Health Planning, Policy and Economics
Core concepts
Health planning begins with needs assessment: normative, felt, expressed, and comparative need. Priority setting combines burden, severity, cost-effectiveness, equity, feasibility, and political acceptability. Know the planning cycle, situation analysis, SWOT, logical frameworks, stakeholder analysis, and the policy triangle of context, actors, content, and process. Health economics requires fixed, variable, marginal, and opportunity costs; cost-effectiveness, cost-utility, and cost-benefit analysis; incremental cost-effectiveness ratios; QALYs; discounting; and provider-payment methods such as fee-for-service, capitation, and diagnosis-related groups. Financing models include tax-based Beveridge systems, social-insurance Bismarck systems, private insurance, and out-of-pocket payment. Universal health coverage means access to needed services without financial hardship, not free care for all.
Traps
Cost-effective does not mean cost-saving. A QALY is a health outcome, not a currency. Average cost is not marginal cost. Opportunity cost is the value of the forgone alternative. Watch for moral hazard, adverse selection, supply-induced demand, and the difference between efficiency and equity. Do not confuse a policy's content with its implementation process.
Worked example
Intervention A costs 10,000 and yields 6 QALYs; B costs 4,000 and yields 4 QALYs. ICER = (10,000−4,000)/(6−4) = 3,000 per QALY gained. If the willingness-to-pay threshold is 5,000 per QALY, A is cost-effective relative to B, but it is not cost-saving.
Rule of thumb
Compare incremental costs with incremental effects, state the perspective, and test conclusions with sensitivity analysis.