Explain how selected economic principles apply to the health care market and the provisions of health care services.
Implications of Health Economic Concepts for Healthcare
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Introduction
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.
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