Economic analyses at macro and microlevels Macroanalyses

Two broad types or levels of economic analysis can be distinguished. At the more general macro-level are examinations of how mental health-care systems operate, the effects of different funding arrangements, and so on. For example, if we look at examples of the two main types of health-care system—a predominantly private insurance system and a national health system—we can see how economic issues have grown in importance and emphasis, and have led to a growth in demand for economic analyses.

In the United States, with a system dominated by private health insurance, the growth of 'managed care' has recently dominated the landscape. (Although initially a private sector phenomenon, managed care is now also a major force in the public system.) Managed care seeks to control or manage service access, quality, and costs. In the United States, with an historically high proportion of national income devoted to health care, and with provider costs and insurance premiums escalating, it has been the third of these—cost containment—which has driven many of the initiatives and attracted much opprobrium. Utilization reviews, case management, capitated payments, and a host of other measures have been employed to arrest expenditure and cost increases. At the same time, patients, their families, and their doctors continue to want to secure the best health outcomes they can. The consequence is rationing of a more overt and controversial kind than hitherto experienced.

The United Kingdom's tax-funded public sector National Health Service ( NHS) is a contrasting health-care system, with rather different forces at work. Nevertheless there are similar objectives and consequences. In the NHS, cost containment has long been a core objective, and quality and health outcomes have been less directly pursued by government. (Individual health-care professionals have had a fair degree of autonomy in these domains.) The introduction of the 'internal market' in 1990 by the Conservative government made more explicit the rationing criteria for treatment access, whilst the Labour government's announced commitment to health improvement programmes and evidence-based medicine is shifting the emphasis onto quality and outcomes. Throughout the history of the NHS, however, difficult choices have had to be made about the deployment of resources.

Macro-level economic analyses are concerned with how health-care systems function and what they achieve. What, for example, are the motivations and behaviour of key 'stakeholders' in these various health-care systems, and what are their implications for access, quality, and costs? What roles do economic forces play and can they be shaped to improve health outcomes and cost-effectiveness? Do different organizational or financial arrangements bring about different resource configurations? For example, do markets achieve fairer or more efficient allocations of health benefits than public sector bureaucracies? Through their macroanalyses, economists can contribute to a better understanding of how health-care systems can improve their utilization of scarce resources. More commonly, however, economic evaluations address micro- or practice-level questions. The remainder of this chapter is devoted to these microanalyses.

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