Why do we need Health Economics?

Let us cut to the chase. Health is important. It is without doubt one of people’s core values regardless of nationality or culture and a key driver of wellbeing. On the other hand, money and funding are important, as well, whether we like it or not. You cannot buy love and you cannot buy health, but nevertheless health and money are connected. But let’s leave the connection between money and love aside!

Unfortunately, modern medicine may not be able to work wonders, but together with a healthy lifestyle, it can help us live longer and stay healthier. Of course, medical treatment and health interventions come with a price.

What is cost-effectiveness research?

We are one step closer to the point now. Resources are scarce and limited, and we do not have endless pockets of money. So, we need to choose. How do we decide?

Consider you need to buy a car. What do you do? You list the possible options, hopefully keeping your budget in mind. You compare the options against each other – which car would benefit you the most and offer most value for money? In other words, you would do appraisals, research, and comparisons on different qualities of the cars. You would also consider how your purchase and its cost would impact you later. What would you have to give up choosing a specific car? How expensive would it be in the long run? How would it benefit you later?

That’s a typical predictive comparison. Now, what does your car have to do with health economics? If you think of the process, it resembles our work quite a lot. Instead of cars we compare health-related things: different treatment options, health technology, and medicinal products, for instance. We are specialists of cost-effectiveness research and produce predictive assessments of health investments and costs, and benefits.

Cost-effectiveness is key

It is crucial we apply our best knowledge into social and health economics outcomes research. The costs of healthcare are rising to a level we cannot afford. The trend is both national and global, and recent incidents such as COVID-19 are likely to catalyse the challenges with health and social care costs.

At the same time, we have treatments and practices that are not effective – they may not be cost-effective even at a zero price. Therefore, it is essential these existing treatments are also assessed carefully, so that we will be able to allocate our national or local healthcare resources in a cost-effective manner. Real-world data is needed for the task, which we can turn into real-world evidence.

To answer our title question: health economics is important because we cannot afford not to utilise its methods to assess cost-effectiveness. Cost-effectiveness is a way to produce health efficiently, and as much as possible. So, a lot is at stake. Our health.

Interested? Contact us and we will gladly tell you more.

Further information:
Erkki Soini, CEO and Health economist