Economics is a social science that examines and describes the results of the choices made using scare resources (Black, 1997). It analyzes how individuals and organizations, such as health care, choose to utilize the scarce resources to achieve quality and at the most minimum cost. The health care sector uses economics to assign its scarce resources to various departments. The allocation of resources through economics in turn enables the health care sector to cut on costs and achieve quality in its services. Therefore, health care and economics are two inseparable areas that share different terms. This paper describes the similarities and differences of cost, quality and resources in health care and economics.
Cost in economics refers to the value of an alternative that an individual must forego in order to seek after a certain action (Drummond, 2005). In other words, it is the benefits of taking a different action. For example, the cost of a student going to campus is the money that the student would have earned if the student chose to work. In that scenario, there are two choices to make and the student has to choose between school and work. The value foregone is the cost as used in economics. On the other hand, cost in health care refers to the amount of money used to provide health care services to patients in a given area (Getzen, 2007). This money is the cost of purchasing medicines and paying the health professionals as they provide the services.
Cost also refers to the amount of money a patient uses to access the services at a health care center (Drummond, 2005). This money is the cost of admission at a health center and the amount of funds paid in buying medicines. Economics is important in health care in determining the alternative to forego to achieve the benefits of a different action. The health care sector utilizes economics to analyze the costs and benefits of providing a given service. The introduction of new drugs or new equipments in health care centers means increased costs in health care provision. Therefore, economics ensures cost effectiveness in providing these new interventions compared to other options.
In economics, quality refers to a measure of excellence. Excellence means that the products or services are free from defects and variations because of strict following of standards to achieve uniformity in the results. Quality in economics could refer to the quality management of in an organization where managers make decisions. For instance, quality decisions are those that meet the organization’s goals without any failure i.e. they are the best. The quality of life also depends on economics and the ability of people to obtain the best goods and services from the marketplace. Quality in health care, on the other hand, refers to the highest degree of effectiveness of health care services and products i.e. the best standards (Getzen, 2007).
Quality in health care is very essential because a small mistake can cost the life of the patient. Therefore, health care providers insist in quality when providing services and other products to their patients. Quality in this sense refers to offering correct diagnosis, correct treatment and timely health care provision to patients. To achieve this quality, health care providers must use the latest high quality equipment and tested drugs in the course of their work. Quality ensures that the health care providers do not cause harm to their patients, but improve their health. The term quality in health care and economics is similar because it refers to the degree of excellence of something. Quality ensures there are no defects or deficiencies in something that may hinder achievement of specific goals. These goals could be quality decisions in economics or quality services in health care.
Resources, in economics, refer to the factors of production that include labor, materials and other inputs (Black, 1997). These factors of production are the resources that are scarce in supply and therefore, they require monitoring in their utilization. These resources enable people to earn a living because they have value attached to them. Human resources in economics refer to human beings such as employees who add value in the organization. There are also natural resources such as raw materials and land that economists use in production of goods and services.
In health care, resources refer to those factors of production and inputs used to supply health care services to citizens. Resources in this setting means the health care providers, the funds used to purchase health care materials and the funds for running the health care center (Getzen, 2007). The equipment and drugs in the health care center are also resources used in health care provision. Resources are common in both economics and health care. In economics, resources are those factors of production that add value to the organization. The resources include land, employees in an organization or raw materials used for production. In health care, resources are the medical equipments for providing services, the medicines, the health care providers and the finances used to run the health care center. These resources are scare in both economics and health care. Economics help in allocation of the scarce resources in health care centers.
Economics and health care are connected. The health care sector uses economics to allocate its scarce resources to various departments. In addition, economics enables health care providers to carry out their activities effectively by analyzing costs and benefits. The term cost in economics means the alternative foregone in order to pursue a different course of action. In health care, cost refers to the amount of finances used in delivering and accessing health care services. Economics enables health care providers to determine the costs and benefits of providing services. Quality in both economics and health care means the degree of excellence of something. Resources are those inputs used in production and provision of quality services. Therefore, health care providers use economics to allocate the scarce resources and make effective decisions.
Black, J. (1997). Dictionary of Economics. Oxford: Oxford University Press.
Drummond, M.F. (2005). Methods for the Economic Evaluation of Health Care Programmes.
Oxford: Oxford University Press.
Getzen, T.E. (2007). Health economics and financing (3rd ed.). Hoboken, New Jersey:
John Wiley & Sons, Inc.