SCOPE OF MANAGERIAL ECONOMICS IN HOSPITAL RESOURCE ISSUES

Submitted by MAYA MATHEW MHA 2 YEAR

SUBMITTED TO MIS.RAICHAL THOMAS MANAGERIAL ECONOMICS

CONTENT 1. INTRODUCTION 2. THE NATURE OF MANAGERIAL ECONOMICS 3. SCOPE OF ECOMONICS IN HOSPITAL SECTOR 4. APPLICATIONS OF MANAGERIAL ECONOMICS 5. What Is a Hospital Human Resource Managers Function? 6. ISSUES PERTAINING TO HUMAN RESOURCES IN HEALTH CARE AND DECISIONS USING MANNEGERIAL 7. ECONOMICS CONCLUSION

SCOPE OF MANAGERIAL ECONOMICS IN HOSPITAL RESOURCE ISSUES INTRODUCTION Decisions made by managers are crucial to the success or failure of a business. Roles played by business managers are becoming increasingly more challenging as complexity in the business world grows. Business decisions are increasingly dependent on constraints imposed from outside the economy in which a particular business is based-impact of rapid technological change on innovation in products and processes, as well as in marketing and sales techniques, figures prominently among the factors contributing to the increasing complexity of the business environment. Moreover, because of increased globalization of the marketplace, there is more volatility in both input and product prices. The continuous changes in the economic and business environment make it ever more difficult to accurately evaluate the outcome of a business decision. In such a changing environment, sound economic analysis becomes all the more important as a basis of decision making. Managerial economics is a discipline that is designed to provide a solid foundation of economic understanding in order for business managers to make well-informed and well-analyzed managerial decisions. THE NATURE OF MANAGERIAL ECONOMICS There are a number of issues relevant to businesses that are based on economic thinking or analysis. Examples of questions that managerial economics attempts to answer are: What determines whether an aspiring business firm should enter a particular industry or simply start producing a new product or service? Should a firm continue to be in business in an industry in which it is currently engaged or cut its losses and exit the industry? Why do some professions pay handsome salaries, whereas some others pay barely enough to survive? How can the business best motivate the employees of a firm? The issues relevant to managerial economics can be further focused by expanding on the first two of the preceding questions. Let us consider the first question in which a firm (or a would-be firm) is considering entering an industry. For example, what led Frederick W. Smith the founder of Federal Express, to start his overnight mail service? A service of this nature did not exist in any significant form in the United States, and people seemed to be doing just fine without overnight mail service provided by a private corporation. One can also consider why there are now so many overnight mail carriers such as United Parcel Service and Airborne Express. The second example pertains to the exit from an industry, specifically, the airline industry in the United States. Pan Am, a pioneer in public air transportation, is no longer in operation, while some airlines such as TWA (Trans World Airlines) are on the verge of exiting the airlines industry. Why, then, have many airlines that operate on international routes fallen on hard times, while small regional airlines seem to be doing just fine? Managerial economics provides answers to these questions.

In order to answer pertinent questions, managerial economics applies economic theories, tools, and techniques to administrative and business decision-making. The first step in the decisionmaking process is to collect relevant economic data carefully and to organize the economic information contained in data collected in such a way as to establish a clear basis for managerial decisions. The goals of the particular business organization must then be clearly spelled out. Based on these stated goals, suitable managerial objectives are formulated. The issue of central concern in the decision-making process is that the desired objectives be reached in the best possible manner. The term "best" in the decision-making context primarily refers to achieving the goals in the most efficient manner, with the minimum use of available resourcesimplying by providing information on waste associated with a proposed decision. SCOPE OF ECOMONICS IN HOSPITAL SECTOR In many cases it costs less to provide a range of services in a single hospital than to have several hospitals each just producing one or two services. For example, emergency surgery and treatment of heart attacks are more cost effectively provided in a single hospital rather than two separate ones. Price maker In this situation, the hospital as supplier of health care services has considerable power to bargain over price. Instead of being a price taker it is a price maker. In this situation a free market does not lead automatically to a Pareto efficient outcome. In particular, if the hospital is profit maximising then it will set price above marginal costs giving an allocatively inefficient outcome. Also it is likely that the hospital will be productively inefficient, since it lacks the incentive to reduce costs which would be provided by competition. APPLICATIONS OF MANAGERIAL ECONOMICS Some examples of managerial decisions have been provided above. The application of managerial economics is, by no means, limited to these examples. Tools of managerial economics can be used to achieve virtually all the goals of a business organization in an efficient manner. Typical managerial decision making may involve one of the following issues:

