HEALTH ECONOMICS

Health economics lies at the interface of economics and medicine and applies the discipline
of economics to the topic of health. There are several reasons why it is important to look
at the economics in health.
1. Applications of Health Economics.
A. Effective Utilization of Resources
Health (and most) resources are finite. A choice has to be made about which resource to
use for which activity. By choosing to use scarce resources for one activity, the
opportunity of using those resources for alternative activities is given up. Economics
attempt to provide an information framework for maximizing benefits within available
resources while pursuing the objectives of efficiency and equity.
B. Analysing Cost-Effectiveness of Health Expenditure
Health economics provides an application of economic principles to analyse how different
economic incentives affect the efficient behavior, policy makers, health administrators, patients
and insurers in the delivery of health services. Predominant economic concerns about the health
care system have historically revolved around problems of cost
Some of the most useful work in health economics employs only elementary economics
concepts but requires detailed knowledge of health technology, health institutions and
health service systems..
2. Evolution of Health Economics
The real beginning of health economics, as it is known today, can be traced to Kenneth Arrow who
emphasised the importance of uncertainty. It is understood intuitively that medical treatments do
not always produce the desired results and hence, the production of health itself involves a
substantial amount of uncertainty. Uncertainty also pervades the structure of health insurance. A
wide range of regulatory interventions in the health market such as licensure and new drug testing
are directly linked to uncertainty.
Health care markets display a collection of unusual economic features that include: (i) the
extent of government involvement; (ii) the dominant presence of uncertainty at all levels
of health dare, ranging from randomness of an individuals illnesses to how well medical
treatments work and for whom; (iii) the large difference in knowledge between doctors
and other providers and their patients, and (iv) Externalities actions by individuals that
impose costs or create benefits for others.
3.Scope of Health Economics
Williams (1987) provided and useful schematic structure of health economics, The four
principal topics instrumental in analysis of health care issues are described in Table17.4.
However, it is the inter-linkages across and within these topics that make the subject
relevant
4. Empirical Fields of Application
A. Market Analysis
This deals with the ways in which markets operative specially in countries where there is
substantial dependence on market institutions for the provision of health care insurance
and delivery of health care. Even where there are no formal markets, the health care
system operates as a kind of quasi-market. For example, contracts between physicians
and hospitals, between non-profit public sector agencies and for-profit institutions, and,
pseudo-prices (time prices) being paid.
Key issues Money prices, time-prices, waiting lists, time for admission to hospital
B. Micro-economic Appraisal.
This is more specifically evaluative and normative. There is an immense variety of
topics, technologies and mechanisms that have been evaluated.
Key issues Cost-effectiveness, cost-benefit, and cost-utility analysis of alternative ways of
delivering care at all phases (detection, diagnosis, treatment and aftercare)
C. Planning, Budgeting, Regulation and Monitoring Mechanisms
The need for this arises largely because of the great variety of health care delivery
institutions, insurance and reimbursement mechanisms, and the diverse roles played by
central and state agencies.
Key Issues Inter-play of budgeting, manpower allocations, regulation, incentive
structures.
D. Systems Evaluation
This is concerned with the highest level of evaluation and appraisal across systems
countries. The internationally observed differences between technologies, mechanisms,
expenditure rates, and the outcomes are phenomena needing explanation but they also
raise difficult questions of how best to make comparisons (for what purposes), and how
best to infer lessons from one system for another.
Key Issues Inter-regional and international comparisons of performance, financing
methods.
5. Application of Economic Analysis in Health Sector
It has been argued that it is unethical to apply economic analysis to the health sector. This
argument is based on the reasoning that human life has no price. In reply, it can be
pointed out that it may not be universally possible to state what should be the value of
life, but that within a given budget one should strive to preserve as many lives, and
reduce as much morbidity as possible.
In public health care, in the present context, the issue is not the ethics of behavior, but the
ethics of decision-making. A decision is made in an ethical way when the decision-maker
views all arguments for and against a decision. Thus, duty to the individual may conflict
with the duty to the group and helping more people may conflict with helping those most
in need. Health economics can contribute in making an optimal choice on the basis of
available data with the application of techniques such as cost-effectiveness analysis of
alternate interventions.
6. Limitations of Health Economics
Health economics has made substantial strides in theory and has had immense
applications in recent years. However, many unanswered (and as many unasked)
questions remain. Health economists are well aware of the limits of economics analysis.
There are a number of important variables that are difficult to translate into economic
terms; for example, non-monetary costs such as physical discomfort or psychological
pain or loss. The contribution of health economics is in informing the consequences of
various alternatives rather than in making choices that will always remain essentially
value based.

