this is PPT files for nursing students in this file i have try to simplify the topics for easily understood by students

1. GUIDED BY, PREPARED BY,
DR. ANJALATCHI MISS. PREETI RAWAT
M.SC.(N) MD(AM), MBA(HA) M.SC. (N) 1 ST YEAR
ERA COLLEGE OF NURSING DEPT. COMMUNITY HEALTH
SARFARAJGANJ LUCKNOW NURSING
2260021 ERA COLLEGE OF NURSING
SARFARAJGANJ LUCKNOW
2260021
UNIT -II
HEALTH
TOPIC- HELATH ECONOMICS

2. UNIT- 2
HEALTH
 Concept and issues
 Determinant
 Measurements
 Alternative system for health promotion and management
of health problems
 Health economics
 Health technology
 Genetics health
 Waste disposal
 ecosystem

3. At the end of this session , the learner will be able
to understand :
 Define the health, Economic
 describe health economics
 Explain Concept of health economic
1- Microeconomic
2- Macroeconomic
 Describe the component of the health economic
 Explain the need of health economic
 Difference between health policy issues / relevancy of health
economic
 Major tasks to economic health care

4. Conti……
 Feature of health economic
 Areas of health economic
 Factors influencing the health economics
 Economic evaluation
 Steps in economic evaluation
 Types of health economic
1- Cost analysis
2- Cost benefit analysis
3- Cost effective analysis
4- Cost utility analysis

5. Abbreviation
 GDP- Gross domestic products
 GNP- Gross national product
 CGHS- Central government health scheme
 HIPC- Health insurance purchasing cooperative
 HMO- Health maintenance organization.
 1993- health services act
 HI- hospital insurance

6. TERMINOLOGY
 ECONOMIC- It deals with human relationship within the
specific context of production , distribution and
consumption including ownership of resource(Goods and
services). It has been variously described as the study of
wealth, study of welfare, study of scarcity.
 HEALTH ECONOMIC- It is the discipline that
determines the price & the quality of limited financial and
nonfinancial resources devoted to the care of the sick and
promotion of health .
 SCARCITY- means that available resources are
insufficient to satisfy all wants and needs of the people.

7. Cont…
 FIXED COST (FC)- these are the cost that the
organization will have to bear, even if there is no program
or activity . This is a reoccurring consent which does not
increase over the total cost even if the programme or
activity is at its maximum level .such cost include the
building its rental taxes , insurance , salaries , equipment
and some maintenance etc.
 VARIABLE COST (VC):- the cost actually incurred any
programme or activities is called the variable cost . It also
include the cost of manpower employed specifically for
the activities

8. CONT…
 AVERAGE COST – the total cost includes for the
activities or the programme to produce certain output .
The average cost is equal to average fixed cost plus
average variable cost .
 TOTAL FIXED COST (TFC)- it is define as a the sum of
total of all the fixed cost in occurred for the activity or
programme
 TOTAL VARIABLE COST (TVC)- It is define as the sum
total of all the variable cost incurred in the activity or
programme.

9. Cont..
 TOTAL COST(TC)- It is define as the sum total of all
the cost incurred to produce certain outputs. Thus
the total cost equals the sum of total fixed costs and
total variable cost.
 MARGINAL COST(MC)- It is define as the extra cost
incurred to produce one or more unit , or to achieve
one more positive result.
 MARGINAL BENEFIT(MB)- It is define as extra
benefit achieved by increasing the magnitude of the
programme by the one unit.

10. Con..
 OPPORTUNITY COST-It is define as the value of the
most desirable alternative which are forgone when
another course of action is taken.
 CAPITAL COST- It is a fixed cost and borne
irrespective of the work load of the center for eg.
Building cost or major equipments cost etc.
 SOCIAL COST – It is the cost of health activity to the
society.
 UNIT COST- It is also known as average cost. It is
the total cost divided by the number of unit produce.

11. Cont..
 OPERATIONAL/ RECURRENT COST- It is
changing and is related to the types of activity in an
health institution, like
1- Salary and allowance of health staff
2- Medicine and drug cost
3- Maintenance and repair cost
4- Transport and training cost.

12. ECONOMICS
 The word “economics” literally means “ house keeping”.
It deals with the human relationship the specific context
of production , distribution , consumption, ownership of
resources, goods and services . Economics and sociology
overlap in many areas.
DEFINITION
The Economics is the science that deals with consequences
of resources scarcity.
The health economic is the study of distribution of health
care. It is a branch of economic concerned with issues
related to scarcity in the allocation of health and health
care.

