Health Economics

In my previous posts, I have emphasized the need to strengthen rehabilitation in health systems for developing countries as a means to attaining Universal Health Coverage. This is based on the WHO Rehabilitation 2030 agenda. Some of the challenges to strengthening rehabilitation include inadequate funding, inadequate qualified health personnel, lack of teamwork and lack of the use of ‘appropriate technology’.

Health care competes with other sectors of the economy in developing countries (and developed countries) for a share of government spending.There is a constant trade-off within policymaking in deciding how resources are allocated to different sectors of the economy. The scarcity of resources means that there are not enough resources to satisfy all human needs, and this is very important for developing countries. The need to build a stable economy, build infrastructure such as roads, improve education and literacy, provide clean drinking water and feed the nation, not to discount fighting wars, famine and hunger all compete with the need to improve health care, using the very scarce resource within the country.

Over the next series, I will be sharing with you how some concepts in health economics can be applied to ensure that health care gets an adequate share of the resources. Most of the content is deriving from the World Bank Course on ‘Basics of Health Economics‘.

Health economics is very key to achieving an effective, efficient and equitable health system. ‘It is the study of how scarce productive resources are allocated among alternative uses for the care of sickness and the promotion, maintenance, and improvement of health. It further includes the study of how health care and health‐related services, their costs and benefits, and health itself, are distributed among individuals and groups in society’ (World Bank Group).

The concept of opportunity cost is very important in policy and decision making. Economics deals with evaluating and choosing among alternative courses of action and examining the costs and consequences of the alternatives. This concept could largely affect how health care is funded within the economic constraints of developing countries.

An example is the free Secondary Education Program introduced by the government of Ghana. Although a very laudable idea, what other health policy alternatives could have been established and why are there no such policies in health care delivery?

Over the next series, I will be discussing some basic health economic concepts and identify how health systems and rehabilitation can be strengthened by applying concepts such as equity and efficiency, the market concept in health care, health financing, risk pooling and resource allocation.

My aim is to provide you with some useful application of economic concepts to strengthen health care in some developing countries and attempt to narrow it down to rehabilitation, with the ultimate aim of achieving Universal Health Coverage.

I hope you enjoy reading my next series.


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