Deciding the price of a product and the quantity of the commodity to be produced Deciding whether to manufacture a product or to buy from another manufacturer Choosing the production technique to be employed in the production of a given product Deciding on the level of inventory a firm will maintain of a product or raw material Deciding on the advertising media and the intensity of the advertising campaign Making employment and training decisions Making decisions regarding further business investment and the mode of financing the investment

It should be noted that the application of managerial economics is not limited to profitseeking business organizations. Tools of managerial economics can be applied equally well to decision problems of nonprofit organizations. Mark Hirschey and James L. Pappas cite the example of a nonprofit hospital. While a nonprofit hospital is not like a typical firm seeking to maximize its profits, a hospital does strive to provide its patients the best medical care possible given its limited staff (doctors, nurses, and support staff), equipment, space, and other resources. The hospital administrator can use the concepts and tools of managerial economics to determine the optimal allocation of the limited resources available to the hospital. In addition to nonprofit business organizations, government agencies and other nonprofit organizations (such as cooperatives, schools, and museums) can use the techniques of managerial decision making to achieve goals in the most efficient manner. While managerial economics is helpful in making optimal decisions, one should be aware that it only describes the predictable economic consequences of a managerial decision. For example, tools of managerial economics can explain the effects of imposing automobile import quotas on the availability of domestic cars, prices charged for automobiles, and the extent of competition in the auto industry. Analysis of managerial economics will reveal that fewer cars will be available, prices of automobiles will increase, and the extent of competition will be reduced. Managerial economics does not address, however, whether imposing automobile import quotas is good government policy. This latter question encompasses broader political considerations involving what economists call value judgments. A hospital pretty much functions like a small city the same issues yet with a stronger dynamic because of all human interaction. There are five shows the cover everything from safety to training where human resource management plays an important role in ensuring that the facilities delivery of services maintains the highest quality standards for optimum patient outcomes. What Is a Hospital Human Resource Managers Function? The human resource manager is responsible feel overriding of different needs for both employees as well as the employer. The manager supervises all aspects of operations that are personnel related that would include the following areas: Interview and hiring Doctor and nurse recruitment Compensation and benefits management Handling of claims Personnel counseling Employee training Performance evaluation Implementation of professional development programs Compliance with state and federal regulations

 Safety and sanitation the workplace Labor Relations and mediation Supervision of employee meetings Maintenance and/or improvement of employee retention and morale Managing People The Human Resources Manager oversees the department (HR) responsible for the hiring and firing of employees. This department also manages all the financial and time-related factors concerning an employees work life. A Human Resources Manager has responsibility making decisions that have a direct effect upon the health, safety and financial well being of all employees. There are certain HR managers that qualify as counselors who have received a specialized training that may include receiving a bachelors degree in Counseling. This may involve conducting one-on-one sessions helping employees deal with everyday challenges including marital, drug, alcohol, family issues and workplace issues affecting both their personal and employment well being and performance. Personnel Claims Against The Business Circumstances arise in any business where and employee feels it necessary to file a claim concerning some type of egregious behavior on the part of the employer or employers representative. These situations can include injuries, layoffs, getting fired or possibly incidents of arrest or other related type experiences. Labor claims are specialty areas that human resource professionals are well-trained receiving the proper knowledge about state and local regulations concerning the disposition of such claims. Employee Training And Performance Evaluation Quality control is an important aspect for human resource management. But, unlike the quality control manager in a factory making sure that products are created according to the necessary specifications, quality control for human resource manager translates to providing the necessary training is that will ensure top on the job performance. Tests are developed by human resource managers to monitor skill levels that can be administered oath prior to hiring as well as at different times throughout the employment. If it is the job of the human resource manager to work quite closely with both clinical and nonclinical department heads to develop relevant professional skills enhancement programs as well as providing continuing education opportunities for all employees. Human Resource Management is not a Clerical Position It was once upon a time. Not so long ago time, the human resource manager at a clerical team who handled hiring and firing as well as payroll and bookkeeping. More thought and energy has been put into redefining the role of the human resource manager and has paved the way toward developing different specialized needs and roles for employees. This has resulted in need for highly specialized training leading to creating human resource managers that have duties far beyond those of writing a check.