13. MODELS
1-POSITIVE ECONOMICS
To establish cause and effect in a
scientific manner
2-NORMATIVE ECONOMICS
Establishing the means by which
socially desirable outcomes can be
achieved

14. CONCEPTS OF HEALTH ECONOMICS
 Health economics works on two concepts :
MICROECONOMICS:-
It deals with the behavior of the individuals and
organization and effect of those behaviors on prices ,
costs and the allocating and distributing resources.
It has following factors:-
 Supply and demand
 Efficiency
 effectiveness

15. Cont,…
MACROECONOMICS:
It deals with the large- scale or general economic
factors, such as interest rates and national
productivity.
It has two factors:
GNP&GDP:-
The Gross national product and Gross domestic
product are the conventional terms used to
understand the performance of the country

16. COMPONENETS OF HEALTH
ECONOMICS
 Demand and scope of health economics
 Determinant of health
 Demand for health and health care system supply of
health care
 Health care market
 The relationship between economic growth and health
 Health sector budgeting and planning
 National health system
 Equity in health outcomes & in health care
 International health.

17. NEEDS FOR HEALTH ECONOMICS
1- Medical
advanced
2- Due to
increase in
life
expectancy
3- Changes
in family
structure
and norms
6- Public
awareness
5- Higher
expectation
among
peoples
4-Advanced
in health
research

18. IMPORTANCE OF HEALTH ECONOMICS
 To formulate health services, health policy
 To estimate the effect of certain economic variables
like user charge, time distance, cost of accessibility
etc on the utilization of health services
 To study the pattern of allocation of budget is
effectiveness and efficiency.
 To study health expenditure vs health status.
 To minimize wasteful expenditure.

19. HEALTH POLICY ISSUSES
REVELANCY OF
ECONOMICS
 Health and economic
development
 To identify and measures
health and disease, basic
needs .To identify
determinates of growth
and economic
development, elements
of health expenditure by
use of macro economic.
DIFFERENT BETWEEN HEALTH POLICY
ISSUES AND RELEVANCY OF ECONOMIC

20. Organization and
economic development.
Finance aspect of health
sector.
To determine the
economic characteristics
of health care and health
related activity.
To find out the source of
health care financing
,social accounting
system , self financing
insurance etc.
Cont…..

21.  Demand analysis
 Supply analysis
 Health man power
 Financial management
 To analyze the
determinants of demand
, individual and supplier
induced behavior, time,
cost , health payment
system etc.
 To determine the
physical resource and
cost.
 To determine the labour
market and demand &
supply of health.
 Budgeting system and
accounting, inventory
management.

22. MAJOR TASKS OF ECONOMIC HEALTH
CARE
Descriptive
economic
Exploratory
economic
Evaluation

23. FEATURES OF HEALTH ECONOMICS
 Health & medical care is considered as economic goods .
 Health is a private and public goods.
 Measurements of health is also considered in economics.
 Investment aspects of health.
 Loss due to ill health
 Resources costs of different disease, effect of health and
medical care provision
 Planning of health and medical care .
 Choice of technology in health care system etc.
 Provision of equity in heath outcomes & health care.

24. Areas of health economics
1-Cost of health care
2-Health problem
3-Demand for health care
4-Supply analysis in health care
5-Health care service market
6-Financing for health care industry
7-Health plans and out lays
8-Optimum utilization

25. 1-Cost and health care
 MEANING:-
The term cost refers to the expenses incurred by the
producer to produce the good and service
In health economics ,the value of the inputs
/resource used for health care service is the cost
 Cost of production :
1. Wages to the labor employed ,salaries
2. Price for the raw material ,equipment, furniture.
3. Rent for the building
4. The rate of interest on money borrowed for doing
such business.

26. 2 –HEALTH PROBLEMS
 Every country has its own health problems
depending upon
1. Size of the population
2. Standard of living
3. Geographical condition of the country
INDIA- Vast developing country
-second highest population (17.7 % of world
population )
- 7 th largest (3.2 million square .km) in land
area .

27. 3- DEMAND ON HEALTH
 DEFINITION:
Demand is defined as the willingness and availbility of
a consumer to purchases a given product in a given
frame of time
 CONCEPT OF DEMAND
1- law of demand
2- demand schedules
1- law of demand
- A fall in price – increased demand
- increase in price – falls in demand

28. Cont..
2- demand schedules
- A statement which gives information of demand by
the consumer at different levels of price
HEALTH CARE DEMAND
- Demand for the health care is derived from
demand for health .
- Health viewed as a sort of capital , asset, wealth
and the right thus demand has increases.

