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The Relationship between Economics and Healthcare Costs

The Relationship between Economics and Healthcare Costs

Major Economic Trends in the Market

The three key trends in the healthcare market include cost, access, and healthcare quality. The three trends are so interrelated that one or two must be adjusted to improve on the others (Beauvais et al., 2021). It is generally difficult to attain high quality, broader access, and low cost concerning healthcare provision. For instance, an increase in quality of care means that the care costs will also rise. Therefore, healthcare systems must employ a balancing act to attain an optimal iron triangle of healthcare.

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Cost is the simplest among the three trends of healthcare. It is merely a question of how much it will cost to provide healthcare to attain a productive and healthy population (Beauvais et al., 2021). In the US context, cost reduction is mainly attributable to private insurance. These private insurance companies spread risk throughout the population so that an individual patient can be treated at a lower cost instead of paying out of pocket. Among the three considerations in healthcare, cost demands the most compromises. That is because any attempt to cut costs often compromises quality and access. Healthcare provider systems must develop innovations to manage costs, but such innovations depend on how the resulting cost outcomes interact with access to and healthcare quality.

Quality of Healthcare

From the outset, quality looks like the simplest of all corners of the healthcare iron triangle. It refers to the measure of healthcare interventions provided to a patient. Since healthcare is a broad sector, various aspects are subjected to quality measures. Firstly, quality delves into the inputs available for care provision (Beauvais et al., 2021). These may include pathologists, primary care doctors, investment in technological advancement and devices, and drug access.

As stated, quality manifests in different forms. For instance, one may not measure healthcare quality based on cancer drugs a health provider purchases. Instead, quality is calculated based on health outcomes (Beauvais et al., 2021). Metrics such as successful cancer treatment rates and life expectancy enhancement apply when assessing the quality of care. Further, cancer treatment procedures affect a patient’s physical and emotional well-being. To that end, more metrics to measure the quality of care, such as the quality of life, arise. From the above, it is evident that quality is difficult to assess, but patients are given what they pay for.

Access to Healthcare Services

Access to healthcare is the final and one of the most complex of the three perspectives. In its simplest terms, access means answering whether one can get healthcare that befits one’s needs (Beauvais et al., 2021). However, there are many ways to look at healthcare access. In the US context, healthcare is viewed from rural dwellers’ versus urban dwellers’ perspectives. Most healthcare providers live in urban areas, implying that citizens who live in rural areas must travel long distances to access care. Further, the cost of care may hinder access since economically vulnerable populations cannot access quality care. Therefore, access is not a question of whether a doctor is nearby but a combination of many other factors.

The Impact of Healthcare Trends on CIOX

CIOX handles health concerns for civilians, active service members, and retired veterans. The three healthcare economic trends affect the nationwide institution like other healthcare providers. Notably, CIOX provides military people with alternative coverage and those relying solely on MHS’s services. Also, CIOX handles civilian information.


Concerning cost, services offered under CIOX are standardized nationwide (Farmer et al., 2016). That sharply contrasts civilian healthcare systems that only provide care to a partially insured population. MHS serves about 9.5 million active and retired service members, all certified. On the flip side, about 28 million Americans are currently uninsured. Therefore, it is easier to manage costs since the organization knows the number of beneficiaries they are dealing with. Another factor that makes it easy for CIOX to deal with the cost is that the military has health practitioners across its ranks. The military deploys dieticians, mental health experts, athletic trainers, and general practitioners (Farmer et al., 2016). These providers ensure service members get quality care at low costs. To that end, MHS safeguards the military from the ever-fluctuating medical expenses civilian systems charge.

Access to Healthcare Services

CIOX uses administrative data to monitor patient admissions and services to ensure all deserving service members access healthcare. The data is recorded at the end of each day, ensuring that all cases are well-catered (Farmer et al., 2016). Other than administrative data, MHS also uses patient surveys to evaluate access. Such surveys inquire about patients’ satisfaction levels, waiting time, and care outcomes. To that end, once the institution gathers essential data, it can use it to enhance access. This sharply contrasts with civilian healthcare systems, where access cannot be easily monitored.

Quality of Healthcare

As mentioned, quality of care is assessed from different angles. Regarding care inputs, the private system faces almost the same dilemma civilian systems face. However, considering that the CIOX can collect data from all its beneficiaries, it becomes easier for them to make corrective actions based on patient surveys and administrative data availed by partner institutions.

