Discussion: Health Economics

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Discussion: Health Economics

Discussion: Health Economics

Health economics is the discipline of economics applied to the topic of health care. Broadly defined, economics concerns how society allocates its resources among alternative uses. Scarcity of these resources provides the foundation of economic theory and from this starting point, three basic questions arise:

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  • What goods and services shall we produce?

  • How shall we produce them?

  • Who shall receive them?

Health economics addresses these questions primarily from the perspective of efficiency—maximising the benefits from available resources (or ensuring benefits gained exceed benefits forgone). Equity concerns are also recognised—what is a fair distribution of resources. Considerations of equity often conflict with efficiency directives. However, due to the contested nature of this area and the difficulties in quantifying equity dimensions, this element has not been a major focus of health economist’s work.

WHY IS HEALTH ECONOMICS IMPORTANT?

Thirty years ago there were limited options for doctors making treatment choices and patients did as they were told. Any values that contributed to the decision making process were implicit and determined by the physician. However, against a background of limited health care resources, an empowered consumer and an increasing array of intervention options (see fig 1) there is a need for decisions to be taken more openly and fairly.

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Write a paragraph in response to each of the following questions. Be sure to indicate the assignment number and your name at the top of your paper (or the TA will have trouble giving you credit).

  1. Outline the four definitions Platt uses of land (pp. 4-8).
  2. Explain Von Thunen’s concept of “economic rent” (p. 29).
  3. Briefly summarize William Gilpin’s and John Wesley Powell’s opposing views of the American West described by Stegner in Beyond the Hundredth Meridian.
  4. Pick one of the works by Cather, Moran, Catlin, or Harris and describe how the work represents one of the four definitions of land used by Platt (pp. 4-8).
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