Health economics in Nursing

1. PRESENTED BY:-
NAVANEETA KUSUM
M.Sc. Nursing
2nd year
HEALTH ECONOMICS

2. INTRODUCTION
Health economics
generally deals with
planning
budgeting which
the purpose and
of is
required to be done
in the
delivery
health care
system for
providing care.

3. HEALTH: -
Health is a state of
complete physical,
mental and social
well-being and not
merely the absence
of disease or
infirmity.

4. ECONOMICS:
It has been
variously
described as the -
study of wealth/
study of welfare/
study of scarcity.

5. HEALTH ECONOMICS:
It is the discipline
that determines the
price
quantity
and the
of limited
financial and non-
financial resources
devoted to the care
of the sick and
promotion of health.

6. •Health economics is the study of how scarce
resources are allocated among alternative uses
for the care of sickness and the promotion,
maintenance and improvement health.
•It can defined as 'the application of the theories,
concepts and techniques of economics to the
health sector'.

7. CONCEPTS IN HEALTH ECONOMICS
 Resources: Lands, Capital, Labor &
Organization.
 Scarce Resources:
> Demand < Supply
 Scarcity:
Infinity wants Vs. Finite resources.
 Buyer
 Seller

8. BASED ON NATURE OF INTERACTION
ECONOMICS BRANCH:
1. Free Market / Capitalist Economics
2. Socialist Eco.
3. Mixed Eco.

9. FREE MARKET / CAPITALIST ECONOMICS
b/ w Buyer Supplier
Govt----- x involvement
Resolve the issue
Failure
Govt-- intervene

10. SOCIALIST ECONOMICS
 Govt. Intervene
 To make everybody better
 Makes Policy & rules
 Ex- China, Denmark

11. MIXED ECONOMICS
 Free market + Socialist
 Some decision- Govt. + Some decision -
Public
 Ex- India

12. works on two principles:
Microeconomics: -
.
Economics
•Study of interaction b/w
•Buyer Seller
•Demander Supplier

13. MICRO- ECONOMICS
 M.E is basically a study b/w 1 individual or
within a commodity (Within an organisation)
but unit is one.
 Study the interaction b/w 1 buyer & 1 seller.
 Looking one thing at a time.
Ex- 1 Physician- 1 Pt. at a time
 All Pt.- Demander
 All Physician- Supplier
• Is there 3rd party involvement occur in M.E?

14. MICRO- ECONOMICS
Buyer Sellers
3rd Party?
Government
Authority
Policy & Rules
 Study of not only buyer and seller but
also the Govt.

15. MACRO- ECONOMICS
 Narrow to Broader.
 Ex- All countries with in Asia
 All sellers in India (their interaction)
 All pt. that consumes Healthcare
 All doctors who is supplier of HC

16. HEALTH MICROECONOMICS
Health microeconomics is concerned with
how individuals choose, minimize costs
or maximize profit or utilities within a
given health care system within a set of
rules and prices.

17. MACROECONOMICS: -
It has two factors:-
GNP & GDP: -
GNP & GDP serves as measures of total production of
goods and services in a country during year.
These indicate the sum total of three components
in a country:-
Personal consumption;
Expenditure of goods and services;
Investment expenditure.

18. NET NATIONAL INCOME (NNI)
The income of households, businesses, and the
government.
Net national income is the difference between what is
earned by nationals living inside and outside the country
put together and non-nationals living in the country.
NNI = C + I + G + (NX) + net foreign income – indirect
foreign taxes - manufactured capital depreciation
 C = Consumption
 I = Investments
 G = Government spending
 NX = Net exports (exports minus imports)

19. GROSS NATIONAL INCOME (GNI)
 previously known as GNP
 the total value of goods/services produced
by a country during one year is equivalent to
the GDP & Net income from foreign
investment.
 GNI=GDP + Money flowing from foreign
countries - Money flowing to foreign
countries.

