The significance of Economics in Healthcare
From an economics point of view, the ultimate aim of consumption is to achieve maximum utility. In healthcare, the value patients accrue from consumption of healthcare services is what can be an equivalent of utility obtained from the consumption of a commodity. In all economies across the world, there is an aspect of limited or scarce resources; thus, this necessitates that all investments in and around healthcare have to be thoroughly scrutinized. One measure of this scrutiny is the aspect of the economic evaluation of healthcare; simply put as ‘value for money'.
Economic Evaluation of Healthcare
In the past, scholars and other healthcare practitioners have used safety, efficacy, and effectiveness of healthcare interventions as the sole measures of ascertaining the utility of healthcare. The first benchmark of safety utilizes post-marketing surveillance studies to determine if healthcare interventions or drugs are harmful for consumption. The second benchmark of efficacy seeks to determine if the patients achieve the desired effect of a clinical intervention given that the right dosage was administered under ideal conditions. The third benchmark of effectiveness assesses whether a clinical intervention/drug works correctly in the real world when consumed under the ordinary perceptions of the patient. Through these traditional utility analyses approaches, recent economists have presented better schemes for evaluating the economic value of healthcare (Brazier et al., 2017)
Economic analysis embodies the aspect of choice between competing or alternative use of resources. As such, scholars point out that the aspect of the cost of healthcare interventions, as well as their outcomes, play a crucial role in economic assessment. First, the parameter of cost-utility analysis is considered; whereby, the patient’s health-related quality of life and the mortality ra...
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