Health economics

src: previews.123rf.com

Health Economics is an economic branch concerned with issues related to efficiency, effectiveness, value and behavior in the production and consumption of health and health care. In a broad sense, health economists study the functioning health care and behavioral systems that affect health such as smoking.

The seminal article of 1963 by Kenneth Arrow, often credited with generating a health economy as a discipline, draws conceptual distinctions between health and other goods. Factors that distinguish health economics from other fields include broad government intervention, uncertainty that is difficult to solve in several dimensions, asymmetric information, entry barriers, externalities and presence of third-party agents. In health care, third-party agents are doctors, who make purchasing decisions (eg, Will order laboratory tests, prescribe drugs, perform surgery, etc.) while isolated from the price of the product or service.

Health economists evaluate different types of financial information: costs, costs and expenses.

Uncertainty is intrinsic to health, both in patient outcomes and in financial problems. The existing knowledge gap between physicians and patients creates a different profit situation for doctors, called asymmetric information.

Externalities often arise when considering health and health care, especially in the context of infectious diseases. For example, trying to avoid catching the common cold affects people other than decision makers.

Video Health economics

Coverage

The scope of the health economy is neatly packed by Alan Williams's "pipe diagram" dividing the discipline into eight different topics:

• What affects health? (other than health care)
• What is health and what is it worth?
• Request for health care
• Health care supplies
• Microeconomic evaluation at the level of care
• Market equilibrium
• Evaluation at all system levels
• Planning, budgeting, and monitoring mechanisms.

????

Maps Health economics

Health care request

The demand for health care is demand that comes from the demand for health. Health care is required as a means for consumers to achieve greater inventory of "health capital." Demand for health is unlike most other items because individuals allocate resources to consume and produce health.

The above description provides three people's roles in the health economy. The World Health Report (page 52) states that people take four roles in health care:

1. Contributors
2. Citizens
3. Provider
4. Consumer

The health production model of Michael Grossman in 1972 has been very influential in this field of study and has some unique elements that make him famous. The Grossman model views each individual as both a producer and a healthcare consumer. Health is treated as a declining stock over time with no "investment" in the health sector, so health is seen as a kind of capital. This model recognizes that health is a consumer goods that results in immediate satisfaction and utility, and investment goods, resulting in consumer satisfaction indirectly through fewer sick days. Investing in health is very expensive because consumers have to trade time and resources devoted to health, such as exercising in a local gym, against other goals. These factors are used to determine the optimal level of health a person will ask for. This model makes predictions about the effect of changes in health care prices and other goods, labor market outcomes such as jobs and wages, and technological change. These predictions and other predictions of the model that expanded Grossman's 1972 paper formed the basis of many econometric studies conducted by health economists.

In the Grossman model, the optimal level of investment in health occurs when the marginal cost of health capital is equal to marginal benefits. With the passage of time, health depreciates at a certain level? The interest rate faced by the consumer is denoted by r. The health capital marginal cost can be found by adding these variables: ${\ displaystyle MC_ {HK} = r \ delta \,}$ . The marginal benefits of health capital are the rate of return of this capital both in the market and non-market sectors. In this model, optimal health supplies can be influenced by factors such as age, wages and education. For example, ${\ displaystyle \ delta \,}$ increases with age, so it becomes more expensive to achieve the same level of health capital or health supplies. Age also reduces the marginal benefits of health supplies. Therefore, optimal supply of health decreases with age.

Beyond the fundamental issues, the "real" demand for medical care derived from the desire to have good health (and hence influenced by the production function for health) is an important distinction between the "marginal benefits" of medical care (which is always associated with the curve " real demand "is based on derivative demand), and a separate" effective demand "curve, summarizing the amount of medical care demanded at a given market price. Since most medical treatments are not purchased directly from providers, but are better earned at subsidized prices due to insurance, unaffordable prices faced by consumers are usually much lower than market prices. Consumers assign MB = MC from the bag, so "effective demand" will have a separate relationship between price and quantity rather than "marginal benefit curve" or real demand relationship. This distinction is often illustrated under the rubric of "ex-post moral hazard" (which is again different from the ex-ante moral dangers found in all types of markets with insurance).

src: ct.catapult.org.uk

Health technology ratings

Economic evaluations, and especially cost-effectiveness analyzes, have been a fundamental part of the technological assessment process for agencies in a number of countries. The Institute for Quality and Economics in Health Services (Institute für QualitÃÆ'¤t und Wirtschaftlichkeit im Gesundheitswesen - IQWiG) in Germany and the National Institute for Health and Nursing Excellence (NICE) in the UK, for example, both consider the cost-effectiveness of new drugs entering the market.

Some agencies, including NICE, recommend the use of utility cost analysis (CUA). This approach measures results in composite metrics in both length and quality of life, quality-adjusted life years (QALY).

src: pmj.bmj.com

Healthcare market

The five health markets are usually analyzed are:

• Health financing market
• Doctor and nursing market services
• Market institutional services
• Input factor market
• Professional education market

Although the assumptions of economic market textbook models apply well enough to the health market, there are important irregularities. Many countries have created a risk pool where relatively healthy immigrants subsidize the rest of the treatment. Insurers must face the bad selection that occurs when they can not fully estimate the cost of the registrant's treatment; reverse selection can destroy the set of risks. Features of an insurance market risk pool, such as group purchases, cherry-picking, and exclusion of pre-existing conditions are intended to overcome inverted selection.

