In part 3 of our blog series on Health Economics, we are looking into how both Healthcare Funders and Health Manufacturers use Health Economics in their decision-making processes.
Public and private funders of healthcare use health economics to decide how best to allocate health resources, including funding for projects and compensation for health workers. Health economic training can not only help to answer the question of whether a certain program works but also whether it is worth funding. For instance, a highly effective program may be very costly under some economics of healthcare funding and thus it may be optimal to spend resources on a less effective but much cheaper program. Moreover, certain health economic methods sum up the effects of different programs in one-dimensional monetary terms. Since money is a familiar measure, such methods allow to communicate the value of diverse healthcare programs to stakeholders in a comprehensible manner. Health economics also helps the funder to assess the sustainability of his or her funds and, therefore, to determine how long a project may be supported. This prevents an uninformed discontinuity of funds and more efficient management. Moreover, if the desired outcomes are not being achieved, the funder is aided to make disinvestment decisions for improved reallocation of funds.
Using an economic evaluation in healthcare to provide the assessment of medical technologies is an important component in supporting budget allocation decisions. Therefore, to meet the demands of the provider, payer, and regulator of medical devices, evidence of value and cost-effectiveness is the top priority of the manufacturer. Also, the cost for developing therapeutic interventions and the pricing of existing ones is to be determined at the manufacturers’ end. Therefore, the use of health economic evaluation methods plays an essential role in the production and provision of health technologies by the manufacturer.
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