Why Economics Is Important In Health Care Economics

Entry 1 - Why is Health Care Economics So Important? (09/13/16) This was my first class in health care economics and served as the foundation of what I learned throughout the semester. The class first began with a review of what health, health care and health insurance entail and their interdependency. Health is defined as one’s well-being. Health care becomes a means of maintain well-being and health insurance offers a solution to pay for the health care that one receives. The next part of the class focused on the determinants of health. This part of the class came to me as a surprise because I learned that health care only constitutes about 10% of one’s health. The remaining 90% are a result of environmental factors and personal habits

This is where I began to realize that our health care budget is not being allocated in the most efficient manner. The next discussion in the class revolved around the terms that are often used in healthcare economics. The first topic was equity vs equality. In economics, equity deals with the fairness of situations or outcomes. The second tropic, productivity, explained how much a country produced. This becomes an important concept when comparing different sectors, such as health care, between countries. The Gross Domestic Product (GDP) becomes a mean of normalizing difference between countries and health care expenditure now become a percentage of the nation’s productivity. Next, we reviewed the concept of opportunity costs and tradeoffs. This idea explained why budgeting, especially in health care is such a daunting task. Opportunity costs and tradeoffs explain that allocating resources in one sector take away from finds that could be used in another sector. The two determinants of health can be used as examples. The excessive amounts of funding given toward access to health care take away from resources that could be used to promote better environmental factors and healthie living