Insured patients are naturally less concerned about health care costs than if they paid the full price of care. The resulting moral hazard raises costs, as the prominent RAND Health Insurance Experiment points out. Insurers use several techniques to limit moral hazard costs, including enforcing copayments to patients and limiting physician incentives to provide expensive treatments. Insurers often compete with the choice of services they offer, cost-sharing requirements, and limitations on doctors.

Consumers in the healthcare market often lack adequate information about what services they need to buy and which provider offers the best value proposition. Health economists have documented problems with supplier-induced demand, where providers base their treatment recommendations on the economy, rather than medical criteria. Researchers have also documented substantial "variations of practice", where care is also on the availability of services to control persuasion and practice variations.

Some economists argue that requiring doctors to have a medical license limits inputs, stifles innovation, and raises costs to consumers while most benefit only the doctors themselves.

src: rspb.royalsocietypublishing.org

Other issues

Medical economy

Often used synonymously with the health economy, medical economics, according to Culyer, is an economic branch associated with the application of economic theory to phenomena and related problems usually with the second and third health markets described above. Usually, however, it deals with the cost-benefit analysis of pharmaceutical products and the cost-effectiveness of various medical treatments. The medical economy often uses mathematical models to synthesize data from biostatistics and epidemiology to support medical decision making, both for individuals and for broader health policies.

Economic behavior

Peter Orszag argues that behavioral economics is an important factor for improving health care systems, but little progress is made when compared to pension policies.

Mental health economics

Mental health economics combines a wide range of subjects, ranging from pharmacoeconomics to labor economy and welfare economics. Mental health can be directly linked to the economy by the potential of affected individuals to contribute as human capital. In 2009 Currie and Stabile published "Mental Health in Children and Human Capital" where they assess how common mental health problems children can alter the accumulation of human capital from affected children. Externalities may include influences that affect an individual against the human capital around him, such as at work or at home. In turn, the economy also affects individuals, especially in the light of globalization. For example, research in India, where there are more and more Western outsourcing, has shown a growing hybrid identity in young professionals who face very different socio-cultural expectations at work and at home.

The mental health economy presents a unique set of challenges for researchers. Individuals with cognitive disabilities may not be able to communicate preferences. These factors are a challenge in terms of assigning value to an individual's mental health status, especially in relation to individual potential as human capital. Furthermore, employment statistics are often used in the study of mental health economics as a means of evaluating individual productivity; However, these statistics do not capture "presenteeism", when one works with lower productivity levels, calculates the loss of non-paid work time, or captures externalities such as having affected family members. Also, given the variations in global wage levels or in social values, the statistics used may be contextual, geographically limited, and the results of studies may not be applicable internationally.

Although research has shown mental health to reduce overall health care costs, demonstrate efficacy, and reduce employee absenteeism while improving employee function, the availability of comprehensive mental health services declines. Petrasek and Rapin (2002) cite three main reasons for this decline as (1) stigma and privacy issues, (2) difficulty measuring medical savings and (3) incentive doctors to treat without specialist referrals. Evers et al. (2009) suggests that improvements can be made by promoting a more active dissemination of mental health economic analysis, building partnerships through policy makers and researchers, and using more use of knowledge brokers.

src: thecvc.ca

See also

src: rspb.royalsocietypublishing.org

References

src: www.heginc.com

Further reading

• Alastair M. Gray, Philip M. Clarke, Jane Wolstenholme, Sarah Wordsworth (2010) Method of Application of Cost-Effectiveness Analysis in Health Care , Oxford University Press. ISBN: 0-19-922728-4
• Drummond, Michael F. (2005) Economic Evaluation Methods of the Health Care Program , Oxford University Press. ISBNÃ, 0-19-852945-7
• Mahar, Maggie, Money-Based Medicine: The Real Reasons of Much Health Care Costs , Harper/Collins, 2006. ISBNÃ, 978-0-06-076533-0
• Siegel, Joanna E.; Russell, Louise B.; Weinstein, Milton C.; Gold, Marthe R. (1996), Cost-effectiveness in health and medicine , New York [u.a.]: Oxford Univ. Press, ISBN 978-0-19-510824-8
• Starr, Paul, American Drug Social Transformation , Books, 1982. ISBNÃ, 0-465-07934-2
• Wennberg J, Gittelsohn; Gittelsohn, A. (December 1973), "Minor variations in health care", Science , 182 (4117): 1102-08, Bibcode: 1973Sci... 182.1102W , doi: 10.1126/science.182.4117.1102, PMIDÃ, 4750608
• Whittington, Ruth (2008). Introduction to Health Economics: Beginner's Guide Preview. ISBN 978-0-9545494-5-9.
Wise, David A. (2009), Developments in the Aging Economy , University of Chicago Press, ISBN 978 -0- 226-90335-4
• A.J. Culyer and J.P. Newhouse, ed. (2000). Health Economy Handbook , Elsevier. 1A . Description. Elsevier.
• _____ (2000). Health Economy Manual , 1B . Description. Elsevier.

src: ct.catapult.org.uk

Journals

• Health Economy . Destination & amp; retrograde title and abstract scope and links.
• Journal of Health Economics Purpose & amp; scope and links to title and abstract back-issue.
• Household Economic Reviews

Source of the article : Wikipedia