I N T R O D U C T I O N

ECONOMICS HEALTH HEALTH ECONOMICS

PHARMACOECONOMI CS

ECONOMICS
Is the study of the activities that involve production and exchange of goods

ECONOMICS
The science of choice

ECONOMICS
The study of commerce among nations

ECONOMICS
The study of man and how he runs the economic activities.

ECONOMICS
The study of money, banking, capital and wealth

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.

Economic Resources 1. Land 2. Labor 3. Technology 4. Capital 5. Market

LAND

LABOR

Capital

Technology

Market

Non-Economic Factors
1. 2. 3. 4. 5. 6. Government Religion Education Social structure Values Culture

Components of Economics
1. Economics is about making CHOICES. 2. Economics is analyzing the different CHOICES and their COSTS. 3. The choices and their costs will give an EFFECT ON THE FUTURE of those who make these decisions, or to the recipients of the commodities.

Macroeconomics
(national Income Analysis) is the study of the functioning of the economy as a WHOLE interest rates and currency exchange trends in prices output, wages, inflation, unemployment government economic policies and taxation

Microeconomics
(Price theory)
Is the study of smaller and individual entities How the industries price the goods, effort, consumption, saving, and allocation How household allocate and use their financial and other resources

Macroeconomics and Microeconomics Differentiated

Terms associated with Macroeconomics Gross national Product Gross Domestic Product Aggregate supply aggregate demand Employment/unemployment Fiscal policy Government and taxation Foreign trade/Balance of trade Inflation/Deflation Interest rate Foreign exchange Terms Associated with Microeconomics Pricing Household allocation of resources Household spending and saving Price and income elasticities

Criteria in Classifying Phases of Economic Development A. Means Livelihood

1. 2. 3. 4. 5. Hunting and fishing phase Pastoral phase Handicraft phase Agricultural phase Industrial phase

Criteria in Classifying Phases of Economic Development B. Extent of Economic Activity

1. Household economy 2. Village economy 3. National economy 4. International economy

Criteria in Classifying Phases of Economic Development C. Medium of Exchange

1. Barter economy 2. Money economy 3. Money and credit economy

Money
Money is a guarantee that we may have what we want in the future. Though we need nothing at the moment, it ensures the possibility of satisfying a new desire when it arises - Aristotle Money is like a sixth sense, and you cant make use of the other five without it. W. Somerset Maugham

Money

Purposes of money
Medium of exchange Unit of account Store of Value Standard of deffered payment

Economic System is responsible for improving economic conditions of the people

Types of Economic System

Traditional Command Market Mixed

Traditional

Command

Market

Effectiveness of ES is measured by the following Criteria

Abundance Stability Security Economic freedom

Growth Efficiency Justice and Equality

Health

HEALTH
WHO DEFINED AS:

The state of mental, physical, and social well being, and does not merely connote the absence of illness

NOTE:
An individual who does not experience any symptoms of disease may not necessarily be healthy. Absence of symptoms does not necessary connote healthfulness

Health

DIMENSIONS OF HEALTH
ENVIRONMENT SOCIETAL Physical Mental Emotional Spiritual Social Sexual

Physical health

Mental health

Emotional Health

How is health objectively measured? There are a number of ways of measuring health 1. Health measures Measures of the health status of people: a. Vital statistics height and weight b. Dental health status decayed, missing and filled teeth, index c. Average height of population proxy for nutritional status d. Percentage of low birth weight babies

2. Health behavior indicators a. Peoples behavior Examples: number of people smoking, drinking alcohol, using drugs, eating a healthy diet, practicing safe sex or planned fertility b. Specific behavior Examples: percentage of children immunized against childhood illness, percentage of women screened for cervical and breast cancer

3. Environmental indicators a. Measurement of physical environment Example: air and water quality b. Social environment Example: housing type and density 4. Socio-economic indicators a. Wealth (3 components) Examples: life expectancy, educational attainment, and income b. GNP a measure of countrys wealth c. Peoples health related beliefs and attitudes

HEALTH ECONOMICS deals with the manipulation of factors that should be able to give people better health

HOW do we manipulate HEALTH? To answer we have to study and ask . WHAT determines health? Or simply, WHAT factors influence HEALTH?