29. CONT..
FACTORS INFUENCNG HEALTH CARE DEMAND
1- patients factors :-
a. Health status of the person
b. Demographic characteristic and
c. Economic status of the person etc
2- physician factors:-
Physician himself / herself is the main factors by
a. Prescribing drugs
b. Admitting the patients into hospitals
c. Ordering the various test, etc

30. 4- SUPPLY ANALYSIS HEALTH CARE
 Supply of health care Facilities depends on internal and
external factors:
INTERNAL FACTOR:
1. Availability of funds/ budget
2. Govt. ,subsidy, grant in aids and encouragement
3. Existence of medical & paramedical personnel, drugs
equipments
IEXTERNAL FACTORS
1. Existence of pharmaceutical
2. Laborites / investigating centre,
3. Blood bank etc.

31. 5- HEALTH CARE MARKET
 MARKET:- Market s an economic activity of
purchases and sale of goods and services at a level of
price
 The health care market ids controlled by the govt..
 The ministry of health control various public and
private sectors health care market.
 The private sectors controlled through legislation
passed by the parliament of India .,
e.g- health care financial market, physician and nurse
services market , health institutional service market,
input factors market etc.

32. 6- INCOME AND BUDGET
 INCOME:-
Income is the outcome of product activity .
Two types :
1- personal income:-
Income of an individual
2- National income :-
An aggregate ( gross total) income o fall the people in a
country is known as national income .
National income is measured by the statstics as as net
national income(NNI).

33. CONT..
 BUDGET:-
Refers a list of planned expenses and
revenues(income)
 PURCHASING POWER:-
It is the volume of a thing or good compared to the
amount paid with money .eg.currency.
Note- the purchasing power of an individual family
decease s when the price of the commodities
increase, but the income remain same .thus the
purchasing is ability affected by the increaseor
decrease the imcome.

34. 7- FINANACIAL FOR HEALTH CARE
INDUSTERY
 Sources of health finance:-
 commercial back ,
 public sector bank,
 private bank ,
 pvt. Foreign bank ,
 co- operative sector banks

35. 8- HEALTH PLANS AND OUT LAYS
 ECONOMIC PLANNING :-
A well – through process , initiated by Central govt. .
To fulfill certain objectives and targets through
optimum utilization of natural human resource
within a specified period .
 HEALTH PLANS IN INDIA:-
A conscious and well designed scheme and program
for better health for the entire population is called
health plans.
 FIVE YEAR PLANS :- there are 12 five yaer plans
in India

36. 9- OPTIMUM UTIIZATION OF
AVAILABLE RESOURCES
 Optimum utilization available resources in health
care delivery system is depends on the :
MMM: Men, Money Materials.

37. Factors influencing health economics
1. Extensive
government
intervention
2. Intractable
uncertainly
In several
dimension
3. Informative
asymmetry
4. Barrier to
entry
5. Externalities
and presence of
third party
agency

38. ECONOMICS EVALUATION
 Economics evaluation is the comparative analysis of
alternative courses of action in term of both there
cost and consequences in order to assist policy
decision
STEPS IN ECONOMICS EVALUATION
1. Deciding upon the study question
2. Assessment of costs and health effect
3. Adjustment of timing.
4. Adjusting for uncertainty
5. Making a decision

39. TYPES OF ECONOMIC EVALUATION
Cost benefit analysis(CBA)
• Cost minimization analysis(CMA)
Cost effective analysis(CEA)
• Cost- utility analysis

40. COST BENEFIT ANALYSIS
 Cost benefits analysis is an economic evaluation
technique that measure the all the positive
(beneficial) and negative(costly) consequences of an
intervention or program in monetary terms .
PURPOSE :-
1. To assess the economic efficiency
2. To decide whether to implement a specific program
3. To select among competing / alternative options

41. Cont……
COST BENEFITS ANALYSIS IMPORTANTS
 It is the method of comprehensive and theoretical sound
from of economic evaluation
 CBA seeks to place monitoring values on both the inputs
and outputs e.g- treatment cost and consequence cost .
 Since both cost and consequence are measured in
monitary units it is possible to whether a treatment
delivers an overall gain to society
 The effects of treatments , such as complication number
of disability days, & number of life years gained , need to
be converted into costs

42. Cont..
COST MINIMIZATION ANALYSIS(CMA)
 The benefits of two or more health care technologies
being compared are assumed to be equivalent , hence the
analysis focuses on the cost alone.
Which costs should be included??
When the evaluation is made from the society as a whole –
the three main categories of costs must be included:
 Health service cost
 Costs borne by patients and there families
 External costs borne by rest of the society

43. Cont…
ADVANTAGES
 It is simple to conduct
 It focuses on cost alone
DISADVANTAGES
 It assumes that equivalence of benefits has been
proved unambiguously , much research effort would
be needed to demonstrate.

