Health Economics & Policy – Summary
Lecture 1: Introduction
Health in the media:
Healthcare is very complicated. Therefore good to study in economic context.
COVID pandemic: field of health economics in
pressure cooker: Things come together in
corona crisis: economics, politics, social policies,
health systems. How to create more sustainable
health systems?
After summer confirmed corona cases increased
again. Netherlands peaks. Japan has very little
confirmed cases. Discussion in media on
different health system responses. What should
be done?
Cross-country comparisons are tricky with big
countries. US: not one response, but different
policies in states.
Difference within countries also interesting:
differences by safety regions:
Northern part has lowest rate of confirmed
cases. Should we have national policy or
different policies?
Timeline on development of coronavirus:
What is health?
In many policy areas we can clearly define what is going on (defense policy: to keep people safe).
What is the objective of health policy starts with question about what health is.
,Old definition:
Health = “Health is a state of complete physical, mental and social well-being and not merely the
absence of disease or infirmity.” (World Health Organization 1948)
Development of definition:
- Life-expectancy and cause of death statistics give a
limited picture of disease burden
o the current epidemiological phase is
characterized by chronic diseases. They reduce
quality of life without necessarily shortening the
life-span.
o to measure burden of disease whilst living we
can use disability adjusted life years.
- Disability adjusted life years:
o Combination of years of life lost due to a
condition with the disability weight of living with
a condition. Ranges from 0 (perfect health) to 1
(death).
- Viewing health over the life-cycle reveals that we are
never really completely free of disease. People are
diseased in different ways during life cycle.
o according to the WHO definition this implies
that we are always sick.
- Many conditions may reduce our quality of life, yet we
can still handle them given our own qualities and the
resources provided by the healthcare system.
o So maybe we should also have a different
definition of health.
New definition:
Health = “The ability to adapt and self-manage in the face of
social, physical, and emotional challenges.” Huber et al. (2011, BMJ)
Problems:
- Hard to measure this + very individualized
- What is the role of healthcare sector in the Huber world?
- If individuals can adapt, what is the rational for health policy?
New definition:
Health = “Confidence and ability to be effective in achieving optimal health given biologic and genetic
disposition; intermediate and the broader social, political, and economic environment; and access to
the public health and health care system.” Prah Ruger (2010, AJPH)
(See figure next page)
Problems:
- The objective of health policy is to enable individuals to gain confidence and ability in
achieving optimal health.
- What if individuals have the ability to be healthy but choose to be unhealthy?
,History of health policy
At this point in time most countries in the world have some form of healthcare system:
- Can be various combinations of public and private parties
- Every country tends to have a quite unique structure making health policy an intricate policy
issue. Not one standard health policy/healthcare system.
- Regardless of financing, healthcare spending makes up a large share of private and public
spending.
Justification for Health Policy:
- Market failure argument:
Without some form of (government) intervention healthcare markets are prone to break
down.
- Public Goods approach to (Public) Health:
Good public health is a pre-requisite for a productive economy, yet nobody individually
“owns” public health.
o (Public goods are non-excludable and non-rival.)
o Who is responsible? Cannot exist with just market forces.
o Private gains can impede with the benefits of public health.
- Human Rights argument (UDHR):
Everyone has the right to a standard of living adequate for the health and wellbeing of
himself and of his family, including food, clothing, housing and medical care and necessary
social services.
o Health policy is aimed at assuring human right of health.
, Health care spending (as % of GDP) across the
OECD countries
Big sector!
Health care market is not only patients and
providers (like normal markets), but also health
insurers. Making indirect market. Also
government in interacting.
History:
- Pre-Historic Times:
o Lot of diseases did not yet exist.
o Strong focus on injury treatment by natural healers.
- Ancient Greece:
o Hippocrates (460 – 570 BC) to Galen (129 – 216 AD):
Heart surgery & Anamnesis.
Long lasting influence in physiology.
o Lot of forms are still existent in modern healthcare.
o Health policy was largely confined to temples or private parties. Only some had
access.
- Middle ages:
o Greek texts were lost. Step backwards. Lot of knowledge on human body had to be
invented again. Study dead bodies and dead animals.
o Healthcare delivery still mainly through religious institutions and private physicians.
- Renaissance:
o Reintroduction of Greek texts, now supplemented with Arab innovations
o Limited access to healthcare:
Barber-surgeon combination.
- Early modern times:
o Splurge in new medicine
First vaccines (Smallpox 1798).
o Start of development of health policy:
Germany starts introducing health coverage for workers in 1880s:
First a small group (low-income workers), then gradually universal
Aimed at quelling the base for social unrest.
Realization: health of nation also depends on wealth of nation.
