Economics in the field of Health sciences

Since this is the first one, it deals with the Introduction of Economics in the area of Health Sciences. 

Summary:

What is Economics?

What is Health?

Economics and Health: Health Economics

Healthcare in India

References.

What is Economics?

Economics is the science which studies human behavior as a relationship between ends and scarce means which have alternative uses, as put forth by an Economist, Lionel Robbins.

 In short, Economics is the study of scarcity, the study of how these scarce resources are put to use or the study of decision-making. Economics is both and art and science as its concept is used in every discipline.

What is Health?

Health as defined by WHO is, A state of complete physical, mental and social well-being, and not merely the absence of diseases.

Health also refers to the degree of bodily functioning observable to an external expert and measurable on medical instruments.  

Economics and health: Health Economics

There's one law that makes economics a study, that resources are scarce while our needs are unlimited. Health is complex, but its an essential good for survival. So, we need a proper understanding of how to allocate scarce resources that provide rational benefits to individuals. That's why the field of Health Economics is needed. 

Health Economics is the application of economic theory, models and empirical techniques to the analyses of decision making by people, healthcare providers and government with respect to health and healthcare. (Morris et al, 2012)

Health Economics comprises a body of theory developed to understand the behavior of patients, doctors and hospitals, and analytical techniques developed to facilitate resource allocation decisions in healthcare. The health sector and Economic well-being activities of spending, investment and employment and the amount of care provided are crucially linked to the overall well-being of the country and its citizen. Decision about healthcare financing is largely influenced by economic environment and economic constraints. Several global, national and even local health issues are increasingly seeking economic ideas and have an impact on economic affair.

Healthcare in India:

Indian health sector consists of 

* Medical care providers like physicians, specialists clinics, nursing homes, hospitals.

* Diagnostic service centers and pathology laboratories.

* Medical equipment manufacturers.

* Contract Research Organizations (CRO's), Pharmaceutical manufactures.

* Third party support service providers (Catering, laundry).

In addition to existence of modern medicine, traditional practices like Ayurveda, Siddha, Unani, Homeopathy, Naturopathy and Yoga (AYUSH) are also largely present in our country. These practices of medical science serve as a lucrative opportunity for health tourism.

The modern healthcare system in India consists of public sector, private sector and an informal network of care providers.

 Health Infrastructure:

At the National Level, there is Ministry of Health and Family Welfare. 

At the State level, there are Departments of Health and Family Welfare and Apex hospitals.

At the District level, there are various district hospitals.

The health facility in Rural areas can be categorized as Community health centers, Primary Health centers, while in Urban areas they are called Hospitals, nursing centers.

Health Infrastructure signifies the investment and priority accorded to creating the infrastructure in public and private sector. The classifications under Health Infrastructure are a)Physical Infrastructure and b) Human Resources.

Infrastructure in private sector provides for at least 80% of health services and are classified as below:

* Private dispensaries

* Private hospitals

* Charity hospitals, including medical centers managed by NGO's

* Corporate hospitals.

In the healthcare industry, human resources play a crucial role in developing, monitoring and enforcing employee training and development programs. Human Resources in the healthcare industry are Physicians, nurses, midwives, dentists, pharmacists, public and environmental health workers, community health workers, lab technicians.

Role of Private Sector:

The private sector in India has gained a significant presence in all the sub-segments of medical education and training, medical technology and diagnostics, pharmaceutical manufacture and sale, hospital construction and ancillary services, and also the provisioning of medical care.

Over 75% of human resources and advanced medical technology, 68% of hospitals and 37% of total beds in the country are of private sector.

There is a growing realization that given their respective strengths and weaknesses, neither the public sector nor the public sector alone can operate in the best interest of the health system. While reviving the health sector in India, the World Bank and the National Commission on Macroeconomics in Health strongly advocated harnessing the private sector's energy and countering its failures by making both public and private sector more accountable.

Expenditure on Health:

The following are included as an expenditure in this sector:

* Provision of preventive and curative health services

* Public health affairs and services

* Health applied research

* Medical supply and delivery system 

The expenditure on provision of water and sanitation is not included in the total expenditure.

In financial year 2022, the government health expenditure in India stood at approximately 845 billion Indian rupees.

About 274 billion Indian rupees were spent on the National Health Mission. 

The total health expenditure is expected to reach above 891 billion Indian rupees by fiscal year 2024 as per government budget estimates. 

The central and state governments’ budgeted expenditure on healthcare touched 2.1 % of GDP in FY23 and 2.2% in FY22, against 1.6% in FY21, as per the Economic Survey 2022-23 tabled in Parliament by finance minister Nirmala Sitharaman.

The Per Capita Government Health Expenditure(GHE) in India as of 2019-20 stands at 2014.

The Government Health Expenditure in India as a percentage of GDP as of 2019-20 stands at 1.35%.

Although there are norms and guidelines, compliance is minimal. In reality, the sector operates in a largely unregulated environment with minimal controls on what services can be provided, by whom, in what manner, and at what cost. Thus, wide disparities occur in access, cost, levels and quality of health services provided across the country.

References:

Bhat Ramesh (2006). Financial Health of Private sector hospitals in India. Working Paper No 2006-01-01, Indian Institute of Management, Ahmedabad.

Economic Research Foundation (2006). Government health expenditure in India: a benchmark study. New Delhi.

Healthcare system in India: An Overview (2020). Paper on Research gate: Seilan Anbu, Nagercoil, India.

www.statista.com, statistical data on expenditure in healthcare.