Impact of the economy business in the us operate in a

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Impact of the Economy Business in the US operate in a market economy (also called a private or free enterprise system). Market economy- an economy in which many sellers compete for customers Oligopoly- an economy with only a few sellers Monopoly- an economy with only one seller who can set whatever price they choose The allocation of resources in a market economy can be understood by understanding the demand and supply of goods. Demand- the amount of a good a buyer is willing to purchase at a given price The health of the overall economy can be analyzed by studying data known as economic indicators. Economic indicators-key measurement that provide information about the health of the economy Interest- the amount, stated as a percentage, paid to borrow money Inflation- an increase in the price level Unemployment- the lack of jobs in an economy for those willing and able to work The regular cycles of growth and decline, called the business cycle, pull together these economic pieces In the prosperity phase of the business cycle, GDP is increasing, and the interest rates, inflation, and unemployment are all low In the recession phase, the economy slows down The government may intervene in the free market economy to move the economy into the recovery phase Role of Government Even though the US does not have a national health system, the government’s involvement in health care is significant. Government plays three roles: provider of health care services, as a payer for services provided by others, and as a regulator of health care providers Government regulates health care by using the political process to make laws. Industry representatives work with legislators to influence the political process Industries will create their own regulatory groups so that government will decide no additional regulation is needed Joint Commission (JCAHO)- national organization that evaluates and accredits health care organizations Traditionally the laws the government uses to regulate health care have two broad
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objectives- ensure fair competition in the marketplace, and protect the public Antitrust- an area of federal law that prohibits monopolization and other activities that lessen competition in the marketplace Legislatures also pass laws that are expected to protect the public The primary purpose of Obamacare was to expand access to insurance coverage through mandates, subsidies, and insurance exchanges Integrating Business and Its Environment The state of the economy, as well as changes in federal and state laws, can dramatically affect a health care business Many managers use a technique called SWOT analysis to determine where the business is in relation to its environment Chapter 3-Insurance and Third-Party Payers What is Health Insurance?
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  • Spring '14
  • AdeleH.Sullivan
  • Health and Health Care

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