Econ principles milestone 3

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Econ Principles Milestone 1

Precious Teasley

Southern New Hampshire University  

IHP-620-Q1591 Economic Principles- healthcare 22TW1

Dr. Scott

September 6,2022

The primary teaching facility for the Leonard M. Miller School of Medicine at the University of Miami is the accredited, non-profit Jackson Memorial Hospital. Jackson Memorial Hospital, which has more than 1,550 licensed beds, serves as a referral facility, attracts researchers, and is the location of the Ryder Trauma Hospital, the only adult and pediatric Level 1 trauma center in Miami-Dade County. The primary teaching facility for the Leonard M. Miller School of Medicine at the University of Miami is the accredited, non-profit Jackson Memorial Hospital (Jackson et al., 2002). Jackson Memorial Hospital, which has more than 1,550 licensed beds, serves as a referral facility, attracts researchers, and is the location of the Ryder Trauma Hospital, the only adult and pediatric Level 1 trauma center in Miami-Dade County.

Patients bear a significant financial burden due to lower insurance payments. In addition, COVID-19 pandemic victims and their families are being compelled to pay extra for even simple and commonplace services due to job loss or layoffs. The patient is now the third-largest payer, after Medicare and Medicaid, according to Jackson Hospital’s vice president of revenue cycle; therefore, the financial risk these developments posed to Jackson Hospital had to be addressed.

The management aimed to implement contemporary methods to involve patients early in discussions about financial obligations, payment alternatives, and agreements (Jackson et al.,2002). To improve patient collections, Jackson Hospital looked for effective ways to convey patient balances and payment choices for services provided. Among the objectives were lowering collection expenses and raising patient satisfaction. A $1.2 billion, not-for-profit, independently run acute care hospital, Jackson Hospital is located in a working-class neighborhood with blue-collar residents (Tookes et al., 2015). Their population’s payer mix is 56% Medicare, 11% Medicaid, and 6% self-pay, and their patients’ average credit scores are under 600. From the financial statements available, this organization has no notable spike in revenue attributable to increased injuries and accidents related to the ice during the winter season.

References

Jackson, C. A., Derose, K. P., Chiesa, J., & Escarce, J. J. (2002). Hospital Care for the Uninsured in Miami-Dade County. Hospital Finance and Patient Travel Patterns. RAND CORP SANTA MONICA CA.

Tookes, H., Diaz, C., Li, H., Khalid, R., & Doblecki-Lewis, S. (2015). A cost analysis of hospitalizations for infections related to injection drug use at a county safety-net hospital in Miami, Florida. PloS one, 10(6), e0129360.

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Healthcare Economics

Precious Teasley

Southern New Hampshire University

IHP-620-Q1591 Economic Principles- healthcare 22TW1

Dr. Scott

September 24,2022

Economic Theories and Principles

A.
Economic Disparities

The provision of healthcare requires financial resources. A healthcare organization needs to be financially stable for it to offer the needed healthcare services to its patients (Hicks, 2020). Jackson Memorial Hospital, despite being a non-profit organization, is financially stable and this implies that the facility can afford to offer the best quality healthcare services as well as research opportunities. When the facility is financially healthy, there is a demand of investing the excess money into new healthcare services so that patients can access more and better services. According to the demand theory, when there is more disposable income, there is an increased demand for more goods and services. In other words, the financial well-being of an organization affects its demand for services.

B.
Economic Theories

One of the most useful economic theories in the healthcare industry is the theory of demand and supply. According to this economic theory, the demand for a product will decline if the price goes up (Bender, 2020). Conversely, when the prices are high, the supply of a product is boosted but when prices drop, the supply is diminished. This theory is relevant to the field of healthcare, especially in chronic illnesses. For instance, if the supply of medicine for a particular disease decreases but the demand persists, then the price of the medicine will go up. The proponents of this theory argue that the level of demand and supply affect the prices of commodities in the market until the point of economic equilibrium is reached. This is true in the healthcare industry because there are situations where there is a shortage of particular drugs or services while the demand is high. This makes them expensive and inaccessible to many patients who require the services.

