The Importance of Economics for Health Care Leaders

Prior to engaging in this discussion, be sure to review Chapters 1 and 2 in the text as well as any relevant Instructor Guidance. It is suggested that you also review the recommended articles to glean any helpful information. In the present paradigm, it has become evident that operational leaders and strategic leaders in health care must be able to appraise how economics impacts health care in the United States. Furthermore, it is critical successful leaders to possess an understanding of the variables and nuances that shape how supply and demand in this heavily regulated industry so they may observe trends and opportunities that lead to a functional organizational system.

Imagine that you are a manager running a unit in a rehabilitation center. Up to this point, your primary population of payers has been elderly patients who come into the center for physical therapy. Recently, there has been a demographic shift in the community. A large number of your primary population has moved out of the area or died, which has caused a shift in your revenues. You have been tasked by your director to illustrate the cost and revenue numbers relative to insurance payouts to ensure that your cost does not exceed your revenue. Drawing on your current professional expertise and understanding drawn from the required resources for this week, create an initial post in which you communicate how the potential payer mix relates economically to changing demographics in your given community. What potential solutions would you suggest to your director that might overcome the demographic shift? Analyze economic theories that are germane to your provision of services and identify one theory that might apply to this specific situation.

Guided Response: Taking on the role of the director of the rehabilitation center, review the posts provided by your classmates and provide a substantive written response to at least two of your peers. Did the post effectively communicate the economic issues at hand? Were the suggested solutions appropriate and manageable given the current situation? In your position as the director of the center, analyze the role of public policy (e.g., the passing of the Affordable Care Act) in your provision of services. What other sources of potential capital might you seek out to ensure that the cost to revenue ratio remains consistent with viability?