Question

1.2 Health economics has enjoyed several decades of remarkable growth, but will this growth continue? Why or why not?

Answer 1

Health economics has enjoyed several decades of remarkable growth and this growth will continue at least for next two three decades.

Reasons:
1. Factors fueling the demand for health economics.

First, there will be a growing gap between what medicine can do and what it is economically feasible to do. Because technological change is, in part, endogenous, the gap is not likely to widen indefinitely, but there will be a lag between the constraints imposed by financial limits and their effect on the flow of medical advances. The outpouring of expensive new drugs and procedures that are already in the R&D pipeline will make the necessity for choice starker and more urgent. Decision makers at all levels will inevitably look to economics, the discipline that emphasizes trade-offs and provides a rigorous way of thinking about them.

2. Second, aging populations will put more pressure on health care resources. In the United States, people over 65 consume three to four times as much medical care per capita as people under 65, and those 85 and over consume three times as much as those 65 to 69. Given the trends in medical technology and demography, the problem of financing health care for the elderly will soon equal and then surpass the problem of financing retirement.

3. Third, the recent large increase in resources devoted to technology assessment, outcomes research, and evidence-based medicine centers will create a much richer database. These better data will make economic analyses more reliable and more widely accepted.