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How the health care system works: Do you know how health economics affects our lives?
Health economics, as a branch of economics that focuses on efficiency, effectiveness, value and behavior, has an important impact on improving health outcomes and lifestyles. It studies the interactions between individuals, medical providers and clinical settings and the functioning of health systems. This article will explore the history and scope of health economics and how it shapes today's healthcare system, giving readers a deeper understanding of how this discipline impacts our lives.
Health economics looks at how to improve people's health through different social interactions.
The definition and importance of health economics
Health economics focuses on issues involved in the production and consumption of health and medical care. At the core of this discipline is an understanding of how to allocate resources to improve health outcomes, ranging from disease prevention to health care utilization. Importantly, health economists often face very complex challenges in their research, such as third-party payment systems by insurance companies and employers that make price and quality opaque.
Historical development of health economics
The academic roots of health economics can be traced back to ancient Greece, when Aristotle discussed the relationship between farmers and doctors. Over time, William Petty noted in the 17th century that spending on workers' medical care and health produced economic benefits. In 1948, the American Medical Association was established and began to incorporate economic issues into medical research. Therefore, in 1963, Kenneth Arrow published the article "Uncertainty and the Welfare Economics of Medical Care", which was regarded as the beginning of the establishment of health economics.
The origin of health economics is closely related to factors such as government intervention, information asymmetry and market failure.
The operation of the health market
In market analysis, health economists often focus on five major health markets: medical financing market, doctor and nurse service market, institutional service market, input factor market and professional education market. In these markets, the U.S. health insurance system presents characteristics that are different from traditional economic markets. In particular, adverse selection often exists in the insurance market, which further deepens information asymmetry in the market.
Root causes of medical needs
Demand for medical services is often seen as arising from a need for health. People will seek medical services to achieve higher “health capital.” The health production model proposed by Michael Grossman in 1972 specified that individuals play the role of both producers and consumers in the health economy, and emphasized that the total amount of healthy capital will decay over time, which requires individuals to continue to Make investments to maintain their health.
The importance of health technology assessment
In many countries, economic evaluation has become an important part of the technology evaluation process, such as the Institute for Quality and Economics in Health Services (IQWiG) in Germany and the National Institute for Health and Care Excellence (NICE) in the UK. When these institutions introduce new drugs, they will conduct a comprehensive assessment of their cost-effectiveness, especially the calculation of quality-adjusted life years, which has become a new standard for evaluation.
Health technology assessment helps ensure the optimal allocation of resources to improve public health.
Future challenges and opportunities
With the global emphasis on health investment, especially after the COVID-19 epidemic, health economics is facing new challenges. Ensuring the adequacy and affordability of health insurance will be a common focus for the government, insurance companies and medical service providers. In addition, how to promote the research, development and application of health technology in an effective way will also become an important issue for the future development of the medical system.
All of these factors illustrate the growing role of health economics in our lives. So, in this changing society, what are your reflections on how health economics affects your own life?
