The Role of Economics in the Health and Medical Care Industry

Introduction

In each and every organization, there is always a need for economics that should be considered in the organizational activities. Economics is the ideological knowledge that is concerned with the consumption, production and transfer of wealth (Folland, Goodman & Stano, 2016). The wealth could be the organizational resources that need a lot of economics knowledge so as to be used appropriately. Economics has however impacted greatly in many organizations. This paper thus seeks to discuss the roles of economics in health and medical care industry by laying out the distribution and allocation of scarce resources, economic theories, economic policies and economic health of the nation.

Distribution and allocation of scarce resources

Healthcare indeed has many resources including, nurses, dentists, pharmacists, medicine, laboratory appliances, and other treating machines. The resources are however scarcely allocated since there sometimes a market failure problem existing when the demand of the resources exceeds the supply.  In some healthcare organizations there might be shortage of nurses and doctors who are responsible for delivering services to the community. However, there might also be problems where there is insufficient medicine in the stores or in the medical centers because of the high demand. The problem always occurs when there is low supply of when there are no funds to purchase the medicine. In the medical industry also, there might be a scarce allocation of health centers across the country. Some communities do not have evenly distributed healthcare facilities thus making them to travel long distances in order to access the resources. 

Economic theories

In healthcare organization, there are many theories that can be used to explain the scarcity and allocation of the resources. For example the demand pull theory that explains that the demand of products might be very high than the supply thus causing a great imbalance. The demand pull cause many effects on the market competition, expected demand which might cause the organization not to have economic benefits, the theory can be applied to explain the effects of scarcity of resources in the market. There is also the supply and demand theory that explains the relationship between the two concepts. The idea helps in determining the supply of resources by looking at the behavior of market demand (spread, 2015).

Methods of predicting market behaviors

One of the major methods is the analytical method. The method acts as a tool for determining the behavior of consumers in the market in regard to the levels of demands at specific times. It would imply that in the near future, the demand of a certain resource will be higher thus creating an awareness form more production to increase the supply. The analytical method of market prediction is more efficient since it describes exact the behavior of the market composition including all the stakeholders of the market. In healthcare, analytical method is most likely to predict an increase in demand by establishing the population growth effect and occurrence of many diseases. There is also scarce allocation of healthcare institutions.

Recommended economic policy for healthcare stakeholder

A good policy that can be recommended to the healthcare stakeholders is the supply- side policy. The policy will ensure massive production of products and resources in the economy so as to meet the endless demands in the market.  th policy will therefore act in increasing the production capacity of resources such as medicine and doctors who will serve the community efficiently (Harker, 2016).

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Economic health of the nation

The economic health of the nation is higher since, there are many strategies that are placed in order to maintain the economy and the distribution of resources. The government acts positively in most of the market segments in the country to ensure economic prosperity.

Conclusion

It is important that factors facing the economy of a certain location such as the allocation of resources to be looked into keenly so as to avoid economic disparity. The economic value of healthcare is very high since it has a very large market which serves all the population existing in the country. The government should therefore act positively in ensuring a higher economy all over the country.