Health Economics

This short course looks at the role of economic principles in understanding how healthcare services are provided and used. It starts with an overview of fundamental economic concepts and their application to health services. The module expands on this base to consider how an understanding of economics can be used to improve health and provision of efficient and effective health care. It considers alternative modes of healthcare financing and the influence such models can have on the efficiency and equity of healthcare provision. The model then addresses the role of economic evaluation in determining what services are provided and what are not. This material includes both description of the analytical framework and its practical application including an examination on the limits of the use of economic evaluation by policy makers. The overall rationale for this module is to provide students with an understanding of the problem of resource scarcity in healthcare and how best to address it.

This module combines the technical aspects of cost appraisal with policy considerations regarding resource prioritisation. As resources are fundamental to enabling all aspects of healthcare systems to function, an understanding of the formal methods of resource allocation support a sound understanding of management practice in all aspects of health care. The module encourages students to critically examine the role of evidence in informing policy in a context of conflicting interests. Having an appreciation that policy makers might not always act in accordance with what evidence suggests is optimal is useful for all aspects of health service management and a critical awareness of this is useful for a rounded understanding of health systems.

By the end of the course, participants should:

• Describe the various principal methods of healthcare financing and to state the primary components of a standard cost-effectiveness analysis;
• Explain the rationale for conducting a cost-effectiveness analysis and the reasons why the application of cost-effectiveness analysis is contentious;
• Combine elements of evidence to formulate the basics of a health economics appraisal;
• Explain how aspects of healthcare financing influence patterns of healthcare provision;
• Present a technical or policy analysis to inform whether an intervention is likely to be cost-effective or promote financial protection.

Please note that this short course is the equivalent of 5 ECTS and runs as part of the MSc in Health Policy and Management.