Health is one of the most important prerequisites of a society, which defines the living conditions and life span of the given society’s population. Over the years, the changes in the economic systems of various countries raise a very important limelight on the economics of healthcare whereby people such as the policymakers, economists as well as every individual in the society start giving their outlook on the whole issue. This Article is quite extensive and deals with the topic of resource distribution in providing health care more specifically the cost, access, quality, and efficiency of health care.
Introduction
The branch of economics dealing with the usage, organization, funding and provision of health care is referred to as health care economics. It involves the understanding of unique modes of behaviour of both clients and health care givers, not forgetting governments within the health and health care sub-sector. This discipline is crucial because it addresses the core question: what strategies work efficiently in providing quality health care for members of the society bearing in mind that there are scarce resource available? This paper focuses on the rationale of studying healthcare economics as a benchmark for developing and implementing policies that will promote and sustain a proper health system.
The Cost of Healthcare
A topic of general concern in the healthcare economics is the ever increasing cost of health care services. It was estimated by the World Health Organization (WHO) that the total amount of money spent on health facilities has been rising at a faster rate than the amount spent on the composite consumption. For instance, in USA, the health care expenditure was approximately equal to 16. 7% of the GDP in 2019 estimating to about $3 trillion was spent on health care facilities and services. 8 trillion. Such a trend is not exclusive to the U. S.; most countries experience similar trends due to factors including the increasing population of people with more years’ experience in their careers, improving medical care technology, and increases in incidences of chronic diseases.
This area remains a significant concern because the civilization in health facilities at the moment is a strain on citizens and their rulers. For individuals, it can result in accustoming health expenses thus sinking many to the dungeons of poverty. On the other hand Governments face the challenge of balancing their budgets in the fulfillment of their role to ensure adequate Health care funding so as not to neglect other equally important sectors. These costs include expenses on purchase of medicine, hospitalization and other special treatments that patients may require. Moreover, varieties of health services markets exhibit a poor level of price transparency that hinders cost regulation.
Another significant driving force of the costs of healthcare is administrative costs. In some types of healthcare systems, such as that of the U. S., administration expenses constitute the major share of the expenses due to packed complicated bills and disjointed care. On the other hand, countries that have efficient health care, as seen from the funnel plots, include Canada and the UK, which spend less on administrative purposes. These are inefficient areas that must be addressed when it comes to cutting costs of health care.
Access to Healthcare
The other issues, which constitutes the health economics within the healthcare systems include the access to the health services. Nevertheless, the delivery of care that is accessible to the populace links ill with cost on one dimension or the other based on the geographic or demographic divide. World Healthcare Organization (WHO) also estimates than approximately 3.5 billion people have inadequate or no access to proper primary healthcare. These are such as geographical factors, economic status of the respondents, and availability of practicing heath care practitioners.
For example, the case is even worse in low middle income countries as captured in the following objectives. This sector is still very rudimentary and these issues are compounded by lack of resources and facilities and that is why the majority of the people cannot receive even the most elementary and essential health care services that should be provided to them. For example, in the SSA sub-region, there was an absolute shortfall of trained human resources in health; the SSA had only 2 skilled health workforce per 1000 persons. At the current time, Iraq has only 2 healthcare workers for every 1000 people; this is not motivating given the WHO standard that calls for 4. 45 per 1,000 people. In this regard, there is the problem of healthcare facilities’ deficit and the lack of specialists in rural communities, which complicates the question of access.
It is pointed out that equity gaps in relation to socioeconomic status in chosen countries are considerable.
Inequality issues are typical for the high-income countries on different spectra, however, one of the most evident is the division based on the payment capacity. For instance, in United States, uninsured as well as under insured citizens find it very hard to seek for treatment. Thus, it is possible to observe that even in developed states with the English language, free, state-financed, and state-provided health care services like Great Britain there can be variations in the territorial accessibility of the above services. It has been realized that tele-consulting and mobile health facilities could be used to address some of these gaps and as we have seen these two are capital intensive and depends on infrastructure.
Quality of Healthcare
The quality of healthcare is an influential aspect of health results. Since the facility of healthcare services are a major determinant to the health of patients, quality services enable patient to gain longer lives, healthy lives and hence healthy living. Nevertheless, to ensure that quality healthcare is provided to individuals is not easily achievable as it entails various factors such as; the caregiver’s skills, settings, and the practice of protocols in the health facilities.
In the recent past, there has been noted a strong focus towards actualization and enhancement of quality enhancing measures in the healthcare organizations globally. For example, the organization of the UK health care called National Health Service, NHS has several strategies of quality improvement, which has been drawn up with the purpose of enhancing not only the quality of the care provided but also safety of the patient.
Likewise in United States the ACA introduced the policies to improve care quality for instance; outlines establishment of Centre for Medicare and Medicaid Innovation (CMMI) for the purpose of entertaining payment and service delivery reforms.