Underlying socioeconomic, demographic, and cultural factors Individual

Determinants of Health: Major Effects and Intervention Points

Proximate Factors Health Care Services Environmental Contamination Nutrient Dietary intake Fertility Injury Health Outcomes Mortality Morbidity Nutritional Status Disability

Health benefits, Attitudes Household Income/wealth Age-gender composition Social network Community

Underlying SocioAge, gender Economic, Education Demographic, and Occupation Cultural Factors

Ecological climate Markets & prices Transportation size, structure, and distribution Social structure and organization

Top 10 Leading Diseasess (mortality)

Disease of the heart Disease of the vascular system Pneumonia Malignant neoplasm TB, all forms Accident
Chronic obstructive pulmonary & allied conditions Other diseases of the respiratory system Diabetes Mellitus Diarrheal disease

Top 10 leading Diseases (morbidity)

Diarrhea Pneumonia Bronchitis Influenza TB, respiratory Hypertension Malaria Chicken pox Diseases of the heart Measles

Major Determinants of Health 1. Genetic and biological factors 2. Lifestyle factors 3. Environmental factors 4. The extent and nature of health services

A. Social and Health Social Class Classification

1. Higher managerial and professional e.g. company directors, bank managers, senior civil servants 2. Lower managerial and professional e.g. Nurses, soldiers, pharmacist 3. Intermediate e.g. Secretaries, clerks 4. Small employers and own account workers e.g. publicans, play group leaders, farmers, taxi drivers 5. Lower supervisory, craft and related occupation e.g. Printers, plumbers, butchers, train drivers 6. Semi-routine occupations e.g. Waiters, road sweepers, cleaners, couriers 7. Never worked and long term unemployment

B. Income and Health

Ways in which low income can affect health 1. Physiological Examples: inadequate or unfit housing, lack of food, lack of fuel 2. Psychological Examples: stress and lack of social support 3. Behavioral Examples: smoking or drinking alcohol; giving of children sweets

C. Housing and Health - housing quality and its lack of availability can damage health - unknown number of families share unsuitable or inadequate accommodations - problems of homelessness respiratory illness depression high rates of infections difficulties in gaining access to health services

D. Employment and Health - work is important to consider as a social determinant of health - it determines income level - it affects self-esteem - the type of employment may itself affect health Examples: mining exposure to hazardous substance or stress publicans high risk of developing cirrhosis

E. Gender and Health - Genders refers to the social categorization of people as men or women, and the social meaning and beliefs about sexual differences - men are encouraged to be aggressive and risk-taking both at work in their leisure time higher rates of accidents and alcoholism - women are socialized to be passive, dependent and sick - women working increased stress and ill health

F. Health of Ethnic Minorities - black and ethnic minority experience more ill health, chronic and mental ill (sickle cell anemia, thalassaemia and Tay-sachs disease) - little information of health, low income, poor working conditions, unemployment and poor housing shared by those in lower social classes

Health Outcomes They can be 1. Distinct figures Examples: life expectancy (length in years, nutritional status (weight for age or height ) 2. Ratios Examples: mortality rates, morbidity rates, incidence and prevalence

Examples of Health Outcomes

1. Fertility Rate measures the reproductive capacity of groups

Crude Birth Rate = Total number of live births (CRB) midyear population x 1000

2. 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

2. Mortality Rate measures risk of dying within a specific group or dying from a cause

Infant Mortality Rate (IFR)

= infant mortality rate <1 year age x 1000 Total number of live births

3. Morbidity Rate measures the frequency of illnesses within specific population Prevalence Rate (PR)
= Number of new and old cases within a period x 100 midyear population

Incidence Rate (IR)

= Number of new cases XF Population at risk

Health outcome before the health program

Compare

Health outcome after the health program

Health Program

Proximate factors and health programs developed

Proximate factors Health Care Service Utilization Environmental Contamination Nutrient Dietary Intake Fertility Injury Health Programs Developed OPLAN Bakuna with Jollibee, OPLAN Alis Disease Anti-pollution Campaign, Worker Health and Safety Program Barangay Day Care Centers, Vitamin A Campaign Responsible Parenthood Information Drive Dont Drink and Drive

Example
A: Individual Level
Occupation as a >>> Exposure to mining >>> increased coal miner contaminants incidence of workers lung disease (Occupation as underlying determinant) (Environmental contamination as proximate determinant) (Health Status/ outcome)

Example
B. Household Level
Low household Income >>> Poor nutritional >>>> Poor nutritional intake status (low weight, height) (Health status/ Outcome)

(Income/Wealth as underlying determinant)