20. INDIA GROSS NATIONAL INCOME - JANUARY
2019.
Actual (12 million)
Previous 12051525
Highest 12865461
Lowest 8659505
Year 2011 -2017
Frequency Yearly

21. GROSS DOMESTIC PRODUCT (GDP)
It is a monetary measure of the market value
of all the final goods and services produced in
a period of time, often annually or quarterly.
Nominal GDP estimates are commonly used
to determine the economic performance of a
whole country or region and to make
international comparisons.
 GDP of India is 2.94 trillion, 2018.
 USA- 21.5 trillion
 China- 14.17 trillion

22. HEALTH STATUS OF INDIA
A/C NHP (2017)
India's population, as per census 2018,
1.33 billion (0.69 billion M and 0.65 F).
There are great inequalities in health
between states.
The infant mortality in Kerala is 6/1000
live births, but in Uttar Pradesh it is
64/1000.

23. NEEDS FOR HEALTH ECONOMICS
NEEDS
Medical
Advances
Due to
increase in life
expectancy
Higher
expectation
among people
Advances in
health research
Changes in
family
structure and
norms
Public
awareness

24. AIM OF HEALTH ECONOMICS:
To quantify
overtime the
resources used in
health service
delivery.
To organize,
allocate and
manage the
resources.

25. GOALS OF HEALTH ECONOMICS
To provide the best quality health care to the
largest number of people, given available
financial resources.

26. IMPORTANCE OFHEALTHECONOMICS
• To formulate healthservices
policy.
• Toestablish the true costs of delivering health
care or to estimate all real costs like the use of
patients' time, loss of output elsewhere in the
system etc

27. IMPORTANCE OFHEALTHECONOMICS
• To evaluate the relative costs
and benefits of particular
policy
• To estimate the effects of certain economic
variables like user charges, time anddistance
costsof accessibility, etc on the utilization of
health services

28. HEALTH FINANCING: -
It refers to the raising of resources to pay for
goods and services related to health. These
resources may be in the form of cash” or “kind”

29. FINANCING OF HEALTH CARE
 PRIVATE SUPPORT
 PUBLIC SUPPORT

30. PUBLIC HEALTHCARE
 Public healthcare is free for those, who are
below the poverty line.
 The public health sector encompasses 18%
of total outpatient care and 44% of total
inpatient care.
 Middle and upper class individuals tend to
use public healthcare less than those with a
lower standard of living.

31. THE SOCIAL SECURITY ACT CREATED
 Medicare: -
It was intended to provide health care to
the growing population of those 65 years of
age and older.
 Medicaid

32. PUBLIC FINANCING CONTINUE…
Medicaid: -
It provides universal health
care coverage for the
indigent (very Poor) and
children.
Priority participation is
given to children,
pregnant women, and the
disabled.

33. PRIVATE HEALTHCARE
– Insurance
– Employers
– Individuals
– Medical saving account

34. PRIVATE HEALTHCARE
 The private sector consists of 58% of hospitals
in the country, 29% beds in hospitals81%
Physicians.
 Indian govt. study (2014) the Indian healthcare
market is likely to grow from $100 Bn to $280
Bn by 2020.
 only about 17% of India's population was
insured.
 Private HC providers offer high quality treatment
at unreasonable costs as there is no regulatory
authority to check for medical malpractices.

35. PRIVATE HEALTHCARE
 In Rajasthan, 40% of practitioners did not have
a medical degree and 20% have not complete
a secondary education.
 Aamir Khans program (2012) Satyamev Jayate
did an episode on "Does Healthcare Need
Healing?" which highlighted the high costs and
other malpractices adopted by private clinics
and hospitals.
 In response to this, Narayana Health plans to
conduct heart operations at a cost of 800 rs.per
patient.

36. HEALTH CARE PAYMENT SYSTEMS
 Paying health care organizations
– Retrospective reimbursement
– Prospective reimbursement
– Cost- plus reimbursement
 Paying health care practitioners
– Fee - for - service
– Capitation

37. MAJOR PROBLEMS IN HEALTH
FINANCING
Lack of funds.
Unequal distribution
of health finances.
Rising health costs.

38. Lack of coordination of
health financing units.
Wastage and in
sufficiency in
spending the funds
MAJOR PROBLEMS IN HEALTH FINANCING
con...

39. MEDICATION
 Indians consumed the most antibiotics per
head in the world in 2010.
 Many antibiotics were on sale in 2018 which had
not been approved in India or in the country of
origin, although this is prohibited.
 A survey in 2017 found 3.16% of the medicines
sampled were substandard and 0.0245% were
fake.
 Those more commonly prescribed are probably
more often faked.

