Health economics

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Health economics is a branch of economics concerned with issues related to scarcity in the allocation of health and health care. In broad terms, health economists study the functioning of the health care system and the private and social causes of health-affecting behaviors such as smoking.

The study of how scarce resources are allocated among alternative uses for the care of sickness and the promotion, maintenance and improvement of health, including 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.

One role of health economics is to provide a set of analytical techniques to assist decision making, usually in the health care sector, to promote efficiency and equity. Another role, however, is simply to provide a way of thinking about health and health care resource use; introducing a thought process that recognizes scarcity, the need to make choices and, thus, that more is not always better if other things can be done with the same resources. Ultimately, health economics is about maximizing social benefits obtained from constrained health producing resources.

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