Health Care Economics

UNIT-2
Healthcare Notions: health economics and the biomedical approach

Health Economics:

Health economics is a branch of economics that deals with the all ocation of resources in
the healthcare sector to optimize the production and distribution of healthcare services. Here
are some key concepts and notions in health economics:

Scarcity and Resource Allocation: Health economics recognizes that resources in

healthcare, such as medical staff, facilities, and funding, are limited. It aims to find efficient
ways to allocate these resources to maximize health outcomes.

Demand and Supply: The demand for healthcare services is driven by the population's
health needs, while the supply is determined by the availability of healthcare providers and
facilities. Health economists study the interaction between supply and demand to understand
pricing and access issues.

Health Insurance: Health insurance plays a crucial role in health economics. It spreads the
financial risk of healthcare expenses across a population. Health economists study insurance
systems, including private and public options, to assess their effectiveness in providing access
to healthcare while controlling costs.

Cost-Benefit Analysis (CBA): CBA is a method used to evaluate healthcare interventions

and policies. It compares the costs of an intervention to its benefits in terms of improved
health outcomes. This analysis helps policymakers make decisions about resource allocation.

Healthcare Market Structures: Health economists study various market structures in

healthcare, such as monopolies, oligopolies, and competitive markets. These structures can
affect prices, access, and quality of healthcare services.
The Biomedical Approach:

The biomedical approach is a model of healthcare that primarily focuses on the biological
aspects of disease and illness. Here are some key notions associated with this approach:

Reductionism: The biomedical approach often reduces complex health issues to their
biological or physiological components. It seeks to understand diseases by studying their
molecular and cellular mechanisms.

Biological Basis: This approach emphasizes the importance of understanding the biological
underpinnings of diseases. Diagnosis and treatment are typically based on biological markers,
such as lab tests and imaging.

Medical Interventions: Biomedical practitioners primarily rely on medical interventions,

such as pharmaceutical drugs and surgical procedures, to treat diseases. These treatments
target specific biological mechanisms to alleviate symptoms or cure illnesses.

Disease-Centered: In the biomedical model, the focus is on diagnosing and treating specific
diseases. It tends to view health as the absence of disease rather than considering holistic
well-being.

Research-Driven: The biomedical approach heavily relies on scientific research and clinical
trials to develop new treatments and therapies. Evidence-based medicine is a central tenet of
this approach.

Critiques: Critics of the biomedical approach argue that it may oversimplify complex health
issues, neglect psychosocial factors, and prioritize treatment over prevention.
It's important to note that healthcare is a multidimensional field, and various approaches and
perspectives, including social determinants of health, behavioral health, and public health,
complement the biomedical approach. Effective healthcare often involves a combination of
these approaches to address the diverse needs of individuals and populations.

Healthcare and Medical Care

Introduction:

In this comprehensive course, we will delve into the intricacies of the healthcare industry,
exploring its various components, challenges, and the critical role it plays in society. Whether
you are a healthcare professional, a student pursuing a career in healthcare, or simply
someone interested in understanding the complexities of the medical field, this lecture series
is designed to provide you with valuable insights.

Module 1: Understanding Healthcare Systems

In the first module, we will lay the foundation by examining different healthcare systems
around the world. We'll explore the key differences between public and private healthcare
systems, as well as their respective advantages and disadvantages. Understanding these
systems is crucial for comprehending the broader context of healthcare delivery.

Module 2: Healthcare Delivery Models

Module 2 will delve into the various models of healthcare delivery. From fee-for-service to
value-based care, we will explore the evolution of healthcare models and their impact on
patient care, costs, and outcomes. This module will also address the concept of patient-
centered care and its growing importance in modern healthcare.
Module 3: Healthcare Professionals and Their Roles

This module will introduce you to the diverse range of healthcare professionals who
contribute to patient care. We will discuss the roles of doctors, nurses, pharmacists,
therapists, and many others, highlighting their unique responsibilities, educational paths, and
the importance of interdisciplinary collaboration in healthcare.

Module 4: Healthcare Ethics and Legal Considerations

Ethics and legality are fundamental in healthcare. In Module 4, we will explore topics such as
patient rights, informed consent, medical ethics, and the legal framework that governs the
practice of medicine. A strong understanding of these issues is crucial for both healthcare
providers and patients.

Module 5: Healthcare Technologies and Innovations

The healthcare landscape is continually evolving due to advances in technology. Module 5

will focus on the latest healthcare technologies and innovations, including telemedicine,
electronic health records, artificial intelligence, and precision medicine. We will examine
how these innovations are transforming patient care and improving outcomes.

