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Health economics from basics to applied


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Health economics from basics to applied

  1. 1. Health Economics- From Basics to Applied Part-I Nayyar Raza Kazmi
  2. 3. <ul><li>Allocative efficiency </li></ul><ul><ul><li>Directing resources to their most productive use. Means assessing which intervention produces greatest health gains for a given investment of resources and focusing on that activity </li></ul></ul><ul><li>Technical efficiency </li></ul><ul><ul><li>Carrying out agreed activities using the least possible resources </li></ul></ul>
  3. 4. <ul><li>Think of any Health activity that has a poor allocative efficiency. </li></ul>
  4. 5. <ul><li>GDP </li></ul><ul><ul><li>Value of all the goods and services produced in a country plus its exports and minus imports (divided per total population of country to express it per head) </li></ul></ul><ul><li>GNP </li></ul><ul><ul><li>Similar but includes assets owned abroad minus payments (debts). </li></ul></ul>
  5. 8. Supply-Demand Curve
  6. 9. Costing Concepts in Health Economics <ul><li>Total Cost </li></ul><ul><ul><li>is what it costs to operate at some particular rate of output. If a firm makes just one kind of product, and is not planning to expand or contract, then the total cost is the same as the firm's budget. </li></ul></ul><ul><li>Fixed Cost </li></ul><ul><ul><li>Total cost can be divided into two portions: Fixed Cost and Variable Cost. Fixed Cost is the part of the budget that stays the same regardless of whether you produce a lot, a little bit, or even if you produce zero. Overhead, rent on buildings, and interest on loans are in fixed cost. </li></ul></ul><ul><li>Variable Cost </li></ul><ul><ul><li>is the rest of total cost, the part that varies as you produce more or less. Producing more adds to Variable Cost. Producing less reduces it. </li></ul></ul>
  7. 11. What is the Variable Cost??
  8. 12. Marginal Costs <ul><li>Marginal cost is the difference in total cost between one rate of output and another. Usually, unless stated otherwise, the marginal cost is the change in cost that results from changing the output by one unit. </li></ul>
  9. 13. What is the Marginal Costs
  10. 14. What is the Marginal Costs
  11. 15. Relation between TC, FC, VC and MC
  12. 16. Discounting <ul><li>If a Health Project is estimated to produce $300 million in health benefits in 10 years and an alternative project would produce $250 in 5 years, which one we should invest in assuming a discount rate of 5%. </li></ul>
  13. 19. Economic Evaluation of Health Programs <ul><li>Cost Minimization Analysis </li></ul><ul><li>Cost Benefit Analysis </li></ul><ul><li>Cost Effectiveness Analysis </li></ul><ul><li>Cost Utility Analysis. </li></ul>
  14. 20. Cost Minimization Analysis <ul><li>An analysis to determine which option costs the lowest for a given range of health outputs/ outcomes. </li></ul>
  15. 21. Cost Benefit Analysis
  16. 23. <ul><li>1.(a) Marginal cost for 1,000 adults = 1,000 × $25 = $25,000. </li></ul><ul><li>Marginal benefit for 1,000 adults = 1,000 × (0,24 – 0.14) × $200 = $20,000. </li></ul><ul><li>No . Do not vaccinate as MC exceeds MB. </li></ul>