Health Care Industry

Health Care Industry 1

HEALTH CARE INDUSTRY

Student Name

Code

Supervisor

University

Course

Date


HEALTH CARE INDUSTRY

Introduction

Health care industry is the most prevailing and important industry in the globalized

world. It is developing at a high pace with the help of new emerging technologies and future

prospects of economical development (Munchus, Roberts, Rivers & Gingerich, 1999). Here in

this report an analysis have been made with the past, present and future of the health care

industry in relation to its finance, economics and technology. This report shows how health care

industry has changed in the last few years and what the scopes of growth for this industry are in

the coming years. To complete this report an analysis has been made with the changes that the

industry has faced in the last 10 years, the current status of the industry and the future aspect of

the health care industry. What technological changes have the industry faced along with the

finance sources and economical development of the industry. The report is presented in three

stages as given below:

Past

During last 10 years from about 2003 to 2013, the health care industry has become

advanced and lots of major changes have been evident in the last few years. The health care

industry has been emerged to be one of the most successful industries with no recession and

downtime (Linden, 2010). It has evident a lot of technological advancement and various

financial supporters have started providing backup to this industry as a scope of growth has been

analyzed from this industry.

Technology is the main supporter of development of health care industry. With the

changing technology, health care industry has also sought growth. New machineries have been


invented for proper health care. In the last 10 years, medicines have been found for many none

curable diseases and new systems have been developed with the help of developing technology

to serve the society in better way. New machineries have been developed to meet the growing

need of the industry. MRI, CT scan technology have been developed. Medicines for cancers first

stage and lot more diseases have been invented.

The increased expenditure on high level of technological development has made the industry

face an economical and financial crisis at the beginning of the 21st century. It was not possible

for the government to support the high level of expenditure in this industry. Due to this the

industry faced a lot of difficulties in the developing countries that does not have sufficient

amount of finance for supporting this industry. Several health institutions were developed and

the World Bank and International Monetary Fund started supporting this industry in several

underdeveloped and developing countries. As investors found this industry to have a good scope

of growth, they stared investing in this industry in the last few years. This industry has become

the most growing industry of the world.

In the earlier days it has been seen that government were the only investors of health care

industry. Few privates firms were financed by private owners. But in the last 10 years the finance

and economical changes have been evident in the health care industry. Due to high level of

development with the emergence of the globalized world, the fiscal need of the industry has

increased in the last 10 years. It was not possible only for the government to support the

increased need of expenditure for the industry. Hence, it made the private investors and financial

institution to take interest in this industry. As this industry has a valid scope of growth. Hence,

several private financial institutions also started providing finance to this industry. The example


of national expenditure in the last ten years in USA has been presented in the table below to

show the financial and economical growth in the last 4 years.

National Health Expenditures (NHE) Amounts And Annual Growth, By

Spending Category, Calendar Years 2009–12 (USA) [Posted by NCSL

January 2014]

Spending category 2009 2010 2011 2012

Expenditure

amount

NHE, billions

$2,504.2

0 $2,599.00 $2,692.80 $2,793.40

Health consumption

expenditures 2,358.00 2,449.60 2,534.90 2,633.40

Personal health care 2,117.40 2,192.90 2,271.20 2,360.40

Hospital care 776.8 812.6 840.8 882.3

Professional services 672.4 694.2 720.9 752.3

Physician and clinical

services 503.2 519 540.1 565

Other professional services 66.8 69.8 73.1 76.4

Dental services 102.5 105.4 107.7 110.9

Other health, residential,

and personal care 122.5 128.1 132.3 138.2

Home health care 67.2 71.2 74 77.8

Nursing care facilities and 138.5 143 149.2 151.5


continuing care retirement

communities

Retail outlet sales of

medical products 339.9 343.9 354 358.3

Prescription drugs 254.5 255.7 262.2 263.3

Durable medical equipment 35 37 39.1 41.3

Other nondurable medical

products 50.3 51.2 52.8 53.7

Government administration 29.8 30.5 32.8 33.6

Net cost of health insurance 136.7 150.9 157.6 164.3

Government public health

activities 74.1 75.3 73.3 75

Investment 146.2 149.4 157.8 160

Noncommercial research 45.4 49.1 49.7 48.1

Structures and equipment 100.9 100.3 108.2 111.9

Annual growth

NHE, billions 3.80% 3.80% 3.60% 3.70%

Health consumption

expenditures 4.5 3.9 3.5 3.9

Personal health care 5 3.6 3.6 3.9

Hospital care 6.6 4.6 3.5 4.9

Professional services 3 3.2 3.8 4.4


Physician and clinical

services 3.4 3.1 4.1 4.6

Other professional services 4.4 4.6 4.6 4.5

Dental services 0.1 2.8 2.2 3

Other health, residential,

and personal care 7.9 4.6 3.3 4.5

Home health care 8 5.8 4.1 5.1

Nursing care facilities and

continuing care retirement

communities 4.5 3.2 4.3 1.6

Retail outlet sales of

medical products 4 1.2 3 1.2

Prescription drugs 4.9 0.4 2.5 0.4

Durable medical equipment 0.4 5.6 5.6 5.6

Other nondurable medical

products 1.7 1.8 3 1.8

Government administration 1.3 2.4 7.3 2.7

Net cost of health insurance −1.8 10.4 4.5 4.2

Government public health

activities 3.6 1.6 −2.6 2.3

Investment −5.3 2.2 5.7 1.4

Noncommercial research 3 8.1 1.2 −3.1

Structures and equipment −8.6 −0.5 7.8 3.4


Health care industry has provided a lot of economical benefits to the economy of the

