Economic Resources in Health

 

What relevance does the concept of economic resources have to health service organizations?

The term economic resources refers to those ‘resources which make it possible for an organisation to provide their goods and/or services’ (Forrest and Johnstone 2004, p. 12). Specifically, when related to the health service organisations these resources can be broken further down and categorized by: ‘natural resources, capital resources, and human resources’ (Forrest and Johnstone 2004, p. 12).

Within the health service organisation the natural resources include: the physical space and environment that the service provided occurs. The capital resources include: the equipment, such as ventilators, beds, lifting devices, drugs and financial support. The human resources includes: the people with the knowledge to deliver the health services needed, such as the nurses, doctors, paramedics, dentists, radiographers, pharmacists and wardspersons.

Most service provider based organisations use human and capital resources to provide their services, and for some health service organizations, ‘total human cost represents up to 80% of total cost of operation’ (Forrest and Johnstone 2004, p. 12).

Shortell and Kaluzny state that: ‘while health care organisations are not greatly different from other organisations, they are subject to enormous economic and social pressures’ (1997, p.12). Health delivery today is having difficulty coordinating its services within ever tightening constraints of the health care budget.  Recently there has been an amalgamation in the Western Sydney Health Service, that resulted in less middle managers. Now each middle manager overseas larger regional areas than they had previously. This was an economic rationalisation that will directly influence service delivery in the coming years.