Consistently with the theory structure, quality in health care organizations is therefore defined in terms of the quantity of patient inputs such as mortality rate, readmission rate, and customers’ satisfaction. Some of the measures taken as a pull towards escalating the quality are such as purchasing a professional development for the health care workers, implementation of health information technology and use of standardized care. Finally, the involvement of the patient as the key participant in the treatment process has also been determined to improve health plus the satisfaction of the patients.
Another aspect of measurement of quality is safety of the process of care delivery that in other words means whether the given process of delivering health care poses any risks to the provider or the receiver of care. Medical errors, and Healthcare Associated Infections are still a core problem that worsens the patient’s outcomes and increases the expenses. Thus, it can be stated that protecting safety measures and encouraging their use, as well as usage of tracking and preventing measures as main instruments are essential steps on the pathway towards increasing the quality and safety characteristics of the health care domain.
Efficiency in Healthcare Delivery
Healthcare productivity refers to enhancing value or the accomplishment of the highest amount of health for the least amount of resource. Efficiency then, refers to providing health care services that meet the patient’s needs at the least cost. However, there is increased wastage of resources in many health facilities and patient outcomes are not satisfactory due to inefficiencies.
The major problem areas can be delineated as follows: One of the Open STEAM’s major inherent inefficiencies is the administrative costs. Thus, in spite of making up less than 5% of the United States’ gross domestic product, administrative costs consume about 8% of every health care dollar while in countries with much simpler and less bureaucratic systems, the proportion of financing consumed by administration ranges between 1 and 3%. One more area is the misuse of Heath care services, for example, over testing and over treating that ends up in wastage of resources, time and risking the lives of patients.
To increase efficiency, an HM must embrace the use of health IT to decrease paperwork and administrative work, focus on paying providers based on the productivity they achieve rather than on the number of patients they treat, and encourage people to take preventive measures to cut the number of patients they have to see with chronic diseases. Moreover, integrated care systems, including the implementation of primary care ACOs assistance in the development of higher-level communication among healthcare providers.
Healthcare Financing
HealthCare financing is a major element of field of study known as healthcare economics. It prescribes the way through which money is acquired and spent in the delivery of health services that are affordable to the populace. Today, health care financing is available in many techniques at the global level and these include the public health care financing, the private financing and the mixed financing every year.
With regards to the funding of the health care systems, the paper notes that in most of the developed countries of the contemporary world, it is financed majorly by the public means. For instance, United Kingdom has a health sector known as National Health Service whereby the financing is from the generality of the revenue in the nation which makes health facilities to be offered freely. While the US has resolved to have a mixed health care system through insurance with a greater leaning on the private insurance this has led to health care that is very expensive and has some gaps as to insurance cover. The ACA attempted to address some of these issues through expansion of Medicaid and the development of the insurance market place however, there are still barriers.
Hence, low and middle incorporated countries financing of health care is still low due to poor financial resources as well as high OOP. Another consideration which has been under put in an attempt to invoke a reduction in the financial burden on HDCs and NFHSs is the SHI or the CHISs. For example, Rwandan government came with a basic approach to the community and enacted community based health insurance for the inhabitants; this has been very effective in increasing the number of people seeking health care services and reducing on out of pocket expenses.
Another important component of financing of the health care is the foreign aid and development support. Majority of the LICs depend on extraneous support in the delivery of FGH meaning that development aids’ support plays a central role in the improvement of the health sector. Some of the organizations, such as the Global Fund and the Gavi – all the Vaccine Alliance finance crucial disease centered projects like the HIV/AIDS, tuberculosis, and immunization. Though the strategy of seeking support from other sources has inherent risks, it is necessary to carry out the analysis of the long-term financing problem in the country.
The Role of Technology in Healthcare
Recent advancement in technology has improved the over healthcare delivery systems, bringing in new means of attaining better health systems. From the just the electronic health records to telemedicine health has been revolutionized by technology.
For instance, electronic health records improve the coordination of care since they grant multiple care givers immediate access to patient’s information. It enhances the quality of care to be given since repeated tests and procedures are eliminated thus making the overall cost to be reduced.
Medicine over the online for instance has the abilities to increase the level of a country’s health regardless of the geographical location of people in need of various health care services. Especially during the COVID-19 outbreak, the importance of medicine consultancy over the online platform and applications on android and iOS for increasing access to and the effectiveness of health care was demonstrated.
However, the mentioned integration of technology in the healthcare systems also has its problem. Challenges like data privacy, cybersecurity, and digital divide are among those which should be solved in order technological resources could be provided to all stakeholders. Also, integration and functioning of new technologies for treating people entail huge costs and may not be easily achievable in low-claiming environments.
AI and machine learning are other field’s steadily entering healthcare, serving interests such as diagnostic algorithms through action plans. It is used in enhancing health assessment diagnostics, recommending the most appropriate therapeutic treatment plan, and prognosis of the state of the disease. However, problems such as the prejudice of the model and above all, the impossibility of explaining an AI’s decision require introducing ethical concerns for the right use of AI in healthcare.
