The imperative of health economics - Hindustan Times
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The imperative of health economics

ByEmily Myers, Nidhi Chaudhary, L M Singh
Apr 06, 2024 02:07 PM IST

This article is authored by Emily Myers, Nidhi Chaudhary and LM Singh.

The post-Covid era has prompted a renewed focus on the resilience and adaptability of health care systems, and India stands at a critical juncture. While substantial investments and enhanced interest have bolstered the Indian health care sector, there is an urgent need to ensure that every rupee spent translates into tangible improvements in health care accessibility, quality and equity.

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As we near the pivotal juncture of the country’s budget allocation, health care spending is in the spotlight. Recent estimates from the Union health ministry's National Health Accounts (NHA) show the evolving picture in health care financing. With the government and household share of health spending at 41.4% and 47.1%, respectively, in 2019-20, there is a trend towards more government financing in health care, a new precedent for the health system. This shift underscores the evolving role of health care in India's dynamic economy and signals a positive trajectory for the sector. However, as government spending on health increases, allocative efficiency becomes ever more important.

This is why health economics emerges as a powerful tool. By applying economic principles to health care issues, health economists can optimise expenditures and ensure equitable allocations in publicly financed health systems. Yet, to fully harness the potential of health economics, we must address critical gaps. While India has many highly trained health economists, there are very few working in government, and academics have limited opportunities and incentives to work directly with government counterparts in planning and conducting analysis. The result is missed opportunities for evidence to inform policy. There is an urgent need to increase human resources, enhance capacity and solidify links between economists and the government.

While the government has developed an institutional framework for health technology assessment, which uses economic methods to evaluate drugs and health care technologies, gaps persist in evaluating the economic implications of public health interventions and healthcare guidelines. Consequently, the majority of the budget allocations towards addressing public health problems may not have undergone rigorous economic evaluation.

The shortage of dedicated analysts within government health agencies compounds this challenge. Health economists are pivotal in guiding policymakers to formulate effective strategies and make informed decisions. Therefore, investing in health economics skills within government and fostering collaboration between government and research institutions supporting this function is imperative.

Recruiting and retaining health economists into public service is not only a challenge in India but also globally. Addressing this scarcity of skills requires proactive measures. Initiatives must be undertaken to equip government health economists with advanced methods for economic evaluation that assess the health benefits and costs of interventions, enabling, a more objective and evidence-based approach to health care policy decisions.

One promising initiative to bridge this gap is the collaboration between Vital Strategies and the Directorate of Health Services, Maharashtra. Through intensive training programmes, health economists mentor health staff to conduct economic evaluations of policy options for addressing public health challenges. This knowledge can be further disseminated by training additional colleagues, forming a sustainable group of experts capable of maximising government health budgets.

The challenges we face in resource allocation must be met with strategic and innovative solutions. Health economic evaluation emerges as a valuable compass in navigating these complexities.

Initiatives to increase the number of health economists working in, or collaborating with, government are crucial and worthy of investment. By addressing the scarcity of skills, promoting training programmes, safeguarding effective budget allocation and facilitating international collaboration, India can chart a path towards more efficient and equitable health care allocation, paving the way for a healthier and more prosperous nation.

Emily Myers, senior technical advisor, Data Impact, Nidhi Chaudhary, principal technical advisor, Data Impact Program, Asia-Pacific Region and L M Singh, Managing, director India and global head, Partnerships and Innovative Finance, Vital Strategies

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