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Periodical article Periodical article Leiden University catalogue Leiden University catalogue WorldCat catalogue WorldCat
Title:The economics of health and the health of economics
Author:Reekie, W. DuncanISNI
Periodical:South African Journal of Economics
Geographic term:South Africa
Subjects:health policy
public health
External link:https://doi.org/10.1111/j.1813-6982.1997.tb01366.x
Abstract:Economists can respond to a national health policy, in this case that of South Africa, in two ways: by emphasizing optimal resource allocation involving the science of choice or by considering the consequences that will follow from setting particular institutional rules. This paper examines how the latter approach, the study of exchange, can alter perspectives both on the place of economics in health care and on the health of much of currently practised economics. It looks first at the prerequisite of exchange, i.e. the right of ownership. Second, it discusses some simple aspects of the economics of health and insurance, dealing with the 'agency relationship' between doctor and patient, the monopoly of the retail pharmacy cartel in South Africa, moral hazard as an inevitable function of insurance, and adverse selection as a consequence of asymmetric information. Third, the paper outlines some current policy concerns, and asks to what extent market analysis is being drawn upon in policy formation. Three policy areas are examined: public sector organization, private sector funding and the overall fiscal framework. The author concludes that the mechanistic approach to health care in South Africa has been overused. Freedom of choice is flouted, costs grow extravagantly and resources end up in the hands of the wrong peoply. A greater emphasis on market solutions would facilitate voluntary exchanges between providers, patients and intermediaries. Bibliogr., notes, ref.