40. HEALTH ISSUES
 Malnutrition: - 60% (2005)
 Communicable diseases:- Dengue fever,
hepatitis, tuberculosis, malaria and
pneumonia continue to plague India due to
increased resistance to drugs.
 Non- Communicable Diseases (NCDs):-
CVD, diabetes, COPD, Cancers, Mental health
disorders and injuries.

41. HEALTH ISSUES
 According to World Bank, the total
expenditure on health care as a proportion of
GDP in 2015 was 3.89%.
 Out of 3.89%, the governmental health
expenditure as a proportion of GDP is just
1% and the out-of-pocket expenditure as a
proportion of the current health expenditure
was 65.06% in 2015.

42. COST FOR HEALTH CARE IN INDIA:
In April 2018, the government announced
the Ayushman Bharat scheme that aims to
cover up to Rs. 5 lakh to 100 million
vulnerable families includes Pg, Child health,
Communicable/ Non- communicable d/s,
Mental, Dental & Geriatric care.
This will cost around $1.7 billion
each year.

43. ECONOMIC ANALYSIS
Economic evaluation is the comparative
analysis of alternative courses of action in
terms of both their costs and consequences
in order to assist policy decisions.
- Helps to get idea about how to use the
resources that were scarce.

44. TYPES OF ECONOMIC EVALUATION
Cost-
effectiveness
Analysis (CEA)
Cost
Minimization
Analysis (CMA)
Cost-Benefit
Analysis (CBA)
Cost-Utility
Analysis (CUA)

45. COST-EFFECTIVENESS ANALYSIS (CEA)
It is an economic study design compares the
relative cost and outcome (effect) of
different course of action.
(Ex- mortality, reduction in blood pressure,
or quality of life deaths avoided, heart
attacks avoided or cases detected).

46. COST-EFFECTIVENESS ANALYSIS (CEA)
It is a tool, decision-makers can use to
assess and potentially improve the
performance of their health systems.
It indicates which interventions provide the
highest 'value for money' and helps them
choose the interventions and programmes
which maximize health for the available
resources.

47. RESEARCH STUDY
 (Prime Minister's Strategy Unit, 2004)
 UK Government (2005) undertook a value for money
analysis in different types of childcare.
 Compared between higher cost "integrated" childcare
centres, providing a range of services to both children
and parents, or lower cost "non-integrated" centres
that provided basic childcare facilities.
 The result of cost-effectiveness analysis was the
intermediate outputs from the policy (e.g. improved
educational attainment aged 18) but not the final
outcomes of the policy (e.g. better overall life chances,
higher skilled workforce and higher economy wide
productivity growth).

48. COST MINIMIZATION ANALYSIS (CMA)
 Cost minimization is used to compare two
products that have been shown to be equivalent
in amount and therapeutic effect.
 It is a method of calculating drug costs to
project the least costly drug or therapeutic
modality.
 A new ACE inhibitor has launched with
essentially the same properties as existing
members of the class; the price would be
equivalent to that of the existing drug(s).

49. COST BENEFIT ANALYSIS (CBA)
It is an economic evaluation technique that
measures all the positive (beneficial) and
negative (costly) consequences of an
intervention or program in monetary terms.
CBA is a practical approach of appraising
the desirability of an intervention involving
public expenditure in terms of net social gain
society.

50. COST BENEFIT ANALYSIS (CBA)
Cost
Benefit
Action

51. ECONOMIC ANALYSIS CONTINUE…
Here a clinical sign
such as mortality, reduction
in blood pressure, or
quality of life, etc. is
measured as a measure
of the effectiveness.
Cost Utility:
To compare current practice
and the change in practice
needed.
Cost effectiveness: -

52. COST UTILITY ANALYSIS (CUA)
 Cost-utility analysis is one form of cost-
effectiveness analysis, which allows the
comparison of different health outcomes by
measuring them all in terms of a single unit-
(QALY).
 To compare current practice and the change
in practice needed.

53. COST UTILITY ANALYSIS (CUA)
 Is used to compare two different drugs or
procedures whose benefits may be different.
 Ex- Use of incremental cost-utility ratios
enables the cost of achieving a health
benefit by treatment with a drug to be
assessed against similar ratios calculated for
other health interventions (e.g. surgery or
screening by mammography).

