Health Economics Prepayment Healthcare System Term Paper

Total Length: 1681 words ( 6 double-spaced pages)

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The considerations of that which is physical and that which is fiscal in the work of Sajay (2005) are clearly polar opposites therefore in no way are they comprehensibly compatible but are destined to be at odds with one the other.


The inherent conflict that exists between financial accounting and accounting for performance are separated by a very thin line. That differentiation is because the focus of the business, management, financial end of the hospital-industry and the physician's end of the hospital-factory is toward two very different goals. Interestingly enough those two very different dimensions in healthcare do come together at the crossroads of end results in the fact that for a patient to suffer due to malpractice, neglect, improper or lack of treatment will most necessarily affect the financial sector of the institution or organization in the realization of punitive damages in lawsuits against them. Therefore, in the view of the business, management or finance individual it is critical that exemplary care be given to the patient in coordination with providing that care in the most resourceful and efficient manner.

Importance of this Study

The importance of this particular study is the hypothesis that both the financial, business and management paradigm and the professional healthcare giver sector paradigm both are more likely to succeed if the other succeeds.
Therefore it may be said that the interrelation of the two is expressed through a critical balance existing between the two that acts in a supportive manner one toward the other. Cost-sharing as well as competitive health plans have ridden the circuits of possibility with health viewed as a "consumption commodity" Sajay (2005) and humans as a type of investment capital. Difficulty in terms of trade yet health was considered to be a commodity by Fuchs and Zeckhauser for the reasons as follows:

Health affects personal utility

Health does not have an unlimited supply

Health can be increased by the applications of scarce resources

Thereby the patient is become 'consumer' in the hospital-factory and its' products and services.


Dowd, B.E. et al. (1986) Inpatient length of stay in Twin Cities health plans Med Care. (8):694-710; 24 August (1986) The Health Institute, New England Medical Center, Boston, MA 02111 JAMA. 1992 Mar 25;267(12):1624-30.

Sajay, Samuel, et….....

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