A monthly publication for middle market business leaders
Counting the Costs of Trade
The June edition of RSM’s monthly publication, The Real Economy, features outlook from Joe Brusuelas, the firm’s chief economist, on the counting cost of trade on consumers as well as changes in the health care industry that could have significant long-term effects.
Recent scholarly research has validated concerns about the comprehensive absorption of costs associated with the number of trade spats in which the United States is now engaged. That research implies that American firms and households are paying a $3 billion per-month increase in costs caused by trade policy, in addition to absorbing roughly $1.4 billion in welfare losses associated with the policy shift on trade. If these polices are sustained or expanded, an expected $165 billion in investment will be redirected away from the United States and China, imposing large costs on companies that have constructed related supply chains over the past two generations.
Aside from economic challenges, skilled labor remains an important component in the current health care system business model, and it is getting scarcer to find. Consistently, we see data from the federal jobs report that suggests the supply of skilled medical workers is being outpaced by demand. Some health care systems are using acquisitions of academic health centers to install their own talent pipelines in response to a shortage of skilled labor. Another option for health care systems—which could be used in tandem with the acquisition strategy—is to use technology to address labor shortages, including robotic process automation.
Internal auditors need to be aware of these significant implications as they continue to understand how their organization is affected by the recent trade issues. In addition, those internal auditors within the health care industry should understand and review management’s strategies for attracting and retaining skilled labor as this issue continues to create headwinds for many health care organizations. Internal audit can play an important role in their health system by looking at merger and acquisition activities, integration, and the risks and benefits associated with these strategies. In addition, as organization representatives look at addressing repetitive back-office tasks via RPA or other technology solutions, internal audit should proactively address these opportunities and potential threats. To address RPA deployment issues before they arise, internal audit should consider pre-implementation audit activities; reviewing areas such as project governance, ownership, security, organizational change management, operations, and technology.
For a deeper dive into these issues, download June’s issue of
The Real Economy.
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The Real Economy
The U.S. middle market makes up one-third of the country’s economy and employs one-third of its workforce, yet this economic growth engine is often overlooked. As the leading provider of assurance, tax and consulting services to middle market businesses, RSM wants to change the conversation.
The Real Economy is a monthly publication to help the middle market anticipate and address the unique issues and challenges facing their businesses and the industries in which they operate. Written by our chief economist, Joe Brusuelas, and including the insights of professionals throughout the firm,
The Real Economy is RSM's answer to making sure the unique needs and opportunities of this important segment of our economy are given the attention they deserve.