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Definition of Health Economics

Wednesday, November 04, 2009
 

Instructions

Identification

  • Step 1:
    People want the best medical services, but have limited means for paying for such services, which are themselves limited in number. Health economics issues allocation of scarce resources in health care.

History

  • Step 1:
    A 1963 article by economist Kenneth Arrow is often considered the starting point of health economics as a specialty within the discipline of economics.

Significance

  • Step 1:
    Most health care issues have an economic dimension to them. Examples include types of health care financing, such as a market system vs. government plans such as single payer; the supply and demand for various health care services, and the price of prescription drugs.

Pharmacoeconomics

  • Step 1:
    Because of concerns about the affordability of pharmaceuticals, pharmacoeconomics is one of the most prominent specialties in health economics.

Considerations

  • Step 1:
    As a market, health care differs from many economic sectors, in which consumers make decisions based on full information about available options. In health care, however, consumers do not always have adequate knowledge of the types of services or coverage they need, which gives an advantage to medical providers and insurers.

Resources

Photo/Video Credit

Image by Flickr.com, courtesy of Todd Huffman

Definition of Health Economics Provided by eHow.com
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