Module 6: Healthcare Challenges and Global Health

In this module, we will address the challenges facing healthcare systems worldwide. Topics
will include healthcare disparities, access to care, healthcare financing, and the impact of
epidemics and pandemics on global health. We will also explore strategies to address these
challenges and promote health equity.
Module 7: Emerging Trends in Healthcare

The final module will provide insights into emerging trends and future directions in
healthcare. We will discuss topics such as personalized medicine, genomics, healthcare
policy, and the role of data analytics in improving healthcare delivery.

Cost of Production in Health Care Economics

In health care economics, the cost of production refers to the expenses incurred in providing
medical services or producing pharmaceuticals and medical equipment. These costs can be
broadly categorized into two main types:

Fixed Costs: These are costs that do not vary with the level of production. In the context of
healthcare, fixed costs might include expenses such as building and equipment maintenance,
administrative salaries, and facility rent. These costs remain relatively stable regardless of the
number of patients treated or the volume of medical products manufactured.

Variable Costs: These are costs that change in proportion to the level of production or the
number of patients served. In healthcare, variable costs might include the cost of medications,
medical supplies, and the salaries of healthcare professionals (like doctors and nurses) who
are paid on a per-patient basis. As patient volume increases or decreases, variable costs will
correspondingly rise or fall.

Understanding and analysing the cost of production in healthcare is essential for several
reasons:

Resource Allocation: It helps healthcare organizations allocate their resources efficiently. By

knowing their cost structure, they can make informed decisions about which services to offer,
how to staff their facilities, and where to invest in new technologies or treatments.
Pricing: It informs the pricing of medical services and products. Healthcare providers and
pharmaceutical companies must set prices that cover their costs while remaining competitive
and accessible to patients.

Policy Decisions: Policymakers and government agencies use cost of production data to
develop healthcare policies, regulate prices, and assess the economic impact of different
healthcare interventions.

Cost-Effectiveness Analysis: Researchers and healthcare economists use cost of production

data to conduct cost-effectiveness analyses of different treatments and interventions. This
helps determine which treatments offer the best value in terms of health outcomes per dollar
spent.

It's important to note that the cost of production in healthcare can vary widely depending on
factors such as the type of service or product, geographic location, and the specific healthcare
system in place. Additionally, healthcare economics is a complex and evolving field, and the
cost structures and economic considerations can change over time.

Medical care: the biomedical approach

The biomedical approach to healthcare is a traditional and reductionist model that focuses
primarily on the physical aspects of illness and disease. It places a strong emphasis on
diagnosing and treating specific biological abnormalities or pathogens that are believed to be
the cause of an individual's health problems. Here are some key notes and diagrams to help
you understand the biomedical approach in healthcare:
Key Concepts:

Biological Basis: The biomedical approach views health and illness through a biological
lens, attributing diseases and health conditions to physiological, genetic, and biochemical
factors.

Reductionism: It reduces complex health issues to their most basic biological components
for analysis and treatment.

Biomedical Model Diagram: Biomedical Model Diagram

Patient at the Center: In this model, the patient is at the center, and all health-related factors
are primarily considered in relation to their biology.

Biological Factors: These factors include genetics, pathogens, cellular processes, and
biochemical imbalances.

Disease Pathogenesis: The biomedical model focuses on understanding how diseases

develop at the cellular and molecular levels.

Diagnosis and Treatment: Emphasis is placed on accurately diagnosing the specific

biological cause of an illness and then treating it with medications, surgeries, or other
interventions.

Reductionism: The model often breaks down complex diseases into simpler components to
identify the root cause.
Strengths:

Precision: It can provide precise diagnoses and treatments for many medical conditions.

Scientific Basis: The biomedical approach is grounded in scientific research and evidence.

Limitations:

Holistic Neglect: It often overlooks the psychological, social, and environmental factors that
can influence health.

Chronic Diseases: It may not address the complex interplay of factors contributing to
chronic diseases like heart disease, diabetes, and mental health disorders.

Preventive Care: The biomedical approach may not focus enough on preventive measures
and health promotion.

Patient-Centeredness: It can sometimes lead to a depersonalized approach to care, with

patients feeling like passive recipients of treatment.

Alternative Approaches:

Biopsychosocial Model: This model considers biological, psychological, and social factors
in understanding health and illness.
Patient-Centered Care: An approach that emphasizes individualized care, shared decision-
making, and addressing the patient's values and preferences.

Preventive Medicine: Focusing on disease prevention through lifestyle changes,

vaccinations, and early detection.

Holistic Medicine: Taking a comprehensive view of a patient's physical, emotional, and

spiritual well-being.

In conclusion, while the biomedical approach has made significant contributions to medical
science and treatment, it is important to recognize its limitations and consider more holistic
and patient-centered approaches to healthcare to address the complex nature of health and
illness. These alternative approaches can better account for the psychological, social, and
environmental factors that play a crucial role in overall well-being.

