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“The Not-So-Dismal Science”
By Dr. David Edward Marcinko; MBA, CMP™
[Publisher-in-Chief]
Economics was labeled the “dismal-science” by Thomas Carlyle a century ago. Since then, its tradition of negativity carries into the present recessionary environment. As the corporate credit and home mortgage crisis escalates, the financial and pharmaceutical industries implode and the population ages, hospitals are shuttered, re-sized or merely struggle onward with trepidation. And, daily, the media focuses on the increasing number of our citizens without health insurance.
To “Afflict the Comfortable and Comfort the Afflicted”
Such media coverage is expected entering into a general economic contraction, recession and/or depression for the healthcare sector, and economy as a whole.
But, in their zeal to “afflict the comfortable and comfort the afflicted”, the media victimizes the for-profit class, while it champions public hospitals, not-for-profit clinics and nanny-state medical care. The news is pre-occupied with calamity even when the health sector is fundamentally strong.
A Print Guide for us All
OK, premium print guides like Healthcare Organizations [Financial Management Strategies] know that bad news draws more subscribers than good news.
When all is well, physicians, executives and administrators are not keen on constructive change. There are also fewer reasons to log-on to this Medical Executive-Post blog. It’s all a matter of perspective!
Q: But, why is the media’s take on economic issues so important?
A: Because it has significant impact on how patients view the entire healthcare industrial complex! It influences how doctors, insurers and politicians adjust their own lobbying and legislative initiatives. And, it governs how CFOs invest in capital expenditures, as well.
Historical Review
Yet, media glare on our industry is not new. It began in 1963 with the article “Uncertainty and the Welfare of Medical Care,” and again in 1972 when Nobel Laureate Kenneth J. Arrow PhD shocked academe’ by identifying health-economics as a separate and distinct field. He codified seemingly disparate insurance, econometric, statistical, business and financial management principles for us all. And, he argued that the marketplace was incapable of insuring against the uncertainties we face in the healthcare arena.
Another View
Of course, the opposing viewpoint argues that, without the existence of a competitive market, individuals lose their freedom to choose, or are allowed to consume medical care for “free.” Therefore, the marketplace cannot learn what an individual values most. Nevertheless, to informed executives and our readers and subscribers, Arrow served as progenitor to the modern strategic health advisory era. In 2004, he was awarded the National Medal of Science for his innovative views.
Economy as Excuse for Self-Pity
Unfortunately for some hospitals, disinformation and exaggeration about health economics is just the excuse needed for self-pity, or to reduce or cease operations. “It’s not our fault, we can’t compete in a free-market economy and our patient satisfaction rates are falling. The malaise is sapping our morale”; etc, and ad nausea
A More Positive Approach
For others, there is the more positive proactive track of your editors, contributing authors and enlightened consultants.
Example:
In a recent budget meeting, one young hospital CFO cautioned physician-executives and healthcare administrators to watch every dollar in anticipation of a softening economy. Yet, his more seasoned CEO responded:
“Fiscal prudence is important, but if you are asking me to take my foot off the gas pedal, my position is that we should choose not to participate in this recession.”
He further opined that we all must anticipate changing cycles, recessions and adverse demographics. But, let’s not make it a self-fulfilling prophecy. It is the astute CEO who realizes that strong financial statements lie in effective negotiation skills and the management of revenue cycles.
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And conversely, that strong entity management and informed decision-making is the basis of an enhanced revenue cycle. In practical terms, this means understanding the process and targeting core aspects revenue growth to fine-tune and support the entire healthcare enterprise.
And so, if you are not a subscriber to this blog, or to our print journal, we trust you will review, communicate, use and profit from both. Let Healthcare Organizations [Financial Management Strategies] enhance your knowledge of modern [new-wave] health-economics, finance and collaborative medical management and avoid its confusion with the traditional [non-Healthcare 2.0] dismal-science.
PS: Don’t forget to review-read-rave and rant online at this communications forum.
Conclusion:
Your thoughts and comments are appreciated; especially from our print journal guide subscribers and all readers of this professional network.
Related Information Sources:
Practice Management: http://www.springerpub.com/prod.aspx?prod_id=23759
Physician Financial Planning: http://www.jbpub.com/catalog/0763745790
Medical Risk Management: http://www.jbpub.com/catalog/9780763733421
Speaker:If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com
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Filed under: Health Economics, Health Insurance, Health Law & Policy, Healthcare Finance | Tagged: kenneth arrow |
The Leading Business Education Network for Doctors, Financial Advisors and Health Industry Consultants 
What Is a Medical Economist?
By Jeff Bauer PhD
Economists are a diverse lot, focusing on everything from international trade and currency exchange rates to single industries and production processes. Macro-economists focus on “big picture” phenomena like national income and employment, the money supply, and government economic policies. Globalization is literally turning their world upside down. The economic theories and models they learned in graduate school don’t apply any more, so macro-economists are struggling to find new policies that will produce desired outcomes in international marketplaces.