54. COMPARISON BETWEEN INDIAN AND
WESTERN HEALTH ECONOMICS:
India and the US differ widely when it comes
to healthcare. With the perspective of
outcomes, in India the life expectancy at
birth is 63 years for men and 66 years for
women, while that for US is 76 years for men
and 81 years for women. Children under the
age of five are also a lot more likely to die in
India than in the US.

55. 1. Public health scenario
The picture is far rosier in the US, where per
person healthcare expenditure is the highest
in the world.
India lags far behind it with clean drinking
water, adequate nutrition, sanitation and
access to healthcare being long-standing
challenges.
US Vs. India cont...

56. 2. NATURE OF HEALTHCARE
Healthcare is taken far more seriously in the US,
as we have already seen.
The Indian healthcare system can be described as
‘Mixed'.
While the government provides
healthcare at primary, secondary and tertiary
levels, there is a number of private hospitals
with better medical facilities. Unfortunately, most
are too expensive for the average citizen.

57. 3. VAST DIFFERENCE IN SPENDS AS %
OF GDP
US India
Total expenditure
of GDP
17% 4%
Performance in
HC sector (WHO)
37th ran 112
Top performer Long way to go
Out of Pocket
expenditure
10-12% 70%

58. 4. HEALTH INSURANCE (US Vs. India)
 In the US, it's mandatory to get health
insurance and pay a penalty if for some reason
choose not to get it.
 Employers in the US, as per government
guidelines, are supposed to provide health
insurance to their employees.
 None of the above holds true in India, where
the provision or purchase of health insurance is
up to the discretion of employers or individuals.

59. 5. SCOPE OF COVERAGE (US Vs. India)
US
Health insurance cover
is generally
comprehensive, and
includes everything
from consultations Ex-
Fever- Hospitalization.
India
Visits to physicians
are not covered under
insurance. Only 30 days
pre-/60 days post-
hospitalization are
covered, depending on
terms of the policy. The
other expenses are to
be borne by the
individual.

60. 6. PREMIUM CHARGES
 Since a larger number of people are covered under
health insurance policies, with much higher standard
of living, the premium rates are generally higher in
the US.
 In India, since the health insurance policies are
taken by a lesser percentage of the population and
owing to cut-throat competition amongst various
insurance companies, the premiums are much lower.
Ex- 30-year-old Indian male needs to pay around
 500/month to get
 5 lakh health insurance coverage.
 10,000 each year. Despite this, medical insurance has
a relatively poor reach.

61. 8. DIFFERENTIATION IN STATES
 The US is a federation of various states, each
of which has different regulations. This also
has an impact on the health insurance rules
and provisions, which differ from state to
state.
 India, on the other hand, is a republic and
the same rules apply across all states.
Therefore a health insurance policy will have
the same rules and regulations across the
country.

62. ROLE OF NURSE
Nurses play a central role
in cost containment, care
quality and patient safety.
Nurses actively engages
inleading efforts to
improve patient care and
reduce costs.

63. ROLE OF NURSE CONTINUE…
Monitoring Financial
Performance.
Building a Culture of
Quality and Safety.
Monitoring Quality
Performance.
guidesSet policy that
care delivery.

64. ROLE OF NURSE CONTINUE…
Help the boards identify,
clarify, and focus on the
wants and needs of the
patients.
Share patient needs and
concerns.

65. CONCLUSION
 Health economics is the discipline that
determines the price and the quantity of limited
financial and nonfinancial resources devoted to
the care of the sick and promotion of health
(Gupta & Mohanjan,2003).
 Health economics is concerned with the use of
resources affect the health care industry
(Jacobs, 2002).

66. REFERENCES
 Currie, Janet and Mark Stabile.(2009) "Mental Health in Childhood and
Human Capital". The Problems of Disadvantaged Youth: An Economic
Perspective ed. J. Gruber. Chicago: University of Chicago Press.
 Evers, S.; Salvador–Carulla, L.; Halsteinli, V.; McDaid, D.; MHEEN Group
(2007), "Implementing mental health economic evaluation evidence:
Building a Bridge between theory and practice", Journal of Mental
Health, 16 (2): 223–41, doi:10.1080/09638230701279881
 http://www.who.int/immunization/research/implementation/health_econ
omics/en/
 https://en.wikipedia.org/wiki/Health_economics

67. THANK YOU