Title: Health Economics and Health Policy
1Health Economics and Health Policy
- Victor R. Fuchs
- Henry J. Kaiser Jr. Professor Emeritus
- Stanford University
- Department of Health
- London
- 9 May 2003
2- the age of chivalry is gone. That of
sophisters, economists, and calculators has
succeeded and the glory of Europe is
extinguished forever - Edmund Burke
3- When the sentimentalist and the moralist
fails, he will have as a last resource to call in
the aid of the economist. - Edwin Chadwick
4What Are Policy-Makers Trying To Do?
- Assure access to medical care
- Control the rate of growth of expenditures for
medical care - Protect and improve the health of the population
- Achieve efficient use of health care resources
- This above all Avoid bad headlines
5How Is Britain Doing?
6- Fewer physicians per 1,000 population than most
other western countries. Approximately 35
percent below the mean of 12 countries - Fewer hospital beds per capita than most other
countries. ( Exact comparisons are suspect
because beds serve different purposes in
different countries)
7- Lower health expenditures per GDP than other
countries. Approximately 22 percent below mean
of 11 countries (U.S. not included) - Higher (8 percent) age-adjusted death rate than
12 country mean. Slightly slower rate of decline
in age-adjusted mortality since 1961, -1.28 vs.
12 country mean of 1.42. Excluding Japan, the
mean is -1.33.
8Health Care Expenditure As Percent of GDP 149
Countries in Late 1990s Averages by Decile of
Real GDP per Capita
Percent
Percent
10.0
10.0
9.0
9.0
8.0
8.0
U.K.
7.0
7.0
6.0
6.0
5.0
5.0
4.0
4.0
3.0
3.0
0.0
0.0
2.0
2.0
500
2,000
5,000
30,000
1,000
10,000
GDP per capita, 1999 U.S. dollars (logarithmic
scale)
9Life Expectancy at Birth, 149 Countries in late
1990s, Averages by Decile of Real GDP per Capita
Years
90
90
80
80
U.K.
70
70
60
60
50
50
U.S. 1900
40
40
0
0
30
30
500
1,000
5,000
10,000
30,000
2,000
GDP per Capita, 1999 U.S. dollars (logarithmic
scale)
10Efficiency
- Who knows?
- Extremely difficult to measure output
11Two principal aspects of efficiency
- Efficiency in utilization of services
- Demand side constraints
- Supply side constraints
- Efficiency in production of services
- Scale of production
- Mix of inputs
- Getting the right scale and mix requires
12- Knowledge
- data, analyses
- Incentives
- physicians, administrators,
- planners
13What Do Economists Have To Contribute to Health
Policy?
14- Realistic approach to lifes problems neither
romantic nor monotechnic - Aptitude and training for quantitative analysis
- Some understanding of decision-making in the face
of uncertainty - Experience in comparing benefits and costs (risks)
15- Ability to think in systemic terms you cant
change only one thing - Appreciation of the difference between average
and marginal measures - Appreciation of the difference between a movement
along a function and a shift in the function - Appreciation of the difference between endogenous
and exogenous variables
16Some Specific Areas For Collaboration Among
Economists, Physicians, and Policy-Makers
17- Evaluation of benefits and costs of new
technologies - Measurement of how incentives affect the behavior
of patients, physicians, and hospital
administrators - Analysis of time trends and cross-sectional
differences in utilization of medical care
18- Analysis of time trends and cross-sectional
differences in health - Monitoring results of demonstration projects
- Keeping policy-makers from making really big
mistakes
19Current and Future Challenges to Health Policy
- How egalitarian a system does society want?
- How to find the right balance between
administrative control and the market? - How to determine an appropriate number and mix of
health care personnel? - How to finance health care expenditures?
- How to reimburse hospitals and physicians?
- How to deal with advances in medical technology?
20- The organization of medicine is not a thing
apart which can be subjected to study in
isolation. It is an aspect of culture whose
arrangements are inseparable from the general
organization of society. - Walton H. Hamilton