The contemporary world has witnessed changes and transformations, especially in the health care system. As the economy experiences transformation, cost of living increases and several economic crises in the world occurred, the health economy has just taken and shaped the nature of health care. Health care economics is a term that stands for all the activities, which enhance efficiency and effectiveness of health care. Health economists evaluate the total distribution of resources with an aim of achieving the best health care values in both production and consumption. Studying health economics helps us to comprehend the effects of the healthcare system and behaviors witnessed in the system better. More specifically, health economics is concerned with the allocation of the scarce health care resources among possible alternatives. Several studies have described that uncertainty is intrinsic to health in the aspects of client’s progress and monetary concerns (Shah, 2011).

Williams devised a framework that expresses the scope of health economics. The scope is composed of eight areas of concerns: influences of health, health and health value, demand for health care, supply for health care, micro-economics, market stability, management processes and the assessment of the level of health care delivery. Following this outline, a cross examination to determine the issue and trend surrounding this topic is done in the health care system. The trend and issues in health have contributed to changes in the health care system. Several modifications, transformation and new dimensions witnessed in health care system are because of trends in health economics (Williams, 2009).

The optimal investment in health results when the marginal cost of health input balances with the marginal benefit. Health care demands do not obey the demand and supply rules. This is because it is not possible to postpone health issues and wait when the cost will go down, at the time when supply will be high and, thus, demand low. The patients are forced to comply with the cost, and the option left is to determine the facility that suits the financial obligations. In this case, quality level of health is highly determined by economic status of the patient. In the health care institutions, the issues of decision-making, reimbursement, remuneration, strategic planning and mode of conflict management are all inclined to the economic status of the health care system. This paper will help to gain the understanding of the current health care economics, determine how it has influenced patients’ care and identify the key turns in the health system (Williams, 2009).

Health Provision

Despite notable improvement in health care field, several challenges still haunt the delivery of care. Over one billion people lack access to health care in the world. Health provision varies in different nations in the world. Most of the well developed countries provide universal care, while, in other countries, there are those who are insured and those whose care is solely in their hands. Several issues have resulted in these variations, in health care provision; one of them being economic conditions. The World Health Organization has described the trend of health provision as inverse care. Those people who are rich and have less health needs, tend to utilize most of the health care resources compared to the poor, who have more health care needs. Worldwide, over 100 Million people slip into poverty levels just because they had to finance their health care. Moreover, the poor marginalized groups often receive under quality services. This is due to the poor allocation and distribution of resources. Resource allocation is highly channeled to curative measure of the diseases other than preventive and curative mechanism. Economic issues surrounding the health care system bring about these factors (Shah, 2011).

Right to Health Care

Health is a fundamental issue in human life. However, the nature of its urgency differentiates it from other needs of humans in terms of economics. Once we seek health, it is not possible to engage in a bargain discussion. This painful truth has resulted into exploitation of the patient by the existing health facilities. Thus, individuals are left to decide where to obtain care depending on their capability to pay for services in the hospital. This factor of what a person has dictates the level of care and has resulted to broad inequalities in health care. It has also divided the society into different social classes (Shah, 2011). The level of care given is currently based on a person’s financial capability; thus, diluting the fact that health care is a human right. Are there some people who enjoy higher classes of human rights, yet we are all human beings?

Economic and Strategic Planning

Economic evaluation involves evaluation of factors that bring about alternative courses that can be adopted to bring a favorable result. The actions or course taken is valued and based on both their cost and consequences. In health care, there are four possible economic evaluations that determine the strategic planning in the health care system. The increase in demand for health care has resulted in a situation where health care systems have to devise plans that will see the institution survival. Cost minimizing and cost benefit are the two main economic evaluations that are used in determining the best possible decision regarding planning in a health care institution (Bernstein, 2009).

Cost minimizing analysis enhances the adoption of courses or programs that will reduce their cost. Thus, most institutions are reducing the number of their employees to cut down the expenses so that they can make profit. In USA and other countries where the health care system is catered for by the government, there are cases of uncompensated cost. Most health care facilities along Mexican-American boarder have closed due to bankruptcies. The upsurges of immigrants have increased the uncompensated cost to levels where the institutions cannot cope. The institutions have reduced the number of health care workers and other costs in tying to reduce expenses, but it has become unbearable. Consequently, they have closed the hospitals.

Insurance in Health Care

Over the past 15 years, several countries have initiated measures to insure their citizens’ health care. The American government, for instance, has been offering Medicare, Medicaid and the now current Obamacare programs, which target to improve health care quality and coverage. However, as compared to other nations such as Japan, Germany and China, the expenses incurred by the government per individual are higher, yet quality of care is low. This is mainly contributed by factors such as poor policies, lack of competition in health care delivery, high number of individuals who are not insured and lack of government intervention. The total health expenses in USA were estimated to be $2.1 trillion in 2006. This worked out gives $7,026 per capita. The total spending is projected hick to $4.2 trillion. The rise in health care expenditure in USA is increasing at a higher rate than the economic improvement of the nation. For instance, in 2005- 2006, the increase in health spending was 6.7 percent, while that of economic growth in the same period was 2.9 percent (Covington, 2010).

Rising health care cost increases health insurance premiums; thus, escalating at a faster rate than the worker’s income. This puts pressure on employees who are the taxpayers. Those who do not have sponsorship from their employer to pay for these premiums face a substantial challenge. Thus, they end up quitting from the programs once they realize that they cannot cope with the increase in the costs. This, in turn, adds to the number of uninsured, which hit back to the government costs. According to USA policies, emergency care is offered free to all. Once the uninsured people seek emergency services from the hospitals, the government is supposed to cater for those costs. However, the compensation program is ineffective, and the institution ends up incurring heavy burden of losses (Minton-Eversole, 2011).

