Health economics: A review of theoretical and empirical literature

Abstract

Health economics is a sub-discipline of economic science concerned with the economic treatment of health. From a socio-economic point of view, health is not an isolated field. It comes from medicine, but it is also related to socio-economic and political factors. Being considered as a superior good and which has particular characteristics, it conditions the ability of individuals to produce and consume. In this paper, we will highlight the interdependencies between the economy and health, then we will analyze the main theories in health economics and finally we will show how the Economy will shape health in its image. The results of our literature review show that the main issues addressed by the health economy revolve around the economic analysis of the interrelationships between economic and social development on the one hand, and population health on the other. Our theoretical analysis shows that the main theoretical approaches in health economics (the neoclassical model, agency theory, conventional theory) are based on two hypotheses: the hypothesis of the individual rationality of actors and the hypothesis of the mode of coordination of their decisions. According to the neoclassical theory, the decisions of individuals, considered as rational, are controlled by market exchange, while the agency theory allows for the presentation of elements that help in economic policy-making. The development of medical sciences and the respect of professional ethics are thus the main contributions of the theory of conventions. These different theoretical approaches complement each other in explaining the functioning of the health care system. However, the theoretical advances made in the field of health economics are still insufficient in terms of the production of new knowledge by research, which mainly concerns the regulation and organization of the health care system.

JEL Classification: I10, I15, I18, I19

Paper type: Theoretical Research