Economic Tools and Concepts

Economic tools and concepts are used in health care to determine the accessibility as well as availability of health care to the public. The tools are also fundamental in determining the quality of health care services and facilities that are availed to different categories of people. Various key players in the industry hold critical roles in determining the nature of services offered at public as well as in private institutions although the government has a more significant role in regulating the health care industry. In the recent years, the health care industry has been hit by a severe shortage of health professionals as well as facilities such that most people rarely access the basic heath cares services. Tools such as elasticity, demand and supply curves as well as marginal analysis in the health care industry are used to present this scenario.

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Discussion

Demand and supply curves as an economic tool in the shortage of nurses

These curves are quite relevant when identifying equilibrium from where the numbers of health care providers who are available to cater for all who are seeking their services. The number of nurses has gone down considerably in the past few years not only in the United States but all over the world. This shortage has led to an increased demand for health care services while the supply of the services is quite low (Getzen 2007).

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Low supply of nurses has been attributed to a step increase in populations all over the world such that the number of individuals seeking the same services has increased at a faster rate than the supply of health are services. Research has shown that more individuals are eager to venture into other careers than nursing as compared to the last century when nursing was among the most lucrative professions. This is mainly due to poor working conditions as well as insufficient remuneration for the nurses who are already practicing. Consequently, admission to nursing graduate school is quite competitive hence locking out many students who were aspiring to join the profession but their grades are low (Lutz, 2008).

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The low supply of nurses in relation to the high demand has been growing at a very alarming rate such that by the year 2020 the supply of nurses is predicted to be less by almost a half of the number demanded. The table below shows the trend from 2000 until 2020.

Year Supply Demand Shortage Percent

2000 1,890,700 2,001,500 -110,800 -6%

2005 1,942,500 2,161,300 -218,800 -10%

2010 1,941,200 2,347,000 -405,800 -17%

2015 1,886,100 2,569,800 -683,700 -27%

2020 1,808,000 2,824,900 -1,016,900 -36%

US: Supply versus Demand Projections for FTE Registered Nurses

Source: Data from the Bureau of Health Professions. (2004)

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Low supply of nurses has created huge disparities in the provision health care services such that the number of deaths has increased to very high levels. This is due to overworking of the nurses who are in the market because they have to stretch their services to all who are demanding for them hence increasing the ratio of patient to nurse. More patients than nurses predicts poor services being offered as the nurse is often very tired especially in facilities where there are few non-professional workers (Getzen 2007).

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Marginal analysis

Marginal analysis incorporates use of marginal, benefits and marginal costs to evaluate the best way of satisfying the needs of the public. Marginal analysis is based on utilitarian philosophy which calls for decisions which increase the benefits gained by the whole society or else give priority to choices which will improve the welfare of the whole society Bureau of Health Professions. (2004).

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Marginal costs in health care are the expenses incurred