Transcript TTUHSC Free Clinic: Patient Flow Analysis

Global Health
Economics: Concepts
and Applications
or “Cool Things Justin Likes about Global Health Economics”
Justin Berk
TTUHSC SOM Global Health Elective
1/28/12
What is economics?
The social science that analyzes the production,
distribution, and consumption of goods and services
The study of how people choose to use available
resources
The study of behavior
The study of incentives
An example
or
My Kingdom for a Horse?
Supply and Demand Activity
Supplier: You just created a new medical invention: a talking stethoscope.
You can set one price for it.
Consumers: 5 of you would be interested in this invention.
1 is willing to spend $50
1 is willing to spend $40
1 is willing to spend $30
1 is willing to spend $20
1 is willing to spend $10
What price will the supplier set?
Supply and Demand
Law of Demand –
the higher the price
of the good, the less
people demand the
good
Law of Supply – the
higher the price of the
good, the more items
you want to sell.
Price
Demand
Supply
Revenues
$50
1
5
$50
$40
2
4
$80
$30
3
3
$90
$20
4
2
$80
$10
5
1
$50
Red Shoes
• http://vimeo.com/27046074
Global Pharmaceutical R&D
• 1 country is willing to spend $5B for chronic care lifestyle
technologies
• 50 countries are willing to spend $500M for chronic care
lifestyle technologies
• 100 countries are willing to spend $10M for life-saving
medicines that cure disease.
You’re the CEO of Pfizer.
It costs over $1B to develop a drug.
Where do you allocate your R&D funds?
Why Health Care Economics is Different
Infinite demand:
• Life or death
decision
Moral hazard
Outcome
uncertainty
Information
Asymmetry
Social
Externalities
Health care is
not health
Third party
payers
Moral Hazard
People insulated from risk behave differently than people
exposed to risk.
RAND Health Insurance Experiment
4 fee-for service plans:
- Free care
- 25% co-pay
- 50% co-pay
- 95% co-pay
Wealth is Health
UK Whitehall Study
Health and Wealth:
A Bi-Directional Relationship
Economics to Health
Strong
Economic
Performance
Higher
Individual
Incomes
Purchasing of
health promoting
goods and
services
Improved
Health
Individual
Productivity
Increases
Overall
Economic
Growth Rate
Increases
Health to Economics
Good health
Human Capital
Increases
Top 10 Causes of Death in LowIncome Countries
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Lower respiratory infections
Diarrheal Disease
HIV/AIDS
Ischemic heart disease
Malaria
Stroke / Cerebrovascular disease
TB
Low birth weight / Prematurity
Birth asphyxia / trauma
Neonatal infections
We have
cures!
Why are people still dying?
Poverty
Basic
resources
Infrastructure
Clean
water
Brain drain
War
No
education
Economic Development is
Health
Health care
Politics
Education
Infrastructure
Governance
Foreign policy
Top 5 Public Health Jobs
(that have nothing to do with public health)
1. Teachers
• Education improves economy, decreases risky behavior
• Most studies suggest more important than race and income
2. Engineers
• Drill for water, build roads, develop energy infrastructure
3. Politicians (kinda)
• Good governance serves enormous factor for health development
• (It’s usually negative.)
4. City Planners
• Create walking cities with access to healthy foods etc.
5. Journalists / Writers
• Inspire world leaders, increase awareness, mobilize social groups
• Martin Luther King, Thomas Paine, Nicholas Kristof, Oprah
Discussion:
Issues in Global Health
Economics
Structural Adjustment Plans
Measures to promote market fundamentalism
• Privatization of state-owned industry
• Deregulation
• Austerity (cutting expenditures)
Tobacco
Tobacco and smoking have a number of negative effects:
• Tobacco smoking kills
• Tobacco exacerbates poverty
• Tobacco contributes to world hunger by diverting prime
land away from food production
• Tobacco production damages the environment
• Tobacco reduces economic productivity
Developing world has 80% of tobacco related deaths.
How do you address this?
Emergency Aid
The village of Williamsville has been hit by a major typhoon.
Farm land has been devastated. People are starving.
There are two ways to get food to those in need:
• A private farming company operates in the neighboring town
of Simón. They know people are desperate and will pay huge
amounts for food and water. They see this as a business
opportunity and are willing to cross risky terrain to deliver the
goods for high profit.
• A coalition of NGOs and foreign aid can deliver food and water
for free.
Economic Development for
Dummies
Need for foreign aid to
overcome poverty and enter
global marketplace
Foreign aid causes harms.
“Searchers” better than
“Planners.”
Military interventions to
guarantee democracy,
International Charters,
preferential trade
Development assistance =
dependency, corruption, poor
governance
Cool Global Health
Business Solutions
Charity:water
• http://vimeo.com/22566556
• Marketing
• Recruiting human capital
• Financing
Grameen Bank
Micro-loans to
the impoverished
Promotes
entrepreneurship
and skill use
Peer pressure
within loan
groups
Women receive
95% of loans
Borrowers have
company equity
96% recovery
rate
2006: Nobel
Peace Prize
2011:
government takeover
Riders for Health
• http://vimeo.com/31962921
•
•
•
•
Overcoming infrastructure challenges
Avoids costs through prevention
Improves supply chain logistics
Improves quality and speed of care
CFWShops
Approximately 20,000 children die each day because they lack access to
essential drugs that often cost less than a cup of coffee.
A short list of preventable and treatable diseases accounts for
approximately 70% of childhood illness and death.
• Entreprenuers provided blue-prints for a micro-franchise
• like McDonald’s
Three-Point Franchise Test
• Standardization
• Scalable
• Economies of scale
Advocate for Change
Clinton Foundation
• 2007: Deep price reductions for AIDS medications
Green Light Committee (PIH, MSF, CDC)
• proved that MDR-TB could be treated in low-income
countries
• negotiated mass price reductions from more than
$30,000 per patient per year to less than $3,000.
How to Save the World
1) Make cool YouTube videos.
2) Small loans.
3) Ride motorcycles.
1) Copy McDonald’s.
2) Yell a lot.
Cool Resources
• EpiAnalysis blog
• http://epianalysis.wordpress.com/
• Acumen Fund (non-profit venture capital)
• http://www.acumenfund.org/
• Unite for Sight
• http://www.uniteforsight.org/
• Partners in Health
• http://www.pih.org/
• Global Issues Blog
• http://www.globalissues.org/article/588/global-health-overview
• Quora
• http://www.quora.com/