Developments and Perspectives

Summary:

Introduction

Development of Health Economics as a subject

Early Pioneers in the field

Importance of understanding Health Economics

Conclusion

Reference

Introduction:

“Health economics is the application of economic theory, models and empirical

techniques to the analysis of decision making by people, healthcare providers and

governments with respect to health and health care.”        

Apart from strong backup from economic theory health economics also comprises a body of theory developed specifically to understand the behavior of patients, doctors and hospitals, and analytical techniques  developed to facilitate resource allocation decisions in health care.

Developments of Health Economics as a subject:

The health economics is a component of public health, a component that It can be used to examine health issues and medical treatment. Health economists consider the origin of their discipline to Petty W, who propose valuation of human life based on a person’s contribution to national production. Arrow K. is credited with creating the field of health economics in a work where he conceptually distinguished between health and other goods. Since Arrow K.'s fundamental publication on health economics from 1963, the scale of the healthcare sector, the share of public budgets allocated to healthcare, and the body of research on health economics have all increased significantly.

In 1931, Bureau of Medical Economics initiated a discussion about insurance

plans as an alternative way of compensation

In 1945,  US Army established the RAND project, which grew in consequent years to RAND

corporation using rational choice framework, which worked on the economics of healthcare.

Early Pioneers in the field:

Some early pioneers of Health Economics include-

1. M. Friedman’s (Nobel prize orient, 1976), his few academic papers (1935, 1945) are seen as the first

pioneering works in the field of Health economics.

2. Selma Mishkin's 2 works, 1st an attempt to define health economics (1958), followed by 2nd work of establishing health as in investment (1962).

3. Kenneth Arrow (another Nobel prize orient, 1972), the single most famous and cited contribution laying grounds for this discipline.

4. Michael Grossman (1972), Theory of Human Capital gave a standard method to assess indirect opportunity cost in health economics.

These are some of the famous Economists whose work in Health Economics have had a significant contribution in the field.

Importance of understanding Health Economics:

* The study of Health Economics is important for individual and societal well-being and the availability of healthcare determines the quality of our lives and prospects for survival.

* The health sector and economic well-being are major sector components 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 & economic constraints, all of global, national and even local health issues are increasingly seeking economic ideas and methods of analysis.

Conclusion:

The Evolution of the subject of Health Economics have been pioneered by few economists, and carried on by various scholars. The subject of Health Economics is the most recent and the current branch of Economics that is budding, and has a lot of scope for future research and experimentations. It is also said that Health Economics is the least explored branch of Economics, amongst all.

References:

https://healtheconomicsreview.biomedcentral.com/

Principles in Health Economics and policy. Oxford University Press, Olsen J.A.