Current Economic Environment and Hospitals: The Interrelationship Between the Health Sector and Economic Welfare

NB: We do not resell your papers. Upon ordering, we do an original paper exclusively for you.

NB: All your data is kept safe from the public.

Table of Contents

Introduction
Effect of the current economic environment on hospitals
Hospital strategies in the current economic environment
Comparison with other industries
Opportunities for hospitals in the economic environment
Conclusion
Works Cited

Introduction

The interrelationship between the health sector and economic welfare cannot be overlooked. Changes in economic status have adverse effects on the performance of health providers as well as their profitability. On the other hand, the health care sector also contributes substantially to economic growth. For instance, an unbelievable percentage of private sector jobs are created by the health provision sector. The effects of economic crisis to hospitals are innumerable. A remedial-based consideration of the most serious effects should be made to ensure that health providers have sufficient motivation to save lives (Quinn 1).

Effect of the current economic environment on hospitals

Hospitals have suffered many blows from frequent economic downturns. The current economic crisis has seen many hospitals being deprived of facility finance and finance for technology needs which are a prerequisite for effective Medicare. The number and variety of patients has also declined substantially due to the prevailing economic crisis. This is due to the less number of people seeking Medicare for small health problems and the decrease in admissions. This reduction of patients due to economic crisis has adversely affected the financial health of hospitals and thus many hospitals are either making or considering cutbacks. The economic crisis has also affected budgets in hospitals because hospital employees seek financial support from the hospitals to ease their survival. It has also affected government budgets with a considerable cut on the funds dedicated to Medicaid which has an enormous effect on hospitals. Despite the hard economic times, hospitals should employ strategies for survival since the society must be provided with health care (AHA 1).

Hospital strategies in the current economic environment

The current economic situation calls for action in ensuring that it does not bring down industries. Hospitals are likely to employ strategies that will enable them cut down costs, access finance and increase revenues in a bid to contain the economic crisis. In doing this, they should ensure that the quality of health provision is not compromised. Some specific strategies that could be employed include: reducing budgets to cater for items with urgency and priority, monitoring of employees to phase out false overtime, reevaluation and perfecting of point-of-sale collections, reducing nursing hours per patient and therapy hours per day, renegotiation of vendor contracts, doing away with unnecessary business lines in the hospital etcetera (HFMA 4).

Comparison with other industries

Virtually all industries are affected by the current economic crisis. However some industries are affected more than others while few others are not affected at all. The health provision industry is one of the least affected industries. This is because during an economic recession there is a tendency of more people getting sick more frequently and therefore the health providers get clients (Rupp 1). Infrastructural industries are the most affected by the economic crisis since the limited resources available are spent on matters of priority like catering, health etcetera leaving insufficient resources to invest in construction of houses and the like. An example of an industry that is not affected by recession is the sin industries. Although the argument is controversial, people are said to spend much of their income on drugs when there is an economic recession than when the economy is stable (Beattie 1). It is therefore clear that, in spite of the fact that economic crisis brings problems, it benefits some industries in some ways.

Opportunities for hospitals in the economic environment

The most commendable benefit to hospitals, which come with recession, is that recession results in a society that is unhealthier and therefore hospitals get patients to attend to. Hospitals also get more opportunities to partner with specialists like cardiologists, orthopedists etcetera. These partnerships have proved to be very lucrative for hospitals. It is therefore evident that recession is not purely depriving to industries.

Conclusion

The hospital industry has been significantly affected by recession but it has learnt to live with the negative effects of economic crisis. Recession has also brought some benefits to hospitals and therefore, with reference to healthcare, the occurrence of recession can not be celebrated or cursed in totality.

Works Cited

AHA, “Report on the Economic Crisis: Initial Impact on Hospitals”, 2008. Web.

Beattie, Andrew, “Industries That Thrive on Recession”, 2009. Web.

HFMA, “How Hospitals are Responding to Current Economic Challenges”, 2009. Web.

Quinn, Richard, “Crunch time: HM Needs to Brace for a Rugged Economic Environment and Seize New Opportunities”, 2009. Web.

Rupp, Allison, “Wyoming hospital benefits from recession”, 2009. Web.

Click Here To Order Now!