economics of health care. basic definitions. amount of medical care spending

ECONOMICS OF HEALTH CARE. BASIC DEFINITIONS

Uses of Medical FundsUses of Medical Funds

Health care is extremely labour-intensive, perhaps more than any other public sector activity. With more than six million workers, health and welfare constitute one of the most significant sectors of the economy in the EU, providing employment for 9.7% of the EU workforce (European Commission 2002). While health care consumes between 7% and 11% of the gross domestic product (GDP) in western European countries, approximately 70% of health budgets are allocated to salaries and other charges related directly to employment. In CEE and the NIS of the former USSR the health sector has an even greater role in employment due to the relative underinvestment in capital, resulting in a labour-intensive model of service delivery.

Approaches to analysing future trends

Mapping the future of HRH in Europe: analysing the factors affecting the health care workforce

While the different approaches to analysing trends in health and HRH explored in the previous section may contribute usefully to exploring future trends in Europe, it is clear that no single discipline can address all aspects of human resources using these three perspectives simultaneously. Instead, a multidisciplinary approach is required to examine the full array of forces affecting HRH and to gain insights about how and why they are changing.

A framework for analysing future trends in HRH

Demographic trends

Demographic trends pose one of the most fundamental challenges to optimizing HRH, shaping the future health labour market directly, by impacting on the supply and composition of the health care workforce, and indirectly, by influencing the demand for products and services.

Direct effects

Across Europe, the ageing of populations - a consequence of persistently low fertility rates coupled with substantial gains in life expectancy - has emerged as a critical policy issue with important implications for both the nature of health care and the workforce that will provide it. The United Nations predicts that the population of Europe (including the Russian Federation) will fall from 726 million in 2003 to 696 million in 2025, resulting in a decline of the European share of the world's population from 11.5% to 9% (United Nations 2003). Within the 15 countries belonging to the EU before May 2004, the average age of the population is predicted to rise from 38.3 years in 1995 to 41.8 in 2015, with consequences for the available labour force. Thus, the working-age population, which increased consistently until the early 1990s, is estimated to decline over the next 25 years (European Commission 2000).

Trends in the share of the female workforce as a percentage of the totalhealth workforce in selected countries in the 1990s

Lisbon Strategy set out in 2000, the Stockholm European Council in 2001 recommended that Member States increase significantly the number of older people (aged 55-64) remaining in the workforce and the Barcelona European Council in 2002 proposed increasing the age of retirement by five years by 2010 (currently it averages 58 years). Yet, in 2001, the employment rate of older workers was only 38% in the 15 Member States of the EU pre-2004 and 37% in the enlarged EU (European Commission 2002). This figure is substantially lower in, for example, France, Italy, Belgium and Luxembourg, mainly because of advantageous early-retirement schemes that contrast with the lack of employment opportunities in CEE. In general, there seems to be a trend towards early retirement. As a result, the length of retirement compared to the duration of working life has increased in all parts of Europe. It seems increasingly obvious that any increase in workforce participation by older workers will thus require fundamental changes in pension schemes and in employers' policies on recruitment and retention, including organizational practices and working conditions.

Female practising physicians as a percentage of all practising physicians in selected countries in the 1990s

Provider-patient relationship

At the same time, the Internet is becoming an increasingly popular source of information on health (Larner 2002; Panes et al. 2002; Tuffrey and Finlay 2002). A better-informed public may elicit enhanced responsiveness from health service providers as individuals demand packages of care that are more suited to their perceived needs. In summary, technological change is having an important impact on HRH by determining the types of services that health workers can perform, the settings in which they deliver them and their practice structures. However, technology is not a monolithic force and its influence is complex. It may reduce or increase costs, promote or inhibit coordination of care, enhance or diminish access to care and improve or worsen patient outcomes.

Dental Hygiene as Forerunner to the Prevention Movement

Dr. Alfred Fones Founder of Dental

Hygiene School and First Author of Dental Hygiene College Textbook

F E D E R A LD ep artm en ts o f th e

F ed era l G overn m en t

N O N G O V E R N M E N TP riva te P rac tice

In s titu t ion s , S c h oo lsIn su ran ce-B ased M od e ls

S TA TED ep artm en ts o f S ta te

S ta te P ris on sC om m u n ity C lin ics , S ch oo ls

V eh ic les o f D en ta l C arein th e U n ited S ta tes

Globalization and trade liberalization

Intensification of the interdependence of global processes and markets emerges as an almost universal feature of economies in contemporary societies. These developments have an important impact on health care and the human resources that deliver it.

Access to Care Restriction of dental

hygiene services Shortage of Medicaid

providers Financial Situations

Insurance Medicaid

Transportation

Executive Branch System

Legislation Senate and House ofRepresentatives

Executive President andCabinet

Judicial Federal Court

Public Health Service Operating Division

Human Services Operating Division

National Institutes of Health

Food and Drug Administration

Centers for Disease Control and Prevention

Agency for Toxic Substances and Disease Registry

Indian Health Services Health Resources and

Services Administration Agency for Health Care

Policy and Research Substance Abuse and

Mental Health Services Administration

PHS works toward improving and advancing the health of our nation.

U.S. Surgeon General Dental Hygienists work as Public Health

Officers.

Agriculture Defense Education Justice

Labor State Treasury Veteran’s Affairs United States Peace

Corps (which is an executive branch agency)

State Dental Divisions

Medicaid S-CHIPS Prisons Tribal Clinics Institutions Community Clinics

Need Demand Utilization Supply Dental Hygiene

Shortages Dental Hygienist

to Dentist Employment Ratio = 1:2

A dental practice sets a fee, and a patient and/or third party pays for the fee.

UCR: usual, customary and reasonable fee

Indemnity plans pay fee-for-service.

Discounted coverage available and sliding scales for certain patients in certain clinics

Dental Managed Care A certain amount is paid to a dental

practice for a certain number of patients. Payment is received whether treatment is provided or not.

Many times employees will state that they are not paid for “cleanings” provided; however, this is not an accurate statement.

Encounters are for an arrangement paid for each visit.

Barter system is used when the dental provider negotiates payment by exchanging goods and services.

Claim Form ADA CDT Payment Plans Dental Credit

Cards Explanation of

Benefits

U.S. PHS Federal Block

Grants State Governments Local Governments

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