Paper Sample on Economics in Health Care

Introduction

Governments are regularly involved in developing healthcare and other social sectors amidst scarce resources (Jakovljevic and Ogura 1-2). While formulating and implementing healthcare reform decisions, policymakers must evaluate the available alternatives and make evidence-based information grounded on utilitarian and socially responsive practices. Since the latter periods of the 20th century, healthcare sector researchers and policymakers continue to engage multidisciplinary players in attempts to carefully analyze the economic demands of the healthcare sector (Jakovljevic and Ogura 2).

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Due to the increasing interest in the economics of the healthcare sector, analysts created the concept of health economics (Lakdawalla et al. 131). This concept intended to integrate the principles of economics in the conceptualization of health care reforms. The economic ideas of understanding choices, benefits, cost, and efficiency have continually found their place in major healthcare systems globally. Analysts have investigated the concept of healthcare economics substantially. However, minimal research output has looked to link the economic theories and empirical techniques to the healthcare reform processes (Lakdawalla et al. 134). This present analysis shall further the literature in healthcare reforms through the use of the resource-scarcity approaches. The researcher theorizes that economic principles and theories are essential considerations for healthcare reform decision making and strategic growth.

Healthcare Economics

In the previous four decades, healthcare sectors in various countries have experienced a rise in financial spending, rationalization, expansion, and organization (Jakovljevic and Ogura 2). The rise of the health economics area of research is often attributed to the 1931 establishment of the Bureau of Medical Economics in the USA. This bureau was formed under the American Medical Association (AMA) as the pioneers of the later work in economics in the health care sector. However, the academic and health practitioners’ world had to wait for almost two decades to begin the theory-building progress in healthcare economics.

The rise in the research of economies in the health sector started through the original seminal works of Selma Muskin in two famous papers. “Towards the definition of health economics,” Muskin´s first significant research output (published in 1958) was followed by “Health as an Investment” of 1962 (Jakovljevic and Ogura 3). The following year (in 1963), Kenneth Arrow published the most cited paper in health economics, an article named “Uncertainty and the welfare economics of medical care” (Jakovljevic and Ogura 3). Later in 1972, Michael Grossman progressed the findings and theory in health economics developed by Kenneth Arrow in his paper on the Theory of Human Capital. Stemming from these three crucial seminal works, social scientists and health practitioners continued to promote research in health economics.

During the four decades spanning between 1971 and 2011, health economics research and practical development continued to increase both inside the US and beyond (Dang et al. 79). While the area or investigation presently dominates global research, the US continues to lead the research publications in health economics. Due to the rise in world powers with stable medical and academic capacities, the US is presently experiencing a weakening of their previous stranglehold in health economics research (Dang et al. 78).

Defining Health Economics

With the rise in global health concerns, various global regions, including the developed and developing economies, continue to embrace the economic principles in addressing unique public health issues (Charles and Edwards 1). Humanity continues to face health issues and pandemics that require proactive solution processes and preparation. Citizens and governments of various countries need mechanisms that may help evaluate the healthcare demands and the economic dimensions of such burdens. Increased healthcare consumerism and government expenditure in disease control have had a reciprocal effect on the health-economy dynamics (Charles and Edwards 1). Economic analysts often position health economics as one of the essential domains of economic research. However, investigation in such field is usually broader than the bounds which the economics analysts can study.

As a discipline developed for the past eight decades, various definitions have been adopted by analysts for the health economics domain. According to Brandon Howard of Johns Hopkins Bloomberg School of Public Health, Health Economics is a field of study that enhances rigorous and systematic investigation and evaluation of healthcare issues faced by all citizens. Such an investigation allows healthcare promotion for everyone (Howard). The author posits that health economists aim to apply the theories of production, competition, disparities, and efficiency to inform better the public and private health sectors of the appropriate course of action. The second definition of health economics comes from Morris and colleagues (2013). These researchers postulate that “health economics is the application of economic theory, models and empirical techniques to the analysis of decision-making by individuals, health care providers and governments with respect to health and health care” (3).

According to these authors, the field of health economics has continued to be highly specialized (Morris et al. 1-20). The domain stayed grounded in economic theory and other accompanying theories that allow for behavioral analysis and resource allocation in healthcare. The field thereby draws immensely from epidemiology, psychology, sociology, statistics, and mathematics to derive specialized data and inform health care reform (Morris et al. 1-20). As such, health economics is an essential component of health services research. This second definition of health economics shall inform the remainder of this present research. This study thus intends to relate the processes of healthcare reforms to the evidence derived from health economics.

Methodology

This research performed a grounded analysis of available literature around healthcare economics. Keyword search was conducted in major research libraries and databases including Google Scholar, Researchgate, Springer, and ScienceDirect. The search tags used include “health economics,” “economics in healthcare,” “health and economics” and “Economic Evaluation in Health Care.” Articles selected for the grounded search entailed information around the role of economics in healthcare reforms. Any literature on economics and health that approached the constructs separately were avoided for this grounded search.

Results

From the above review of literature, healthcare is alluded to an economic good. Definitions and descriptions of the concept – healthcare economics – appeared to surround the economic constructs such as scarcity of supply and unlimited demand. To determine whether healthcare is an economic good, it is first essential that the terminology “Economic” is disambiguated. Economic products are often described as goods and services that are not sufficient for societal demands. As such, economic analyses make pertinent decisions regarding the production and consumption patterns for such goods. In economics, thereby, resources are restricted relative to their unbounded potential uses.

Conclusion

Expectations of the public regarding healthcare providers continue to rise significantly (Charles and Edwards 2). In developed and developing countries alike, citizens continue to demand better standards of healthcare. These individuals are sufficiently informed about their options for their health and treatment. Increasingly, therefore, healthcare providers and policymakers in these countries are charged with the unenviable responsibility of evaluating the available treatment options and analyzing the most effective and beneficial one for their societal contexts (Soekhai et al. 202). Economic analysis and evaluation approaches provide mechanisms for investigating and mathematizing various health model and determining the most economically viable and feasible alternative. Despite such attempts by the governments to leverage the benefits and affordability of healthcare, the costs often spill over to the citizens. The consumers must, thereby, part with higher fees and bills while seeking higher standards of treatment.