Health economics and the biomedical approach,

Health Economics:

Health economics is a field that applies economic principles and techniques to the study of
health and healthcare systems. It seeks to understand how resources are allocated, the impact
of policies on health outcomes, and the behavior of individuals, healthcare providers, and
institutions in the context of healthcare.
Key concepts and areas of study in health economics include:

Supply and Demand: Analyzing how the supply and demand for healthcare services affect
prices, utilization, and access to care.

Healthcare Financing: Examining how healthcare is financed, including public and private
insurance, out-of-pocket spending, and government programs like Medicaid and Medicare.

Cost-Benefit Analysis: Evaluating the costs and benefits of healthcare interventions,

policies, and programs to determine their efficiency and effectiveness.

Healthcare Markets: Investigating the structure of healthcare markets, including

competition, market power, and the role of healthcare providers and insurers.

Healthcare Policy: Assessing the impact of healthcare policies, regulations, and reforms on
healthcare delivery and outcomes.

Health Behavior: Studying how individual behaviors, such as smoking, diet, and exercise,
affect health and healthcare costs.

Biomedical Approach:

The biomedical approach is a dominant paradigm in modern medicine. It focuses on

understanding and treating diseases primarily from a biological perspective. Key elements of
the biomedical approach include:
Reductionism: Biomedical research often seeks to reduce complex health phenomena to
their smallest, measurable components, such as genes, cells, and molecules.

Biological Basis: Emphasis is placed on identifying the underlying biological causes of

diseases, including genetic, biochemical, and physiological factors.

Biomedical Interventions: Biomedical practitioners use pharmaceuticals, surgery, and other

medical interventions to treat diseases by targeting specific biological mechanisms.

Biomedical Research: Biomedical scientists conduct research to discover new treatments

and interventions based on an understanding of biological processes.

Evidence-Based Medicine: The biomedical approach emphasizes evidence-based practices,

relying on rigorous clinical trials and research to guide medical decisions.

It's important to note that while the biomedical approach has led to many significant medical
advancements, there is a growing recognition of the importance of considering social
determinants of health, health economics, and a broader view of health that includes
psychological, social, and environmental factors.

The biomedical approach to medical care is a traditional and widely practiced model of
healthcare that focuses on diagnosing and treating diseases and medical conditions primarily
through biological and physiological means. Here are some key points to understand about
this approach:

Reductionism: The biomedical approach often takes a reductionist view, where it seeks to
understand diseases and conditions by breaking them down into their component parts at the
molecular, cellular, and organ system levels. It emphasizes the study of biological
mechanisms and processes.

Biological Basis: This approach is grounded in the belief that most diseases have a biological
basis, such as infections caused by microorganisms, genetic mutations, or abnormalities in
cellular processes. Consequently, it places a strong emphasis on laboratory tests, imaging,
and other diagnostic tools to identify the underlying biological factors.

Pharmacological Treatment: Biomedical care heavily relies on pharmaceutical

interventions, such as medications and vaccines, to treat diseases. It aims to restore normal
physiological functioning or eliminate pathogens through the use of drugs.

Specialization: Biomedical care often involves specialization in different medical fields,

such as cardiology, dermatology, oncology, etc. Medical practitioners may focus on specific
organ systems or diseases.

Evidence-Based Medicine: The biomedical approach places a strong emphasis on evidence-

based medicine. It relies on scientific research, clinical trials, and empirical evidence to guide
treatment decisions and ensure that interventions are proven effective.

Disease-Centered: In this approach, the disease or medical condition is the central focus of
attention. Healthcare providers aim to diagnose and treat the specific ailment, often
addressing symptoms and underlying causes.

Biomedical Ethics: Ethical considerations in biomedical care include issues like informed
consent, patient autonomy, and medical confidentiality. The approach emphasizes ethical
principles like beneficence (doing good) and non-maleficence (do no harm).
Limitations: While the biomedical approach has led to significant advancements in medical
science and treatments, it has some limitations. It may sometimes overlook psychosocial and
environmental factors that influence health. Additionally, it may not adequately address the
prevention of diseases or promote holistic well-being.

Complementary Approaches: Many healthcare systems now recognize the importance of

integrating complementary approaches, such as psychosocial support, lifestyle interventions,
and preventive medicine, alongside the biomedical model to provide more holistic care.

It's important to note that the biomedical approach is just one of several models of healthcare,
and its application can vary depending on the healthcare system and individual patient needs.
In recent years, there has been a growing recognition of the need for a more patient-centered
and holistic approach to healthcare that considers not only the biological aspects but also the
psychosocial and environmental factors affecting health and well-being.

