Health Economics Define Health economics is the study

Health Economics

Define: Health economics is the study of how resources are allocated among alternative uses for the care of sickness and the promotion, maintenance and improvement of health, including the study of how health care and health-related services, their costs and benefits, are distributed among individuals and groups in society. It can, broadly, be defined as 'the application of theories, concepts and techniques of economics to the health sector'.

Cost-effectiveness analysis

Define (CEA) It is aform of economic analysis that compares the relative costs and outcoms (effects) of two or more courses of action. CEA is often used in the field of health services as tool by decision-makers to assess and potentially improve the performance of their health systems. It indicates which interventions provide the highest 'value for money' and helps them choose the interventions and programmes which maximize health for the available resources.

Aim of (CEA) : 1) To maximize the level of benefits- health effects -relative to the level of resources available. 2) To compare alternative programs with a common health outcome To assess the consequences of expanding an existing program. 3) To identify and exclude programs that is wasting resources.

Benefits of (CER): • This method is easy to understand more readily suited to decision making. • It provides empirical results for the decision makers to compare the costs and consequences associated with alternative programmes.

How to use (CEA): Adistiniction must be made between those interventions that are completely independent – that is , where the costs & effects of one intervention are not affected by introduction or other wise of other interventions –and those that are mutually exclusive that is where implementing one intervention means that anther cannot be implemanted or where the implementation of one intervention results in changes to the costs and effects of anther.

Independent programmes : Using (CEA) with independent programmes requires that cost effectivness ratios (CERs) are calculated for each programme and placed in rank order. CER= Costs of intervention/ Health effects produced (eg life years gained)

Mutually exclusive interventions • In reality , the likelihood is that choices will have to be made between different treatment regimens for the same condition , different dosages or treatment versus prophylaxis – that is , mutually exclusive interventions. • Incremental cost – effectiveness ratios (ICERS) are used : = Difference in costs between programmes P 1 and P 2 /Difference in health effects between programmes P 1 and P 2