HEALTH ECONOMICS

Health economics



Health economics

Introduction

Economics analysis and” evaluation describe a broad set of analytical approached used to describe and compare the benefits and cost of competing use of scarce resources “(S. Morris et al, 2007).

Health economics is widely understood encompassing the study of the demand and supply for medical services (physician services, services provided in hospitals and independent laboratories, pharmaceuticals, etc.) and for health insurance, as well as comparative studies of different health care systems. It also includes the study of the determinants of demand for health itself, global public health problems, and the nonmedical inputs into health, such as a decent living standard, education, physical and social environment, and personal lifestyle choices, to the extent that they are exogenous (e.g., independent of one's health status). Although the nonmedical factors got increasingly realized to be important in achieving a healthy community at an affordable level of expenditure, most courses in health economics got primarily concerned with the provision of medical care and with health insurance that primarily covers medical care.

In this paper, I my aim it to try to discuss and analyze if “Health economics is a discipline of economics applied to the topic of health” for normative economic analysis point of view”. To be able to discuss that, I will start with giving an overview of the two major economic schools (positive and normative). It should give a basic understanding of the two different concepts, I will then explain the normative analysis methods as the focus of this paper, in which I will analyse the distinction between the two major methods used in health care evaluation. Then I will move to discuss my conclusion and opinion around if health economics gets considered a discipline of economics from the normative analysis point of view.

Methodology Used in Health Economics Research

The methodology of health economics research includes the following two categories.

Statistical Techniques

In health economics, experimental laboratory conditions rarely can be created. Therefore, once a hypothesis got formulated and sample data gets gathered, statistical techniques must be used to isolate and estimate the effects of factors. Economists most commonly “remove” the other effects by using the techniques of multivariate correlation and regression analysis. Whenever possible, researchers use “difference-in-difference” estimators, where changes in a control group get compared with changes in a treatment group.

In isolating the effect of a change in policy or environment, one needs to have a control group to compare with a treatment group. In some cases, “natural experiments” are provided by the environment. For example, quasi-experimental conditions were provided when Tennessee raised its rate of Medicaid remuneration for physician visits while a neighbouring state, Maryland, did not. This enabled researchers to estimate the effect of fees on the willingness of physicians to treat Medicaid patients. Physicians in Maryland were the control group.

Researchers occasionally are able to undertake experiments in which large numbers of subjects gets randomly assigned to different groups. An example is the RAND Health Insurance Experiment, conducted over 1974 to ...