Evaluating Strengths and Weaknesses in the Market

One of the key strengths in the digital healthcare market is the opportunity to partner with other players in the sector. CIOX collaborates with care systems and a myriad of stakeholders in the healthcare sector, including the VA, MHS, civilian insurance companies, and state agencies. These institutions have readily available data in their systems, which are universally accessible. Therefore, other players do not have to shift from one organization to another to seek information. CIOX consolidates this data and shares it with other interested parties.

On the other hand, the data hosted by CIOX is susceptible to cyber-attacks. A key reason for such susceptibility is the failure to train handlers at CIOX on dealing with cyber attacks. Besides, there has been an increase in digital theft over the recent past, and CIOX is not spared. Hackers who access unauthorized information make changes that can significantly affect care delivery. Even without making any changes, hackers still access private and sensitive data that is not supposed to be exposed. Essentially, once healthcare data is compromised, it affects the overall healthcare delivery.

Another impactful factor in the operations of CIOX is the issue of access to information. Notably, most people now own smartphones, and the internet has spread. Nonetheless, a cohort of individuals still lacks access to these facilities that form the basis of CIOX’s operations. Consequently, some potential beneficiaries may be denied services due to insufficient information.

The Influence of CIOX on Healthcare Economics

In light of CIOX’s essential functions, there is no doubt that the organization significantly influences the economics of the healthcare sector. Perhaps the most significant and notable influence is that the data collected from CIOX drives the decision-making process among health institutions (Ayaad et al., 2019). The data from the organization guides decision-making in hospitals and insurance companies. As a result, such detailed information enhances access to healthcare. For instance, when a patient visits a hospital, one of the initial considerations for doctors is a patient’s history. Consequently, a patient’s history forms the basis of their treatment process. When a patient’s data is accessed fast and efficiently, the wait time is also significantly reduced, thus enhancing the patient’s access to care.

As far as care quality is concerned, CIOX’s database offers care providers access to evidence-based data. In turn, practitioners employ evidence-based data to treat patients, and such developments eliminate any occurrence of guesswork when treating patients. Evidence-based data guide healthcare providers throughout a patient’s stay in a hospital, ensuring that they receive the proper care. As a result, there is a reduced chance that a patient will receive the wrong treatment, which may lead to side effects (Ayaad et al., 2019). Since quality in healthcare is primarily based on care outcomes, CIOX’s data enhances the quality of care. Also, the availability of CIOX’s data leads to significant cost savings. Hospitals adopting the system have eliminated the red tape that characterized the traditional healthcare information structure. The extra workforce that could otherwise be used for information searches is directed elsewhere.


Ayaad, O., Alloubani, A., ALhajaa, E. A., Farhan, M., Abuseif, S., Al Hroub, A., & Akhu-Zaheya, L. (2019). The role of electronic medical records in improving the quality of health care services: Comparative study. International Journal of Medical Informatics, 127, 63–67.

Beauvais, B., Kruse, C. S., Fulton, L., Brooks, M., Mileski, M., Lee, K., Ramamonjiarivelo, Z., & Shanmugam, R. (2021). Testing Kissick’s Iron Triangle—Structural Equation Modeling Analysis of a Practical Theory. Healthcare, 9(12), 1753.

Farmer, C. M., Hosek, S. D., & Adamson, D. M. (2016). Balancing Demand and Supply for Veterans’ Health Care: A Summary of Three RAND Assessments Conducted Under the Veterans Choice Act. Rand Health Quarterly, 6(1), 12.


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You have understood the relationship between economics and healthcare costs by this point in the course. Furthermore, market trends and demands differ from locality to locality, and it is advantageous for healthcare administrators to be aware of the particular drivers of demand impacting their facilities.

The Relationship between Economics and Healthcare Costs

The Relationship between Economics and Healthcare Costs

Review the SWOT analysis you completed for your organization in MHA/505. Applying your knowledge of economic principles, analyze how financial concepts impact the opportunities or threats facing your organization.

Write a 1,225- to 1,550-word report on your organization’s SWOT and how economics in your market impact the strategy and future of your organization. Include the following:

Summarize the major economic trends in your market.
Evaluate whether these trends benefit or harm your organization’s strategic goals. Provide a rationale for your response.
Evaluate whether the economy in your market presents opportunities or threats for your organization or both. Describe them and how they apply to your organization.
Examine whether your organization can influence the economics in your area. Explain your perspective.

Cite any references to support your assignment.
Format your citations according to APA guidelines.

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