Any “economics of …” first requires an understanding of the topic in question. This first chapter deals with the nature of health and disease, and the complex medical institutions and systems that modern societies have put in place to prevent, diagnose and treat illness. We give a short, introductory overview of health and disease and equity of healthcare. This chapter (as well as Chapters 2 and 5) are primarily descriptive. They do not provide theory (e.g. how to improve “efficiency”); this will be covered in later parts of the book.

Definitions and models of “health” and “disease”

“Health” is a constitutive human experience. It is not by chance that since antiquity (and historical records began) every society has had health experts (as opposed to economists). Medicine was one of the founding faculties of the oldest European universities – in addition to theology, philosophy and law. At first glance, “health” appears both easy to define as well as being an issue of pure natural science; after all, diseases (and health) are about biology. However, on closer examination, things are much more complicated. “Health” interacts with physiology but also affects psychology, sociology, politics and ethics, amongst others, and vice versa: for example, the concept of “pain” is not just an issue of pure biology since in some societies patients are entitled to complain about it whereas in others they are expected to be brave. The health of a population also heavily influences its economic power (the Covid-19 pandemic is a case in point).

This is one of the reasons why it is notoriously difficult to succinctly define “health” and “illness”. The key challenges are:

• • Is health a state/ stock (of being healthy) or a process/ flow (of producing health)? Is health something that individuals and society experience or constantly “create” by, for example, fighting pathogens?

• • Is health something to be felt (feeling ill) or something that enables people to perform (being able to work)?

• • Who decides whether a patient is ill – the patient or society? The decision can be based on individual perception or societal definition (declaring someone ill, for example, to allow them to access sick pay).