Causes and Prevention of Economic Failure in Healthcare Organizations Essay

963 Words4 Pages
Introduction Health is one of the most important assets any one can have. But the deterioration of health is inevitable by many reasons. To maintain the good health one has to use the expert’s knowledge and facilities. Those facilities are usually medical facilities provided in health care setups like clinic or hospital. New drugs, treatment protocols and technologies have been invented to treat the diseases easily and efficiently. But there are many factors which make those health care systems fail to bring the intended outcomes compare to the cost invested. The demand of the population is increasing as the size of population around the world is increasing and the resources are scarce which brings the need of efficient management of the resource allocation and utilisation. When health organisation fails to efficiently manage and utilisation of those scares resources it results in very high cost of health services or poor quality of services or deficiency of resources etc. The causes of those economic failures are discussed in the report and the possible prevention strategies too. Report There are various reasons behind the economic failure of the health services. One of the issues is the continuously rising cost of the health services. In 2009 USA health expenditure per capita was 7578 $(Health Expenditures ,n.d.). It is much higher than the other Organization for Economic Cooperation and Development (OECD) countries (Hixon, 2012). The causes of those higher costs of health services are discussed below. One of the reasons behind the higher cost of health services is technological inventions in the field of healthcare. 50% of the rise in costs of health services is related to technological advancement (Technological Change, 2008). The new technologies of course have benefits but when we compare the benefits of those technologies with their cost, results

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