QUEENSLAND HEALTH ECONOMIC PERFORMANCE

QUEENSLAND HEALTH ECONOMIC PERFORMANCE

Executive Summary

The Queensland Health is a non-profit organization which operates on government funding and funding from charging services to people, mainly patients. Generally, the Queensland Health department does not operate on the profit principle where economies of scale should result in the firm maximizing profit but rather the economies of scale make sure that the health services can be offered to more people. This operation model is expected to be used to further enhance the quality of services dispensed at Queensland Health. The revenue pumped into Queensland Health should alleviate the standards of service by the nurses and doctors working in under this health umbrella. The funding of this department is highly ranked in the government priorities which is a clear indication that the government of Queensland is concerned about the health of people. The government ensures that in every budgetary allocation, Queensland is well funded because failure to that will lead to a collapse in the health system within the state.

The Health structure in Queensland was consolidated into twenty health districts down from thirty eight in a bid to enhance the management and reduce bureaucracy within the Hospitals (Robertson, 2008). The Queensland Health organization also spear heads the innovation health improvement projects and research into health conditions and other health related concerns. This means that at any given time, the health of the people in Queensland is being taken seriously and work goes on in a bid to make the health services better. The research is very important in discovering and designing better or new medicines for illnesses that are a threat to the people in Queensland. The funding for research can be beneficial to the health department because when the doctors discover a new outbreak and quickly put together a vaccine or cure, they get more funding from selling their discovery. This makes it easier for the health department to generate more revenue and the pressure on government funding reduces. It also means that the Queensland Health participates in improving the quality of health services across the world.

Background Information

Queensland Health is the name of the firm that is in charge of the health services by the government to the people of Queensland State of Australia. It is a non-profit entity that handles the health affairs of the people of Queensland. The firm takes part in medical research within Australia in a bid to improve health care and medication for patients. It is a firm that is dedicated to serving people and helping them live better lives for those with chronic or terminal conditions. The firm was started in 1901 and in the 1940s began offering free health services to the residents of Queensland. It has been restructured severally, most recently in 2006 where the patients were given an avenue of airing their complaints in a bid to help the management improve the service they receive for the hospital. It is important to note that the Health department of Queensland had a good service plan but the implementation was not up to standard. The patients got bad service but had no avenue to raise concerns when they felt the need to alert someone in the management.

Economically, the firm contributes to the country by offering employment and service to the population. It has been one of the major employers in the Australian economy (Queensland Government , 2012). The economic contribution of the non-profit firms in a country or region in this case, the Queensland region, is reducing unemployment and filling in the need gap in the economy. It is not to say that these firms do not suffer when inflation in the country occurs, they do. The cost of medical supplies increases significantly and the firm has to contend with funding being inadequate. The non-profit firms often operate in an oligopoly situation. The competition in hospitals is usually open where patients get to choose where they want to get treated depending on their ability to pay for the treatment. This does not mean that anybody can open a hospital and not expect any scrutiny form the existing hospitals. The pre-existing hospitals have to approve of the operations of the new hospitals, especially when the new hospital is competing with other privately owned hospitals.  However, when taking into consideration the fact that the Queensland Health treats people for free or at a very small fee, their hospitals are most likely overwhelmed by patients. 

Critical Analysis

The performance of Queensland Health was deteriorating before 2006 when the management realized that there are a lot of complaints from the patients with no avenue to air them. After a better system was put in place, the firm improved in ranking among the hospitals people choose in Queensland. The health department suffered a shortage of resources during the recession in 2007-2008 and by the end of the year, there was a shortage of staff (Queensland Treasury , n.d.). This is a clear indication that there was a boom period in their clientele. The health department was equally as affected by the sudden shortage in skilled labor in the market. Considering the fact that the rate of economic growth in Queensland has been one of the best in Australia, the Health care department has to be equally among the best in the country. The Queensland Health firm has been operating under an oligopolistic market model where the hospitals in existence set their standards of operations so that they are almost similar. In this case, however, the standards in the Queensland Health are set by the government through the Health department management. 

An oligopoly market model is affected by boom and recession in the economy equally as a monopoly and a perfect competition market. It is also reflected in the rates of employment and unemployment. For instance, the economic growth rate in Queensland from the year 2007 to 2013 has seen an uneven Gross Domestic Profit performance with unemployment levels rising steadily as illustrated in the bar graph below.

The data presented above trickles down to all the firms operating in the Queensland Economy meaning that the Health department was significantly affected. The unemployment levels in the year 2007 the Health department faced a shortage due to lack of funding from the government. Poor economic performance usually leads to an influx in illnesses, therefore, the hospitals were well overwhelmed by patients. The problem was magnified by the fact that the hospitals could not hire more staff because the government funding was not enough to support and extra wage bill. The 2008 economic recession was tough on all world economies, the economy of Queensland was not treated exempted from the same. It is also important to note that in the year 2008 to 2009 the growth in Gross Domestic Profit in Queensland was the lowest ever recorded. The growth was at 1.1% which was promptly reflected in the highest unemployment rate margin recorded. The unemployment issue has yet to be rectified seeing that by the year 2013, the rate was at an alarming 6% (Queensland Government Stastician’s Office, 2016).

