8.1 Health Care Economics Introduction

Open Resources for Nursing (Open RN)

Learning Objectives

  • Practice and advocate for cost-effective care
  • Summarize funding and reimbursement sources for patient-care services
  • Explore how political, social, and demographic trends have affected the patient population and delivery of health care
  • Analyze the link between economics and quality
  • Describe nursing strategies to provide cost-effective care
  • Examine economic pressures impacting case management and the management of institutional resources
  • Describe the impact of evidence-based practice on health care economics and patient care outcomes

Whether health care is a right or a privilege is a historical ethical question debated around the world that ultimately leads to the question, “Who gets what resources?” Economics is the study of how individuals and societies make decisions about how to use their limited resources. Health care is considered a limited resource because there isn’t enough money or time in the world to purchase and provide care for every individual in every conceivable manner. The ethical question of who pays for that care is referred to as the ethics of rationing health care.

Economics is split into two broad categories called macroeconomics and microeconomics. Macroeconomics looks at decisions that affect the entire society as a whole, whereas microeconomics looks at the financial decisions of businesses and individuals.[1] This chapter will provide an overview of the broad topics of health care funding and reimbursement models at a societal level, as well as staffing and budgeting issues at the institutional level that impact nurses in their day-to-day work. Economics in health care affects an individual’s ability to pay for and receive health care, the ability of an institution to provide health care services, and nurses’ ability to provide safe, quality care to the communities they serve.


  1. Khan Academy. (2017, August 8). Macroeconomics unit: Basic economics concepts. https://www.khanacademy.org/economics-finance-domain/macroeconomics/macro-basic-economics-concepts
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8.1 Health Care Economics Introduction Copyright © by Open Resources for Nursing (Open RN) is licensed under a Creative Commons Attribution 4.0 International License, except where otherwise noted.

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