Health Economics For Nurses

Intro Guide

Stephen Morris

• Publisher: Routledge
• Year: 2014
• eBook ISBN: 9781317903918
• Topic: Medicine
• Subtopic: Health Care Delivery

First published in 1998. In recent years there has been a growing interest in the application of economics to the health care sector. Increasingly, attention is being given to the role of health economics for nurses, as efficient and cost-effective use of resources is seen to be necessary for the provision of a high-quality nursing service. Moreover, as the number of nursing degrees and diplomas increases, the incorporation of formal tuition in health economics and related issues in the training of nurses is becoming more common. This book is specifically designed for and aimed at nurses and will provide a foundation upon which teaching of the economic concepts relevant to the National Health Service in general and the nursing profession in particular can be based.

1 Scarcity and health care

In this chapter we provide a foundation for the application of economics to the health care sector. We examine the existence of scarcity in the context of the UK National Health Service, and evidence is provided which forms the basis of the analysis and discussion of the following chapters.

Summary

1. The fundamental problem that economics attempts to address is that of scarce resources. This is the basic economic problem, and it provides the foundation and justification for economic theory and analysis.

2. The three basic problems that we are interested in as economists are: What goods and services shall we produce? How shall we produce these goods and services? Who will receive these goods and services?

3. It is often argued that the basic economic problem of scarcity is exceptionally acute in the UK National Health Service (NHS). This is because the need and demand for health care in the UK are thought by far to exceed the resources available to the NHS. It is difficult to quantify the exact size and nature of the problem of scarcity in the NHS though evidence is available which may be used to draw some general conclusions. Such evidence includes data on: expenditure on health care; quantity of resources to provide health care; size of the population; utilisation of the NHS; waiting lists; length of stay; and utilisation of private health insurance.

4. The United States spends nearly three and a half times more on health care per person than the UK (£2,816 versus £808), and the only countries in the developed world to spend less on health care per person than the UK are Ireland, New Zealand, Spain, Portugal and Greece.

5. In 1994 there were 61,331 fewer nurses and midwives working in the NHS than there were in 1989 (429,214 versus 490,545 nurses and midwives).

6. In 1994 there were just over half the number of beds available in NHS hospitals than there were in 1975 (497,000 versus 285,000 beds). The number of available hospital beds in the NHS per 100,0000 individuals in the population has also fallen (8.8 beds per 100,000 individuals in the population in 1975 versus 4.9 beds per 100,000 individuals in the population in 1994).

7. In 1994 there were 58.4 million individuals of all ages living in the UK, and the population of the UK is rising continuously.

8. In 1975, 5.0 per cent of the population of the UK was aged 75 years or more (2.8 million individuals). In 1994, this figure had risen to 7.1 per cent of the population (4.1 million individuals).

9. In 1975, 24 per cent of the population of Great Britain reported chronic ill health and 15 per cent reported acute ill health. In 1993 these figures had risen to 32 per cent and 19 per cent, respectively.

10. Across all ages, the average number of NHS consultations per person per year is increasing. In 1975, the average number of NHS consultations was three. In 1993 this figure had risen to five.

11. Across all specialities in 1994 there were 608,000 individuals on a waiting list for treatment as an inpatient in England.

12. In 1975 the average length of stay in an NHS hospital was 23 days. This was nearly three times longer than the average length of stay in 1994, which was eight days.

13. In 1975 approximately 1.1 million individuals subscribed to private health insurance and 2.3 million individuals were insured. In 1996, 4.0 million individuals subscribed to private health insurance and 8.0 million individuals were insured.

14. Evidence suggests that the NHS is underfunded and that health care resources in the UK are scarce. Unfortunately, this evidence may also be interpreted quite differently to show that the NHS, rather than being underfunded, is in fact adequately meeting the demands placed upon it. Given the available evidence, it is therefore difficult to draw any firm conclusions as to whether there are scarce resources in the NHS because the extent of the problem depends upon the way in which the available evidence is interpreted.

15. If we assume that the problem of scarcity does exist in the NHS, the key issue then becomes what to do about it. Specifically, three issues need to be addressed: What treatments should be made available? How should these treatments be provided? Who should receive these treatments?

Scarcity

The fundamental problem that economics attempts to address is that of scarce resources. This is called the basic economic problem, and it provides the foundation and justification for economic theory and analysis.

By resources we refer to all the things which are used in the production of goods and services. This includes not only natural resources such as oil, trees, land and water, but also human resources, such as labour, and capital resources, such as machines and factories. These are the things which are used to produce the goods and services which we desire. Unfortunately, these resources are scarce.

With only limited resources, we are unable to provide all the goods and services which ideally we would like. Therefore, we must make a choice between competing uses of limited resources in terms of what to produce, how to produce it and who shall receive it.

Economics is concerned with evaluating the choices betwe...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Dedication
• Table of Contents
• Preface
• 1 Scarcity and health care
• 2 Basic theory of economics: demand, supply and the market solution
• 3 The demand and supply of health care
• 4 Equity in the finance and distribution of health care
• 5 Health insurance
• 6 Financing health care
• 7 The UK National Health Service
• 8 The nursing labour market
• 9 Introduction to economic evaluation
• 10 Measuring effectiveness
• 11 Measuring costs
• 12 Measuring cost-effectiveness
• Index