The Role of Economics in Public Health Policy

Public health economists play a leading role in optimizing scarce resources to improve health outcomes.

—RTI International (2014)

In varying degrees, economics is a driving force behind all public health decisions. Much like the well-known saying, “money talks,” the costs of an intervention can sometimes overshadow the potential good it can bring to the general public.

To combat the initial shock of an intervention’s “price tag,” economists work alongside public health professionals to make the costs of an intervention as transparent as possible. One such way they do this is by conducting a cost-effectiveness analysis. Cost-effectiveness analyses are based upon the idea that to truly understand the costs of an intervention, one must first compare these costs to potential health outcomes. This process is both complex and critical, for just as costs must be accurate, so, too, must health outcomes be “precise measurements [in terms of] lives saved, infections averted, quality-adjusted life years, and disability-adjusted life years” (Bhattacharya, 2013, p. 96).

This week, you explore how economists assist professionals from multiple disciplines to identify and analyze public health costs. In your Discussion, you conduct a cost-effectiveness analysis to determine the associated costs and health outcomes of interventions identified in your Scholar-Practitioner Project. You also submit your Letter to the Editor by Day 7 of this week.

Learning Objectives

Students will:
  • Evaluate associated costs and health outcomes of interventions based on cost-effectiveness analyses
  • Write letters to the editor advocating public health issues

Learning Resources

Note: To access this week’s required library resources, please click on the link to the Course Readings List, found in the Course Materials section of your Syllabus.

Required Readings

Bhattacharya, D. (2013).
Public health policy: Issues, theories, and advocacy. San Francisco, CA: Jossey-Bass.

  • Chapter 3, “The Role of Economics: Theories, Modeling, and Evaluation” (pp. 77–98)

Haines, T. P., Hill, A.-M., Hill, K. D., Brauer, S. G., Hoffman, T., Etherton-Beer, C., & McPhail, S. M. (2013). Cost effectiveness of patient education for the prevention of falls in hospital: Economic evaluation from a randomized controlled trial.
BMC Medicine, 11, 135.

Note: Retrieved from the Walden Library databases.

Micklethwaite, A., Brownson, C. A., O’Toole, M. L., & Kilpatrick, K. E. (2012). The business case for a diabetes self-management intervention in a community general hospital.
Population Health Management, 15(4), 230–235.

Note: Retrieved from the Walden Library databases.

Pierce, D. S., Sperry, J., & Nirula, R. (2011). Cost-effective analysis of transjugular intrahepatic portosystemic shunt versus surgical portacaval shunt for variceal bleeding in early cirrhosis.
The American Surgeon, 77(2), 169–173.

Note: Retrieved from the Walden Library databases.

Wong, F. K. Y., Chau, J., So, C., Tam, S. K. F., & McGhee, S. (2012). Cost-effectiveness of a health-social partnership transitional program for post-discharge medical patients.
BMC Health Services Research, 12(1), 479–486.

Note: Retrieved from the Walden Library databases.

Wong, J. B., Coates, P. M., Russell, R. M., Dwyer, J. T., Schuttinga, J. A., Bowman, B. A., & Peterson, S. A. (2011). Economic analysis of nutrition interventions for chronic disease prevention: Methods, research, and policy.
Nutrition Reviews, 69(9), 533–549.

Note: Retrieved from the Walden Library databases.


Discussion: The Economics Behind the Adoption or Rejection of Interventions

The term economics has become synonymous with cost analyses, which is understandable given the value we place on determining the monetary impact, in investment and returns, of a given intervention.

—Bhattacharya (2013, p. 78)

Public health interventions must be economically feasible. If monetary impact(s) are not taken into account, even a well-supported intervention with promising health outcomes could be rejected.

When approaching issues related to monetary impact, it is important to note that economics does not work in public health the way that it does in business. This is because businesses are regulated by the nature of supply and demand. Typically, the more demand there is for a product, the higher the price. If there is less demand, either the price will likely reduce or the product will be taken off the market. In public health, this is not the case. The cost of an intervention may or may not increase due to a higher demand. Likewise, the production or implementation of interventions may not decrease due to low profit margins. For example, even though pharmaceutical companies made little to no money producing influenza vaccines, regulatory and governmental bodies can mandate that these companies continue production for the common good of the general public.

In this Discussion, you conduct a cost-effectiveness analysis to determine the feasibility of interventions, which you identified in your ”Conducting Research” assignment for your Scholar Practitioner Project. As you approach this Discussion, it is critical to remember that public health economics is not about making a profit. Rather, it is about the allocation of budgetary resources as a means to promote long-term savings and positive health outcomes. As you conduct your cost-effectiveness analysis, ask yourself the following questions:

  • How economically feasible is the intervention?
  • What are the long-term savings of the intervention?
  • How do the potential health outcomes outweigh the costs of the intervention?

To prepare for this Discussion, conduct a cost-effectiveness analysis on the one current and one alternative intervention identified in your “Conducting Research” assignment for your Scholar Practitioner Project. Based on this analysis, consider the costs associated with and health outcomes of implementing each. Refer to Chapter 3 of your course text to assist you in conducting your analysis.

By Day 4

Post an explanation that compares the costs associated with and health outcomes of each intervention. Then, explain the intervention that you recommend, justifying your ideas with references to your cost-effective analysis. Support your response with the Learning Resources and peer-reviewed sources.

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