Perspectives on health economics. 3. Economics in action.

Abstract

This paper describes 4 health care studies which illustrate the value of using economic analysis to evaluate health care choices. A Chamberlain undertook an applied health economics study of family planning service costs in a Scottish community. The study revealed that the cost of avoiding an unwanted birth was 320-490 pounds. Chamberlain also calculated the utilization cost for 1 woman/year of family planning services when the services were provided by a general practitioner (10.74 pounds), by a multipurpose health center (7.87 pounds), and by a family planning clinic (10.22 pounds). Information of this type can be used to develop rational health care policies. J.K. Wang'ombe assessed the costs and benefits of a project to decentralize access to primary health care in West Kenya. In order to increase health care contacts among the members of communities surrounding rural health posts, a number of community health workers were trained to diagnose and treat minor illness and to refer more serious cases on to the health posts. The project resulted in a marked increase in health care contact and a decline in the cost of each contact. Over a period of a year, the program provided 10 times as much value (contacts)/cost unit as the previous program, i.e., operating the health post without community health workers. The 3rd study was undertaken at a health maintenance organization in the US. It compared the cost of using a physician only with the cost of using a combined physician and nurse team to do the tasks outlined in the diagnosis and treatment protocals for 4 different medical conditions. For 3 of the 4 medical conditions the team approach was less expensive than the physician only approach, and for 2 of the conditions the team approach was significantly less expensive than the physician only approach. Medical outcomes were as good and sometimes better under the team system as under the physician only system. The 4th study was conducted in the Netherlands. It compared the treatment and referral behavior of general practitioners working in different practice setting, e.g., private offices and community health centers. The study revealed that savings expected to be associated with community health care centers, especially in referrals for secondary care, were not realized. The study raised serious questions as to whether the government should continue to provide subsidies to community health care centers. Despite the demonstrated applied value of health economic studies, economic analyses are rarely used in health planning and evaluation. In 1983, the National Health Service of the United Kingdom held a seminar to address this issue. The participants attributed the dearth of economic analysis in health planning to health professionals' lack of awareness of health economics and lack of concern with efficiency. Health professionals tend to believe that no price should be placed on saving a life. Other reasons were: 1) disagreements about whether equity should be be based on service access, quality, or utilization; 2) a lack of understanding between NHS and economists; and 3) the difficulties involved in attempting to do economic analyses in the context of poor health planning. These difficulties could be overcome by making planning less political, providing incentives for efficiency in the health care system, and educating health professionals about the value of efficiency.