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Towards an alternative economics of health care

Published online by Cambridge University Press:  22 December 2008

GEOFFREY M. HODGSON
GEOFFREY M. HODGSON*
Affiliation:
The Business School, University of Hertfordshire, UK
*
*Correspondence to: Professor Geoffrey Hodgson, The Business School, University of Hertfordshire, De Havilland Campus, Hatfield, Hertfordshire AL10 9AB, UK. Email: [email protected]
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Abstract

It is argued here that an economics centred on subjective utility-maximization is unsuitable for the analysis and policy grounding of health care provision. To some extent, the peculiarities of health care have been recognized by mainstream health economists, who sometimes abandon Paretian welfare considerations to focus on needs instead. This article examines important peculiarities of health care that are relatively neglected in the literature. Some of these concern health care needs: while health itself is a universal need, needs for health care provision are largely involuntary, varied, and idiosyncratic. These issues have important consequences for the planning of health care systems and the extent of transaction costs in any market-based system. These factors, combined with the inherent dynamism of modern health care needs and capabilities, create an opening for alternative approaches to health care economics.

Type
Perspective
Information
Health Economics, Policy and Law , Volume 4 , Issue 1 , January 2009 , pp. 99 - 114
Copyright
Copyright © Cambridge University Press 2009

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