(Nutritional intake as proximate determinant)

Example
C. Community Level
Poor transportation >>> Poor health care >>> More deaths in transportation network (Transportation as underlying determinant) (Healthcare service utilization as a proximate factor (Health Status/ Outcome) service utilization the area

Relationship Of health and Economic

Improvement in Health status

More resources allocated for health

Improvement in worker productivity

Contributes to better economy

HEALTH ECONOMICS

Health Economics

Health Economics Can be defined broadly as the application of the theories, concepts, techniques of economics to the health care sector

 It deals with the analysis of the economic costs of disease, control programs, ROI in education, training conditions conducive to medical research

Health economics concerned

1. Allocation of resources between various health promoting activities 2. Quantity of resources used in healthcare delivery to improve health 3. Organization and funding of health organizations 4. Efficiency of the allocation and use of resources for health 5. Assessment of the effects of preventive, curative, and rehabilitative health

CIRCULAR FLOW OF PHARMACOECONOMIC ACTIVITY

LAND, LABOR,CAPITAL (Resources)

(Resource Owners)

HOUSEHOLDS

(Organizers and Users Of Resources)

FIRMS

GOODS & SERVICES (Output)

THE CIRCULAR FLOW OF THE PRODUCTION PROCESS

FRAMEWORK OF HEALTH ECONOMICS

WHAT IS HEALTH? WHAT IS ITS VALUE? Perceived attributes of health, health indices, value of life.

WHAT INFLUENCES HEALTH? Occupational

Hazards, Educational, and Income

B E
MICRO ECONOMIC EVALUATION
CMA CEA CBA CUA

C
DEMAND FOR HEALTHCARE

F
MARKET EQUILIBRIUM Money Prices Time Prices Equilibrating mechanism

Influences of A and B on Health Care Seeking Behavior

D
Costs of Production Alternative Production Techniques Input Substitution

SUPPLY OF HEALTHCARE

H
PLANNING, BUDGETING AND MONITORING MECHANISMS
Evaluation of Effectiveness

G
EVALUATION WHOLE SYSTEM LEVEL Equity & Allocative Efficiency Criteria

2 Basic Activities undertaken In Pharmacoeconomics 1. Production 2. Consumption STOCK and FLOW CONCEPTS 1. Stock = refers to the measure of quantity at a point of time 2. Flow refers to the measure of movement of quantity over a period of time

THE FLOW OF OUTPUT BETWEEN FIRMS AND HOUSEHOLDS

Raw Materials Firms

Raw materials

Intermediate Good Firms

Intermediate goods

HOUSEHOLDS
Final goods

Final Goods Firms

THE CIRCULAR FLOW OF GOODS AND INCOME AMONG PRODUCERS AND HOUSEHOLDS
ECONOMIC RESOUCES

HOUSEHOLDS

Payment

RAW MATERIAL PRODUCERS

ECONOMIC RESOUCES

Payment
ECONOMIC RESOUCES

INTERMEDIATE GOODS PRODUCERS

Payment Final Goods Payment

FINAL GOODS PRODUCERS

Pharmacoeconomics
means by which pharmacists can demonstrate the value of their products and services

Pharmacoeconomics
the description and analysis of the costs of drug therapy to healthcare systems and society

Pharmacoeconomics
Art and science of investigating the varied conditions, key environmental forces, laws and regulations involving the production, distribution, promotion and consumption of pharmaceutical drug products

5 factors to consider in pharmaceutical economics

Pharmaceutical business and professional challenge The availability of drugs and services satisfying customers The physical distribution of healthcare products The usage/consumption of drug products and services The allocation of resources

Pharmacoeconomic research
1. Identify, 2. Measure, 3. Compare the costs and consequences of pharmaceutical products

Goal of Pharmacoeconomics
To help decision makers allocate a fixed amount of resources across competing products and services so as to maximize health benefits to the population of patients they serve

INPUT - PROCESSES
FUNCTIONAL CAPACITY Cardio Respiratory Nutritional Muscular Fitness Good Eating FitnessHealth Good Exercise

OUTPU T

Motor Fitness No Stress And Tensions

QUALITY OF LIFE

2 Types of Trading Businesses

Retail Trading Businesses Wholesale Trading Businesses

2 Types of Goods
1. Consumer Goods 2. Industrial Goods

2 Types of Industrial Businesses

1.Manufacturing business 2.Extractive Business