Why has the share of healthcare output produced by hospitals

Why has the share of healthcare output produced by hospitals fallen? Will this trend continue? Can you think of a policy or technology change that would further reduce hospital use? Can you think of a policy or technology change that would increase hospital use? What implications do these changes have for the careers of healthcare managers?

Solution

Hospital usage has reduced due to preventive healthcare practices being adopted by people. Nowadays, high healthcare expense has compelled many people to control and change their lifestyle, dietary habits and other health issues in order to be proactive in controlling potential health problems that may require (even if low-duration) stay in hospitals.

This trend may continue in future, with rising health awareness by people. It may well happen in future that hospitals keep earning considerable earnings from providing preventive healthcare services, out-patient services and diagnostic services, than in-patient hospital stay revenues.

If majority of healthcare insurance sellers increase the percent of coinsurance in healthcare expenses, use of hospital stay will further go down since patients will have to pay more than before for their hospital stay. That will raise their awareness and higher management of their own health to avoid such cost.

I don\'t believe any policy or technology can result in higher hospital use!

The result of these changes is that, the healthcare managers need to look ahead and focus on out-patient and preventive healthcare as importantly as the in-patient healthcare services, in order to make the hospitals strive and stay in business.