Micro-economists, on the other hand, study resource allocation and productions processes at the level of specific industries — including health care. A medical economist with graduate training should have the skills to study the flow of goods and services through a medical enterprise (hospital, medical group, drug company, health plan, etc.) and to identify changes that would reduce costs of production, improve quality of output, or otherwise enhance productivity of workers, equipment, and capital. A good medical economist can easily find wasted resources in the health care delivery system and then develop ways to put them to more productive use.
Medical economists should be busily at work in today’s health care organizations because resources for medical services are becoming very scarce. Patients and their traditional third-party payers simply don’t have any more money to pay for care. The health sector is finally hitting a budget constraint. It is no longer “different” from other sectors of the economy, so conventional economic analysis is now applicable to solving the serious problems on one of our economy’s most inefficient and ineffective sectors.
When called upon to apply their analytical and problem-solving skills, medical economists can be very valuable members of clinician-led, multi-disciplinary teams with responsibility and authority to make sure that medical services are provided correctly all the time, as inexpensively as possible. I would never expect a medical economist to solve health care’s problems single-handedly, but neither would I expect the problems to be solved without appropriate input from one.
Unfortunately, medical economists have tended to concentrate their efforts on a macro-economic issue, health care’s rising consumption of the gross domestic product (GDP). This narrow focus makes me think of many medical economists as Chicken Littles who loudly proclaim that the sky is falling without taking time to understand what’s really happening. My health sector friends in Europe have come to the same conclusion. They note that the U.S. has far more medical economists than any other country (by at least a factor of ten, I’ll bet), yet it has one of the developed world’s most unproductive health care delivery systems. I think that the health of our economy and our residents would be a whole lot better off if medical economists would quit talking about health care’s rising costs and start doing something about it instead.
What do you think?
via Ann Miller RN MHA
http://www.thehealthydebate.blogspot.com/2011/02/what-is-medical-economist.html
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About Uneasy Money and English Economist Dr. Ralph G. Hawtrey
Uneasy Money is a new blog about monetary policy, which means it is also about monetary theory and macroeconomics.
Like the author, my own view is that monetary policy has been too tight for the past three years, thereby creating the conditions for the September 2008 financial crisis after Lehman Brothers failed and then preventing the economy from staging a rapid recovery as it has often done previously after sharp downturns. And, it is more than coincidence that the last time that the US economy failed to recover strongly after a sharp downturn was during the Great Depression.
Then, the underlying cause of the downturn was monetary, and then too, the economy failed to recover because monetary policy remained too tight (owing to the perverse dynamics of a dysfunctional gold standard) to allow a recovery to gain any traction.
Much has been written about the Great Depression, but very little added to the account of its causes offered by the eminent English economist Ralph G. Hawtrey in several books and dozens of articles as events were unfolding towards their tragically catastrophic outcomes.
So, check it out: http://www.uneasymoney.com
By Dr. David Edward Marcinko MBA CMP™
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WHAT DO ECONOMISTS THINK?
As they’ve traveled across the country, U.S. Presidential candidates have made a variety of economic proposals and promises. National Public Radio’s Planet Money asked 22 economists from across the political spectrum for their two cents on the matter. Survey participants were given three options: good, debatable, or bad. Here are their opinions:
End the “carried interest” tax break, which benefits hedge fund managers and private equity executives.
•Good: 20
•Debatable: 2
•Bad: 0
Lower the corporate tax rate to 25 percent.
•Good: 10
•Debatable: 10
•Bad: 2
Create a “National Infrastructure Bank” seeded with public money to help finance infrastructure projects.
•Good: 10
•Debatable: 8
•Bad: 4
Make tuition free at public colleges and universities.
•Good: 1
•Debatable: 1
•Bad: 20
Make tuition free at community colleges for students who contribute earnings from working 10 hours a week.
•Good: 5
•Debatable: 9
•Bad: 8
Impose a “spectator tax.” Stock trades will be taxed at 0.5 percent and bonds at 0.1 percent.
•Good: 4
•Debatable: 6
•Bad: 12
Raise the federal minimum wage to $15 an hour.
•Good: 2
•Debatable: 4
•Bad: 16
Remove single taxpayers who earn less than $25,000, and married taxpayers (and those filing jointly) who earn less than $50,000 – approximately over 50 percent – from the tax rolls.
•Good: 2
•Debatable: 9
•Bad: 11
Everyone pays the same 10 percent tax rate. It retains some version of the earned income tax credit and deductions for lower-income families.
•Good: 1
•Debatable: 0
•Bad: 21
Expel immigrants who are in the United States illegally.
•Good: 0
•Debatable: 0
•Bad: 22
We’ll find out what the American people think later this year!
Arthur Chalekian GEPC
[Financial Consultant]
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