Health Economics and Policy

Correlation
Economics is the science of scarcity

The most appropriate choices have to be made These choices are reflected as policies

To raise the standard of living the first priority is to limit population growth- choice One child norm-policy

Science of Scarcity
Unlimited Demands

Limited Resources

Scarcity leads to trade offs -PPF

Opportunity Cost
The value of forgone benefit which could be obtained from a resource in its next-best alternative use Deciding to do A implies deciding not to do B, ie value of benefits from A>B Cost can be incurred without expenditure Value not necessarily determined by the market

Allocation of healthcare
Free system- purchasing power of consumer Command system- needs of consumers Mixed system

Fact or Fisdom?
Driven by value system Cannot be proved true or false Originated from a research/analysis Can be proved true or false

All children should be given free treatment

Only 25% of children have access to free medical care

POSITIVE

NORMATIVE

India s healthcare market

India spends 5.1 percent of its GDP on health But India s per capita healthcare expenditure is low The health market is estimated at Rs.1, 408 billion($30 billion) It includes retail pharmaceutical, healthcare services, medical and diagnostic equipment and supplies The government s share in the healthcare delivery market is 20 percent while 80 percent is with the private sector