Health Economics

Introduction

The main function of a health system is to provide high-quality healthcare services to the population. Good health is essential for the social fabric of a country. Therefore, governments should ensure that they implement healthcare policies that promote quality delivery of services. In addition to health improvement, investments and spending in health systems play a major role in supporting the country’s economic status and stability (Evans and Stoddart, 2017). The health system is essential for inclusive and sustainable development because it provides employment and promotes trade. The social benefits of health systems are frequently overlooked. However, reports by the World Health Organisation (WHO) show that health and well-being contribute to economic prosperity and social progress (Boyce and Brown, 2019). Therefore, economic security and social cohesion become key determinants of health. A careful exploration of issues related to health and health care can help to illustrate how economics, social policy, and politics are key in understanding the sector. This article analyses ways that economics, politics and social policies add to our knowledge of health and health care.

Health and Health Care

Health is often confused with health care. By definition, health is the absence of disease, while health care refers to the efforts implemented to maintain and improve people’s health conditions through the provision of medical care. As a practical matter, people usually understand health care to mean hospitals, physicians, blood tests, imaging scans, medicines, dialysis, and surgeries. All of these are means to help people achieve health. According to Boyce and Brown (2019), health systems’ main role is to provide health care, thus protecting and promoting the health of the population. Therefore, health can be differentiated from health care in that health is a state of well-being, while health care denotes the efforts undertaken to maintain that state.

Health Systems

Health systems are set up to improve health care. According to Gilson (2012), health systems can be defined by what they are meant to implement or by their constituent elements. She adds that the systems provide both curative and preventive health services (Evans and Stoddart, 2017). They also protect and promote public health, as well as emergency preparedness and responses. A health system consists of all organisations, people, and activities whose main purpose is to promote, restore or sustain health. This includes the provision of quality health care; health systems are expected to be fair and fight any discrimination that may compromise service delivery (World Health Organization, 2017). Health systems belong to the social fabric that makes up a nation (Gore and Parker, 2019). Therefore, they should ensure that there is a uniform distribution of health and finances supporting the systems. Improving health care also translates to protecting households from catastrophic diseases that might affect their financial stability. Healthcare providers should take the lead in promoting people’s dignity.

Components of a Health System

According to Fanjiang et al. (2005), the healthcare system comprises four components that include the individual patient, the care team, the organisation, and the political and economic environment. An effective healthcare system is user-centred, prioritising the needs and preferences of the patient. Some consumers have sought to increase the system’s effectiveness by offering feedback on areas of improvement. The care team consists of health professionals and other caregivers, that is, the physicians, support staff and family members offering medical help to the patient. The care team creates a clinical micro-system for the individual patient. Fanjiang et al. (2005) postulate that the organisation refers to the infrastructure: for example, a hospital, nursing home, clinic or dispensary. These infrastructures all provide complementary elements to support the care team in providing healthcare services to the patient. The organisation provides a supportive environment for initiating changes through its chain of command, decision-making and operations systems. The political and economic environment comprises regulatory, financial and regimes that affect the organisation and functioning of the healthcare system.

Impacts of the Health System to the Economy

The economic and social impacts of health systems are normally overlooked as policymakers focus on the expenses associated with medical care. As medical care costs rise globally, governments debate how to make health care more affordable while at the same time improving its quality and safety. Boyce and Brown (2019) stipulate that since only the costs in health systems are given priority, the benefits and positive impacts go unnoticed. However, according to WHO, health systems generate a series of economic benefits that validate their existence (Boyce and Brown, 2019). Compared to an educational facility such as a local university, health systems contribute to economic and social progress. Health systems existence in a locality promotes sustainable economic development and social cohesion. They attain economic growth in health systems through creation of employment opportunities and the adoption of inclusive employment policies, bettering the skill base in a local labour market, investing in regions with low economic output, targeting local micro-, small and medium-sized enterprises when making purchases and procurements, and promoting unity in marginalized communities (Evans and Stoddart, 2017). These economic benefits positively impact residents because they promote economic growth and improving their wellbeing. Furthermore, expenses in health and the design of health financing policies should be addressed in terms of the interplay between health and the economy.

Social and Economic Impacts of Employment

Employment opportunities created in the health sector have a relative amount of influence in the local community. According to Boyce and Brown (2019), local wealth increases when staff who live locally spend their income. The injection of funds has a positive income on both economic and social resilience in the long term. Living in close proximity to their workplace saves the environment by reducing carbon emissions as there is minimum travel to work (Boyce and Brown, 2019). Consequently, benefits are experienced in the housing sector, nutrition, social cohesion and the environment (Bloom et al., 2019). Hiring local residents ensures that the health systems can support jobs, thus keeping the local population employed.

