Economics Terms and Health Care History

Economics Terms and Health Care History

HCS- 440 Health Care Economics

December 19, 2011

Economics Terms and Health Care History

Introduction

The United States healthcare system is continually changing in an attempt to meet the supply and demand constraints of an ever changing economy. The following paper will describe the history and evolution of healthcare economics and the time line of funding using our vocabulary terms.

Economics

It is detrimental to the ongoing success of a healthcare organization to stay abreast of their financial gains and limitations as a whole. All health care organizations in America today teeter-totter on the brink of closing down mainly attributed to inability to stay abreast of financial gains and set goals to stay within previously established limitations. It would be wise for an organization to prepare for the worst and work for the best in order to sustain a strong hold on their marginal revenue (Getzen & Allen, Chapter 2, 2007). This is where the science of economic comes into play. According to University of Phoenix Economic Terms and Health Care History Simulation (2010), Economics as it applies to the healthcare system is defined as "The science that deals with the production distribution and consumption of goods and services, or the material welfare of human kind" (University of Phoenix, 2010, para. 1). According to Scott, Solomon, and McGowan, "economics (as it applies to health care) is about resource allocation of funds, and efficiency in resources use (getting the most from available resources) in health care" (CDC, 2001). An example of this would be, while taking care not to exhaust all recourses (material and human), healthcare worker work efficiently to ensure that services renders meet both the need and expectation of the patient (/ money).

Supply and Demand

The reason why the saying "Money makes the world go round" is so true; because the saying is a derivative of the economical principle known as "Supply and Demand". Supply and Demand ultimately determines micro and macroeconomics (defined later) because within any given market, at any time in the world, supply and demand influences the prices and the quantity of services and goods available. An overage or shortage in marginal revenue is determined by the demand for products and services sold. If there is not a demand for products and services, then the supply is affected, in either an overage or a shortage. Without a demand for products and services; there would be no reason to supply/offer services. On the other hand, if the demand for products and services is too great, then the supply would also be limited. "Supply and demand: The relation between these two factors determines the price of a commodity" (University of Phoenix, 2010, para. 1).

Microeconomics and Macroeconomics

Microeconomics focuses on how individuals and organizations chose in what manner to distribute the marginal revenue available to them, to ensure that not only are the needs of the consumer are being met; but, the needs of the organization supplying the goods or services are being met as well. According to University of Phoenix Economic Terms and Health Care History Simulation (2010), Microeconomics is: "The branch of economics dealing with particular aspects of an economy, as the price-cost relationship of a firm" (University of Phoenix, 2010, para. 1). According to University of Phoenix Economic