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INTRODUCTION TO HEALTH ECONOMICS || Dra. Mariano

 Health Economics seeks to maximize the output of the given inputs of activities or alternative programs that seek to produce
better health. It seeks to ensure that each resource used for the production of health gives the most impact on the production
(or end goal) which is better health.
 Health economics studies the factors that influence health (A). These factors are the proximate and underlying sociocultural
and demographic factors that directly and indirectly affect health outcomes. The attributes of health (B) and the value of
health is measured in terms of extending life spans, improving quality of life. This fact is most important to remember: health
should be measured and valued.
 The demand for health (C) must also be understood clearly. The factors influencing health and the perceived attributes of
health affect the health seeking behavior and thus the demand for health care. It is also important to understand how these
factors affect the current demand but how it will change in the future.
 Balancing the demand for health with the supply of health (D) is also very important. The forces of supply and demand
interact and influence the prices of health goods and commodities. If medicines and health services are being supplied without
aligning these to what is demanded, these medicines and services are wasted. On the other hand, problems occur when
health care is demanded but not adequately supplied. To exaggerate this situation – people die.
 Microeconomic evaluation (E) allows the evaluation and choice between alternative health interventions or programs. It is
the systematic and objective way of evaluating different alternatives in producing better health. It seeks to measure costs of
health care alternative interventions and compare them to health outcomes that must be delivered. Various evaluation
techniques are: cost minimization, cost-effectiveness analysis, cost benefit analysis and cost utility analysis.
 Planning, budgeting and monitoring (H) are health administration functions which try to ensure that the chosen programs
or alternatives (E) are implemented effectively and efficiently.
 General evaluation (G) are done to assess the equities of programs (;that is, people get equal capability of accessing health
care) and efficiencies relating to such different program.
 Equity – justice according to natural law; freedom from bias or favoritism

TRANSCRIBERS: Lirio, Taan, Tan 1|P a ge


MED ETHICS 2 Introduction to Health Economics

TRANSCRIBERS: Lirio, Taan, Tan 2|P a ge