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Lecture

Health Economics lec 03 HLTB03

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Department
Health Studies
Course
HLTA02H3
Professor
Dan Silver
Semester
Fall

Description
Health Economics – Lec 03- HLT B03 Objective  Importance of health care economics  Sharing techniques for evaluating health issues using economics  Economics jargon: terms you get familiar with  To emphasize the importance of health care economics Why should we care about economics in healthcare?  Health is important  Society level: someone next to you doesn’t have a disease  Access to health care improves your health and society health  health care is a way of modifying the incidence of poor health  economic analysis offers a unique framework for analyzing and finding solutions to health care issues  A large amount of money is spent on health care Total spending on health care in Canada  Over time spending has been increasing What goes into $200 billion?  Compensation of health professionals  Paying for doctors and nurses  Increased use of services (drugs, procedures)  Aging population  changes in technology, increases in service utilization and health-sector inflation above the rate of general inflation  also pays for the many machineries needed in health care units; surgeries with machinery Why should we care about the economics of healthcare?  Global health care issues are being discussed in economics  To avoid being deceived by economists Important Terms:  Economic Goods  Health Economics  Opportunity Cost  Allocative Efficiency  Economics of scale ECONOMICS  Resources available to society are scarce; not plentiful  Decisions must be made about what is their best use  Resources are best used when they maximize benefits to society  The science of scarcity  The analysis of the production, distribution, and consumption of goods and services  A set of tools that can be applied to help us answer tough questions related to the provision of health care services ECONOMIC GOODS  Good service individuals want, but are scarce General Economic Assumptions 1) Resources are limited 2) Potential uses those resources are unbounded HEALTH CARE AS AN ECONOMIC GOOD  The resources that are used to produce health care services are finite  Individuals want health but the more health care we choose the more of something else we must sacrifice How to make the transition? Ex. Health Care: Economic Good  Nurses are limited  Many constraints in a household that you’d have to sacrifice HEALTH ECONOMICS  Branch of Economic: helps understand the maximal benefits of goods  The application of economic theory, models, and empirical techniques to the analysis of decision making as it relates to health and health care by individuals, health care providers, and governments OPPORTUNITY COSTS What you sacrifice?  Best alternative to what you’re doing  Ex. Operating on one patient over another  Tradeoffs; Measured by the next best alternative  Opportunity cost of commiting resources to produce a good service is the benefits forgone from those same resources not being used in their next best alternative RESOURCES  Financial: do you have enough money?  Time: do you have enough time/skill set (equipment)  Energy  Skills  Equipment ALLOCATIVE EFFICIENCY  Who can benefit most from resources  The extent to which resources can be allocated to the group or individuals who can benefit most  The minimum amount of resource that are combined to achieved a given outcome PRODUCTION  The Production Function: a relationship/raw material and the amount of health care facilities and between inputs and outputs SUPPLY  The decisions that producers make about how much of a product to supply to a matket at any given price  The quantity of a product that a producer is willing and able to supply onto the market at a gi
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