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The Mystery of Health Economics: Why is it so Unique?
In modern society, health economics, as a unique field, has received increasing attention. The core focus of this discipline is the efficiency, effectiveness, and value of health and health care. Research in health economics shows that how to improve health outcomes and lifestyles through the interaction between individuals, medical providers, and clinical settings has become an important challenge facing contemporary economists and policymakers.
Health economics is important because it helps people understand how healthcare systems work and behaviors that affect health, such as smoking, diabetes, and obesity.
Health economics is not just an academic study, but a practical tool to help formulate policies and optimize resource allocation. One of the biggest challenges facing health economists is that the economics of health care do not follow the principles of conventional economics. For example, the existence of a three-party payment system between insurance companies and employers often keeps price and quality hidden.
Other common measures, such as the quality-adjusted life year (QALY), are also very difficult to measure and rely on assumptions that are often not justified.
187 Duo's classic article marked the birth of health economics as a discipline. This article provides insights into the conceptual distinction between health and other goods. In addition, extensive government intervention, uncertainty, information asymmetry, and the existence of third parties are the main differences between health economics and other fields of economics.
In health care, the patient's health insurance is one such third party that economists need to consider the cost of resource use, charges, and expenditures. Health conditions themselves carry uncertainty, which is reflected not only in patients' health outcomes but also in financial issues.
Scope of Health Economics
The scope of health economics can be divided into the following areas:
- Factors that influence health (besides medical care)
- The definition and value of health
- Demand for health care
- Provision of medical care
- Microeconomic evaluation at the treatment level
- Overall system evaluation
- Planning, budgeting and monitoring mechanisms
These eight aspects cover the full picture of health economics and demonstrate its wide application at different levels. The history of health economics also shows the evolution of this discipline. From Aristotle in ancient Greece to modern medical economics, the relationship between health and economy has always been a core issue in policy making.
The growth in medical and health spending also reflects the importance society places on healthcare.
Medical needs and health technology assessment
Medical demand can be considered as a derivative of health demand, which means that people will pursue medical services to obtain more health capital. Grossman's model has played an important role in this field, viewing each individual as a producer and consumer of health. This model emphasizes that health is a kind of capital that depreciates over time.
With the development of health technologies, economic evaluation and especially cost-effectiveness analysis have now become a basic component of the technology assessment process in many countries. Agencies such as Germany and the United Kingdom consider the cost-effectiveness of new drugs, which is essential for developing sound health policy.
Changes in the medical market and the need for intervention
In the medical market, we usually analyze five core markets, including the medical financing market, the doctor and nursing service market, the institutional service market, the input factor market and the professional education market. Although some of the assumptions and models of these markets are applicable to general economic markets, there are many deviations in reality.
For example, the lapse in health insurance could lead to market failure, particularly in the demand for insurance for certain high-risk diseases. At this time, government intervention is necessary, for example, during the COVID-19 epidemic, the country needs to provide timely medical support.
Also, the monopoly situation in the healthcare industry requires government intervention to avoid high healthcare costs.
Health economics is a challenging field that not only involves data analysis and policy making, but also concerns the quality of life and value of life for each individual.
In short, health economics, as a unique discipline, combines economic theory with medical practice, providing valuable tools and ideas for improving human health. As we face increasingly complex health challenges, we can’t help but wonder: How will future health economics affect our lives?
