Why and How Did Health Economics Appear? Who Were the Main Authors? What is the Role of ITCs in its Development?

Why and How Did Health Economics Appear? Who Were the Main Authors? What is the Role of ITCs in its Development?

Ana Pinto Borges (Universidade do Porto, & NIDISAG, Portugal) and Erika Laranjeira (Universidade do Porto, Portugal)
DOI: 10.4018/978-1-4666-3990-4.ch051
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Abstract

Over the past sixty years, developed countries have registered high growth of total expenditure on health, which has attracted the attention of health economists, organizations, and policymakers alike. At the same time, the authors observe the increasingly important role of the Information and Communication Technologies (ICTs), not only in improving diagnosis and treatment and the quality of information, but also in the growth of these expenditures. According to this scenario, the authors focus on the development of Health Economics as an autonomous branch within Economics, highlighting not only its origin and the leading authors that began to write about it, but also the impact and the role of the development of ICTs on Health Economics and healthcare.
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1. The Origin Of Health Economics And The Leading Authors

Issues related with the quality, effectiveness and efficiency of the health sector and, especially, with the level of costs have been frequent themes in the political agendas of different countries. The growing trend verified in health expenditure attracted the attention of different personalities in the area, with the aim of understanding the underlying causes of this apparent out-of-control spiraling growth (Mehrotra et al., 2003) and also to give some answers to control such phenomenon.

This phenomenon also began to attract the attention of some organizations (such as the Institute of Economic Affairs3 in London and the Ford Foundation4), as well as the concern of policymakers. Their special concerns were not over the fact that the costs were high but mainly because the steady upward spiral did not seem to have an end in sight.

Essentially, the growth in health spending in most of industrialized countries5, not only in terms of consumption of national resources but also in global terms, i.e. in terms of public spending and its inherent market frictions began after the World War II. Some works done in the area (Cutler 1995, Okunade and Murthy 2002, Matteo 2005, among others) attribute large part of the growth observed in health spending to the advances in medical knowledge (new medical procedures and drugs), to the introduction of new and sophisticated technology (the initial expense and installations costs for the new equipment is often high), and to the changes occurred in management dogmas and political beliefs.

According to forecast studies developed by Cutler (1995) and Newhouse (1992), the emergence of new medical technologies and services and their adoption were the principle responsible of such growth, contributing roughly by half of the increase verified in healthcare expenditures in the past decades6.

Key Terms in this Chapter

Health Sector: Includes the hospitals, sanatoriums, nursing and care homes, medical and dental practices, ambulance transportation, complementary medicine and other health activities, such as medical laboratories and scientific and research services, across a range of organizations within the public, private and voluntary sectors.

Health: Is “a state of complete physician, mental and social well-being and not merely the absence of disease or infimity” (World Health Organization).

Innovation: Is the process of creating and introducing something new and it requires the invention of something new and its implementation in the organization or in the market.

Healthcare: Correspond to the set of actions for prevention, diagnosis and treatment performed by health professionals or allied health professions. It refers to the work done in providing primary care, secondary care, tertiary care, and continuum of care.

Health Sector: Includes the hospitals, sanatoriums, nursing and care homes, medical and dental practices, ambulance transportation, complementary medicine and other health activities, such as medical laboratories and scientific and research services, across a range of organizations within the public, private and voluntary sectors.

Health: Is “a state of complete physician, mental and social well-being and not merely the absence of disease or infimity” (World Health Organization).

Information and Communication Technologies (ICTs): Refers to technologies that provide access to information through telecommunications. This includes the Internet, wireless networks, cell phones, and other communication mediums. ICTs in health assume the responsibility for health promotion and disease prevention, provision of healthcare and governance efficient of health systems.

Information and Communication Technologies (ICTs): Refers to technologies that provide access to information through telecommunications. This includes the Internet, wireless networks, cell phones, and other communication mediums. ICTs in health assume the responsibility for health promotion and disease prevention, provision of healthcare and governance efficient of health systems.

EHealth: Includes all the ICTs tools and services for health used behind the scenes by healthcare professionals, or directly by patients, which contribute to improve the health of citizens all over the world. Through the ICTs, the responsible authorities want to enhance healthcare quality and reduce healthcare costs, by improving the efficiency with which healthcare is delivered and reducing the delivery of services with little or no value ( European Commission, 2004 ).

EHealth: Includes all the ICTs tools and services for health used behind the scenes by healthcare professionals, or directly by patients, which contribute to improve the health of citizens all over the world. Through the ICTs, the responsible authorities want to enhance healthcare quality and reduce healthcare costs, by improving the efficiency with which healthcare is delivered and reducing the delivery of services with little or no value (European Commission, 2004).

Healthcare: Correspond to the set of actions for prevention, diagnosis and treatment performed by health professionals or allied health professions. It refers to the work done in providing primary care, secondary care, tertiary care, and continuum of care.

Health Economics: Is a branch of economics concerned with allocation of resources in the health sector. In general, health economics is focused on issues related with efficiency, effectiveness, quality in production and consumption of health and healthcare.

Innovation: Is the process of creating and introducing something new and it requires the invention of something new and its implementation in the organization or in the market.

Health Economics: Is a branch of economics concerned with allocation of resources in the health sector. In general, health economics is focused on issues related with efficiency, effectiveness, quality in production and consumption of health and healthcare.

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