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Introduction To Health Economics Assessment

Introduction-Introduction To Health Economics Assessment

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Healthcare finance is defined as the planning, allocation, and distribution of finances or resources to increase the efficiency of healthcare. Financial management for healthcare is important to achieve different goals such as meeting overall expenditure for different activities and for that, 4Cs play crucial roles. These 4C's model stands for costs, cash, capital, and control of the organisation for effective management of available finance. In this essay, the concept of supply to meet different needs of healthcare in two different countries will be discussed. Two countries, the UK, which is a developed country, and India, which is a developing country, have been selected.

A comparative study will be done on different care plans for a specific disease of both countries. Other than that, their healthcare finance plans of allocation and distribution of resources, and their contributions to the efficiency of healthcare services will also be discussed here. Discussion on different competitions, economic evaluation of the market, policies of government, and economic theories and models to solve organisational problems will be done. In the end, a brief recommendation will be given on how to effectively improve the existing healthcare plans, financial management, supply of demands, and betterment of care plans.


Healthcare systems of both countries

The Healthcare market is one of the largest markets in the UK and India. The UK has a monarchy constitution and is democratic in nature. The UK has advanced public health care services for all permanent residents. Although after Brexit, different changes have taken place in the National Health Services (NHS). Before Brexit, there was a National Insurance Act (1911), where a small amount was deducted from employees' salary, which was used for providing free treatments to them. The conditions of both the urban and rural health services were not so developed. 'Department of Health', 'Primary Care Trusts', and 'Strategic Health Authorities' used to take care of all health policies like providing free treatment to poor people, improving urban healthcare capacities, and so on. ‘The Countryside Agency’ and ‘The Institute of Rural Health’ worked to improve the health conditions of rural people. All the services were free for special needs people and their expenses were provided from taxations paid by wealthy people of the UK. However, Brexit made conditions worse than the previous. The citizens of the UK lose accessibility to get health insurance benefits. They can only use a “European Health Insurance Card” (EHIC) during an emergency and visit other EEA countries (Fahy et al., 2019). Brexit also caused a shortage of skilled workers like doctors and nurses in healthcare centres. The shortage is so severe that at least 5000 more nurses recruitment is needed annually (Kingsfund.org, 2021). Previously The UK used to import medicines from the EEA, but after Brexit, more laws were added for direct import of medicines, which caused an increase in medicine prices.

In case Of India, which is a democratic country too, has different policies for healthcare services. Both the poor and rich get benefits from different initiatives taken by the government. Some major health initiatives taken by the Prime minister of the country are "Pradhan Mantri Surakshit Matritva Abhiyan", "Mera "Aspataal", "Ayushman Bharat", "eSanjeevani- National telemedicine service", etc. citizens of India living below the poverty line get many facilities like free treatments, free medicines, and free operations as well. The National Rural Health Mission (NHM) which was launched in 2005, contributed towards strengthening the rural healthcare facilities.

The approach of government towards the healthcare services

According to Ons.gov (2021), the UK has approximately spent around £269 billion for healthcare expenditure and the GDP approximately 12.8% in 2020, spent in the cases of both government and non-government health sectors. In the UK, hospital boards have responsibilities of government hospitals and specialist services. Other than that, Local health authorities’ work to provide services to maternal and childcare and treatments. All the NHS is financed by taxes paid by citizens. Around 217 NHS provide specialised care and is divided into primary, secondary, and tertiary care. Among 217 NHS facilities, 80 of them provide hospital-based services and 30 of them provide services related to mental health and learning disabilities. Additionally, 22 of the NHS facilities provide specialised care for mental health, 44 NHS provide community care, and 10 NHS provide ambulance services, etc. Around 290000 nurses and 117000 doctors are part of these 217 NHS, working hard towards welfare of citizens (Nhsproviders.org, 2021). Therefore, it can be said that the NHS has properly allocated and managed all the funds efficiently regarding their treatment process in the UK.

