Policy Research (Research Paper Sample)

Applying Economic Principles to Healthcare Your name Department name, Institution name Course number: Course name Instructor’s name Due date Applying Economic Principles to Healthcare Economic Theories and Principles Economic Disparities According to market and demand theories, the availability of healthcare services influences the financial performance of the healthcare sector. The healthcare business generates high revenues and profitability, which leads to investments in buildings, services, and access (Talavera & Sanchis, 2020). This increasing supply goes hand in hand with the increasing demand for healthcare. They may reduce services or close facilities during an economic crisis or some financial problems in the healthcare industry and thus reduce care (Norwich University, 2024). This has led to poor health equity as the lower income and disadvantaged groups are the most affected due to limited access to health care services. Since knowledge is not distributed evenly, externalities exist, and wealth distribution is unequal, the market is inefficient when allocating resources for healthcare, which leads to inequalities in access (Mankiw & Taylor, 2020). There is a need for policy makers to consider market failures and ensure that healthcare sector funding enhances access and eradicates inequalities. According to the market and demand theories, the industry's financial condition and healthcare accessibility may be analyzed, and the stakeholders can develop focused actions to enhance treatment accessibility. Economic Theories Many economic ideas influence the healthcare business. The theory of supply and demand describes how the availability and price of healthcare services determine consumer behavior and the balance of supply and demand (Mankiw & Taylor, 2020). Market failure arises when goods and services are distributed suboptimally because of information failure, spillover effects, or public goods (Norwich University, 2024). The concept of elasticity helps healthcare organizations determine the relationship between the price and demand and the resources required to balance the pricing strategies by showing how demand changes in response to changes in price or income (Talavera & Sanchis, 2020). It also helps in assessing the economic and social impact of the strategic plans and policies of the healthcare organization (ProPublica, 2024). Applying these economic theories to explain the healthcare business's complexity helps the stakeholders make the right decision and design the right strategies. Ideas of this kind help attain the optimal means of resource management and allocation and the quality and availability of health care services. Use of Economic Principles Businesses use economic concepts in making short-run and long-run decisions because they provide a logical approach to understanding markets, consumers, and resources. Economics assists healthcare organizations in setting the right price, controlling the availability of resources and their distribution, and managing the changes in demand in the short run (Mankiw & Taylor, 2020). Knowledge of the price elasticity of demand could assist organizations in setting rates that maximize income while maintaining the affordability of care. Investment in research and development, as well as the growth of facilities and services and collaborations over time, are influenced by economic theories (Talavera & Sanchis, 2020). Cost-benefit analysis lets organizations assess alternative projects' long-term economic and social consequences to optimize resource allocation (ProPublica, 2024). Economic principles enable organizations to foresee and react to market upheavals, legislative changes, and new trends, helping them adapt and compete in a dynamic sector (Norwich University, 2024). Healthcare businesses may optimize resource allocation, increase financial sustainability, and improve patient care by basing strategic decision-making on economic principles. Economic concepts are solid for managing healthcare's complicated difficulties and prospects. For-Profit and Non-profit Financial Differentiation For-profit and non-profit healthcare companies vary financially in goals, income, and profit distribution. For-profit healthcare firms maximize shareholder and investor profits via patient income, private insurance payments, and strategic investments (Mankiw & Taylor, 2020). These companies have better capital market access and may utilize earnings to expand services, invest in technology, and reward shareholders. However, non-profit healthcare institutions focus on their charity goal and spend excess cash on facility improvements, access to treatment, and research and teaching (Norwich University, 2024). Non-profits survive on patient money, government financing, grants, and charitable contributions (ProPublica, 2024). They must offer charity care and community health initiatives as tax-exempt entities. Each healthcare organization's finances reflect its goal and stakeholder objectives. Non-profits promote social impact and community well-being, whereas for-profits stress financial success and shareholder value. Policymakers, managers, and investors must understand these financial variances to make educated choices and promote a balanced, successful healthcare system. Economic Differentiation Economic policies and laws vary between for-profit and non-profit healthcare institutions due to their rules, tax treatments, and reimbursement procedures. Antitrust laws, pricing transparency, and surprise billing restrictions affect for-profit healthcare firms (Mankiw & Taylor, 2020). The Tax Cuts and Jobs Act of 2017 gave for-profit firms tax breaks, which may affect their investment and growth plans (Talavera & Sanchis, 2020). Community benefit standards and tax incentives for charity contributions impact non-profit healthcare organizations (Norwich University, 2024). Economic measures like the Affordable Care Act of 2010 have boosted coverage and service demand, especially among non-profits serving low-income and uninsured people (Ercia, 2021). Non-profits must prove their community benefit to keep their tax-exempt status. For-profit and non-profit healthcare companies contribute differently to the healthcare system; hence, their economic policies and laws differ. Policymakers must balance market efficiency with non-profit provider charity to promote sustainable and fair healthcare. Policy, Changes, and Disparities Economic Policy and Disparities in Care Recent research and five-year statistics reveal the complex relationship between economic policy, health insurance, and outcomes. Economics like healthcare funding, insurance coverage, and provider reimbursement may affect healthcare access and cost, especially for disadvantaged people (Mankiw & Taylor, 2020). The Affordable Care Act, which expands insurance coverage, has been found to enhance health outcomes for low-income and minority groups (Ercia, 2021). When economic policies fail to address socioeconomic determinants of health or have unexpected repercussions like higher cost-sharing or decreased provider engagement in public insurance schemes, they may worsen inequities (Talavera & Sanchis, 2020). Economic policies affect care inequalities via complicated processes, including resource allocation, provider incentives, and patient navigation of the healthcare system (Norwich University, 2024). Economic policies may promote health equality, but they must be properly conceived and executed to avoid widening inequities or creating new obstacles to treatment. An integrated strategy that addresses economic policies, social determinants of health, and disadvantaged groups' needs and problems is needed to address care inequalities. Policy Changes Recent legislative developments have affected healthcare economic policy overall. For instance, the 2010 Affordable Care Act (ACA) overhauled U.S. healthcare (Ercia, 2021). Under the AC...