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HEALTH CARE ECONOMICS

Authors: Hristo Petkov and Dimitar Sepetliev

 

It proved that economics is very resistant area of thinking when you have to write for a laymen. It is not surprising that this particular inclination devoid from any mathematization and modeling have won economics a status of Nobel Prize science in 1969. However, it doesn't make a clearance for the debris of human strive for assets, which, is basically dictated by greed and envy. This being the case and while the author of this lines have not been able to recognize neither socialism nor capitalism as a solution of the problem - namely, we are going to an interlude and an example from theoretician Edward de Bono. He introduced - among other things - a term called "lateral thinking" and referring to fields of science as economics and management. What he meant by this term is the following - viz., you have to do things and the other way around when problems accumulate above a certain limit. For example, you can eat a meatball in a vertical manner, while, you can still eat it in a proper way. That's it and we are done.

Now, let us continue with some sketches on the development of economics and both from international and national point of view. When a first professorship in economics was founded in Oxford in the 1820s and many people were by no means unhappy about the prospect of a science "so prone to usurp the rest". This is so, since, even the name of the discipline doesn't reflect its subject matter /i.e., in the interpretation of "house keeping"/. We shall note here, that some other sciences in their modern perspective and they also do not cover their purpose meaning /i.e., epidemiology as a medical science is far away from its conventional meaning of "science for the epidemics"/. If this is the case and we are in a process of reductionism in sciences, which, is a contrary tendency to the differentiation and integration processes in the past.

As for the field of health economics and it has branched rather late in the mainstream disciplinary domain. We couldn't trace the early origins of health economics and further beyond a seminal paper from Kenneth Arrow in 1963 - viz., "Arrow KJ. Uncertainty and the welfare economics of medical care. American Economic Review 1963; 53: 941-73". Besides its methodological insights this article's relevance comes from the citations index, which, is being five times more numerous than any other paper in the field for the long run.

We shall finish with a short paragraph on the state of health economics in Bulgaria. In the literature review, that, we tried to accomplish for this presentation and very little could be of real interest for the western reader. Most of the authors have been compiling information from russian authors or translation from foreign languages in poor quality. First textbook in the discipline is written, as early as, year 1969 from authors H. Petkov and D. Sepetliev. It reflects a central planning concept and is in accord with most of the other general literature on the theme. However, it is far from the modern econometrics models, that, dominate a modern economics science in the western world. All in all, planning was a misnomer perception for the whole economic domain and I wouldn't feel guilty to mark - namely, that this faulty idea has been still exploited in some western democracies with an unyielding belief. But this is stuff, that, a future European Union is going to deal in a fight with "uneconomic enterprise". This is not an euphemism.

Further for the health economics in Bulgaria and we come to a transition period in 1989. This is a point, when, a planning approach is substituted with a market approach in the eastern hemisphere of the world. The single approach, which, has been hailed by the western emissaries in their rounds for adjoining a single market with the west and had a "bottleneck effect". The latter has been dealing with a main idea, that, an eastern block shouldn't repeat a multitude of mistakes that have been dictating western development in the past 50 years or so. It neglects the idea, that, eastern economies have a specificity of their own and shouldn't repeat models that have proved right or wrong in the western hemisphere. This approach has its approval in terms of parsimony, however, it is faulty in its ethical dimension.

It is here, that I would like to link the textbook at hand and make further comments with references unspecific in time and place, but important as to the development of my own personal thinking as a scholar. And as someone has remarked in a conversation between economists professionals, that "... the latter is like an elephant in a glassware store".

I remember my early years as teaching and research assistant at the NISM /i.e., Scientific Institute for Social Medicine with transliteration from bulgarian/, where, I have started work in year 1990 as part of my post-graduate training in public health specialty. This was an undesirable job at that time, since, it pertained connotations for socialism, welfare, etc. which were unwelcome in the country making a transition to democracy and market economy. It proved also, that this is conundrum since exactly those people with high positions in the former communist party and now in the disguise of true democrats have been mostly privileged in the following 15 years of so called "change of the system" debate.

Let us be chronological and try to reconstruct the beginnings of this debate. I remember this early years, when there were some 120 salaried employees working on varied occupations in the institute. The Institute of Social Medicine has been appended to the gigantic complex of Medical Academy since it's first years of inception in year 1972. The complex of Medical Academy itself was an unregulated quasi-structure - namely, created and administered for the purposes of social planning, while in fact it blow-up all capital reserve in the health care sector for a period of some twenty years. Whatever, the planners of this project and some of them were still working at the NISM in the 1990s; furthermore, those people were the one who had to implement a new economic mechanism within the premises of the "old and crooked house" they built themselves. The irony is obvious and does not need comment, anymore.

While this was the outward appearance of those civil servants in the institute and I try to remember the procedural mechanisms of working and collaborating in those years of change. People were crammed in groups of 4-5 persons at a single small room with no technical facilities, whatsoever. No computers or even printers and scanners were available. Myself and two other young specialists were the only representatives of the new wave in an establishment that boasted mean age of hired personnel at approximately 50 years. I was given a typewriter and appointed the task to write an article on health care management, which, was immediately published in the local newspaper "Forum Medicus". These were times of unceasing debates on the meaning of the new reforms and their economic component. We were having general meetings 2-3 times a week and those conversations were contributing to none the less than diminishing the faith of the people in the subject matter of their primary occupation. In the early nineties and Bulgaria was in deep crisis, both in terms of monetary values and lifestyle habits.

For some period of five years, subsequently, the NISM and it's personnel has totally disintegrated. People with long-term carriers in public health had reshaped their employment status and started working elsewhere. Processes of integration and differentiation in health care were tremendous and from 120 /hundred and twenty/ people working there in the institute - namely, only about 50 /fifty/ employees remained in the structure of a Department of Social Medicine which was functioning at the newly re-established High Institute of Medicine in the capital Sofia.

I wish to continue my story, however, discipline dictate me to stop right now. An editor in a peer-reviewed journal wouldn't accept such piece of an article and altogether, for many reasons we have developed a site digestible for general purposes. Now, for the sake of being adequate and scientific, we wish to offer some propositions of common parlance with reference to health economics. The latter science is about making trade-offs and we have some examples about it. Sometimes, an economist have to be pragmatic and the philosophy of this approach is in the field of equity and rationale. Other times, economics works with explanatory and causal phenomenon, which themselves are exercise in the domain of occurrence logic. Those two simple postulates give a good frame for most of the cases dealing with health economics issues. The rest is financing and administration which shouldn't be studied by medical cadres, per se.

To finish in a last sentence and about the authors of this book. It is written by two of the oldest cadres from the Institute of Social Medicine referred from above. For it's time being, this book has served as "indispensable utility" and since during a socialist period it was not considered necessary more than one tool for general educative purposes. This made it's authors seem very important in the eyes of their contemplative students. For research and doctoral students, respectively, a variety of russian textbooks were recommended - viz., composed and modeled in the spirit of socialist scholasticism.

 

 

Copyright 2006 by the author.