In comparison to other developed and developing countries, India is one of the poorest countries in the world. Several incidents of brutality towards Doctors and Nurses occur in India. For this reason, the doctors sometimes refuse to work, which hampers healthcare activities. Different political outrage occurs in India and causes the unsuccessful implementation of policies. Recently, India has taken different initiatives to fight against malnutrition, hunger, and poverty. In ICDS centres, one meal a day is being provided to all pregnant, lactating mothers, and pre-school children. The Mid-day meal scheme provides food to school going children. This scheme not only aims to reduce hunger but also to increase school attendance (Rani et al., 2020). Sustainable Development Goals (SDGs), aim to improve overall improvement of poverty, health, education, and environmental issues of India. Ayushman Bharat launched in 2018 aimed to upgrade Sub-health centres, primary health centres, and hospitals of both the urban and rural areas. Special care is taken to bring improvements in the care plan of vulnerable groups like pregnant, lactating women, neonates, children under 5 years old. Family planning, management for non-communicable chronic diseases, care plans for elderly, special treatment facilities for emergencies are some of the healthcare packages provided by the government of India (Pib.gov, 2021). The Prime Minister Narendra Modi, allocated about rupees 69000 crores for spending in healthcare in 2020-2021 budget. India spends only 1.1% of its GDP on the healthcare sector whereas, other countries like New Zealand, Australia spend about 9% of the GDP.


Public health-related issues of the countries

Both of the countries work efficiently to achieve different healthcare agendas to bring welfare to the citizens. In 2020, a Coronavirus outbreak occurred globally and resulted in a few million deaths. Due to COVID, all the necessary healthcare facilities were affected. All the healthcare organisations were taking extra precautions to stop the spreading of the disease. This results in postponement of all necessary care for patients suffering from chronic diseases. In the UK, for example, people suffering from cancer and need urgent radiotherapy or chemotherapy and having COVID symptoms treatments were provided sufficient treatments during that crisis (Burki, 2020). There was a considerable delay in the diagnosis of Cancer as well and there was a decrease in rate of average emergency visits in the UK as well. All these ultimately caused delays in starting the treatment for patients (Ranganathan et al., 2021). On the other hand, India also faced difficulties in providing essential services during the Pandemic. For instance in Mumbai, patients faced difficulties to reach hospitals and avail essential treatments. Every year, about 1 crores new cases of Cancer is reported and people from rural areas have to travel long distances to get their treatments. Due to COVID, essential services were reduced due to a lack of workforce as most of the doctors and nurses were busy taking care of COVID patients. However, few of the private hospitals continued to offer treatments for cancer patients by making proper plans (Sharma, 2020). In normal times, patients get regular treatment for all diseases and especially for Cancer treatment the government hospitals have free treatment facilities for poor people.

Supply-side economies

The Supply-side economy is defined as how changes in taxation policies affect the overall economy of the country. It is seen that high taxation policies negatively affect different factors like people’s motivation for earning or production as it causes increased marginal rates, and companies tend to pay less to their workers. Other than that, to avoid paying taxation, people tend to invest more towards tax-saving schemes. Therefore, supply-side economics results in a higher price and reduced output of the products (Irwin, 2017).

From this theory, it can be concluded that the governments of the countries should not increase taxation in order to meet increased economic demands. In case of the UK, all the medical expenses of the country come from taxes paid by citizens. However, for healthcare industry, the GDP is increasing every year. Increase in GDP. Total GDP decides the amount of money invested in fulfilling different needs of healthcare. National Health Expenditure Accounts (NHEA) has to be converted into NIPA-based demand following standard input-output (IO) accounting to determine overall cost and labour for healthcare. This NHE, compared with GDP, acts as identification of expenses of healthcare on comprehensive economy of the country. Therefore, to determine expenses of different sections of healthcare, analysis of supply-side issues is necessary. In healthcare, primary expenses are decided by amount of money spent on providing salaries to doctors, nurses, and healthcare personnel, cost for different free services provided to poor people like free medicines, free operation etc, cost for other infrastructure upgrades, and so on. NHE has decided to consider expenses for personal health care, nursing home care, home health care, different drugs, dental services, durable and non-durable medical care, etc. On the other hand, the income is decided by the amount that comes from taxation, health insurance, money spent for availing medical facilities, etc (Topachevskyi et al., 2018). Therefore, it can be said that the supply-side economy affects the healthcare sector to meet its demand.


In terms of effectively implementing all the policies and strategies, the government needs to identify the obstructions coming on the way and make necessary changes accordingly. In the case of the UK, the government must emphasise providing free treatments to economically weaker people. Currently, they only have healthcare insurance plans for working class people. All the healthcare expenses are met by taxes paid by citizens only. The government must think about some alternative plans in order to fulfil healthcare demands. For example, they can approach different shareholders to buy shares of the hospitals, especially privately owned hospitals to gain some amount of money, which can be spent, on meeting healthcare needs. In this way, the organisations can also run efficiently and all people can get benefits out of this.

