Health Care Economics

Category: Economics

Health Care Economics is thought to be the branch of economics that is connected with manufacturing of medical care products and distribution of those products among consumers. Speaking more specifically, we can say that its main target is to research functioning of medical and health care organizations and systems of all levels, including such unhealthy issues as tobacco and alcohol consumption. In this paper, we will try to illustrate how economics applies to health care and how it impacts the health care system and the implications of a poor health care system on a nation. In addition, on the example of a statistical tool difference of means, on the health care system, that is used to measure health economics, we will discuss significance of this tool and how this tool could be used to make decisions regarding health care. Moreover, we will focus on the relationship between this tool and economic efficiency.

First of all, to understand how economics could be applied in the health care system, we need to understand how it works and what its main targets and purposes are. Health economics usually deals with evaluation of different medical costs, expenses and other financial questions. It evaluated possible charges and fees during the process of manufacturing, transportation and distribution of medical products. Economics in this sector also provides statistical evaluation of market equilibrium, supplies and health evaluation. This branch of economics is a part of the economic theory to phenomena and difficulties that are associated normally with medical service market and institutional service market (Culyer, 1989).

Being in demand, health provides for the market a good place to grow in the sector of a health care. Consumers want to become healthier, that is why health care economics could be easily applied in a sector of medical care. The biggest part of health economics is taken by microeconomics that provides treatment individually according to needs of a person. For example, in European countries, such as Germany and the United Kingdom, pharmaceutical institutions use economic statistics provided by other medical institutions. Nevertheless, sometimes consumers suffer from the lack of the adequate information on the health care market, and, as a result, cannot get a professional care. On the other hand, developed economics can provide good evaluation of the medical care, including healthcare institutions and doctors' medical licenses and competence. "Some economists argue that requiring doctors to have a medical license constrains inputs, inhibits innovation and increases cost to consumers while largely only benefiting the doctors themselves" (Svorny, 2004).

Market in this sector, with a help of statistics, provides highly professional care, but failures sometimes take place because of disinformation about prices on medical goods and barriers that occur in the financial sector. For example, those barriers could be related with insurances, monopolies and transportation from one country to another. "Where patient level data are available on health care costs, it is natural to use statistical analysis to describe the differences in cost between alternative treatments" (Briggs, Gray, 1998) In addition, we need to say that if the medical product is rare, then many problems can occur on the stage of its distribution.

Speaking particularly about the impact on the nation, there is a need to understand that health care economics is a very important sector that develops health care. It serves as a starting point for medical market to develop and increase the quality of pharmaceutical products and services. Operating with the standards and a real data, manufacturers and consumers understand the potential possibilities of growth and quality standards. Economic theories within the statistics predict the demand and its sensitiveness to prices on the market. Measurements that are used to evaluate economic changes could be hardly analyzed while medical companies raise their prices. Nevertheless, economic analysis is very important for the research of data levels and statistics of health care and efficiency of the products on the market.

Taking into account such evaluation system as Difference of Means, we can say that it provides a statistical comparison that is quite useful in the medical care. For example, measuring cholesterol levels, we can see the difference in the man`s and woman`s body. Moreover, cholesterol levels depend not only on the gender, but also on the other factors. "Those raised in more affluent families may have been better fed than those in poor families; poor children may have had diets higher in certain fats or starches" (Statistical Tools for Health Economics, 2009). On this example, we can see that any element of a healthcare system could be evaluated with a help of comparison. Cigarette smoking or drug addiction is usually evaluated with a help of the method of Difference of Means. Different types of people suffer from different types of illnesses and other health problems. It depends on the gender, age, nationality, life conditions, heredity, etc. Evaluating the rate of smokers, first of all, we distinguish people who smoke and compare them with one or another group. The clearer the distinction that is used (taking into account all the factors), the more adequate the results would be.

To sum up, we need to say that health care economics, first of all, deals with evaluation of potential costs on medical products and statistics on the large scale. It helps health care institutions to provide adequate research of the pharmaceutical quality and product costs. In addition, it helps consumers to be informed about the rates of health care institutions. Financial evaluation on the stage of manufacturing, transportation and distribution is highly important for the market operation. Difference of Means, as a system, provides accurate results according to data comparison.

Special attention is paid to the quality of each academic paper that we produce!