The modern healthcare sector is a wide-ranging industry and one that encompasses a diverse selection of roles. It is also a sector that is about much more than just patient care, nursing, surgery and physiotherapy. One good example of this is the growing importance of healthcare economics in the industry. But what exactly is this, how has it impacted the sector and how is it managed?
What is healthcare economics?
In simple terms, healthcare economics refers to the various factors that influence costs and spending within healthcare. While this can be studied on a general scale across the sector, it is also used within individual healthcare settings to manage their finances/allocate resources.
How can you find out more about healthcare economics?
As you may expect, healthcare economics is something that is mostly seen in more-senior roles within the healthcare system. This is because higher-level roles include the responsibility for budgets, resource allocation and spending across a department/institution. Due to this, it is key for those working at the more-senior levels in the industry to have an excellent working knowledge of the subject.
One way to develop this is studying an academic course, which would teach you how economics in healthcare works. This arms you with the latest knowledge to fall back on and sees you fully prepared to manage healthcare economics in your current or future roles. Baylor University’s DNP Executive Leadership is a 100% online course that includes modules on strategic economic and financial concepts. With no GRE/GMAT requirements, it is the ideal way for healthcare executives to learn more about this subject and stay in your full-time job at the same time.
What impact has healthcare economics had on the sector?
Just as a primary care physician has a major impact on patient care, economics also plays a crucial role in modern healthcare. But just what kind of impact has it had on the industry?
To begin with, it is fair to say that economics in healthcare has enabled institutions to gain a much deeper insight into their finances. By focusing on this, modern clinics or hospitals are able to see where money is being spent and how much is being spent in one specific area. In turn, this enables them to get a tight grip on spending and ensures money is spent only when and where truly needed.
In addition, taking an interest in healthcare economics enables hospitals and clinics to focus on costs. This can enable them to save some money and reinvest these extra funds into better patient care (such as more nurses or extra medical supplies). By looking at costs, healthcare facilities can pinpoint where they are paying more than they should for specific items/medical supplies and act accordingly.
Healthcare economics can help reduce waste
One of the major impacts that economics in healthcare has on the sector generally is a drive to reduce waste. By looking at costs and spending, for example, it is possible to discover where wastage is high in a healthcare setting and dig down into why this might be true. This then enables you to speak with the staff involved about this and take steps to reduce waste, thus bringing down spending.
A very basic example of this could be that you notice your hospital’s administration department is spending a lot on office supplies. When you dig deeper, you may find out that staff are given new office chairs each year. This naturally is a major waste of resources and is something discovered when taking a look at healthcare economics.
How is healthcare economics managed?
The management of healthcare economics is usually by those at more senior levels. It would not be fair after all to expect newly trained nurses or lower-level admin staff to take on this responsibility. As this subject is so crucial to the modern industry, it has to be managed by those higher up in the system.
Having professionals whose role it is to look after things like this also means they have the time to actually do it properly. A Registered Nurse most likely could not fit a detailed analysis of a hospital’s finances into her daily schedule.
But exactly how do those charged with keeping tabs on this subject go about it? First, much of this comes down to understanding how to generate resources and then how to allocate them to where they are most needed. This helps any healthcare facility ensure that any funds generated are not wasted and used in the right places.
Second, allocation of human resources can also come into play here. It could see those who manage healthcare economics deciding which departments need more staff or where new staff should be placed.
How else is economics in healthcare managed?
Proper management of healthcare economics will also involve those at the executive level, keeping an eye on spending and costs in their clinic, practice or hospital. This enables them to keep the institution on a sound financial footing and operating in the most efficient way, financially. To achieve this, healthcare leaders will look at data on how much each department is spending, what their budget is, what the money is being spent on and what costs could be cut.
To effectively manage economics in this sector, healthcare executives will also need to look at general industry trends. This enables them to see if any could be useful to follow in their own institution or if there are negative trends they need to be aware of.
Healthcare economics key for the industry
Although a lot of focus in healthcare can go onto the practical side of patient care, the economics involved in the sector is becoming increasingly important to address. This now sees plenty of healthcare settings employing people in high-level roles to manage their own finances and budgets. By doing this, hospitals and clinics can ensure the financial side of their operation is in good hands and that they are operating in a sensible, strategically sound way.
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