The value of Health Economics is indispensable in a society. Its scarcity is a primary concern especially among countries without ample resources to provide healthcare (Culyer, 1989). Another major issue that makes Health Economics important is the mode of distribution. There have been situations showing lack of logistic strategies that effectively deliver health to major recipients. Finally, the sustenance of supply and allocation of health care makes Health Economics valuable. In ensuring both the necessities are satisfied, costs have to be incurred consistently. It is the spending capacity of countries that decide supply and distribution of healthcare.
According to Fuchs (1996, pp.1-24), the level of expenditures incurred by governments in healthcare delivery has increased precipitously. The sudden rise in cost can be attributed to intellectual advances, greater availability of information, and the ever-increasing demand for such service. The dedication of government spending to health care services results to various economic sacrifices. Aside from health, there are pressing needs that the society needs to acquire. Concentration in healthcare looms problems such as forging quality education and the generation of sustainable income through investments and government spending.
Direct costs of delivering healthcare involve...
Moreover, the government needs to incur indirect costs such as building of infrastructures to ensure that transportation and communication improves healthcare delivery. Furthermore, the marginal cost of health care needs to be evaluated. Unlike the total cost, which is simply an aggregate, marginal cost accounts the movement in the cost. It is more important to monitor the effect of population increase in total healthcare than measuring the total cost alone.
Four Techniques of Health Economics
Health Economics can be approached scientifically using tools and mechanisms. Analytic evaluation of cost management in Health Economics serves as the primary point of these discussions. First, the cost-minimisation analysis (CMA) economic compares a particular health care product or service. The goal of the method is to find the least costly option among a pool of choices (Donaldson and Shackley, 1997). It has to be noted that the alternative chosen needs to demonstrate an effect that is substantially similar to the other choices provided.
There are several conditions in this analysis that have to be verified before arriving as conclusive findings. The initial comparison will use price as the gauge. Indeed, it is easy to identify which among the alternatives is the most economic. Another important consideration in this analysis is the negative effects provided by a medicines being compared. It is important to emphasize on the level of toxicity and the option being considered needs to be as low-risk as the other medicines. Lastly, the effectiveness of the medicine being prioritised has to within the level of the other medicine it is being compared with.
Cost-benefit analysis (CBA) necessitates programme results to be valued monetarily (Nas, 1996). This allows