ch 1 key concepts in health economics.docx

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Department
Economics
Course
ECO440H5
Professor
Multiple Professors
Semester
Winter

Description
Ch 1 Key Concepts in health economicsKey termsEfficiency a general term used to describe the relationship between inputs and outputs It is concerned with maximizing benefits with the resources available or minimizing costs for a given level of benefitGoods there are the outputs such as health care of a production process that involves the combining of different resources such as labor and equipment Goods including services are valuable in the sense that they provide some utility see below to individual consumers They are termed Goods as they are desirable as distinct from bads which will be discussed latedHealth Sector consists of organized public and private health services the policies and activities of health departments and ministries healthrelated nongovernment organizations and community groups and professional associationsHealth services the range of services undertaken primarily for health reasons that have a direct effect on health including health care programs such as health promotion and specific disease preventionand treatmentMarginal analysis an examination of the additional benefits or costs arising from an extra unit of consumption or production of a goodOpprotunity cost economic cost as resources are scarce an individual in choosing to consume a good in principle chooses the good which gives him or her the greatest benefit and thus forgoes the consumption of a range of alternative goods of lesser value The opportunity cost is the value of the benefit of the next best alternativeUtility the happiness or satisfaction an individual gains from consuming a good The more utility an individual derives from the consumption of a good all else being equal the more they would be willing to spend their income on itResources these represent inputs into the process of producing goods They can be classified into three main elements labor capital and land Different goods would generally require varing combinations of these elements Resources are generally valued in monetary termsWelfare or Social Welfare the economic criterion on which a policy change or intervention is deemed to affect the wellbeing of a society In general this is assumed to b e determined by aggregation of the utilities experienced by every individual in the societyTypes of economic problems in the health sectorthe health sector consists of organized public and private health services from Surgery to health promotion programs dentirstry the policies and activities of health departments and ministries healthrelated nongovernment organizations and community groups and professional associationsThose responsible for determining and managing different areas of a health sector are typically forced to consider questions such as at what level should hospital fees be set are taxes on cigarettes a useful way of promoting health through reducing the prevalence of smokingeconomics is the study of scarcity and the means by which we deal with this problembecause resources are essentially limited choices need to be made about how they are to be usedone of the key assumptions generally made in economics is that individuals will make these decisions rationally Maximize their utility There are four specific questions that are the primary concern of economics1 what goods are being produced and in what quantities2 How are these goods produced3 How is societys output of goods divided among its members4 How efficient is societys production and distributionWhat is an economy
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