Economics

Program Director: Chunling Lu, PhD

Program Background

Health economics is a crucial dimension of global health delivery. At the macro level, it is important to know who pays for health care, how much money is given, for what purpose it is provided, and how best to allocate limited resources to various services, diseases, and health system components in order to maximize the beneficial effect of interventions and improve population health. At the individual level, there is a clear link between poor health and poverty. Illness can be costly to individuals both in terms of direct spending on medical care and through indirect costs such as the loss of productivity. The literature demonstrates that out-of-pocket health payments not only create financial barriers that prevent millions of people from seeking and receiving needed health services each year but are also economically catastrophic—often pushing households into poverty. Designing and implementing a payment plan that can achieve universal health coverage with effective financial risk protection requires societal efforts and has become an indispensable part of translational research for global health delivery. The indirect cost of individual illness, usually measured by the impact of illness on individual labor market participation and productivity constitutes an important component of the overall economic burden of diseases. The indirect cost of illness also highlights the potential economic gain of preventing and treating diseases, which has long been ignored in traditional cost-effectiveness analysis and policy priority setting. To break the vicious cycle between poor health and poverty, evidence that shows how to deliver health services with equity and efficiency is urgently needed.