Essentials of health economics: part I (continued)-what is economics?

  • Mooney G
  • Drummond M
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Abstract

In applying economics to problems of health care economists try to compare different patterns of use of resources with the various patterns of benefits which arise. This costing is never a simple and value-free exercise. The principal ingredient in costing is asking the right question. Because of the squeeze on NHS resources of late the question: Can you cost this please ? is posed more frequently by doctors to accountants and economists. Although greater awareness of costs can create a better climate for increasing efficiency, the question is unfortunately often posed without a real understanding either of the nature of the cost or of the problem (the two are, in practice, inextricably linked). Such a question ought always to be answered by, Why? because unless the nature of the problem to be solved is understood the wrong cost figure may well be calculated. What is the right costing question? The answers to the question, What is the cost of a delivery in a Scottish specialist maternity unit ? were f540, £510, and £210, and many others were possible.' To determine which answer is appropriate much more specific questions have to be asked as follows: (a) What is the current NHS unit cost of a delivery in a Scottish specialist maternity unit? Answer: £540. (b) If we wanted to increase the number of deliveries in Scottish specialist maternity units, assuming that the number of beds can be increased, what would be the extra NHS cost per delivery? Answer: £510. (c) If we wanted to increase the number of deliveries in Scottish specialist maternity units, assuming that the number of beds is fixed, what would be the extra NHS cost per delivery? Answer: £210. Two important considerations emerge from these questions. Firstly, the unit cost in the first question is the only one that is an "average" cost, since this would presumably be calculated by dividing the relevant total costs by the number of deliveries. (In practice such a figure must be of doubtful relevance to any choices in maternity care.) The other two questions relate to changes "at the margin"-that is, to alterations in size. Often in health care questions are not of the type, Should we do this or not? but rather, Should we do more (or less) of this ? Such

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Mooney, G. H., & Drummond, M. F. (1982). Essentials of health economics: part I (continued)-what is economics? BMJ, 285(6347), 1024–1025. https://doi.org/10.1136/bmj.285.6347.1024

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