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ECONOMICS HEALTH HEALTH ECONOMICS PHARMACOECONOMICS

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HEALTH ECONOMICS

Health Economics

HEALTH ECONOMICS

study of the proper allocation and efficient utilization of health resources for the improvement of health

HEALTH ECONOMICS
the application of the theories, concepts and techniques of economics to the health sector.

IMPORTANCE OF HEALTH ECONOMICS

To ensure that the most beneficial activities are selected among the available health resources

IMPORTANCE OF HEALTH ECONOMICS

It provides set of analytical technique that assists decision making to promote efficiency and equity.

IMPORTANCE OF HEALTH ECONOMICS

It provide answers to the three basic economic problems

Health economics concerned

1. Allocation of resources between various health promoting activities

2. Quantity of resources used in healthcare delivery to improve health

3. Organization and funding of health organizations 4. Efficiency of the allocation and use of resources for health 5. Assessment of the effects of preventive, curative, and rehabilitative health

THE CONCEPT OF HEALTH ECONOMICS

1. Scarcity and Choice 2. The Opportunity Cost and Trade-Off 3. The Production Posibility Frontier 4. Efficiency and Trade-Off

THE CONCEPT OF HEALTH ECONOMICS

1. Scarcity and Choice Scarcity- refers to the condition in which resources are available only in limited supply.

THE CONCEPT OF HEALTH ECONOMICS

Due to scarcity of resources, all societies face the problem of deciding what to produce and how to divide the products among their members.

THE CONCEPT OF HEALTH ECONOMICS

2. The Opportunity Cost and Trade-Off Opportunity Cost-the benefit that must be forgone by not allocating the resources to the next best activity.

THE CONCEPT OF HEALTH ECONOMICS

Trade-Off- a situation in which more of one good thing can be obtained only by giving of another thing.

THE CONCEPT OF HEALTH ECONOMICS

3. The Production Posibility Frontier Most efficiently producing its good and services and properly allocating its resources in the best way possilbe.

THE CONCEPT OF HEALTH ECONOMICS

4. Efficiency and Trade-Off Efficiency is attained if all medical inputs are producing maximum amount of medical services.

FRAMEWORK OF HEALTH ECONOMICS

WHAT IS HEALTH? WHAT IS ITS VALUE? Perceived attributes of health, health indices, value of life.

WHAT INFLUENCES HEALTH? Occupational

Hazards, Educational, and Income

C
DEMAND FOR HEALTHCARE

E
MICRO ECONOMIC EVALUATION
CMA CEA CBA CUA

F
MARKET EQUILIBRIUM Money Prices Time Prices Equilibrating mechanism

Influences of A and B on Health Care Seeking Behavior

D
Costs of Production Alternative Production Techniques Input Substitution

SUPPLY OF HEALTHCARE

H
PLANNING, BUDGETING AND MONITORING MECHANISMS
Evaluation of Effectiveness

G
EVALUATION WHOLE SYSTEM LEVEL Equity & Allocative Efficiency Criteria

Pharmacoeconomis

Pharmacoeconomics
means by which pharmacists
can demonstrate the value of their products and services

Pharmacoeconomics
the description and analysis of
the costs of drug therapy to

healthcare systems and society

Pharmacoeconomics
Art and science of investigating the varied conditions, key environmental forces, laws and regulations involving the production, distribution, promotion and consumption of pharmaceutical drug products

5 factors to consider in pharmaceutical economics

Pharmaceutical business and professional challenge The availability of drugs and services satisfying customers The physical distribution of healthcare products The usage/consumption of drug products and services The allocation of resources

FRAMEWORK OF HEALTH ECONOMICS

WHAT IS HEALTH? WHAT IS ITS VALUE? Perceived attributes of health, health indices, value of life.

WHAT INFLUENCES HEALTH? Occupational

Hazards, Educational, and Income

C
DEMAND FOR HEALTHCARE

E
MICRO ECONOMIC EVALUATION
CMA CEA CBA CUA

F
MARKET EQUILIBRIUM Money Prices Time Prices Equilibrating mechanism

Influences of A and B on Health Care Seeking Behavior

D
Costs of Production Alternative Production Techniques Input Substitution

SUPPLY OF HEALTHCARE

H
PLANNING, BUDGETING AND MONITORING MECHANISMS
Evaluation of Effectiveness

G
EVALUATION WHOLE SYSTEM LEVEL Equity & Allocative Efficiency Criteria

Economic Problems do exist because of

1. Resources are scarce 2. Human wants are unlimited

Pharmacoeconomic research
1. Identify,
2. Measure,

3. Compare the costs and

consequences of pharmaceutical products

Goal of Pharmacoeconomics
To help decision makers allocate a fixed amount of resources across competing products and services so as to maximize health benefits to the population of patients they serve

2 Basic Activities undertaken

In Pharmacoeconomics 1. Production 2. Consumption STOCK and FLOW CONCEPTS

1. Stock = refers to the measure of quantity at a point of time

2. Flow refers to the measure of movement of quantity over a period of time