IDSB04 Week 11 Readings Chapter 12 Health Economics and the Politics of Health Financing Key Questions: What is the relationship between health and the economy? How is health care system organization linked to financing and management? What are the different approaches to health economics and what does each emphasize? The health sector and the economy are linked where the health sector has become one of the worlds largest industries Growth and productivity gains in a neoliberal capitalist system often come at the expense of health which is seen with the increasing downgrade of environmental regulations, working conditions, social protections, corporate taxes, government social spending and wages which are all to maximize profits Health Economics: A Snapshot The world spends so much on health but it is very inequitable Concerns for health economics: the allocation of resources, the quantity of resources that are used in health service delivery; efficiency with which resources are used for hear purposes o Overall, they are concerned with efficient and effective use of resources, but consider questions of equity and social justice o Orthodox health economics looks at more technocratic measures to address the deficient health care delivery Political economy of health approach focuses on underlying forces: o Inequitable distribution of power and resources within and across countries o Proditeering by corporations (ex. Insurance companies, pharmaceiticals) o A global neoliberal capitalist system that represents the interests of TNCs and wealthy elites the exploitative resource extraction, unfair terms of trade, labor oppression, financialization and corruption that occur within this system oppress the majority of the worlds population, particularly those in LMICs Critical political economists try to find solutions that go beyond symptoms, support the role of social and political movements struggling for health care as a right instead of a commodity; regulating TNCs and global capital to diminish rampant exploitation and illicit financial flows Economic Approaches to Public Health and Medical Spending Key Questions: What are the underlying assumptions of markets? How does health care differ from other goodsservices? Why are markets incapable of equitably providing health services? The demand for health care is highly not dependent on manipulation of supply but based on need and is often time sensitive o Table 122 shows how the classic supply and demand curve doesnt apply to health care it is not mediated by price The health sector is one where the provider has decision making autonomy and can overshadow consumer sovereignty Table 122 How the Health Care Sector Differs from Markets Typical Market Assumptions Using Health Care Services Buyers and seller freely enter and exit the market Most people use health care services because of emergencies for chronic conditions that require long any time, based on personal preferences term care or to comply with school, workplace or government regulations Buyers use personal resources to purchase goods andGovernments, employers, or privatelyrun insurance companies are often the main purchasers of health services care services, with consumers paying indirectly through taxes, premiums, andor coinsurance (or directly out of pocket) Buyers are free to choose which goodservice they Health plans usually provide limited choice to buyers (with private insurance also restricting choice). In want to purchase, if any many places, there is little choice in health care services or providers Consumers may prioritize accessibility and availability of health services over choice of services or providers Health decisions may be made for the patient by health care prioders or by family members Buyers and sellers have equal access to informationAsymmetric information between providers and consumers results in patients being unaware of which from which to make rational decisions health goodservices is needed, if any or which is most effective or costeffective At the same time, patients may not always disclose vital health information to providers What Makes Health Care Different from Markets?