Analyze the main potential benefits of learning about health economics related to private sector government involvement in healthcare economics, financing, and delivery
Implications of Health Economic Concepts for Healthcare
Health economics connects the field of economics and medicine and integrates economics to the health sector. It is concerned with issues that relate to effectiveness, efficiency, behavior and value in consumption and production of health and health care. Better service delivery is an essential element in any health system and is important in achieving health sector development goals. Therefore, the provision of services is a fundamental requirement for population health status. Evaluating economics in health is crucial due to the finite nature of resources in the sector. Hence, a choice is needed to determine the resources to be utilized for a particular activity and which to use for the other. The benefits that come up with selected activities should exceed their opportunity cost.
Economics is a useful field for decision makers. It is because financial constraints and resource limitations apply in all health systems. There are alternatives competing for resources, which, therefore, lead to significant implications for decisions on resource allocation, equity and health outcomes. By understanding health economics, decision makers will be able to perform the costs-benefits analysis. Make a distinction between the average and the margin as well as efficiency and equity. They can also compound future costs and benefits and understand the importance of who gains and who loses. Economics is concerned with an efficiency that deals with how the resources in healthcare are allocated and also their fair distribution.
Decision makers in health care should be objective to ensure equity. They can be able to pursue both efficiency and equity when equipped with the economic knowledge. Scarcity is an economic problem since the resources available are less compared to needs, wants, and demands. Hence, this information is crucial to decision makers as they budget. Forces of demand and supply interact when the market forces may fail due to challenges such as moral hazard, adverse selection, information asymmetry and demand induced by the supplier. However, due to the scarcity of resources a choice has to be made to examine health care that should be given, what quantities to provide, the way to provide them and how to distribute.
Understanding health economics will enable decision makers identify which issues they should highlight and those to give more details and emphasis based on existing resources. Health economics will also enable decision makers be rational when making decisions for the organization. It means that they can make choices that develop their goals considering resources at their disposal.
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