Equity and efficiency in public health: The contribution of health economics

© Oxford University Press, 2010. All rights reserved. Health economics has been defined as 'the application of economic theory, models and empirical techniques to the analysis of decision making by individuals, health care providers and governments with respect to health and health care'. It is a branch of economics, but it is not just the application of standard economic theory to health and health care. It has been developed specifically to: understand the behaviour of people as members of the population, as patients, and as health professionals; of institutions, such as hospitals and insurance companies; and to facilitate resource allocation decisions in health care. This chapter investigates the notions of efficiency and equity, which are commonly used in health economics in order to judge the appropriate use of health care resources, and which are the main contribution of health economics to decision making in health care. These are applied to the provision of public health programmes, and the role that the National Institute for Health and Clinical Excellence (NICE) plays in this is investigated.