University:
Adelphi University
Course:
EECA 101 | Introduction to Economics
Academic year:

2024
Views:

130

Pages:

2
Author:

Silvana C.

Course : Economics Of Health Care Credits Hours : 3 Credits Semester / Session : 5th Semester / 2023 Basic principles of health economics Health economics is a field of study that examines how limited resources can be allocated to improve the health of individuals and populations. It involves the application of economic principles and methods to analyze the production, consumption, and distribution of healthcare services and resources. This field of study is important because it helps policymakers and healthcare providers make informed decisions regarding resource allocation, healthcare financing, and delivery of healthcare services. Basic Principles of Health Economics: 1. Scarcity of resources: Healthcare resources are limited and finite, which means that there is an opportunity cost to using them. This means that when resources are allocated to one area, they cannot be allocated to another. Therefore, choices must be made about how to allocate resources in the most efficient and effective manner. 2. Opportunity cost: Every decision to allocate resources to healthcare involves an opportunity cost. This means that the cost of choosing one option is the value of the benefits foregone from not choosing the next best alternative. 3. Efficiency: The goal of healthcare economics is to achieve the highest possible level of health with the available resources. Efficiency refers to the allocation of resources in a way that maximizes health benefits while minimizing costs. 4. Equity: The distribution of healthcare resources and benefits should be fair and equitable across different groups of people, regardless of their income or social status. 5. Marginal analysis: Marginal analysis involves comparing the additional benefits and costs of a specific action or intervention. It is important in healthcare economics because it allows decision-makers to determine the optimal level of healthcare services or interventions that should be provided. 6. Market failure: Healthcare markets often fail to allocate resources efficiently due to market imperfections, such as information asymmetry, moral hazard, and adverse selection. This means that the government may need to intervene to ensure t healthcare services are provided in an efficient and equitable manner. 7. Externalities: Externalities occur when the actions of one individual or group affect the well-being of another individual or group. In healthcare, externalities can occur when the spread of infectious diseases affects the health of the entire population, or when unhealthy behaviors, such as smoking, have a negative impact on the health of others. Conclusion: Health economics is a field of study that is essential for understanding the healthcare industry and making informed decisions about healthcare resource allocation. Basic principles of health economics include scarcity of resources, opportunity cost, efficiency, equity, marginal analysis, market failure, and externalities. By understanding these principles, decision-makers can allocate healthcare resources in a way that maximizes health benefits and promotes equitable access to healthcare services.