Biomedical approach to the medical care: issues and concerns

The biomedical approach to medical care has been the dominant model for much of modern
medicine. It focuses on understanding and treating diseases and conditions primarily through
biological mechanisms, often relying heavily on pharmaceuticals, surgical interventions, and
laboratory tests. While this approach has led to significant advances in healthcare, it also
raises several issues and concerns:

Reductionism: The biomedical approach tends to reduce complex health issues to single
biological factors or mechanisms. This reductionist perspective may overlook the broader
social, psychological, and environmental determinants of health, which can be equally
important.
Overemphasis on treatment: Biomedicine often prioritizes treating existing diseases and
conditions rather than preventing them. This can lead to a reactive rather than a proactive
approach to healthcare.

Pharmaceutical-centric: The pharmaceutical industry plays a significant role in the

biomedical model, which can lead to overmedication, concerns about drug pricing, and
potential conflicts of interest.

Ignoring social determinants: Biomedicine may overlook social determinants of health such
as poverty, education, housing, and access to healthy food, which have a profound impact on
health outcomes.

Lack of patient-centered care: Biomedicine can sometimes prioritize the disease over the
patient. A more holistic approach that considers patients' values, preferences, and quality of
life is often lacking.

Side effects and iatrogenic harm: The use of medications and invasive procedures can lead
to unintended side effects and iatrogenic harm (harm caused by medical treatment).
Overreliance on the biomedical approach may lead to unnecessary interventions and their
associated risks.

High healthcare costs: The focus on high-tech interventions and pharmaceuticals can drive
up healthcare costs, making healthcare less accessible and affordable for many individuals
and communities.

Neglect of preventive care: Preventive measures, such as lifestyle changes and health
education, are often not given enough attention in the biomedical model. Preventing diseases
can be more cost-effective and beneficial than treating them.
Health disparities: The biomedical model can contribute to health disparities by not
adequately addressing the unique healthcare needs of different populations, leading to
unequal access and outcomes.

Environmental concerns: The biomedical approach may not adequately consider the
environmental impact of medical practices, such as the production and disposal of
pharmaceuticals and medical waste.

In response to these concerns, there has been a growing interest in adopting a more holistic
and patient-centered approach to healthcare, often referred to as the biopsychosocial model.
This model considers biological, psychological, and social factors when assessing and
treating health issues, aiming to provide more comprehensive and personalized care.
Integrative medicine and complementary and alternative therapies also seek to complement
the biomedical approach by incorporating non-conventional methods and promoting wellness
and prevention alongside treatment.

Ultimately, while the biomedical approach has made significant contributions to healthcare, it
is important to address its limitations and work towards a more balanced and patient-centered
approach to medical care. This may involve integrating various models and approaches to
provide more effective and holistic healthcare solutions.

Delineating Medical Care and Healthcare

I. Introduction

Healthcare is a broad term encompassing various aspects of maintaining and improving

health.

Medical care is a subset of healthcare, focusing on the diagnosis, treatment, and management
of medical conditions.
II. Definitions

A. Healthcare

Healthcare refers to the overall system and framework that encompasses the prevention,
treatment, and management of illnesses and the promotion of overall well-being.

It includes not only medical care but also public health, health education, health policy, and
various support services.

B. Medical Care

Medical care is the specific provision of medical services by healthcare professionals to

diagnose, treat, and manage individual patients' health conditions.

It is a hands-on approach that involves direct interaction between patients and healthcare
providers.

III. Components of Healthcare

A. Preventive Care

Healthcare involves preventive measures aimed at avoiding the onset of diseases or

conditions.

Examples include vaccinations, health screenings, and lifestyle counseling.

B. Medical Care Services

Medical care services constitute a significant portion of healthcare.

These services range from primary care provided by general practitioners to specialized care
offered by specialists.

C. Rehabilitation Services

Healthcare includes rehabilitation services aimed at restoring individuals' function and

quality of life post-injury or illness.

Examples include physical therapy and occupational therapy.

D. Support Services

Healthcare also includes support services such as laboratory testing, medical imaging, and
pharmacy services, which aid in diagnosis and treatment.

E. Public Health

Public health initiatives are a vital component of healthcare.

They focus on preventing diseases and promoting the health of entire populations through
measures like health education and policy development.

IV. The Role of Medical Care in Healthcare

Medical care is a cornerstone of healthcare.

It involves the diagnosis, treatment, and management of various medical conditions through
procedures, medications, surgeries, and therapies.

V. Challenges in Healthcare and Medical Care

A. Access

Ensuring equitable access to both healthcare and medical care services remains a challenge in
many regions.

B. Cost

Healthcare costs, including medical care expenses, can be prohibitive, leading to disparities
in access.

C. Quality

Maintaining high-quality healthcare and medical care services is essential to ensure patient
safety and positive outcomes.

VI. Conclusion

Healthcare and medical care are closely intertwined concepts, with healthcare representing
the broader framework and medical care being a crucial component.

Challenges related to access, cost, and quality continue to shape the healthcare landscape.