Health+Economics

“A healthy population is an engine for economic growth.” //By: Supanat Angsuwarangsi (Matthew)//



**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.


 * People take four roles in the health care: ** 1.Contributors 2.Citizens (stewardship) 3.Providers 4.Consumers

// The demand for health care is a //** derived demand **// from the demand for health. Health care is demanded as a means for consumers to achieve a larger stock of "health capital." The demand for health is unlike most other goods because individuals allocate resources in order to both consume and produce health. //

Positive –reduction of production losses due to fewer worker illnesses –increased productivity of adults as a result of better nutrition –lower absenteeism rates and improved learning among school children Negative –Excessive health expense leads to financial problems



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Examples:


 * Robert Barro – Using post–World War II data, he estimates that a 10% increase of life expectancy could raise economic growth by 0.4% yearly.
 * Alan Williams' "**plumbing diagram**" - what is health and what is its value?
 * Michael Grossman's 1972 model of health production - individual as both a producer and a consumer of health. Health is treated as a stock which degrades over time in the absence of "investments" in health, so that health is viewed as a sort of capital.
 * Peter Orszag has suggested that behavioral economics is an important factor for improving the health care system.



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