44. COSTN- EFFECTIVE ANALYSIS (CEA)
 This type of analysis is used to compare health care
technologies that have different outcomes, common one
dimensional health benefits and which are measured in
the same units.
 CEA can be used to compare both across and within
disease groups as long as the effectiveness can be
measured in common units.
 For example , cost ca be compared using common units ,
such as ‘ per lives saved” or ‘ per pain free day
 ,.
 A CEA can therefore be used to compare heart surgery
and kidney transplantation.

45. Cont….
 It is essential to specify which costs are included in a
cost – effectiveness analysis and which are not , to
ensure that the finding are not subject to
misinterpretation.
 Large number of evaluation studies in the dentistry
are comparison of cost of preventive strategies with
their effectiveness
 The result of CEA arr usually presented in the form
of ratio e.g cost /life year gained.

46. Cont..
 ADVANTAGE :-
this methods is used when the programmed may have
differential success in outcome , as well as deferential
cost, but outcome must be common to both programme.
To find the most efficient treatment opinion in term of cost
/ unit effect.
• DISADVANTAGE :-
The disadvantage of the cost effectiveness approach is that
it cannot be used to assess single programme or to
compare interventions which have several different
clinical effects

47. COST UTILITY ANALYSIS
 To overcome the concerns of expressing all benefits
in term of money and alternative measure used is
that is concept of utility
 Utility value lie between 0 and 1
 To compare the costs and benefits of health care
technologies
 it is a methods of choice when quality of life is an
important outcome

48. Cont…
ADVANTAGE :-
Allows comparison across different health programme
and policies by using a common unit of measure
( money / QALY gained
CUA provides a more complete analysis of total
benefits then simple cost benefits analysis does.
DISADVANTAGES :-
Elderly individuals are assumed to have lower QALYs
Since they do not have as many years to influence the
calculation of the measurement

49. Cont..
 Specific health outcomes may also be difficult to
quantify, thus making it difficult to compare all
factors that may influence an individual QALYs .

50. SUMMARY
 Till now we discussed about the meaning of
economics, and health economics, concepts of health
ecomonomics, models, componenets,needs of health
economics, importance, different between health
policy issues / relevancy of economic, major tasks,
feature of health economic, areas, factors
influencing, economic evaluation, steps and types of
health economics etc.

51. CONCLUSION
 Going to conclude the topic health economics I hope
you all understands the health economics and their
concepts , models , needs , important , types of
health economics etc.

52. QUESTIONNAIRE OF HEALTH ECONOMICS
 Define the following ?
1. Define the economics
2. Define health economics
3. Define microeconomics
4. Define health policy issues
5. Define scarcity
 Shorts questions related to the health economic?
1. Describe the components of the health economics
2. Define the needs of health economics

53. CONT…
3- write the different between health policy
issues/relevancy of health economics
4- write the concepts of health economics
5- what is economic evaluation
 Long questions related to health economics?
1. Briefly describe the types of health economics
2. List out the features of health economics & explain
in details
3. Define health economics & concepts of health
economics

54. CONT…
 Fill in the blanks
1. Scarcity means the available resource------------ to
satisfy all wants & needs of peoples.
2. To establish cause & effects in a scientific manner is
called-----------
3. What is full form of GNP & GDP-------------
4. Income is the outcome of --------------
5. National income is measured by the ------------- as
net national income (NNI).

55. REFERENCE
 Students reference?
1. Gupta & mahajan. textbook of preventive and social
medicine .jaypee brothers publication.4rth edition.
2013. page no. 524- 534.
2. Anand N.K. health economics for nurses. A.I.T.B.S
publisher , India. Second edition . 2012. page no.1- 228.
3. Swankar keshav by. Community health nursing. 2nd
edition. N.R brothers publisher 2007. page no. 388-
396.
4. Journals, elsevier.com.
5. Jhsph.edu.