Chapter 8 Economics of Public Health Nursing Copyright

Economics • Study of how scarce resources are allocated – Supply – Demand 2

Economics • Allocation of scarce resources – Opportunity costs • Preferences • Uncertainty 3

Economic Decision Making • Economic logic – Scarcity – Preference – Opportunity costs –

Basic Economic Reasoning • Decision making at the margin – Marginal benefit – Utility

Economic Reasoning in Public Health • Profit maximization and cost minimization – Fixed cost – Variable cost – Efficiency • Technical efficiency – Technical rate of substitution • Allocative efficiency 6 Copyright © 2008 Delmar. All rights reserved.

Economic Reasoning in Public Health • Economics of for-profit and not-for-profit organizations’ behavior – Organizational objectives • Minimizing costs • Discount rate 7 Copyright © 2008 Delmar. All rights reserved.

Economic Reasoning in Public Health • Economics of an individual investment in health – Health promotion and disease prevention – Motivation – Valuing the future 8 Copyright © 2008 Delmar. All rights reserved.

Economic Reasoning in Public Health • Effects of one person’s behavior on another person’s health – Externalities • Positive: Immunizations • Negative: Smoking 9 Copyright © 2008 Delmar. All rights reserved.

Economic Reasoning in Public Health • Decisions under uncertainty – S-CHIP • Economic evaluation using cost benefit and cost effectiveness analyses – Cost benefit – Cost effectiveness analysis • Quality Adjusted Life Year (QALY) 10 Copyright © 2008 Delmar. All rights reserved.

Economic Reasoning • Economics of the public health nurse labor market – Labor supply curve – Reservation wage – Individual motivation to work – Backward bending supply curve 11 Copyright © 2008 Delmar. All rights reserved.