Health systems are leaders in providing quality jobs, as well as a large quantity of them. This way, health systems improve working conditions for local communities, making them more equal and inclusive (Raphael et al., 2019). The results of improving working conditions include better childcare services, enhanced gender equality through inclusive job opportunities that employ around 67% women, reduced geographic inequities through delocalisation of employment opportunities and increased opportunities for marginalised groups such as people with disabilities and minority groups (Boyce and Brown, 2019; Stewart et al., 2019). Good working conditions boost health because of enhanced health and safety measures to safeguard the staff.

Politics and Health

Political traditions and healthcare providers have a symbiotic relationship in which politics play a paramount role in shaping health dynamics. According to Cinaroglu (2019), a health system is designed in a way that policymakers have a direct influence on healthcare provision. He adds that politicians have made medical care their playground (Raphael et al., 2019). Most importantly, responses to health challenges depend upon political decisions regarding the allocation of proper resources; in these cases, politicians maintain power by using incentives such as improving health care quality, increasing insurance coverage, and augmenting health infrastructure for easier access. The politicians define politics as an endless struggle for power and authority. Since power is backed by the economy and social cohesion, consolidating both power and authority can be easily achieved using health care. Health cannot be separated from politics.

Politicians understand that citizens crave better health care; therefore, they use it to keep authority by making considerable investments in the health care sector. As Cinaroglu (2019) postulates, politicians base the theory behind the relationship between politics and health on political economics literature. According to Borrell et al. (2007), this literature focuses on the relationship between electoral rules and health. Electoral proportionality closely matches the vote share and the seat share in parliament, thus influencing healthcare provision (Kickbusch, 2015). The increased beneficiaries of redistributive health policies translate to political influence. In developing countries, political leaders that advocate for equal distribution of quality health care gain citizens’ trust and thus have more power. Voters’ behaviours are influenced by individual economic and social benefits (Raphael et al., 2019). Therefore, increases in benefits for the poor population promote political support for the party that implements policies to improve healthcare provision for the common citizen.

Social Policies and Health Care

Social policies are health determinants, dictating the quality and quantity of health services provided to citizens. Terries (2011) contends that social policy for health should not ignore the fact that poverty and racial discrimination are major causes of ill health. For total eradication of poverty and health discrimination as etiological factors in disease, Raphael et al. (2019) further suggest that health professionals should work beyond their specific interests. However, for developing countries dependent on outdated agricultural economies, residents are unable to construct and maintain proper water and sewage systems, cooling or pasteurization plants (Navarro et al. 2006). Therefore, it is impossible to eradicate poverty in such regions. According to Thomson et al. (2011), governments lack finance resources to train adequate health professionals and build well-equipped health facilities and institutions. In such countries, health policies cannot eliminate economic and social backwardness, thus rendering industrialisation and economic development the only keys to high-quality health care.

These policies may directly or indirectly affect healthcare provision. While healthcare and public health policies directly target health care, social policies may indirectly influence health. Osypuk et al. (2014) and Raphael et al. (2019) postulate that social policies might mitigate inequalities in health by unevenly distributing social determinants of health to dissimilar population subgroups. Social policies contribute to social and economic outcomes, including marriage, income, education and housing. Since these outcomes are causes of good health, they consequently influence health provision (Evans and Stoddart, 2017). However, the extent to which social policies influence health care is yet to be disclosed due to the absence of sufficient research on the topic.

Conclusion

Understanding health and health care requires knowledge of political, economic, and social policies. Health and health care are often erroneously used interchangeably to refer to both the absence of disease and the provision of medical care. Political influence in healthcare provision is key for power retention. Policymakers initiate incentives intended to improve the quality of health care provided to gain voter support. However, they focus more on the costs of healthcare provision while overlooking the economic benefits attached. The location of a health care facility in a locality with low economic output helps in attaining sustainable growth. Health systems provide employment opportunities that are inclusive and equitable. Employment affects economic and social cohesion, and the quality of working conditions improves as well. Health care is, however, affected by racial discrimination and poverty. Social policies established to eradicate racial discrimination and poverty may only work in developed countries, since developing countries lack the finances to implement them. However, the author believes future research may uncover solutions to eradicate racial discrimination and poverty in developing countries.