Economics Corner with Kavan Choksi: The Healthcare System

Kavan Choksi Discusses the Economics of the Healthcare Industry

No other industry worked harder in the past two and a half years than the healthcare sector as a result of the global COVID-19 pandemic. As Kavan Choksi notes, healthcare professionals worldwide made a lot of personal sacrifices to tend to the sick, risking their lives to serve on the front lines of this health emergency. However, despite all the advancements in medicine over the previous two decades, the healthcare system continues to face difficulties, including high costs not necessarily supported by positive health outcomes. These struggles point to the importance of health economists determining the optimal balance between costs paid and benefits received.

Health economists are key figures in the healthcare industry. Some of them manage healthcare facilities to ensure they are not wasting resources. Other health economists evaluate hospitals and clinics regarding the quality of care patients receive, later comparing it to how much patients are charged. Their goal is to determine the extent to which the costs of procedures outweigh the resulting health outcomes.

Health economists also perform necessary adjustments to make their facilities more sustainable. For example, some assist in computing a fair price point for medications, basing these calculations on the current market, production costs, and profit margins. Health economists may also be part of research and data-collecting branches. They study health-related behavior like the consumption of unhealthy food, smoking, and an inactive lifestyle.

Kavan Choksi notes that, in the end, the goal of health economists is to help doctors, nurses, and other healthcare professionals provide better, more affordable care to the sick.

What do you think about healthcare economics? Is there any way to improve the healthcare system? Share your thoughts with Kavan Choksi in the comments section below.

Kavan Choksi is a freelance business and finance consultant. For more of Kavan Choksi’s insights on global finance, business, and economics, visit this website.