The Field Of Health Economics

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As we have learned in class this semester, there are a multitude of topics that, together, comprise the field of Health Economics. Everything from basic supply and demand to insurance policy to the metric of Quality Adjusted Life Years has found its way into the lesson plan at some point. One of, if not the, biggest institutions that drives the field of healthcare economics (and healthcare in general) is the hospital. Surgeries, x-rays, emergency room visits, magnetic reasoning image scans and other important procedures all take place at this very important location. Organizational structure is key in any business, but it plays an especially large role at hospitals, where the stakes are especially high as far as employee job performance is…show more content…
Using a probit statistical model, she analyzed American Hospital Association data and surveys from 1988-2000 whether hospital ownership was correlated with the offering of thirty different types of medical services. One interesting result that Horwitz discovered was that for-profit hospitals are “more likely than nonprofits” to offer open-heart surgery, due to its relatively profitable nature compared to other types of medical services, while not-for profit hospitals are more likely to offer hospital-based psychiatric treatment than for-profit hospitals due to it’s relatively unprofitable nature (Horwitz).
Horwitz’s overall conclusion is that for-profit hospitals are more likely to pick and choose what types of services they offer, which makes sense given that they need to satisfy their shareholders who have invested monetary capital in the hospital’s performance. I found it quite interesting that psychiatric care was classified as relatively unprofitable by Horwitz, but her reasoning stating that “psychiatric care reimbursement is uncertain and often low relative to cost” was very sound and helped me understand why that is the case (Horwitz).
According to a paper published by the aforementioned Professor Sloan of Duke University, over two-thirds of
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