8.1 Health Care Economics Introduction

Is health care a right or a privilege? This is a long-standing ethical question debated around the world that ultimately leads to the question, “Who gets what resources?” Economics is the study of how society makes decisions about its limited resources. Simply put, health care is considered a limited resource because there isn’t enough money or time in the world to purchase and provide care for every individual in every conceivable manner.^[1] The ethical question of who pays for that care is referred to as the ethics of rationing health care.

Economics is split into two broad categories called macroeconomics and microeconomics. Macroeconomics looks at decisions that affect the entire country and society as a whole, whereas microeconomics looks at the financial decisions of businesses and individuals.^[2] This chapter will provide an overview of the broad topics of health care funding and reimbursement models impacting society, as well as staffing and budgeting issues at the institutional level that specifically impact nurses in their day-to-day work. Economics in health care affects an individual’s ability to pay for and receive health care; an institution’s ability to provide health care services; and nurses’ ability to provide safe, quality care to the communities they serve.