In case of India, the government carries out all the expenses of healthcare only. However, problems arise at the implementation stages. In order to solve this problem the government needs to identify the gaps, which restrict the implementation of policies. There must be proper law against people who take advantage of free services and break laws by beating doctors. In spite of all the policies, some people can not use these benefits due to some people's negative intentions. Therefore, the governments should not only focus on making policies but also must work on their proper implementation. 


In conclusion, it can be said that healthcare finances must be used effectively. In this essay, healthcare systems of the UK, and India have been discussed. Both the governments have taken several policies to meet various healthcare demands. The UK has 217 NHS, which have different activities and provide different facilities. On the other hand, India has different government policies like “Pradhan Mantri Surakshit Matritva Abhiyan”, “Mera “Aspataal”, “Ayushman bharat”, “eSanjeevani- National telemedicine service” etc. to provide free services and advantages to the people. Several steps have also been taken to eradicate hunger, poverty, and malnutrition from the country. Not only these, various public health issues of both the countries are also being discussed. How both countries handle critical situations that took place during the Pandemic and the ways they tackle that? After that, some light was shed on supply-side economy and how that affects the National Health Expenditure (NHE) of the countries was discussed. Finally, in the end some recommendations are given on how to effectively implement different policies and manage healthcare finance of the countries. 

 Reference list

Burki, T.K., 2020. Cancer care in the time of COVID-19. The Lancet Oncology21(5), p.628.

Fahy, N., Hervey, T., Greer, S., Jarman, H., Stuckler, D., Galsworthy, M. and McKee, M., 2019. How will Brexit affect health services in the UK? An updated evaluation. The Lancet393(10174), pp.949-958.

Ibef.org, 2021. Available at: https://www.ibef.org/industry/healthcare-india.aspx (Accessed on 11 December 2021)

Irwin, N., 2017. Supply-Side Economics, but for Liberals. The New York Times, April15, p.2017.

Kingsfund.org, 2021. Available at: https://www.kingsfund.org.uk/publications/articles/brexit-end-of-transition-period-impact-health-care-system (Accessed on 11 December 2021)

Nhsproviders.org, 2021. Available at: https://nhsproviders.org/topics/delivery-and-performance/the-nhs-provider-sector (Accessed on 11 December 2021)

Ons.gov, 2021. Available at: https://www.ons.gov.uk/peoplepopulationandcommunity/healthandsocialcare/healthcaresystem/bulletins/healthcareexpenditureukhealthaccountsprovisionalestimates/2020 (Accessed on 11 December 2021)

Pib.gov, 2021. Available at: https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1744363 (Accessed on 11 December 2021)

Ranganathan, P., Sengar, M., Chinnaswamy, G., Agrawal, G., Arumugham, R., Bhatt, R., Bilimagga, R., Chakrabarti, J., Chandrasekharan, A., Chaturvedi, H.K. and Choudhrie, R., 2021. Impact of COVID-19 on cancer care in India: a cohort study. The Lancet Oncology.

Rani, S., Singh, R., Kamble, D.B., Upadhyay, A., Yadav, S. and Kaur, B.P., 2020. Multigrain noodles: nutritional fitness and cost effectiveness for Indian Mid-Day Meal. Food Security12(2), pp.479-488.

Richards, M., Anderson, M., Carter, P., Ebert, B.L. and Mossialos, E., 2020. The impact of the COVID-19 pandemic on cancer care. Nature Cancer1(6), pp.565-567.

Sharma, D.C., 2020. Lockdown poses new challenges for cancer care in India. The Lancet Oncology21(7), p.884.

Stack, A.G., Johnson, M.E., Blak, B., Klein, A., Carpenter, L., Morlock, R., Maguire, A.R. and Parsons, V.L., 2019. Gout and the risk of advanced chronic kidney disease in the UK health system: a national cohort study. BMJ open9(8), p.e031550.

Topachevskyi, O., Piniazhko, O., Lebega, O. and Oleshchuk, O., 2018. Estimation of supply-side cost effectiveness threshold in Ukraine: perspective use in health care decision-making. Value in Health21, p.S100.

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