C.
Use of Economic Principles

Economic principles are important to organizations because they help in making informed decisions especially financially. For an organization to operate, it needs to invest in various areas where it intends to provide goods and services to its clients. In such cases, economic principles must be applied to determine the cost-benefit analysis of the potential investment. This helps to tell whether or not there will be a reasonable return on investment in whichever project an organization takes. If there is an indication that investment will be successful, resources should be provided for the project. In other words, economic principles play a key role in informing an organization about the chances of success or failure of what they want to do. For the best results to be achieved, a variety of economic principles such as the cost-benefit analysis and the SWOT analysis should be utilized. Even if an organization is a non-profit, it needs to make the correct economic decisions for it to survive in the industry.

For Profit and Non-Profit

A.
Financial Differentiation

As the names suggest, for-profit healthcare organizations, apart from offering healthcare services, are also established to make financial gains. On the contrary, non-profit healthcare organizations are majorly established for public and social benefit. They do not intend to make profits for their owners. For-profit organizations sell their services at a cost that enables the organization to earn a profit. The proceeds are used to finance the operations of the facility (Rice & Unruh, 2015). On the other hand, non-profit healthcare organizations usually offer free services or charge a subsidized fee. Their operations and services are funded by donors and well-wishers. As much as the two types of organizations might offer similar services, they are established for different reasons.

B.
Economic Differentiation

As aforementioned, for-profit and non-profit organizations are established for different reasons even if they might be operating in the same industry. As far as economic differentiation is concerned, for-profit organizations utilize economic principles that focus on buying goods at a lower price or manufacturing them and then reselling them at a higher price (Bender, 2020). The economic model for for-profit organizations focuses on minimizing losses and maximizing profits. On the other hand, non-profit organizations only utilize economic models that focus on sustainability; as long as the organization can sustain itself, that is what matters. Such organizations pay a lot of attention to employee accountability and responsibility to make sure everyone works responsibly to keep the organization functional. Non-profit organizations focus on best practices that revolve around client satisfaction rather than maximizing profits.

Policies, Changes, and Disparities

A.
Economic Policies and Disparities in Healthcare

Economic policies have a direct impact on healthcare, and sometimes they cause disparities. For instance, health insurance is an economic policy that is intended to make healthcare affordable, especially in emergency cases that require substantial financial resources. Insurance determines the kind of services different patients receive depending on how much they contribute towards their coverage. Economic policies such as health insurance make access to healthcare affordable. The difference is different patients receive different types of care determined by their contributions (Rice & Unruh, 2015). There are disparities in healthcare occasioned by economic policies as seen above.

B.
Policy Changes

One of the recent policy changes is the introduction of the Temporary Marketplace Premium Tax Credit Enhancement. This is a policy change that enables more people to afford healthcare coverage by widening the coverage. It is a move by the Biden administration to ensure there is more affordability in terms of accessing healthcare. If congress passes this into law, more than 14 million Americans will receive affordable healthcare coverage. The impact that this policy has on the healthcare economic policy is the fact that organizations will have to adjust their policies so that they can accommodate the new development. There will be more demand for healthcare services because they are affordable to more people. Healthcare organizations will be required to increase the supply of their products, services, and manpower to match the newly increased demand. When policies are made by the government, organizations in the affected industries need to adjust their strategies so that they can fit in the new environment.

C.
Disparities Planning

Disparities must be factored into healthcare strategic planning because they affect operations and the productivity of the organization. It is essential to pay attention to such factors so that operations are streamlined and uninterrupted. Healthcare disparities, in simple terms, refer to differences in healthcare components such as insurance covers, types of diseases, types of healthcare needed, and income disparity among patients. The more disparities, the more challenging a situation is. With such a huge difference, there needs to be effective strategic planning for an organization to handle the situation (Hicks, 2020). For instance, in the case where a healthcare organization serves people who speak a different language than the native one, there needs to be a plan to have permanent language translators to ease the communication between patients and caregivers.

References

Bender, L. (2020).
Economics: Theories and Applied Principles. New York: CLANRYE International.

Hicks, L. (2020).
Economics of Health and Medical Care. Burlington, MA: Jones and Bartlett.

Rice, T. & Unruh, L. (2015).
The Economics of Health Reconsidered. Chicago: Health Administration Press.

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