- Modern times:
Lecture 1: Introduction
Health in the media:
Healthcare is very complicated. Therefore good to study in economic context.
COVID pandemic: field of health economics in
pressure cooker: Things come together in
corona crisis: economics, politics, social policies,
health systems. How to create more sustainable
health systems?
After summer confirmed corona cases increased
again. Netherlands peaks. Japan has very little
confirmed cases. Discussion in media on
different health system responses. What should
be done?
Cross-country comparisons are tricky with big
countries. US: not one response, but different
policies in states.
Difference within countries also interesting:
differences by safety regions:
Northern part has lowest rate of confirmed
cases. Should we have national policy or
different policies?
Timeline on development of coronavirus:
What is health?
In many policy areas we can clearly define what is going on (defense policy: to keep people safe).
What is the objective of health policy starts with question about what health is.
,Old definition:
Health = “Health is a state of complete physical, mental and social well-being and not merely the
absence of disease or infirmity.” (World Health Organization 1948)
Development of definition:
- Life-expectancy and cause of death statistics give a
limited picture of disease burden
o the current epidemiological phase is
characterized by chronic diseases. They reduce
quality of life without necessarily shortening the
life-span.
o to measure burden of disease whilst living we
can use disability adjusted life years.
- Disability adjusted life years:
o Combination of years of life lost due to a
condition with the disability weight of living with
a condition. Ranges from 0 (perfect health) to 1
(death).
- Viewing health over the life-cycle reveals that we are
never really completely free of disease. People are
diseased in different ways during life cycle.
o according to the WHO definition this implies
that we are always sick.
- Many conditions may reduce our quality of life, yet we
can still handle them given our own qualities and the
resources provided by the healthcare system.
o So maybe we should also have a different
definition of health.
New definition:
Health = “The ability to adapt and self-manage in the face of
social, physical, and emotional challenges.” Huber et al. (2011, BMJ)
Problems:
- Hard to measure this + very individualized
- What is the role of healthcare sector in the Huber world?
- If individuals can adapt, what is the rational for health policy?
New definition:
Health = “Confidence and ability to be effective in achieving optimal health given biologic and genetic
disposition; intermediate and the broader social, political, and economic environment; and access to
the public health and health care system.” Prah Ruger (2010, AJPH)
(See figure next page)
Problems:
- The objective of health policy is to enable individuals to gain confidence and ability in
achieving optimal health.
- What if individuals have the ability to be healthy but choose to be unhealthy?
,History of health policy
At this point in time most countries in the world have some form of healthcare system:
- Can be various combinations of public and private parties
- Every country tends to have a quite unique structure making health policy an intricate policy
issue. Not one standard health policy/healthcare system.
- Regardless of financing, healthcare spending makes up a large share of private and public
spending.
Justification for Health Policy:
- Market failure argument:
Without some form of (government) intervention healthcare markets are prone to break
down.
- Public Goods approach to (Public) Health:
Good public health is a pre-requisite for a productive economy, yet nobody individually
“owns” public health.
o (Public goods are non-excludable and non-rival.)
o Who is responsible? Cannot exist with just market forces.
o Private gains can impede with the benefits of public health.
- Human Rights argument (UDHR):
Everyone has the right to a standard of living adequate for the health and wellbeing of
himself and of his family, including food, clothing, housing and medical care and necessary
social services.
o Health policy is aimed at assuring human right of health.
, Health care spending (as % of GDP) across the
OECD countries
Big sector!
Health care market is not only patients and
providers (like normal markets), but also health
insurers. Making indirect market. Also
government in interacting.
History:
- Pre-Historic Times:
o Lot of diseases did not yet exist.
o Strong focus on injury treatment by natural healers.
- Ancient Greece:
o Hippocrates (460 – 570 BC) to Galen (129 – 216 AD):
Heart surgery & Anamnesis.
Long lasting influence in physiology.
o Lot of forms are still existent in modern healthcare.
o Health policy was largely confined to temples or private parties. Only some had
access.
- Middle ages:
o Greek texts were lost. Step backwards. Lot of knowledge on human body had to be
invented again. Study dead bodies and dead animals.
o Healthcare delivery still mainly through religious institutions and private physicians.
- Renaissance:
o Reintroduction of Greek texts, now supplemented with Arab innovations
o Limited access to healthcare:
Barber-surgeon combination.
- Early modern times:
o Splurge in new medicine
First vaccines (Smallpox 1798).
o Start of development of health policy:
Germany starts introducing health coverage for workers in 1880s:
First a small group (low-income workers), then gradually universal
Aimed at quelling the base for social unrest.
Realization: health of nation also depends on wealth of nation.
- Modern times:
