What to know about Health Economics ?
Health economics is an area where the principles of economics are applied to healthcare in achieving both cost-effectiveness and efficiency for clinical services. It aims at improving both the affordability and profitability of healthcare. This end-to-end solution can be effected only by making certain strategic changes in several areas of healthcare like business planning and execution, financial management, operations management, quality management, etc.
Every hospital must apply the principles of Health Economics in order to ensure that its clinical services reach more number of people at any given time. To achieve this, it should take valuable inputs from Healthcare consultants in Chennai who have considerable knowledge in this area.
What is Health Economics?
Health Economics deals with the effective distribution of healthcare. It is a segment of economics that focuses on achieving not just clinical efficiency but also cost-efficiency in healthcare. It attempts to solve the economical issues related to the production and consumption of healthcare. Health Economics studies the value and behaviour of the healthcare unit in order to improve its productivity and efficacy.
In simple words, Health Economics deals with the allocation of resources within the healthcare market and industry. Since Health Economics deals with evaluating the costs of healthcare in enabling to reach a wider audience, it has aspects of Financial management too. While trying to analyze the consequences of healthcare, it touches on the fields of Quality and Operations Management. And while examining the benefits of healthcare, it handles business planning and execution. In other words, Health economics is a multi-faceted field which tries to apply economic principles to maximize the use of healthcare.
How can hospitals use Health Economics?
A reputed healthcare service provider in Chennai tell us why hospitals need to understand the basic principles of Health Economics.
- Improving the efficiency of the hospital-
Health Economics concerns itself with the effectiveness of healthcare. To do this, it studies the behavior of the individual and his reason for choosing the said hospital. This will make the hospital understand which parameters it has to address in order to improve the quality and value of its healthcare. Health Economics offers valuable inputs to improve Quality Management at the hospital to improve its efficiency.
- Making healthcare affordable to all-
A hospital may have the best team and the best medical equipment. Yet, if its costs are high, many will hesitate to use its clinical services. The efficiency of a hospital lies not just in offering world-class clinical treatment or making profits but in ensuring its healthcare services are used by all.
Health Economics tries to ensure this by making the hospital’s healthcare affordable to all. To accomplish this, it examines everything needed to reduce the hospital’s charges. Here Healthcare Economics helps financial management by offering suggestions to implement price-cutting measures.
- Cutting the costs of healthcare-
Here, cutting costs mean not only providing affordable healthcare services but also in ensuring that the hospital reduces its costs and overheads. To achieve this, Health Economics analyzes operations management at the hospital. Right from inventory to waste-reduction, everything is studied in order to cut hospital costs.
- Maximize the utility of the Hospital-
Health economics concentrates on “how best the hospital is used by the society? To understand this, it scrutinizes the business planning, execution and operations management at the hospital. Then, it recommends remedial measures to increase the value of the hospital.
- To address global health issues-
Global issues like pandemics, climate change, poverty, availability of vaccines, etc affect both the public and healthcare industry. Health economics finds ways for the hospital to contribute towards these global health issues in a positive manner.
Many decision-making processes at the hospital are determined by the factors of Health economics. Right from the choice and purchase of medical equipment at the hospital to the cost of its healthcare services, everything is determined by Health Economics. An astute application of the principles of Health Economics by an expert healthcare consultant in Chennai can make the hospital improve its quality and efficiency.