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The increasing cost adds pressure on the government that is the main sponsor of the insurance programs. The government faces a significant challenge in prioritizing for its budget expenditure.

Economic Trend and Advanced Practice Nursing

The economic changes have influenced the advanced practices in nursing in a number of aspects. There are increased cases of specialists in nursing. Most of these specialists have resulted from the growing needs of cut down expenses in the health care system. For instance, institutions have engaged in sponsoring nurses to undergo training in the advanced care as a way to motivate them to retain their jobs. The hard times have resulted in high rates of employees shifting from one institution to another based on salaries. Therefore, institutions do sponsor advanced training so that their workers continue to serve them (Minton-Eversole, 2011).

In personal terms, nurses have also devised plans on how they can make themselves marketable by going for training that increases their qualification. With the current hardships in the health care economics, most institutions are interested in practitioners who can provide quality care at a cheaper cost. Therefore, they emphasize on a highly trained individual who can manage several units rather than several basic nurses that will end up raising the expenses.

The advanced practices are also seen as a way of attracting customers, especially in the private sectors. People will always trust their lives in the hands of a specialist nurse rather than many nurses who wait for directions on how to manage cases. Therefore, due to these changes in health care economics, advanced nursing practices have been given a considerable boost. The trend of moving from hospice to acute care is an indication of concerns in advanced nursing practices. In USA, there are speculations that the increasing number of nursing homes and home health care will substitute free family care (Williams, 2009).

Economic Trend Relation to Physical and Human Management

Physical and human management are other areas that are affected by financial issues. The management of these two broad areas is imperative in balancing the distribution of scarce resources. Over the past 20 years, the management of hospitals has emphasized on using machines in the hospital to cut down the expenses. Health care system has adopted the technology patient management. This has seen employment of practitioners reduced since machines manage most of their activities (Shah, 2011).

Heath Care Economics and Conflict Management in Health Care

Differences in priorities, competition for resources, exhaustion and frustrations are examples of causes of conflicts in the health care system. Interestingly, these factors are linked in one way or another to health care economics. The increased need to balance the resources in the health institutions will result to complain of inequalities. Health care workers will develop a feeling of being overworked, while they are paid little and there are even cases of favors. The management will be acting to cut down the number of employees and the salaries so that they reduce the cost incurred. These factors will amount to frustration among the workers. All these cases combined will lead to conflicts in the working areas, between organizations and within the government (Williams, 2009).

Conflicts resolution is a serious concern for institutions, families and the government. Cases of strikes, high turnover, and increased absence in work places, quarrelling and poor outputs are evidences of conflicts. Significantly, these conflicts add up to the cost of health care. During the period of conflicts, individual’s output is diminished. Moreover, a lot is invested in striking a balance or resolving the conflicts. The national rate of job turnover due to unresolved conflicts in health care institution is 65%. The cost of replacing a specialty nurse is valued at 156% annual salary (Medical Training Institute International).

The need to increase competence in the managing team to resolve, manage and prevent conflicts in the work places has emerged to help to cut down health care cost. The early identification of such conflicts will prevent them amounting to levels that result to resignation, vengeance, strike or costly legal action.

Institutions have devised approaches that are cost effective in solving conflicts in the work places (Shah, 2011). The process of conflict management that is employed to resolve issues includes negotiation, collaboration, mediation and arbitration. Groups involved in the provision of heath care use these methods to strike a deal. For instance, the insurance companies and the government have to negotiate to agree on the possible insurance terms. In other cases, where the two groups involved are not ready to lose their ideas, they collaborate for a common goal.

Mediation involves an external person who plays a role of bringing the parties of a conflict together for an agreeable ground. Where the conflicting groups are government bodies of different countries, arbitrator comes in to settle the dispute.

Medical Tourism

The growing cost of health care in local/domestic healthcare institutions has resulted in escalated cases of medical tourism. Individuals are now seeking services that are cheaper in other countries, rather than purchase them in their own country. This is viewed as advantageous since the people seeking such services also benefit through tourism. Medical tourism has been attributed to several benefits. The program is cost effective, convenient, reduces delays in receiving the services, leads to improved quality and is related to psychological healing. This is achieved through touring that helps to divert one’s thinking from the disease condition (Medical Tourism Corporation, 2011).

Medical tourism is also associated with some risk that the client should be aware of before deciding on whether to use the program or not. The risk of journey to the intended destination should be evaluated. The client should choose a qualified and informed health professional companion for the journey in case of emergency attention. The client should also be informed on the procedures and quality of services that he/she intends to seek. This is because different countries have different terms to describe varied qualities of care. It is necessary to ensure that there are not hindrances to care such as language barriers, hidden costs or no compensation before deciding to leave for treatment (Medical Tourism Corporation, 2011).

Medical tourism is an example of consequences of increased healthcare cost. Among the countries that are popular in medical tourism include Lithuania, India, Israel and Hungary.  India is preferred for its cost effective services, less waiting, and their quality care. India targets to be serving 2.5% of international medical tourism. This will earn the country a total of $2.3 billion (Medical Tourism Corporation, 2011).


The increasing cost of health care in most countries has resulted in several health programs. One of these programs is medical tourism. Moreover, issues and trends in the health care economics have influenced the management, leadership and relationship within the health care system. The economic forces have been shown to affect health care access, utilization, quality, and cost. Moreover, the influences are felt among the employees, employers and the clients receiving these services. Several management strategies need to be enforced to enhance quality care despite the increasing cost.   

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