Critics of the Economic Evaluation in Health - Essay Example

"Critics of the Economic Evaluation in Health" is a controversial example of a paper on the health system.
The article reviewed here was written by Mr. D. P. Kernick and appeared in the May 30, 1998, issue of the British Medical Journal. It is concerned with further promoting the new field of health economics, which considers the possible applications of traditional economic theories to a new field which is health care. In this regard, it is increasingly being used to plan, budget, or otherwise balance demand and supply constraints in resource allocation of health care services.

In his article “Economic Evaluation in Health: A Thumb Nail Sketch,” Dr. Kernick cites as the basic reason for doctors and other health-care providers is their need to study and learn new health economics because of increasing and sometimes conflicting demands on health care needs of today's pro-active (or activist and demanding) patients. A number of vital issues must need to be addressed such as how outputs can be measured and costs are contained; in other words, these can be best answered using principles in economics and apply it to the health care industry.

He rationalizes the use of economic theories in the analyses and evaluations because of various or competing health interventions available today thanks to modern medicine. The use of economics in health care will facilitate making decisions especially when choices are to be made within the context of scarce resources (limited budgets for public health/more expensive private health insurance). Specifically, his article mentions four types of core or basic economic analysis which are cost minimization (only the inputs are measured), cost-benefit ratio (all outputs are to be measured in monetary or financial terms), cost-effectiveness (a slightly different measurement that considers clinical outputs which can be measured more accurately, such as morbidity, blood pressure or quality of life) and lastly, cost-utility (allocating a numerical value to the quality of life).

Strengths – Dr. Kernick's article had correctly pointed out that costs should be contained and that costs must ideally be related or correlated to better patient outcomes (Kernick, 1998, p. 1663). Doctors are usually not very mindful of the costs involved for the patient, often thinking a patient has sufficient financial means to avail of the recommended treatment. Another strength is the proper acknowledgment of the various perspectives in which economic health analysis may take, such as the viewpoint of the pharmaceutical company, the general practice, from an individual patient's perspective, the health authority (a government agency), or the bigger society at large. It is necessary to mention these different perspectives as scientific research studies can acquire a local color (bias), depending on whom the study is intended for; an example is a pharmaceutical industry that sponsors continuing medical education (CME) of most health professionals and one cannot eliminate bias entirely from any study sponsored by them. A third strength could be the proper citing of the inherent limitations in applying economic theories to an industry that is by nature quite hard to measure in monetary terms and must be integrated with value systems like equity.

Weaknesses – this article was written by a medical practitioner and therefore suffers in a limited view of how economics should be used more vigorously in the health care industry. This article is much too focused on cost containment and does not take into account the dynamics of a competitive industry such as health care which is mostly a private enterprise today. That means a view towards profitability, efficiency, better patient outcomes, greater customer satisfaction, and a host of other profit-related factors should be considered. In another related article, Harvard Prof. Michael E. Porter has a more comprehensive view of what ails the health care system today and had succinctly analyzed it in terms of the competitive factors (Porter and Teisberg, 1994. p. 2).