The economy dictates a lot of what Health and Social Care Management professionals can do. In this article, we will explore how the everyday tasks of a manager are affected because of the fluctuating economy.
In most developing countries a major portion of the GDP is spent on healthcare[i]. For instance, the UK spent 7.3% of the GDP[ii] on healthcare whereas the USA spent an average of 17.3%[iii] in 2018.
But still, the cost of managing healthcare facilities has been increasing at alarming rates for almost a decade[iv].
And that puts pressure on the managers to cut costs and propose efficient working systems while maintaining the standard of care.
Here are 3 ways the economy affects a manager's job
1. Staffing
In events such as the recent recessions, a lot of non-essential workers are laid off to cut down hospital costs. And when the trend continues, there are no more funds to keep even the essential staff[v].
The thing is in a health and social care setting; managers depend on all of their staff for the proper functioning of the hospitals.
In case of layoffs, managers have to create new guidelines about the chain of command and distribution of labour in the facility.
2. Insurance issues
Health and Social care Managers coordinate with the insurance companies on behalf of the hospital and the patients. In times of economic turmoil, there are heavy cuts in the amounts of reimbursements from third-party payers.
Therefore professionals have to balance between ensuring patient care, the budget, and the estimated timeline of reimbursement[vi].
Low reimbursement rates make it difficult for management to keep the facilities running.
3. Budgeting
When the funding runs low the managers have to get creative about how to increase profits.
Generally, the focus is shifted towards scheduling more surgeries and offering privatized patient care because these are the areas generating most of the revenue for the hospital. On average it’s about $16.3 to $17.7 billion/ month[vii].
Hence anytime the economy shifts and the funding is cut, managers have to modify the quarterly or annual budget plans. This in turn affects equipment upgrades, infrastructure improvements, new hires, etc.
Conclusion
The dilemma is this; a struggling economy negatively impacts Health and Social Care services, but the efficient working of these systems is essential for the gears of the economy to keep turning.
Hence, the fall of one will eventually lead to the fall of the other and vice versa.
All it does is make the job of managers even harder. Answering board members or government officials, managing staff, and the scope of services are all affected due to the economy.
Competent and experienced Health and Social Care managers can navigate economic changes efficiently. If you are in a similar position, then consider learning more insights about your field and contemporary practices by enrolling in SNATIKA's UK Masters in Health and Social Care Management today!
[i] https://data.worldbank.org/indicator/SH.XPD.CHEX.GD.ZS
[ii] https://www.statista.com/statistics/472984/public-health-spending-share-of-gdp-united-kingdom-uk/
[iii] https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/NationalHealthAccountsHistorical#:~:text=U.S.%20health%20care%20spending%20grew,For%20additional%20information%2C%20see%20below.
[iv] https://www.healthsystemtracker.org/chart-collection/u-s-spending-healthcare-changed-time/#item-usspendingovertime_2
[v] https://hbr.org/2020/04/why-are-health-care-providers-forced-to-downsize-just-when-we-need-them-most
[vi] https://publish.illinois.edu/illinoisblj/2010/03/16/hospitals-in-distress-how-the-economy-has-affected-financing-of-health-care/
[vii] https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7388821/