The healthcare economics have changed so much over the years. The changed was because of the evolutionary changes that happened in the United States which cause the dramatic change in the economics medical technology. One of the main reasons that moves all things are by health care economics is the money and the money help keeps an organization to established and be stable and it is the key to success. One way that the organization is using to help run the business is the cash flow system. It run the business and somehow help in making a decision in the future and also learning the healthcare economics. “Economics is the science that deals with the production, distribution, and consumption of goods and services or the material welfare of human kind.” (Getzen & Moore, 2007).
There are some factors that contributed to the evolution of healthcare and these are technology and medical advancement. If somebody understand the flow of funds and the health care economics started, it will be easier task of planning for the future. Like what I mentioned earlier it’s the money is the driving force at health care economics. In the past most people paid privately for health care. The funding began over the years that come more from the health care insurance. That way the individuals are only paying a portion of the cost of the health care insurance the private insurance will pay the rest. (Getzen & Moore, 2007)
The United States technology change because of the supply and demand and new technology system are continuously upgrading and updating to help the increasing population in United States. Before our time people who needs to be treated by a doctor will trade things that they own in exchange for the payment of the health service, they did not have any money or they couldn’t afford the cost of the health care services. There are times the doctors would trade treatment for some things such as cotton, livestock, grain and jewelry as the patient form of Economic Terms and Health Care History3
payment. These doctors were tradesmen, the patient was paying one hundred percent cost for health care services rendered. As the United Stated progress with the technology and other historical factors, such as The Great Depression, a new health care system was made to aid the American population in purchasing medical services.
Microeconomics and Macroeconomics
Microeconomics is how the individuals and organizations make a decision on how to allocate the resources that are available so by allocating the resources they can meet their own or the consumer demands. Macroeconomics is the general population or the health care system as a whole, rather than the individual consumers or organizations. Both Microeconomics and Macroeconomics explained that the supply and demand of the population. Microeconomics concentrate on the product costs in any given market. Macroeconomics explain the price of the product that are sold. Macroeconomics are influenced by inflation, consumer consumption and employment rates.
In Microeconomics, the individual that need medical are but do not have health care insurance may continue the treatment until it finish. The health care system that can assist this individual are through Medicaid or Medicare. However Microeconomics affects Macroeconomics. For the patient or the organization with the demands that are not met, the whole system becomes stained.
Economic Terms and Health Care History4
Gross Domestic Product
Gross Domestic Product are consists of total market value of all services and goods that produced during the specific period of time. (Apollo Group, 2010). This comprises the services and goods that are produce with the market values over a year. The three ways gross market value determined are expenditures, product approach and income approach. Despite with all approaches the outcomes are identical.
Elasticity and Inelasticity
The consumers determined the elasticity same as the cost of the products by supply and demand. If the consumer agreed that the product is important or essential, then the cost of the product may be higher, most of the time consumer will continue to purchase the product out of necessity and still willing to play a higher price. So if the product or service is in such a great demand and consumer still willing to purchase regardless of its costs, then it is considered inelastic.
Supply and Demand
The Supply and Demand played an important role in the society. It has influenced the prices and the quantities of the product available. This is where microeconomics and macroeconomics get affected. If there are no demand of the products then the supply of the product gets affected. The supply of the product will be limited if there are no demands. If the demands is a lot, then the supply would be limited as well, it is because of how much the product is sold and the quantity of the supplier can sell the product. The consumer always consider the cost of the products, by this it determine the supply and demand of the product.
Economic Terms and Health Care History5
Economics is part of our health care industry, it can be used to predict the costs in the health care world by supply and demand, microeconomics and macroeconomics, service elasticity and inelasticity.
Economics Terms and Health Care History6
Getzen and Allen 2007, Healthcare Economics
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