Critical Ideas in Health Economics
Several different areas of economics are related to health care. These include cost-effectiveness analysis, vertical equity, and the healthcare financing system’s progressivity. These areas can help judge how health care is used and the resources needed.
Increasingly, cost-effectiveness analysis in health economics is being used to inform healthcare decision-makers. Cost-effectiveness analysis is used to evaluate health interventions and estimate how much health gains can be achieved for a particular level of expenditure. Using this method, an intervention can be compared to other interventions with the exact cost. The goal is to find the option with the lowest cost-effectiveness ratio.
There are several different types of cost-effectiveness analysis in health economics. The most common types include cost-benefit, cost-effectiveness, and cost-utility analyses. Understanding the fundamental concepts of each can help stakeholders make better use of health economic evidence.
Cost-benefit analysis is the most common type of complete economic evaluation. It figures out the cost per case of disease prevented. Death avoided, and a reduction in morbidity are needed to figure out how good an intervention is for health. Typically, health benefits are calculated in monetary terms, such as potential productivity gains. However, many studies use averted cost-of-illness estimates.
Various views have been put forward regarding the issue of vertical equity in health economics. These views vary on how to define equity, how it should be measured, and how to eliminate inequities. The goal of equity in health is not to equalize health among all people but to eliminate factors that lead to inequities.
Health is a human right. No one should be denied the opportunity to reach their full health potential. Inequalities in health status can be eliminated with the right policy. It is also essential to identify disadvantaged social groups to cushion them from adverse health outcomes. Identifying disadvantaged groups is crucial to the policy-making process in many health systems.
A study conducted in Ghana examined the use of healthcare services by older adults. It was based on secondary cross-sectional data from the World Health Organization’s study on global aging. Researchers looked at how outpatient and inpatient healthcare use was related to SES, taking into account sociodemographic and predisposing factors.
Progressivity of the healthcare financing system
The government must invest more money in the health sector to ensure everyone has access to health care. It also helps ensure financial protection. Similarly, a sound and sustainable health financing system are required to achieve universal health coverage (UHC). In this paper, the authors examine Indonesia’s healthcare financing system’s progressivity. They look at the performance of three crucial national data sets: the Indonesian Family Life Survey (IFLS), the National Socioeconomic Survey (SUSENAS), and the Social Security Earnings Projections (MINT).
The IFLS is a multipurpose household survey that covers at least 200,000 households. The survey is a nationally representative sample of the Indonesian population. The other national data sets are the SUSENAS and the SER (Social Security Earnings Projections).
The SUSENAS provides data on national income and expenditure. The SER 1951-2001 provides the earnings projections. These earnings projections are based on the splicing approach. This approach combines older workers’ earnings with incomplete earning records for the younger worker.
Economic analysis judges how resources are used.
Economic analysis can provide valuable insights to inform your decisions about whether you are interested in healthcare or the economy. However, there are some differences between efficiency and equity analysis. This article will introduce some of the key ideas in health economics.
The fundamental concept of economics is that resources are limited at a particular time. Consequently, there are competing demands for them. This makes markets a powerful source of competitive pressure for efficiency. However, if markets are imperfect, there may be no socially efficient economy.
In economics, “efficiency” means getting the most out of a set of resources. It can be defined as “the cheapest way to produce a given output.” There are many different ways to judge the efficiency of a production process.
The efficiency of a firm can be assessed using the resource input and goods output model. This model looks at the costs of resources within the firm and the outputs it produces.