What Healthcare Administrators Should Know About International Price Indexes
This economic tool can help predict shifts in the healthcare landscape.
If you’re considering working in healthcare administration, it’s important that you become familiar with the International Price Program’s import and export price indexes (MXP). Reported by the U.S. Bureau of Labor Statistics, the MXP measures changes in the price of goods and services imported to and exported from the U.S. In one sense, the MXP helps the Federal Reserve Board develop monetary policy. But healthcare administrators can also use data from the indexes to better understand the shifting economic climate and how these changes can impact healthcare costs.
What is the purpose of the MXP?
The MXP contains data on the changing prices of non-military goods and services traded between the U.S. and other countries.1 More specifically, it provides key insight on:
- The strength of the U.S. economy.
- Trends in consumer spending.
- Demand for U.S. goods abroad.
- Inflation in import prices.
Updated monthly, this economic tool indicates increases in petroleum import prices, for example, or increases in export metal prices. Healthcare administrators should be aware of these changes, as they can have dramatic effects on departmental budgets and even a staff’s ability to provide care.
How does the MXP affect health administration?
Those exploring jobs in healthcare administration may wonder: What relevance do rising natural gas prices have on ambulatory care or patient advocacy? Though the connection between the MXP and healthcare administration may not be entirely obvious, it is definitely present.
Consider the COVID-19 pandemic, for instance. Early in the pandemic, a global shortage of hospital gowns, gloves, masks, and other personal protective equipment (PPE) caused a crisis.2 As China reported the first coronavirus cases, the country immediately increased PPE imports and decreased exports. Other Asian and European countries soon followed suit, which inflated the price of PPE.
In the U.S., the fiscal consequences of COVID-19 were felt more so by individuals seeking medical care. By June 2020, about 7.7 million workers lost jobs with employer-sponsored medical insurance.3 Many of the uninsured relied on charity care benefits to pay their medical bills.
What are the key takeaways for healthcare administrators?
The MXP allows economists and politicians to gauge changes in imports and exports. However, when leveraged by healthcare administrators, this economic tool can also be used to predict changes that may affect day-to-day operations. As seen during the COVID-19 pandemic, the collapse of global trade can have major ramifications across industries. Monitoring the MXP is just one way healthcare administrators can remain proactive in building an effective response to future public health crises.
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4Source: O*Net Online. Summary Report for SOC Code 11-9111. Medical and Health Services Managers. Sample of reported job titles include Clinical Director. Retrieved October 2021. Career options may require additional experience, training, or other factors beyond the successful completion of this degree program.
Walden University is accredited by The Higher Learning Commission, www.hlcommission.org.