Basic yet Major Concepts of Health Economics

1. Need
In every discipline, there are some basic terminologies that play a crucial role in better
understanding important concepts, even the whole discipline, especially when it comes to
policy adoption. If you are a reader whether in health economics or economics, you are
very likely to be familiar with the terms need, want and demand, yet many researchers,
even scholars, may not distinguish the fine line among them, which normally affects their
judgment regarding policies that have been implemented or should be recommended. In
this piece of writing, I will share my thoughts about need and its importance.

To do their daily activities, human beings require an array of basic needs like eating,
sleeping, drinking a nice cup of coffee and so on. Every person's needs regarding items
such as drinking 8 glasses of water or sleeping 8 hours a day are thought to be limited by
human's nature unless they have physical or mental disorders. These items are a part of
basic human needs which can be expanded to a complicated concept like Maslow's
hierarchy of needs. Citizens in every society, more or less, could identify their own basic
needs, although there is no guarantee whether they can meet their needs or not, particularly
in developing nations.

In health sector, there is a wide range of health professional groups; take physicians,
nurses and lab technicians as typical examples. When the term need is discussed in health
sector, it is assumed that patients or health service buyers cannot identify their own health
needs in a proper way, for in this sector need is different from how it is defined in daily
life. In health systems, need is an objective concept and is distinguished just by physicians,
who have been taught several years in medical schools to become qualified doctors.
Physicians, with the help of not only medical technologies and physical examinations but
also focusing on symptoms of an illness can identify patients' needs; therefore, need could
be defined as "the best treatment for a patient based on his or her physical and mental
condition". To meet patients' needs, physicians do a variety of activities ranging from
giving recommendations like taking an aspirin for a simple headache to performing
surgeries as well as doing some para-clinical tests. Generally, during a treatment period,
when a physician prescribes a course of medication or lab tests, he or she tends to
prescribe the latest generation of medicines and tests even if they are not covered by health
insurance plans. A case in point is Iran where this is a common scenario.

People from my tribe, health economists and economists, firmly believe that physicians
are the most qualified group to identify patients' needs as they are capable of undertaking
this task thanks to their all-round education and specialty. What is neglected in this view is
that each health system has its own concerns, the most important of which is resource
scarcity not only regarding finances but also regarding human resources. While making
decisions to meet patients' needs, physicians assume that there is no limitation in resources
because they are not educated in this regard and just focus on curing the ailments with the
latest medical technologies regardless of their cost effectiveness .

Physicians seem to be the most powerful group in every health system as they are the
gatekeepers and decide whether this treatment is better for the patient or that one; hence,
their decisions directly or indirectly will affect health care resources. Resource scarcity
becomes even a bigger concern when it comes to individual or household levels because
with a specific amount of money in a monthly or annual basis, families have to allocate
their limited budget to a variety of needs. People may postpone some of their needs like
going on a holiday; nonetheless, they cannot do it when doing a surgery is necessary for
them.

Having had a conversation with more than 10 physicians, I presume that should they be
given enough education about the impact of their decisions on resources in both national
and individual levels, policy makers can be hopeful about improving resource allocation
by this group while serving the society as the leading group in a health system. The first
step to achieve this goal could be obtained by modifying the educational curriculum in
medical schools. Besides, regulating health market and assessing the behavior of health
service providers based on established guidelines are of utmost importance
.
Sattar Mehraban, researcher in the field of health economics, drsattarm@yahoo.com