Lecture Notes and Reading List ISSUES IN ECONOMICS OF HEALTH By Prof. D.N.Rao Center for Economic Studies and Planning School of Social Sciences Jawaharlal Nehru University New Delhi 110067. Email: dnrao@jnuniv.ernet.in To be delivered on August 21, 1998 to the participants of 19" Refresher Course in Economics at Academic Staff College, J.N.U. WHY ECONOMICS OF HEALTH? 1.1 The nature of the commodity called 'health' - and its importance in the measures of 'quality of life', like PQLI, HDI etc. 1.2 'Health' vs. 'Healthcare'. Components of 'healthcare': Public Health, Curative Care' and 'Immunisation'. Factors affecting health status of individuals and communities. 1.3 Conceptual problems in the measurement of health and health care. Grossman's idea of 'health capital'. Difference between the concepts of 'health capital' and 'human capital'. Health care as a complex bundle of commodities and services - Feldstein's measures of healthcare - 'number of GP visits' for OPD care and 'patient-weeks' for in-patient care'. 1.4 The multi-dimensional nature of healthcare as a public good, as a social merit want, and as a private consumption good. 1.5 Some theoretical peculiarities of health care - the principal-agent problem, two- types of uncertainty and violation of the principle of non-satiety. Essential role of altruism in the provision of healthcare. 1.6 Implications of the above for the mode of provision and method offinancing. Of healthcare. Role of the state and the role of insurance in the provision of health care. Models of insurance in financing of health cafe. 1.7 The concept of user prices in health care and its relevance in the context of the debate on cost-recovery in publicly provided health care. 2. Issues in public provision of health care 2.1 Issues in financing public provision of health care. 2.2 The concept of cost-recovery and the principles of fixing user prices arising from the essential characteristics of healthcare - uncertainty, lumpiness and temporary inability to pay arising out of morbidity particularly in developing countries like India. 2.3 Efficiency in the provision of health care. The difficulty in applying conventional economic efficiency criterion to the problem of achieving efficiency of allocation of resources to different dimensions of healthcare. 2.4 Measurement of efficiency of hospitals 3. Evaluation of health care projects 3.1 Limitations in applying CBA to healthcare projects 3.2 The cost-effectiveness studies 3.3 Measurement of health outcomes in terms of QALY and DALYs and their use in measurement of efficiency of health intervention - the World Bank approach. 4. REFERENCES AND FURTHER READING Bhat, Ramesh, "The private/public mix in health care in India", Health Policy and Planning, 8(1):43-56, 1993. Brent, Robert, "Shadow prices for a physician's services", Applied Economics, 26: 669- 676, Dev, A.K. and D.N.Rao, "Determination of the impact of the policy variables on health status - an inter-state study", Report - conducted for the World Health Organisation, Himachal Institute of Public Administraion, Shimla, 1992. Dev. A:K. and D.N. Rao, " A multi-stage model of awareness about and adoption of maternity and child health practices in India", HIPA, Shimla, 1994. Drummond, M.F., A. Ludbrook, K. Lowson and A Steele, Studies in economic appraisal of health care, Vol. 2, Oxford University Press, 1987. Drummond, M.F., GL. Stoddart and G.W. Tonance, Methods for economic evaluation of health care programmes, Oxford University Press, 1987. Purohit, M.C and D.N.Rao, " Fertility differentials, population growth and fiscal operations", paper presented at the 48" Congress of the International Institute of Public Finance and Policy, Seoul, August 24-27, 1992. Rao, D. N., "Issues in Health Economics: costs and cost effectiveness of health services - an empirical viewpoint ", First WHO-BOP Workshop on Health Economics and Health Financing, January 30-31, 1995, pp.XO-85, Bureau ofPlannin& Directorate General of Health Services, Ministry of Health and Family Welfare, Government ofIndia, New Delhi. Rao, D. N., "Equity in Health Services ", WHO-BOP National Workshop on Emerging Economic and Financial Issues in the Area of Health Planning and Development, April 23-25, 1996, pp.73-79, Bureau ofPlanning, Directorate General of Health Services, Ministry of Health and Family Welfare, Government ofIndia, New Delhi. Rao, D. N. and R.L. Bhat, " Estimation ofa community health services index on the basis ofa MIMIC model", Indian Economic Review, vol. 25, 1991, pp. 51-65. Rao, D.N. and R.L.Bhat, " Health Status -an international comparision based on community health status index", Proceedings of Indian Economic Association(Supplement), Platinum Jubilee Conference, Bombay, 1994. Rao, D.N, "Morbidity and Mortality Trends in India during 50 years dfIndependence", Proceedings of the seminar on 'Health and Family Welfare Development in Independent India and Future Directions to Achieve Health for All in the Country', organised by the National Institute of Health and Family Welfare, New Delhi, July 27-29, 1998, Vol. 1. Rao, D.N. and Sisira Sarma: "The State of Morbidity in Two Locations in the Ganjam District ofOrissa", Memeo, July 1998. Sen, Saugato, Measurement of Hospital Efficiency using Data Envelopment Anaiysis, M.Phil thesis, Jawaharlal Nehru University, 1994. Sengupta, Srijata, Effect of Public Expenditures on Child Health Staus, M. Phil thesis, Jawaharlal Nehru University, 1995. Srivastava, Abhay Kumar, Distributional aspects of public expenditure on health care in India, M. Phii thesis, Jawaharlal Nehru University, 1993.