Analysis Reflection

In the analysis conducted above, the Queensland Health was affected the same way as the rest of the economy. The recession in the year 2008 was not gentle on any firm or organization, the Queensland Health suffered shortages in research funding as well as skilled health workers. The Queensland Health has to invest in strategic plans to ensure that even when recession hits the State, it has funds or plans to cushion the systems from a total collapse. This can be in terms of investment in technology that can help make work easier for the health workers and emergency funding kitty. Being that it is a non-profit organization, it is important for the firm to participate in income generating activities. The income can be used to fund the emergency kitty for the firm. The economic recessionary periods and occurrences cannot be guaranteed as long as countries exist and depend on each other for economic growth and enhancement. 

The Queensland Health should take into consideration the fact that its economic position is reliant on the government’s decisions. When the government allocates funds, the Health department can only request for more when need be but not dictate how much they should be granted. The strengths of Queensland Health are that the government can give the health department the emergency funding. What remains unclear, however, is the fact that the health department can face extreme staffing shortages and there is no contingency plan to deal with that. When the economy was doing well, the health department had no problems when handling the health issues of the citizens. When the world recession occurred, however, even the firm had to be affected in a way. The research is programs were strained and unproductive. This possess a greater threat than poverty. If a new condition develops and the researched do not catch it in time, there could be another outbreak like the Ebola outbreak. Such an occurrence with shortage of funds will mean deaths of very many people in the Australian state of Queensland.

Key Strategic Issue

The key strategic issue in the firm is the choice of action to be implemented when there is a recession in the economy and government funding is not adequate to support the operations of the Queensland Health department well enough.

The strategic issue has to be analyzed and a contingency plan put together for the purposes of cushioning the department against funding shortages. There are options of dealing with the issue; one is having an emergency kitty and the other is sourcing for funds from external donors. The better of the two is the emergency kitty option. It may not be enough but it will give the firm time to find alternative funding sources. It can be considered a fiscal policy by the firm. This is where the firm reduces unnecessary spending in favor of efficient spending. The savings for the emergency kitty is applicable and practical. The emergency kitty will give the Health department as sense of security which will mean that no health workers will be relieved when there is an economic recession. The fiscal policy also encourages the health department to find ways of generating more revenue to support the emergency funding. This could be done by encouraging patients who can pay for their treatment to do so at subsidized rates. 

The second option would be seeking fun ding from external donors. This would be good if the donors were available because it would give the health department adequate funds and not threaten to run out before the government was back on its feet. This would be a sort of investment by the donors in charity functions. In the event that the health department was funded by external donors, the fiscal policy would have to apply to assist the donors to support the department. Efficient use of the money would be used to ensure that the hospitals were well funded and that the research projects were not hindered. The two options are likely to handle the unemployment problem presented by the economic recession problem. 

Assumptions

The assumptions in these options is that the funding would be easy to source. The patients would be able to foot their bills and the donors would be willing to help. Failure to get patients who can afford medical care cost to pay would means that the emergency kitty will not be funded. It also means that the medical funds would not have a cushioning plan in case of an economic recession. In the event that a recession occurs, the health department will not be in a position to well equip the hospitals and keep them funded and well supplied with drugs. The plan on external donors can also fail. During a recession, the donors cannot be spared and their pledges may go unfulfilled. A donor cannot give what they do not have. This will mean that the donors will not be in a position to help the health department. It is a bad enough situation when the government cannot adequately fund its health programs, but when the donors cannot come in and aid, people survive on faith. The chronically ill patients will most likely die and others will develop permanent conditions like paralysis. This is simply because the economic status of the country cannot handle the pressure. 

Conclusion

The analysis has revealed a bigger problem in the Queensland Health in relation to the economy of Queensland. The health depart being a non-profit organization faces the risk of lacking adequate funding during a recession in the economy. It should be in a position to cushion its operations against a collapse caused by poor economic performance. The management may have their hands tied when the economy performs poorly. The likelihood of the management to go into a crisis is sky high. There should be a strategic issue to handle possible funding shortages in the department. 

Recommendations

The funding problem due to recession of the economy is a difficult subject to maneuver. However, it is important that the management of the firm knows what parts of the health system cannot be left unattended regardless of the economic situations. This will mean that the management will have to ensure that all intensive care units are always well maintained, staffed and stocked worth the necessary drugs. The stock could include prepayment to the producers for long periods prior to need. This will ensure that even during a recession, the drugs and equipment are available. It is also important that the management invest in staff housing for the health workers. The workers will pay rent as usual but it will be a strategy to ensure that during a recession, they do not quit the health care jobs because they cannot afford to pay their bills. The housing during this time can be provided for free so that the patients in hospitals do not suffer without nurses to assist and drugs to help their recoveries. 

References

Queensland Government , 2012. The Health and Community Services Industry- Building a Stronger Economy and a Fairer Queensland, Queensland: State of Queensland.

Queensland Government Stastician’s Office, 2016. Emmployment and Unemployment, Queensland. [Online]
Available at: www.qgso.gld.gov.au/products/tables/employment-unemployment-job-status-m/index.php
[Accessed 17 May 2017].

Queensland Treasury , n.d. Queensland Government. [Online]
Available at: www.treasury.gld.gov.au/economy/the-queensland-economy/
[Accessed 17 May 2017].

Robertson, S., 2008. Queensland Health Restructure Delivers Less Bureucracy and More Services. [Online]
Available at: statements.gld.gov.au/Statemnt/Id/59711
[Accessed 17 May 2017].

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