The Impact of Aging Populations
Elderly populations remain a strain to healthcare services since they are vulnerable to special illnesses. Due to aging, individuals’ frequency of access to health care services raises, with an emphasis on the treatment of chronic diseases and the need for long-term care. By the year 2050, the United Nations forecasted that the people’s population rearing 65 years old and above will increase by more than double. 5 billion.
Global research shows that aging populations hold huge economic consequences. Higher levels of health care expenditure along with labor constraint the pressure mounts on the government finances. Governments must prepare for this demographic trend by redesigning healthcare, and this can be done by utilizing more money in various measures such as on preventive care and care of the elderly besides developing a model of care delivery system that links various providers.
Another social concern which stands out prominent in the field of aging societies is long-term care. Special attention should be paid to the fact that the care in relation to the elders, especially those individuals with chronic diseases or disabilities entails considerable costs. Thus, the issue of shortage of LTC facilities and properly skilled human resource in continuing care remains a formidable concern not just for many countries, but also for those receiving informal care from their relatives. This situation emphasizes the necessity of polices that can encourage the caregivers and also increasing the opportunities to consume a formal long-term care services.
Other factors that should be incorporated include the preventive care together with healthy aging programs as well. The programs that increase awareness and encourage the community to take some basic healthy practices such as exercising, eating right, and getting checked regularly for early signs of any diseases, will go a long way in cutting down on the incidences of chronic diseases, and therefore cutting down on the burden in the health care systems. Furthermore, fighting loneliness and providing elderly individuals with social interactions should also be among a nurse’s priorities due to its impact on the quality of life.
Addressing Health Inequities
Economic challenges with health are reasonably well-developed, particularly within the concept of health inequities. These disparities are commonly influenced by factors that are often referred to as the social determinants of health including the income, education and living standards. Designing strategies that would help eradicate heath disparities should intervene on impartiality of the health care system as well as other influential social determinants.
Measures that can support enhancing health equity consist of increasing coverage in available healthcare facilities; enhancing information about health; and eradicating health-related disparities. For instance, programs that award grants to low-income consumers, grants will create a bridge that will enable them get access to these services thereby reducing health inequalities. Thus, restoring inequities means supporting both macro and micro-level healthy living and disease prevention interventions, which target the causes of health disparities.
They also consist of conditions linked to systemic prejudice and political structures or practice-related factors regarding accessing and delivering healthcare services. In order to address these red flags some of the approaches used include policy changes aimed at increasing diversity of the health care workforce and eradicating prejudice and culturally insensitive practices in health care provision, solving disparities and prejudices coupled with culturally sensitive patient care practices and services. It is also important to establish relationships with communities in order to define and design specific prevention and treatment programs for disadvantaged groups of people.
The Role of Government in Healthcare
Health is another major facet of human life that is greatly influenced by governments. It involves the formulation of policies, control of the health care practitioners as well as guaranteeing the availability and affordable health care. The difference in governments’ involvement ranges from fully funded like the NHS to largely privatized care like in the USA.
This is because there is need for government to intervene so as to correct the market failures in the offer of the HSs and to make sure that health care services are fairly distributed. For example, fiscal policy in terms of the prices can be used in a way that can control the high billing by the health players and also make the crucial drugs accessible to the public at reasonable costs. They may also be able to visually fund population health improvement activities such as, immunization, health promotion and launches.
Health policies are on the center of disease prevention and health maintenance in communities. It is as if measures against smoking, vaccination, and campaigns against obesity are indispensable elements of public health policy. Another important aspect of health crises is that governments are involved in the process of mitigation of the disease spreading and providing required facilities.
Healthcare is another sector where the government plays a central role especially in research and development agendas better known as R&D. Government spending for health research offers beneficial advancements for treatment and technologies that enhance the quality of residents’ lives. Organizations including the NIH in the United States have the responsibility of enhancing the medical science and putting the outcomes of research into actual use.
Conclusion
The concern of health economics in one way or the other involves cost, access, quality, and efficiency of health care. Health care systems all over the world today are under pressure due to such issues as; cost, ageing people, differential health status, amongst others, hence the imperative to implement proper and feasible solutions to health care delivery and financing.
It implies that the stakeholders of the several countries, the policymakers, the healthcare givers, and the generality of the people should fashion out ways and offer a health care system that is just, effective, and sustainable to afford quality health care for all. Thus, since the enhancement of health status and quality of people’s lives in the global context promotes the more rational use of resources to address today’s and tomorrow’s challenges, it is necessary to consider the economic aspects of healthcare. Therefore, to enable the fair and efficient provision of health care, theory development, as well as practical application, realistic refinements, strict compliance, and especially, shifting attention towards equity and quality in health care provision, can only be a continuous process.
