Loading in 2 Seconds...
Loading in 2 Seconds...
Health Economics & Policy 3 rd Edition James W. Henderson. Chapter 2 Using Economics to Study Health Issues. Is Economics Relevant?. Economics is the study of human behavior Economics is a way of thinking Economics provides a systematic way of looking at a problem. Economic Methodology.
Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.
Health Economics & Policy3rd EditionJames W. Henderson Chapter 2 Using Economics to Study Health Issues
Is Economics Relevant? • Economics is the study of human behavior • Economics is a way of thinking • Economics provides a systematic way of looking at a problem
Economic Methodology • Critical assumptions • Rational choice and self interest • Science of “rationality” • Most “scientific” of all the social sciences • Abides strictly to scientific method • Theory and empiricism • Model building • Problem solving
Economic Optimization • Neoclassical framework • Rational decision makers • Optimizing behavior • Predictable results • Marginal decision making • MB = MC, not TB = TC • Victor Fuchs – flat of the curve
Demand and Supply • Rational self interest and competition • Lead to equilibrium outcomes • Constraints impede market outcomes • Government regulations • Price floors and ceilings • Medical care markets • Halfway competition • Ineffective regulation stripping managed care of its ability to control prices
Elasticity of Demand • Sensitivity to change • Price elasticity • Elasticity and expenditures • Introduction of cost-saving technologies may not lower spending – technological diffusion may actually increase spending • Income elasticity • Classification of goods • HCE as percent of GDP
Competitive Model • Assumptions • Graphical presentation • Applicability to medical care
Imperfect Competition • Supply-side imperfections • Demand-side imperfections
Key Economic Concepts • Scarcity and choice • Opportunity cost • Marginal analysis • Self-interest • Markets and pricing
Key Economic Concepts • Supply and demand • Competition • Efficiency • Market failure • Comparative advantage