Health Care

1. What conventional economic principles apply in the health care environment?

Economics is defined as “The scientific study of the choices made by individuals and societies in regard to the alternative uses of scarce resources which are employed to satisfy wants (Rodda, 2004).” The health care environment is based off of uncertainty (i.e. accidents, death, etc) thus, we can expect a large amount of uncertainty towards the future. Since we know there is a lot of risk and uncertainty involved, we also know these are major measurements that the study of economics researches. Economics has some basic principles that are crucial to its theory. For instance, supply and demand is an important principle that affects the health care environment. What we know from this is that when demand rises, prices increase, and when supply rises, prices decrease. Currently, we can see this in Medicaid and Medicare today as demand for these services continue to increase as more older people continue to live longer lives.

Another issue is costs. Costs are skyrocketing for healthcare and many can no longer afford it. The cost of healthcare continues to rise and many more are becoming uninsured.

Another factor is a labor shortage. Nursing, and other areas in the hospital are becoming dangerously problematic. According to The American Association of College Nursing (AACN) between 1995