Macro-Economic Indicators in the Healthcare Industry

Topics: Health care, Economic growth, Economics Pages: 6 (1715 words) Published: September 5, 2009

Due to the fact our industry deals with medical supplies, the healthcare sector, as a whole, tends to be our main focus area. Health care is traditionally funded through contributions paid by individuals as a percentage of their salaried income. There are, however, some countries that also provide a free public medical service funded by a national budget. Regardless of the coverage it is the quality of the medical supplies and medical personnel when dealing with preventive and corrective medicine that is determined by the below mentioned macroeconomic indicators:1

• “The proportion in GDP of health care expenditures has the same meaning like the corresponding indicator in case of education sector;

• Number of medical personnel usually expressed as the number of specialized personnel (doctors, nurses, etc.) per 10000 inhabitants.

• Number of medical institutions, by type of establishment (hospitals, clinics, sanatoria, ambulatory services) or by in-patient, respectively outpatient institutions;

• Number of beds in medical institutions, expressed in per 10000 inhabitants terms.

• Capacity utilization, showing the proportion of capacity that is effectively used, in average, in a certain period. In some countries there is an over-utilization of establishments (more patients than the number of beds, for example), while in others (the case of Moldova) the capacities are under-utilized.

• Mortality rate, by age groups, expressed as the total number of illness deceases per 1000 inhabitants; the indicator shows how efficient the medical sector is in preventing and curing the diseases.

• Number of ambulances per 1000 inhabitants;

• Average cost per patient, indicating the efficiency in using the financial resources allocated to the sector.” (Zaman, 2008).

There are other less prevalent indicators that can be used to gauge our industry. One such indicator is known as Medical Labor Production. This is basically a measurement of the medical industry based on an hourly output. Efficiency in this realm reduces costs; therefore, it is wise for this area to be well managed. Another area is the Unit Medical Labor Costs, represented by the expense of a physician. The final area worth mentioning is the Capacity of Medical Utilization, a percentage of the highest rate at which a health care facility can function under regular circumstances. 2

These areas are all important when dealing with our industry. There are many projections for the future, some conservatively assuming a great deal of economic growth while others projecting health care price inflation. It can be agreed that regardless of the projection, the health care industry will consume a great deal of the national GDP in the decades to come. If, for some unforeseen reason, the economic growth became stagnant, demographic tendencies could become less accurate and the health care industry may become a large consumer of capital.3


Total health care expenditure, as percentage of GDP

Total health care expenditure, per capita in international dollars 276.70

United States
Total health care expenditure, as percentage of GDP

United States
Total health care expenditure, per capita in international dollars 6,096.20

Below is a comparison of the Macroeconomic indicators pertinent to our industry for both the United States and China.

TABLE 1 (Courtesy of

As evidenced by TABLE 1, we can see that China is well below the United States in its’ healthcare expenditures as a percentage of GDP. While this may indeed be a counterproductive statistic, China’s spending in this area is on the rise. As China embarks on health care reform, we will see these numbers rise in a swift manner, thus providing our industry great success and stability in this foreign country for years to come....
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