ECO 605 Discussion 2.1: Inputs and the Production Function
ECO 605 Discussion 2.1: Inputs and the Production Function
o understand fixed input and variable input, one must be familiar with the production process, which has an appreciable impact on economic variables as well as economic factors. The production process often utilizes technology as a way of transforming inputs to outputs. This process involves the use of resources, also known as inputs, and can be divided into two groups: fixed and variable. Fixed inputs are restricted to their current functions and can’t be changed during the period of production (Hicks, 2021). In other words, fixed inputs do not involve short term variations. Variable inputs can easily be increased or decreased within a short time frame (Lumen, n.d.). Examples of fixed inputs include capital expenditures, testing equipment, and contracts with other suppliers. Examples of variable inputs include labor, nurses, and medical supplies required for the production process. The production function is a summary of what goes into the process (inputs) and what comes out (outputs). It is the relationship between quantities of productive factors and the amount of the product obtained.
Hospitals, where surgical as well as medical procedures are provided and electronic medical records such as EPIC, are two examples of fixed inputs. Four examples of variable inputs consist of nurse labor, purchasing/implementing new equipment, medical supplies such as IV’s and medicines, and treatment of a patient’s condition.
References
Hicks, L. L. (2021). Healthcare Production and Costs. In Economics of Health and Medical Care (pp. 72–73). essay, Jones & Bartlett Learning.
Learning, L. (n.d.). Microeconomics. Lumen. Retrieved January 14, 2022, from https://courses.lumenlearning.com/wmopen-microeconomics/chapter/the-production-function/
When looking at production function this is the relationship between the productive factors and the final product quantity that is obtained (Hicks, 2021). It looks at the end result of the final quantity of product. Fixed inputs are the productive factors that cannot be changed or varied during the current period of production, this will stay constant in the production function (Hicks, 2021). On the opposite end of this are variable inputs, in which they do not have their usage restricted to the current function for the duration of time and they can be altered or changed (Hicks, 2021).
Two fixed examples include the building in which the clinic space takes place in and permeant building equipment such as CT and XRAY machines. These are fixed inputs because they can not be altered or changed in the end production. When looking at examples of variable inputs these can include availability of nursing staff, shortages of medications such as heparin, patient care supplies, and PPE supplies as well. All of these are variable inputs in which these can be changed at any given time that will ultimately affect the end production.
Hicks, L. L. (2021). Economics of Health and Medical Care. Jones & Bartlett Learning.
The term fixed input describes items such as office space or equipment that is not changed or varied during the production process of a particular item. The opposite being a variable input, usually supplies or labor, that can adjust over a period of time. Production function is defined as the maximum amount of output that can be produced given a set of fixed inputs/outputs. (Bradley University, n.d.)
My background of nursing is in urgent care, and I’m currently the occupational health nurse for a large clinic with services like primary care, different specialists, laboratory, and radiology. The biggest fixed input this clinic deals with is office space. The building, while large, gives a finite space where offices can be. While it can be adjusted to a point, there is still a maximum capacity and functionality to the building itself. Another fixed input my clinic experiences is time. The clinic is only open certain days of the year, as it is closed on all major holidays.
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Some examples of a variable input that could be tied to medical treatment is staffing shortages. Currently, there is a staff shortage due to illness and that in turn effect medical treatment of patients. One could argue the pandemic is a variable input of medical treatment as well. With medical devices, an example of a variable input would be supplies like syringes or needles. A pharmaceutical example could be the different COVID-19 vaccines; Moderna, Pfizer, and Janssen.
References
Bradley University. (n.d.). The production function [Media Presentation]. https://lmscontent.embanet.com/Media/BDU/ECO605/ECO605-w02-m01/
Stephanie,
Thanks for sharing your discussion. I definitely agree with you when it comes to the pandemic being a variable input. The number of nurses available to work and syringes used for vaccine administration are both variable inputs that have been affected by the COVID-19 pandemic. If there is a decrease in nursing staff, there will be a decrease in the production function, which is fewer patients being seen and treated. This can be said for an inpatient and outpatient setting. I work in an inpatient setting and I tend to find nurses getting heavy assignments even if the patient load is only 4-5 patients. With that being said, do you find your nurse-to-patient ratio becoming overwhelming? I ask because I know every work environment and healthcare setting is different. Factors that can affect the production function of syringes and needles include accessibility to these supplies. Because there is an increased demand for syringes and needles, there will be less available in the market. As a result, it will create fewer vaccines available and longer wait times for needed supplies to distribute vaccines to clinics and outpatient centers. From this week’s content, it is obvious that production function is directly affected by demand and availability. Hope you have a great week!
Hey Rana, thank you for your reply!!
I work in an outpatient setting, specifically in occupational health, so my patient ratio could be considered a variable input as it depends on who is sick at the time. On average I’m caring for about 10-15 employees on a daily basis between vaccines, boosters, and COVID testing. That does not take into consideration the many other hats I also wear like training, being a CPR instructor, etc. Currently, my nurse to patient ratio isn’t overwhelming as I’m not doing care like I would be in a hospital. I think the most difficult aspect is the juggling between the many roles I have and being able to adjust course quickly depending on what is going on in the clinic. I really enjoy it though!!
I agree with what you said on factors affecting production function on supplies. When the pandemic first started the clinic had to change products of syringes and needles to different manufacturers because of availability. Some products were better than what we used before, others were not. Needles and syringes were definitely something that was in short supply!! A solution to this problem that we found, specifically for COVID vaccine clinics were the use of the vanishing point syringes that retract the needle as the safety. This not only reduced the risk of needle stick injuries, but cut the amount of needles used by half because the vaccine was drawn up and administered with the same needle.
Thanks again for your response!!
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