Why do we need Health Economics in Health Care?

Economic evaluation is a component of high-quality medical research
"However, uncertainty has surrounded the conduct of such economic evaluations in developing and underdeveloped countries due to reluctance over the implementation of their criteria." [Representational Image]
"However, uncertainty has surrounded the conduct of such economic evaluations in developing and underdeveloped countries due to reluctance over the implementation of their criteria." [Representational Image] Rawpixels [Creative Commons]

BY MUDASIR RAJAB

Health economic studies provide information to decision makers for efficient use of available resources for maximising health benefits. Economic assessment is a component of health economics used to compare the costs and outcomes of various therapies.

Developed nations have successfully used health technology assessment as an economic evaluation method. Cost reduction, cost-effectiveness analysis, cost-utility analysis, and cost-benefit analysis comprise the conventional classification of economic evaluation.

However, uncertainty has surrounded the conduct of such economic evaluations in developing and underdeveloped countries due to reluctance over the implementation of their criteria.

All people engaged in the supply and purchase of health care lack a grasp of the procedures currently in use, posing the greatest obstacle to the implementation of this method. In several nations, various techniques of economic evaluation have been implemented for decision-making, most frequently to address the issue of public subsidies for the purchase of medications.

There is insufficient information about the effect of health insurance on the health and economic well-being of beneficiaries in developing nations. India being one of the developing nations is now pursuing a number of methods to enhance its population’s health care, including investing in government-provided services and purchasing services from public and private providers through different programmes.

Nevertheless, in India, there is a much need for future growth and development in this field since fast health care inflation, rising rates of chronic illnesses, an ageing population, and increased technological diffusion will necessitate higher economic efficiency within health care systems.

As a method for assessing and comparing the health benefits and costs of different therapies, the economic evaluation inherent in Health Technology Assessment (HTA) has grown in significance. In the industrialised world, HTA and outcomes research are frequently utilised to select interventions that reflect the most efficient use of resources among several competing possibilities.

Economic evaluations in different types of decisions come into play when the following decisions must be made: decisions regarding drug treatments, other health care interventions/programs, investments in new technology or research, and similarities and differences between various types of decision making. Economic evaluation is most beneficial when preceded by three other significant forms of evaluation: Efficacy, Effectiveness, and Availability.

Economic evaluation is a component of high-quality medical research and is necessary for technology evaluation. Combining high-quality epidemiological and cost data yields the most accurate cost-effectiveness estimations. The ultimate purpose of health economic evaluation is to support policy decisions based on facts. It is always crucial that the research conducted is relevant to decision makers. This is feasible via the collaboration of health institutions, researchers, and decision makers. But India has devoted little attention to the micro components of health economics. To execute rules on the efficient evaluation of health care, the government’s approach must undergo a significant shift. In order to reduce out-of-pocket spending on health care, expenditures on health care must be increased. Private voluntary health insurance coverage should be promoted and made available to the majority of the employed population, and the concept should be repeated for community-based health insurance for persons engaged in the unorganised sector. Likewise, the health economics has traditionally been the realm of micro economists in industrialised nations, who apply economic theory to resource allocation in the health sector. In developing nations, such as India, the establishment of efficient HTA faces several obstacles. The reasons include a shortage of qualified professionals, an ineffective reporting system, and a limited budget. In India, there is no public health service; thus, the majority of the population pays privately for medical treatment.

Health economists working in isolation from the medical profession and relying on aggregate statistics of questionable accuracy either juggle with the available figures (primarily from the public sector) or enter the new hugely profitable field of hospital management in the private sector without questioning the alternative.

The question arises why do we disregard the considerably more humanitarian and cost-effective components of our indigenous medical systems, which are acceptable to our society? They have more to offer than just medical treatment in the sphere of health.

The health culture of our people also embraces the issues of graceful ageing and dying at home surrounded by loving family and friends, rather than in the harsh isolation of an excessively costly critical care facility predicated on a foreign ideology of ‘conquering’ sickness, incapacity, and death.

Thus it is time for economists and members of the medical profession who are interested in delivering good basic health and medical care to all in an affordable and compassionate manner to come together on a common platform so that the fields of health and economics can work together to analyse the current situation and develop a more suitable and affordable model of health and medical care to achieve health for all. But when is the only question!

Mudasir Rajab, PhD Research Scholar at Department of Economics Aligarh Muslim University

DISCLAIMER: The views and opinions expressed in this article are the personal opinions of the author.

The facts, analysis, assumptions and perspective appearing in the article do not reflect the views of GK.

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