country. It has helped the economy by providing employment and scope of livelihood to several

people (Freeman, Hawkes & Bennett, n.d.). This industry serves a huge population by providing

their daily livelihood. The graph below shows how employment has been increased in the world

with the development of the health care industry. The graph shows the figure for last 10 years

from 2003 to 2013 keeping 2003 as base year.

Source: (Thompson, 2013)

Present

Health care industry has become dependent on technological development because of its

dependency on the highly efficient machineries and technical systems. Several laws and

regulations have been developed that controls the working of the health care industry. It focuses

on providing better services to the patients with proper system of health care. Several


technological developments have been seen in the field of internet use. The health care system

has seen an online system development in the present years. This helps the health care

professional to provide better services to the patients.

With the technological development there emerges a need of financial backup for the

health care industry. In present day the industry is financed by the international monetary

organizations and health organizations for the developing countries. It has been found that US

has spend around $3 trillion in the year 2014 in the health care industry and this expenditure is

forecasted to rise at a rate of 5.6% in the year 2015. For providing the financial backup the health

care industry needs the help of the private investors and financial institutions that helps the

industry in exchange of profit. Several health insurance companies also provide finance to the

people for maintaining the health and safety. This is a source of using the public money in

financing the health care industry.

There are several types of payment methods that have been used in the health care

industry in the present period (Dhooper, 2012). These methods are like direct financing by

private mechanisms that includes self financing, charity financing, indemnity insurance and

commercial insurance. Health industry also uses the public financing mechanism in the form of

government financing, international institutional financing etc. as it has been known that the

industry needs a huge amount of finance to fulfill its need of technological development; it needs

the backup of both type of mechanism.

Future

It is important to know the future aspect of the industry in the existing market and what

changes will occur in the industry. Here in this section the occurrences of the technological


changes have been discussed in the health care industry and the effects of the changes in the

development of the industry has also been analyzed. The industry will see more changes in the

use of technology in the coming future. Health care apps have been developed with the emerging

technology of smart phones. It is important to know how much the new technologies will be

capable of meeting the growing needs of the health care industry.

It has been forecasted that the growing technology will need growing financial backup

for the industry. With the development of technology and automatic machines and robotic

system the need for employees will decline in the coming future that will increase the reduction

of employees in this sector. This will adversely affect the economy of the globalized world. With

the increasing standards of the modern health care system the cost and expenditure of the

industry also increases. It has been estimated that the rate of increase of the expenditure will be

about 6% every year and will reach to 10% in the coming ten years. This is all because of the

increasing technological modernization of the industry.

With the increasing monetary needs that industry will need more financial backup that

will be supported by several payment mechanisms (Brymer, 1995). As it is already discussed that

the health care’s industry uses two different types of payment mechanisms which helps to gather

financial backup for the industry. In future the industry needs to develop new mechanism for

financial support. New systems of gathering finance needs to be developed to meet the growing

need of the industry. The biggest changes in the health care industry will be the way the industry

serves the society. The industry will develop new systems that will be more human friendly and

people will be able to take self care with the help of the system. This will reduce the burden and

pressure on the industry.


Conclusion

With proper study of the health care industry it has been seen that the industry has

development at a great pace in the last 10years and it is the only industry that will never face a

recession. It is such an industry that has a good scope of growth. A lot of technological

development has been seen in the last few years that will be followed by some new advancement

in the coming years. With the advancement in the technology, the industry will see several

changes in the fiscal policy and development in the economy.


References

Brymer, R. (1995). Hospitality management. Dubuque, Iowa: Kendall/Hunt Pub. Co.

Dhooper, S. (2012). Social work in health care. Los Angeles, Calif.: Sage.

Freeman, M., Hawkes, S., & Bennett, B. Law and global health.

Linden, R. (2010). The rise & fall of the American medical empire. North Branch: Sunrise River

Press.

Munchus, G., Roberts, V., Rivers, P., & Gingerich, B. (1999). The US Home Health Care

Industry: Past, Present, and Future. Home Health Care Management & Practice, 11(5), 21-

30. doi:10.1177/108482239901100507

Thompson, D. (2013). A Truly Astonishing Graph of the Growth of Health-Care Jobs in

America. The Atlantic. Retrieved 15 February 2015, from

http://www.theatlantic.com/business/archive/2013/07/a-truly-astonishing-graph-of-the-

growth-of-health-care-jobs-in-america/277454/

Health Care Industry

Documents

Transcript of Health Care Industry