Health economics--concepts and conceptual problems.

ABSTRACT

PIP: A new discipline, health economics, which reflects the relationship between the health objective procuring adequate health care and the financial resources available, is becoming increasingly important. The WHO definition of health, that health is a "state of complete physical, mental and social well being and not merely the absence of disease or infirmity," is criticized for not lending itself to direct measurement of the health of the individual or community. This concept should include consideration of the process of being well as well as the absence of disease. It must also recognize that services to promote health, to prevent, diagnose and treat disease and rehabilitate incapacitated people must be included in the concept. For economic analysis purposes, health services can be classified into medical care, public health services and environmental public health services. It is suggested that the cost of education and training of medical personnel and medical research should be included in computing the cost of health services. In defining economic concepts many factors including capital and current costs, and depreciation must be considered. In addition all health economists have differentiated the direct cost of sickness including cost of prevention, detection, treatment, rehabilitation, research, training, and capital investments from indirect costs which include loss of output to the economy, disability and premature death. Using these concepts, some understanding of cost trends, cost accounting, cost benefit analysis and cost efficiency analysis should be made available in the medical curriculum and for health administrators so that health management can be more standardized and effective.