Getting it all in the Book The human resource manager is also responsible for producing what is commonly referred to as an employee handbook. The HR manager will oversee operation collecting all the necessary data that can provide the answers to many employee questions. These are usually answers to common issues faced by all pulleys and a facility that are compiled in a book that is easy to navigate and can be given everyone. Human resource manager is necessary for productive and effective healthcare.Health care systems depend upon effective human resource management. It is crucial that effective human resource management produces successful recruitment and retention for both clinical and not critical staff. Human resource management also plays the vital role helping to maintain staff morale, providing employees with opportunities for professional advancement, as well as providing ongoing training programs to ensure top quality health care service delivery. ISSUES PERTAINING TO HUMAN RESOURCES IN HEALTH CARE AND DECISIONS USING MANNEGERIAL ECONOMICS When examining health care systems in a global context, many general human resources issues and questions arise. Some of the issues of greatest relevance that will be discussed in further detail include the size, composition and distribution of the health care workforce, workforce training issues, the migration of health workers, the level of economic development in a particular country and socio demographic, geographical and cultural factors. The variation of size, distribution and composition within a county's health care workforce is of great concern. For example, the number of health workers available in a country is a key indicator of that country's capacity to provide delivery and interventions. Factors to consider when determining the demand for health services in a particular country include cultural characteristics, socio demographic characteristics and economic factors. Workforce training is another important issue. It is essential that human resources personnel consider the composition of the health workforce in terms of both skill categories and training levels . New options for the education and in-service training of health care workers are required to ensure that the workforce is aware of and prepared to meet a particular country's present and future needs . A properly trained and competent workforce is essential to any successful health care system. The migration of health care workers is an issue that arises when examining global health care systems. Research suggests that the movement of health care professionals closely follows the migration pattern of all professionals in that the internal movement of the workforce to urban areas is common to all countries . Workforce mobility can create additional imbalances that require better workforce planning, attention to issues of pay and other rewards and improved overall management of the workforce . In addition to salary incentives, developing countries use other strategies such as housing, infrastructure and opportunities for job rotation to recruit and retain health professionals , since many health workers in developing countries are underpaid,

poorly motivated and very dissatisfied. The migration of health workers is an important human resources issue that must be carefully measured and monitored. Another issue that arises when examining global health care systems is a country's level of economic development. There is evidence of a significant positive correlation between the level of economic development in a country and its number of human resources for health . Countries with higher gross domestic product (GDP) per capita spend more on health care than countries with lower GDP and they tend to have larger health workforces . This is an important factor to consider when examining and attempting to implement solutions to problems in health care systems in developing countries. Socio-demographic elements such as age distribution of the population also play a key role in a country's health care system. An ageing population leads to an increase in demand for health services and health personnel . An ageing population within the health care system itself also has important implications: additional training of younger workers will be required to fill the positions of the large number of health care workers that will be retiring. It is also essential that cultural and geographical factors be considered when examining global health care systems. Geographical factors such as climate or topography influence the ability to deliver health services; the cultural and political values of a particular nation can also affect the demand and supply of human resources for health . The above are just some of the many issues that must be addressed when examining global health care and human resources.

CONCLUSION Managerial economics employs economic concepts and principles, which are known as the theory of Firm or 'Economics of the Firm'. Thus, its scope is narrower than that of pure economic theory. Takes the help of macroeconomics: economics incorporates certain aspects of macroeconomic theory. These are essential to comprehending the circumstances and environments that envelop the working conditions of an individual firm or an industry. These are essential to comprehending the circumstances and environments that envelop the working conditions of an individual firm or an industry. Issues such industrial policy of the government, price and distribution policies, wage policies and antimonopoly policies and so on, is integral to the successful functioning of a business enterprise. Aims at helping the management: Managerial economics aims at supporting the management in taking corrective decisions and charting plans and policies for future. A scientific art: Science is a system of rules and principles engendered for attaining given ends. Scientific methods have been credited as the optimal path to achieving one's goals. Managerial economics has been is also called a scientific art because it helps the management in the best and efficient utilisation of scarce economic resources. It considers production costs, demand, price, profit, risk etc. It assists the management in singling out the most feasible alternative. Managerial economics facilitates good and result oriented decisions under conditions of uncertainty.