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The Business Side of Health Care

29/09/21

سشسشسشسشبؤتفالSAHAR ALHARBI - 443203999

OUTLINES:

OUTLINES

1. OBJECTIVES

2. INTRODUCTION

3. WHAT IS THE BUSINESS

4.FORMS OF BUSINESS OWNERSHIP

5. BUSINESS FUNCTIONS

6.THE IMPACT OF THE ECONOMY

7.THE ROLE OF GOVERNMENT

8. INTEGRATING BUSINESS AND ITS ENVIRONMENT

OBJECTIVES:

OBJECTIVES

1. Define the term of Business.

2. Discuss forms of Business Ownership and characteristics.

3. Illustrate the Business functions.

4. Identify the impact of the Economy.

5. Discuss the role of Government.

6. Describe the integrating Business and its Environment.

INTRODUCTION

INTRODUCTION

Business make decisions about products they offer,the customers they try to attract, and how they organize and manage their employees and operations.

Figure 2.1

Business and its Environment

What is Business?

What is Business?

The activity of providing goods and service to customers for Profit.

Profit = Revenue - Expenses

All business must make a profit.

For-profit

Making a profit is identified as the primary reason for the business to exist.

For-profit

Dr. Soliman Fakeeh Hospital - Jeddah

Not-for-profit

Not-for-profit

The primary reason for the business to exist is some reason other than profit ( taking social issue)

Bab Al Khair

First non-profit hospital -Makkah

Forms of Business Ownership

Forms of Business

  • Sole proprietorship
  • Partnership
  • Corporation

Sole proprietorship

Forms of Business Ownership

Advantages:

Easy to create business.

Owner has complete authority.

Reaps all the profit and rewards.

Sole proprietorship

Owned by one person.

Disadvantages:

ALSAGGAF EYE CENTER

Owner must work long hours.

Take all the risk.

Owner death, Business death.

Partnership

Forms of Business Ownership

Advantages

Start up with low cost.

Shared decision making.

Putting together their expertise.

Sharing risk.

Partnership

Two or more people work together.

Healthcare and Medical Services Group

Disadvantages

Conflict can be easily.

Shared profit.

limited life.

Corporation

Forms of Business Ownership

Advantages

Corporation

Owner can be easily transform.

The risk is shared.

Unlimited life of business.

Have many owners.

Dallah Health Services Company

Disadvantages

Difficult to start.

Loss limited to initial investment.

Corporation pays tax and shareholder pays tax.

BUSINESS FUNCTIONS:

Business Functions

  • MANAGEMENT
  • MARKETING
  • ACCOUNTING
  • PRODUCTION
  • INFORMATION TECHNOLOGY

The Health Care Industry

THE HEALTH CARE INDUSTRY

The North American Industry Classification System (NAICS)

Under code 62( health and social assistance) The businesses are divided into four categories:

1. Ambulatory health care services.

2. Hospitals.

3. Nursing and residential care facilities.

4. Social assistance.

The Impact of the Economy

The Impact of the Economy

Businesses in united states operate in the market economy.

Competition is the central feature for this market.

Some business do not operate in a true market economy.

Market where there are only a few seller is called (oligopoly).

or one seller called (monopoly).

Demand the amount of a good a buyer is willing to purchase at a given price.

Supply the higher the price goes, the more they are willing to produce for the market.

Supply and Demand

Figure 2.3

Equilibrium price

The Impact of the Economy

The health of the overall economy can be analyzed by studying data known as economic indicators:

  • Interest rate .
  • Inflation rate.
  • Unemployment rate.

Interest : the price paid when an individual or business borrows money.

Inflation : is an increase in the general price level, or average of price at a given time.

Unemployment : is the lack of jobs for those who are willing and able to work.

The Impact of the Economy

Business cycle:

Regular cycles of growth and decline.

The Impact of the Economy

The are four possible scenarios of Business cycle:

1. Prosperity phase

times are good-GDP increasing

interest rate , Inflation rate and unemployment rate are all

2. Recession phase

the economy slow down.

inflation and interest rate start to

3. Depression phase

If a recession persists,economy activity comes to a near standstill.

4. Recovery phase

things begin to improve.Business hire back employees, and business and individuals are able to buy the items.

The Role of Government

The Role of Government

Government actually play three roles :

1. Provider of health care services.

2. A payer for services provided by others.

3. A regulator of health care provider.

*Government regulates health care by using the political process to make laws.

*Industries create their own regulatory groups so government will decide no additional regulation is needed.

(The Joint Commission evaluates health care organizations to improve the quality and safety of health care services).

The Role of Government

The government uses laws to regulate health care have had two objectives:

1. To ensure fair competition in marketplace.

2. To protect the public.

Antitrust laws are an example of how the government regulates competition.

The Role of Government

The Role of Government

Integrating Business and its Environment

Integrating Business and its Environment

Many managers use a technique called SWOT analysis to determine where the business is in relation to its environment.

Summary

  • Health care is a business as well as a delivery system.
  • Business involves providing a products or service to customers for profit.
  • The business may may be legally organized as sole proprietorship, a partnership or corporation.
  • Business functions of management , marketing, accounting, productions and information technology.
  • Two external environment impact the operation of health care business: economic and political legal.
  • SWOT analysis can be used to integrate business with its environment to plan for future.

Article discussion

What drove the health system reforms in the Kingdom of Saudi Arabia? An analysis.

Article discussion

The main idea of the article is to present the key directions taken by the Saudi health care system following the Saudi Vision 2030. The government is now ardently pursuing private sector development and has initiated privatization and marketization as a core strategy of reforms in its health system.

For the past 20 years, the KSA government has been promoting reforms in the private sector. The state is committed to providing the best health care to meet the changing needs of society, improve quality and minimize costs. The National Transformation Plan focused on reducing dependence on the oil economy through diversification and foreign investment. To improve the health sector, it encouraged private sector participation, privatized some public facilities, and provided health care through health insurance. NTP aims to strengthen the role of the private sector in the economy by focusing on privatization and public-private partnerships through improving the business environment, developing local capital markets, encouraging foreign direct investment. These reforms have always been on upgrading the quality and addressing the economic and financial issues. The impact of health system reforms remains inconclusive as costs, inequality, equity, and outcomes. Not to mention the effect of covid pandemic on the economy in the past two years which lead to increase interest rate, inflation rate and unemployment rate.

References

References:

Austin/Wetle, The United States Health Care System, 3/e ISBN-10:

0134297792 • ISBN-13: 9780134297798 • 2017Pearson • Paper, 288 pp

Published 09 Jun 2016

Rahman, R., & Alsharqi, O. Z. (2018a). What drove the health system reforms in the Kingdom of Saudi Arabia? An analysis. The International Journal of Health Planning and Management, 34(1), 100–110. https://doi.org/10.1002/hpm.2584

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