Health Economics

Cost-benefit, cost-effectiveness and cost-utility analyses are forms of economic evaluation which are useful in health economics for comparing costs and allocating resources. Health economics is widely relevant to governments and the health sector in implementation of new policy, as it concerns the allocation of resources in the context of a limited budget, or 'scarcity'. Economic evaluation is a potential tool for setting priorities in health, though it is only one of many potential criteria, including overall budget and public attitudes and wants. Economic evaluation is already in use in some settings, such as in pharmaceutical company proposals for government subsidisation, but there is room for expansion across the field of healthcare. Different types of economic evaluation have different uses, such as assessing the cost effectiveness of the implementation of programmes when none are in place (cost-benefit analysis) or the comparison of potential new technologies to existing technologies (cost-effectiveness and cost-utility analysis). Though useful in this sense, there are significant barriers against the successful implementation and use of these techniques due to problems with their accessibility and acceptability in policy making. Solutions to these problems have been identified, such as increasing the education of the public and of healthcare professionals and organisations in understanding and utilising health economic evaluation, and establishing consistent methodology and presentation guidelines. With better integration of economic evaluation, it can potentially serve as a very useful tool for the analysis of costs and the better distribution of resources to improve both efficiency and equity.

Health economics is c...

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