ECONOMICS

Ms. Hope L. Gemida

ECONOMICS
HEALTH ECONOMICS
Developed as a distinct discipline of Economics in the
1980s, it is a relatively new field.
As the term implies, it is the application of economic
principles to health.
More specifically, it implies the use of economic
methods to improve health using the most efficient
interventions.
Health economics contributes immensely to health
planning.

ECONOMICS
Economics has been defined in different ways.
Samuelson, an authority in economics, and the
author of one of the most widely-read and referredto textbooks in economics, has drawn up a list of
definitions:
Economics is the study of those activities that
involve the production and exchange of goods.
Economics is the science of choice. It studies how
people choose to use scarce or limited productive
resources (land, labor, equipment, and technical
knowledge), to produce various commodities, and to
distribute these goods to various members of the
society for their consumption.

ECONOMICS
Economics is the study of money, banking,
capital, and wealth.
Economics is the study of commerce among
nations. It helps explain why nations export some
goods and import others, and analyses the effects
of putting economic barriers at national frontiers.

ECONOMICS
As defined by Samuelson:
Economics is the study of how people and society
end up choosing, with or without the use of
money, to employ scarce but productive resources
that could have alternative uses, to produce
various commodities and distribute them for
consumption, now or in the future, among various
persons and group in society. It analyses the costs
and the benefits of improving patterns in resource
allocation.

ECONOMICS
Based on Samuelsons definition of economics, we
can imply the following characteristics of
economics:
1) Economic resources will always be scarce, and
people will always struggle to work against
scarcity.
2) There is a universal objective of attaining the
maximum output out of a given input.

ECONOMICS
Man has economic resources which he can use to
produce commodities:
Land
Labor
Technology
Capital

Components of
Economics
1.Economics is about making choices. Choices can
be on:
what commodities to produce,
For whom the commodities should be produced,
How to best and most efficiently produce these
goods,
What is the best way to distribute the
commodities, and
How much of the commodities will be produced.

Components of
Economics
2. Economics is analysing the different choices
and their costs.
Remember that these choices will have costs.
Different alternative choices will have different
corresponding costs
3. The choices and their costs will have an effect
on the future of those who make these decisions,
or to the recipients of the commodities.

Macroeconomics
Is the study of the functioning of the economy as
a whole. Macro means big or grand.
Macroeconomics studies, among other things:
Interest rates and currency exchange rates;
Trends in prices, output, wages, inflation,
unemployment;
Government economic policies and taxation.

Microeconomics
is the study of smaller and individual entities. It
studies the behavior of industries, companies, and
households. Micro means small or miniscule.
Microeconomics studies, among other things:
How industries price the goods they produce and
distribute;
How taxes affect peoples work effort,
consumption, saving, and allocation; and
How households allocate and use their financial
and other resources.

Table 1. Macroeconomics and

Microeconomics Differentiated
Terms Associated with
Macroeconomics
Gross National Product (GNP)
Gross Domestic Product
(GDP)
Aggregate supply and
aggregate demand
Employment/ Unemployment
and wages
Fiscal Policy
Government and Taxation
Foreign Trade/ Balance of
Trade
Inflation/ Deflation
Interest Rates
Foreign exchange

Terms Associated with

Microeconomics

Pricing
Household allocation
of resources
Household spending
and saving
Price and Income
elasticities

The
Determinants
of Health
Prepared by: Ms. Hope L. Gemida

The Determinants of
Health
Health has been defined by the World Health
Organization (WHO), as:
The state of mental, physical and social well being,
and does not merely connote the absence of illness.
Health is a multi-factorial phenomenon.
an individual who does not experience any
symptoms of disease may not necessarily be
healthy.
For example, a person who has an elevated blood
cholesterol or glucose level, may not feel anything
at all even when a disease process is already on
going.

The Determinants of
Health
Thus the absence of symptoms does not
necessarily connote healthfulness. An individual
may not necessarily feel anything even when a
disease process has already started.
On the other hand, a woman who experiences
nausea and vomiting during the early stages of
pregnancy may still be considered normal during
early pregnancy.
Conclusion: The presence of symptoms does not
necessarily connote illness. The reason for such
symptoms has to be investigated.

The Determinants of
Health
A 35-year old individual who is able to run ten
kilo meters may be considered healthier than
another individual who is only able to climb a few
flight of stairs, all other things being equal.
Conclusion: There are varying degrees or states of
health.
A person who seeks medical care more often than
another may not necessarily be healthier than the
other who does not visit a health facility as
frequently.

The Determinants of
Health
Truly the state of being healthy or unhealthy can
be expressed in many ways. Health economics
deals with the manipulation of factors that should
be able to give people better health. This poses
a problem for health planners since health is
difficult to both qualify and quantify.
How do we manipulate health? To answer this we
have to study and ask: what determines health?
Or simply what factors influence health?

