those other professionals  Changes in the health care systems provide opportunities for expanded growth C. Salary The money received by an employee for services rendered under contract between the employer and the employee 2. Wages in the nursing labor market ii. The preferences of individual nurses concerning careers versus families 3.

Labor shortage . is getting older  Technology is more complex  Large waves of teen agers and risky behaviors  Government interventions to increase insurance coverage in the country  Managed care Supply trends  Trend in the undergraduate nursing programs i. A decrease in the admission of nursing students. including nurses.c) d) e) f) g) h) i) Seniority is measured by years of uninterrupted nursing experience which makes significant differences in the nurses pay. hence a decrease in nursing graduates  Trend in the graduate nursing programs i. Breaks in the service include frequent changes in employment state. Setting and specialty Acute care setting offered the highest pay among various work setting. Nurses who have post baccalaureate degree experience a higher return than a baccalaureate degree. More students are entering the masters program 3. Employers typically pay more to attract employees to fill these irregular time slots Part time nurses Part time nurses earn less than full time nurses Union membership and geographic location Demand trends Demand trend: the historical pattern of the number of the nurses hired at different points in time for the country as a whole or to the different regions in the country Factors:  Population continues to grow  The population. Higher wages for over time. nights and weekends Higher overtime pay is a traditional source of extra income for nurses. long periods of unemployment and part – time work Education A nurse’s educational background has a relatively significant impact on wage rates. weekend work and night duties are less desirable than regular work during the day. Overtime work.

and community resources to promote an optimum level of client well . 1998) It is holistic and is focused on the individual client. Risks and Opportunities for the Future Nurses a) Acute care There is still an ongoing demand for hospital nurses.Labor shortage results when the demand for labor outstrips the supply. it requires a higher level of expertise in training and skills because of the increasing severity of illness of the hospitalized patient Acute care nurse can substitute for medical residents by providing care that is within the residents scope of practice. The hospice movement views dying as a natural part of life The demand for hospice care services in increasing as evidenced by the increasing number of patient’s served and the number of agencies providing hospice care d) Extended care that can occur in the home setting(subacute care) This includes basic and skilled nursing facilities in nursing homes. Nursing Labor Excess: Nursing in the global environment 1. integrating family/caregiver. however. of comparable quality.being The comparative cost per day of home health care versus hospital care demonstrates a lower cost of service for home health care c) Hospice care Hospice care is a setting that provides practice opportunities for nurses interested in the end of life care. environmental. An increase in supply or decrease in the demand can eliminate the shortage a) More frequent floating of nurses from one unit or department to another b) Substitution of less expensive and lesser trained personnel c) Emphasis on cross training of nursing and other personnel to make them more adaptable to the needs of their work environment D. and of equal or lower cost. e) Public health and Community health nursing . b) Home health care Home – care agencies provide care to patients in their homes Home health care nursing: (ANA.

Case management in occupational health is directed to the early detection and treatment of illness and injury to promote early recovery. including the control and prevention of occupational diseases. g) School health It was established to promote and protect the health of school aged children      Value of School Nursing Immunizations Communicable disease management Interdisciplinary team planning Medication administration Comprehensive health education h) Parish nursing Parish Nursing involves the promotion of wellness by a parish nurse who is part of the ministerial team of the congregation. 1986) The cost effectiveness of health promotion and prevention activities is demonstrated when the activities can prevent costly illness. f) Occupational nursing Occupational health practice is concerned with the health of the working population. non –profit agencies and other community based agencies Public Health Nursing: the practice of promoting and protecting the health of populations using knowledge from nursing. providing a holistic approach to the physical. emotional. decreased health care cost. and spiritual needs of the congregation members i) Correctional health . and early return to work.This includes health departments. social and public health services It is the synthesis of nursing practice and public health practice applied to and promoting and preserving the health of populations (ANA.

Prevention of illness and appropriate disease management can reduce the overall cost of care j) Ambulatory care This focuses on systematic assessment. They work with staff and direct their talents toward the goals of the organization 2. Nurse entrepreneur: always search for change. respond to it and exploit it as an opportunity Nurse intraprenuer: creative and self directed people who nurture entrepreneurial activities within the organization in which they are employed. and preventive care for patients and families. Global challenges Facing Nursing a) The impact of global Trade b) Job opportunities across borders c) Global markets for nursing services  Marketing A social and managerial process by which individuals and groups obtain what they need and want through creating.Correctional health nursing provides opportunity to assess inmates for physical and psychological problems. Correct identification and appropriate treatment can lead to decreased health care cost. The nurse practicing in this setting functions independently and must be self directed k) Nurse owned business Nurse owned business are created by individuals who use their nursing expertise to create a solution to some patient or other health care need and who assume a financial risk to implement their vision. diagnosis of acute illness. changing products of value to others  Marketing opportunities o Nurses’ careers o Entrepreneurship o Direct reimbursement o Consumer driven services o Partnerships  Marketing Tools o Product  What the firm offers to the market  The attractive attributes of what is offered by a business firm . offering.

o Price  Amount of money that the consumers are asked to pay  Pricing: the use of price as a strategic tool to promote a product o Place  Refers to the various things a firm does to make the product more accessible to the market o Promotion  Refers to the various activities that the firm undertakes to communicate the value of the service or the product to the target costumers .

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