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

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.