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Concept of Health Economics - Coggle Diagram
Concept of Health Economics
Demand of health care service
Concept of Demand
It means a consumer should have desire , ability to pay for a product or service and willingness to pay for it.
LAW OF DEMAND
“The lower the price of a product, the more of that product people will buy (the more demand it has from people).”
Curve of Demand
Health care and Demand of Health Care
Health Care
is the maintenance or improvement of health via the prevention, diagnosis, treatment, recovery, or cure of disease, illness, injury, and other physical and mental impairments in people.
Demand of Health Care
Demand analysis seeks to identify which factors are most influential in determining how much care people are willing to purchase
Michel Grossman Model of Health Care
1) Health is consumption commodity, it makes the consumer feel better (,when you are healthier)
2) Health is an investment commodity, a state of health will determine the amount of time available to the consumer for productivity
Demand of Health capacity
Basic questions in Economics
Scarcity
When combined with limited resources, unlimited wants and
needs results in the fundamental problem of scarcity.
Demand & Supply
Supply of health care service
Supply of health care service
Supply of health care service refer to produced using a production function thatuses labor, capital, and intermediate inputs in hospital or health care unit
Level of health care
Primary health care
is the first level of contact between the recipient of care and the health care delivery system. Majority of the problems at this level are solved by the people with some assistance and guidance of health workers
Secondary health care
is the specialist treatment and support provided by doctors and other health professionals for patients who have been referred to them for specific expert care, most often provided in hospitals.
Tertiary health care
is specialized consultative health care, usually for inpatients and on referral from a primary or secondary health professional, in a facility that has personnel and facilities for advanced medical investigation and treatment.
Determinants on supply of HCS
Health Situation
People living with chronic diseases
Aging population
The global reach of disease
Health care Policy (Government)
Manpower
Technology
Budget (GDP on health sector / per capita)
Concept of Supply
The total amount of a product (goods or service) available for purchase at any specified price in specific time period.
Law of Supply
price of a good or service increase, the quantity of good
or services that suppliers offer will increase
Supply curve
Factors affecting supply
Size of the industry
Weather; positive or negative
Prices of production-related goods
Taxation and support of government
Input prices
Technological change
Seller expectations
Unit cost analysis
Measurement of resource utilization: Time horizon
and perspectives
Time horizon
Retrospective
databases
household survey
chart review
Prospective
cost diary
data collection form
Perspectives
Healthcare perspective
Societal perspective
Patient or consumer perspective
Provider perspective
Payer/purchaser perspective
Adjust monetary value to the present value
Differential timing of costs and consequences
Time preference: the different valuation individuals tend to place on goods/services consumed now or in the future
Inflation: the upward movement of price of goods/services over time
Time horizon
Factors: nature of disease, budget, duration of study
Long enough to capture all costs and effects of
interventions
Sensitivity analysis
Analysis of extremes: maximum and minimum values of each variables
Threshold analysis: to determine change detection by changing different levels of a parameter
Multi-way or multivariate sensitivity analysis: scenario analysis
Probabilistic sensitivity analysis: the random selection of the input parameters according to their probability distributions
One-way or univariate sensitivity analysis: plausible range, upper and lower bound of 95% confidence interval
Value to resource use
Estimating the value to resource use
Valuing informal care cost
Opportunity costs: time cost × Gross National Product
(day/hour)
Replacement costs: paid caregiver (market wage rates)
Valuing productivity costs
Human capital approach: the period of absence from work due to illness is considered and valued by the achievable gross income (GNI)
Friction cost approach: the time until another worker from the pool of unemployed has replaced the individual who is absent due to an illness
Direct measurement
Gross or top-down or macro costing
Micro or bottom-up or activity-based costing
Classification of costs
Classification of costs by concepts
Economic cost
Opportunity cost – value of resources were used for productive purpose and the forgone benefit that would have been derived by an option not chosen
Use in economic evaluation
Accounting cost
Money spends for required resource to produce
products/services/ interventions
Classification of costs by the money paid
Tangible cost
obvious costs, including opportunity costs
Intangible cost
subjectivity
Classification of costs by inputs
Capital cost
Operating or recurrent cost
depend on production volume
consists of labour cost (salaries, wages), material cost (raw material, office supplies, utility expenses, telephone expense)
Classification of costs by the project
implementation
Cost of providers
Cost of patients or customers
