How the Economics of Health Care Impacts Current Nursing Salaries
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Health economics is a branch of medicine that deals with how effective and efficient the health care and health provision are. Health economics covers a certain scope of issues, including the demand and supply in health care, as well as various influences of health among others. The economics of healthcare has a variety of influences in different areas within the health care sector, including current nursing salaries. Nurses represent the largest professional group within the health care sector, which is why the economics of health care has a huge impact on them. Various events relating to the economics of health care can either lead to cuts in salaries of nurses or to an increase in them. Salaries of nurses are affected by different factors within the economics of healthcare such as the demand for health care services, labor provided by nurses, their educational backgrounds, and budgets of various institutions. The economics of health care impacts current nursing salaries through the state legislation that has allowed nurses to practice medicine on their own, as well as through budget cuts, the shift in the demand for health care services among the population, as well as the shift in the supply of nurses in the nurses’ labor market.
Economics of Health Care
No universal definition is provided for the economics of health care. However, the economics of health care describes various issues that have an effect on the health care delivery for the population (Yi, 2017). These issues include health markets, health technology assessments, as well as demand for health care. All these issues have either a positive or negative effect on the entire health economy and, as a result, they can impact salaries of nurses positively or negatively. Nurses play a huge role in the delivery of healthcare. They can be viewed as the core of health care delivery since they interact with patients more often than any other medical practitioners. Recent trends in the health care sector have affected their salaries in different ways. Some of these trends include pieces of the state legislation, access to health care, and the shift in demand and supply of nurses
Demand & Supply of Nurses as It Impacts Wages
Before discussing issues that affect salaries of the nurses both positively and negatively, it is crucial to discuss the economics of health care as far as demand and supply of nurses are concerned. Demand and supply of nurses have the significant effect as far as nursing salaries are concerned. In case there is an increased demand for nurses, then their salaries go up (Alameddine, Baumann, Laporte, & Deber, 2012). In turn, in case the supply of nurses is higher than the demand, then salaries of nurses go down. Demand and supply of nurses are measured through the entry or exit of nurses in the health care sector.
Currently, there is a number of health institutions seeking services of nurses. These institutions include hospitals, home-care facilities, various clinics, and long-term care facilities among others. There has been a shortage in nurses working in various facilities. To solve the problem with this deficit, the immigration of foreign nurses has been sought as a solution. This means that there has been a huge demand for nurses, which has had a positive impact on their salaries. Demand has ensured that nurses are able to leverage with their employers for a better pay and this has led to an increase in their salaries. However, in the event that the deficit is dealt with, then current nursing salaries are projected to go down. Moreover, a shortage in the supply of nurses also leads to an increase in wages of nurses. According to Feldstein (2012), a shortage in the supply of nurses leads to increased vacancy rates, hence leading to an increase in wages to be paid to nurses. Thus, such a shortage leads to an increase in wages.
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Another factor in the economics of health care that affects current nursing salaries is the legislation developed and adopted by the government. Legislation is a factor that has an influence on the economics of health care. The government has an obligation to provide health care to individuals. According to Larrat, Marcoux, & Vogenberg (2012), various pieces of the legislation affect how different stakeholders within the health care sector are reimbursed. The government also allocates budget to aid in the provision of health care to the population.
In case the economy is in the decline, budgets for various sectors, including health care, get cut by the government. Nurses who constitute the majority of health care practitioners are affected by such situations the most. Cuts in the health care budget have a negative impact on salaries of nurses (Larrat, Marcoux, & Vogenberg, 2012). Moreover, the government can pass the legislation that can affect salaries in a variety of ways. One of these pieces of legislation is the legislation allowing registered nursing practitioners to practice medicine. This legislation allows nurses to provide some services, including diagnosis of diseases, drug prescription, and provision of medical advice to individuals among others. Such a legislation has led to the emergence of private practice conducted by some nurse practitioners, thus reducing the number of nurses within the industry. This results in an increase in the demand for nurses, thereby leading to an increase in salaries of nurses.
Access to Health Care
Consequently, one of issues within the scope of the economics of health care is access to health care. Access to health care defines the number of people that receive health care services each day. Previously, the rising costs of health care meant that many individuals did not have access to these services (Folland, 2017). However, introduction of various forms of insurance has ensured that most people have access to health care. It means that people can afford paying for the health care services that they get. This, in turn, provides funds required to pay nurses. Improved access to health care, thus, has a positive impact on salaries of nurses as funds are available to pay salaries to nurses. Moreover, it also leads to an increase in the demand for health care among the population, hence increasing the demand for nurses. The government has improved access to health care through the provision of insurance to different individuals within the population. Folland (2017) indicates that the level of uninsured individuals in the US has fallen considerably between 2010 and 2016 by about 20 million. This means that more people are insured, which increases the demand for health care within the population and leads to an increase in wages that nurses are offered in return for their services.
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The economics of health care discusses efficiency, effectiveness, and value as far as production and consumption of health care are concerned. Health care economics can be attributed to having either a positive or negative impact on current salaries of nurses. One of the issues that affect the economics of health care is the demand for health care and the supply of nurses in the labor market. An increase in the demand for health care pushes salaries up. Moreover, a low supply of nurses within the labor market pushes salaries up as well. In case of budget cuts initiated by the government, nurses are those medical practitioners who are negatively affected by such cuts. Access to health care also leads to an increase in wages offered to nurses.