The Determinants of
Health
Underlying SocioEconomic, Demographic,
and Cultural Factors

Individual
Age, Sex
Education
Occupation
Health Benefits,
Attitudes
Households
Income/Wealth
Age-Sex
Composition
Social Network
Community
Ecological Climate
Markets and Prices
Transportation Size,
Structure, and
Distribution
Social Structure and
Organization

Proximate
Factors

Health
Outcomes

Health Care
Service
Utilization

Mortality

Environmental
Contamination
Nutrient Dietary
Intake
Fertility
Injury

Nutritional status

Morbidity

Disability

The Determinants of
Health
Table 2 explicitly shows that health is a multifactorial phenomenon. It is directly and indirectly
affected by a lot of factors.
The diagram shows that health intervention does
not only focus on the individual, but also on the
household and the community.
Health outcomes are objective measures of
health. They are the parameters used to measure
the health condition of individuals, communities,
or countries. They are standardized measures
which are understood and applied internationally.

The Determinants of
Health
Proximate determinants are factors that have a
direct influence on health outcomes.
Proximate means attached, near or direct.
Underlying determinants influence health
outcomes indirectly by their effect on proximate
outcomes.
Underlying means what lies beneath, or the root
cause.

Health Outcomes
Health outcomes are objective measurements of
health and disease. They can be:
Distinct figures e.g., life expectancy (length in
years), nutritional status (weight for age or
height); or
Ratios e.g., mortality rates, morbidity rates,
incidence and prevalence.

Examples of Health
Outcomes
Fertility Rate measures the reproductive capacity
of groups.
Crude Birth Rate(CBR)= Total number of live births x
1000
midyear population
Mortality Rate measures risk of dying within a specific group
or dying from a cause
Crude Death Rate (CDR)=number of deaths, all causes x 1000
midyear population
Cause Specific Death Rate (CSDR)
=number of deaths from specific cause x F
midyear population

Examples of Health
Outcomes
Infant Mortality Rate (IFR)= Infant mortality rate < 1 year age x
1000
Total number of livebirths

Morbidity Rates measures the frequency of illnesses within

specific population.
Prevalence Rate (PR)
= Number of new and old cases within a period x1000
midyear population

Incidence Rate (IR) = Number of new cases x F

Population at risk

Health Outcomes
Monitoring and measuring the effectiveness of health
activities and programs that seeks to improve health.

Health outcome
before the
health program

COMPA
RE

HEALTH
PROGRAM

Health outcome
after the health
program

Proximate Factors
Proximate determinants are factors that directly affect
the health status or outcomes of individuals or groups.
These factors may be innate to a person, e.g., nutrient
intake and fertility. These are physiological factors
which directly affect the health status of an individual.
These may be external factors, e.g., environmental
contamination, injuries, and health care service
utilization which also directly affect the health status of
people or communities.

Proximate Factors
Physicians, nurses, and other health practitioners in
clinical practice are mostly more concerned with the
health of individuals.
Most healthcare facilities commonly focus on problems of
individuals. These are nutrition, survival or deaths
(mortality) from illnesses, recovery and prevention of
disabilities fro serious illnesses, like strokes or accidents.
Good public health programs focus on the prevention of
such illnesses stated before.
It is important to remember that the treatment of
illnesses should not only be focused on the sick of
individual, but also on factors which directly cause them.

TABLE 4. PROXIMATE FACTORS AND HEALTH

PROGRAMS DEVELOPED
PROXIMATE
FACTORS
HEALTH CARE SERVICE
UTILIZATION
ENVIRONMENTAL
CONTAMINATION

NUTRIENT DIETARY
INTAKE
FERTILITY

HEALTH PROGRAMS
DEVELOPED
OPLAN Bakuna with
Jollibee, OPLAN Alis
Disease
Anti-pollution
Campaign, Worker
Health and Safety
Programs
Barangay Day Care
Centers, Vitamin A
Campaign
Responsible
Parenthood

Underlying Socio-Economic,
Demographic, and Cultural
Factors
There are factors which do not directly affect health
outcomes, but have an influence on the proximate
factors which ultimately affect the health status.
These are social, economic, cultural and demographic
factors which seemingly do not affect health.
However, these factors will ultimately influence the
activities, exposures, and attitudes of individuals,
households, and communities towards health.

Underlying Socio-Economic,
Demographic, and Cultural
Factors
Again, ultimately they will affect health outcomes in a
cascading manner.
Remember that underlying factors are those that lie
beneath or root causes.
Thus, underlying factors affect proximate factors
which then affect health outcomes.

Following are examples based

on the illustrative framework.
A. Individual level
B. Household level
C. Community level