ASSESSMENT OF PSYCHIATRIC DISABILITY AND REHABILITATION NEEDS
As in developing any other treatment, a thorough assessment is the first step in planning
rehabilitation.
Use of symptom assessment to choose pharamacological and behavioral methods to
decrease symptoms is considered insufficient today. Currently, the mainstay of
assessment in rehabilitation psychiatry is the functional assessment. Increasingly focus is
being directed towards cognitive and dynamic assessment and on assessment of recovery
Functional assessment is the evaluation of the manner in which people perform in real
life situations. The client assessment for strength, interests and goals (CASIG) is one of
the commonly used measures for functional assessment. It is administered as a structured
interview to assess ten areas:
i. Personal medium term goals and roles.
ii. Quality of life.
Iii. Unacceptable community behaviors
iv. Medication practices.
v. Functional living skills.
vi. Symptoms.
vii. Cognitive functioning.
viii. Quality of treatment.
ix. Spiritual and religious aspects
x. Patient rights.
It is a specific patient-based tool to assess psychiatric disability and recovery.
However, it is most useful for outpatients and higher functioning inpatients who are
clearly able to articulate realistic goals and whose behavior approximates community
standards.
For most patients in log-term residential settings, performance based and
observational measures are more appropriate. Maryland Assessment of Social
Competence (MASC) is such a structured role play for assessing social skills. Other
comprehensive, observational assessments systems with demonstrated utility are
Time Sample Behavior Checklist (TSBC), Clinical Frequencies Recording System
(CFRS) and Staff Resident Interaction Chronograph (SRIC).
The rationale for cognitive assessment is clear in most MIs including Schizophrenia
but most of the traditional assessments are confounded by multiple cognitive
processes, are not strongly correlated to theories of cognition, and cannot aid in
determin ing the cause of poor performance. Recent measures like Schizophrenia
cognition rating scale (SCORS) provides an assessment of patients cognitive
functioning based on interviews both with patients and their caregivers. Other useful
neuropsychological batteries are Repeatable Battery for the Neuropsychological
Assessment of Schizophrenia (RBANS), the brief assessment of cognition in
Schizophrenia (BACS), and the Measurement and Treatment Research to Improve
Cognition in Schizophrenia (MATRICS) and Consensus Cognitive Battery (MCCB).
Dynamic assessment is assessment of the learning potential. This is accomplished by
incorporating sensitive methods for assessing the ability to improve with instructions
and or practice into the testing conditions. The micro module learning test (MMLT) is
a brief brief measure of responsiveness to the three core components involved in
skills training-verbal instruction, modeling and role play.

INTERVENTIONS IN REHABILITATION
Psychiatric rehabilitation comprises of two intervention strategies. Individual-centerd
strategies are aimed at developing patient skills in interacting with stressful
environment while ecological strategies are directed towards developing
environmental resources to reduce potential stressors. Those with SMI are likely to
need both approaches.
There are, fortunately, numerous interventions available for rehabilitation services.
Needless to say, mot all may ne required in a given individual. Further, any particular
objective may be achieved by multiple interventions either used at tandem or in
combinations. It is important for patients felt-needs to be addressed rather than
providing prefabricated packages (Nagaswami et al., 1985). Some of these
interventions are briefly outlined below
A. Cognitive behavior therapy: Cognitive behavior interventions can be used
for a variety of purposes. Irrespective of the diagnosis, it may be used for anxiety
management, activity scheduling and assuring treatment compliance (Tarrier, 1992).
In addition, it has been used for those with schizophrenia with an intention to help
patients re-evaluate their psychotic symptoms including their hallucination and
delusions (Fowler et al., 1995). The therapist, working in close alliance with patients,
helps to improve their coping ability, rationalize their beliefs and reduce their
distressing experiences of anxiety and suspiciousness. Direct confrontation is
counterproductive and hence is avoided. Systemic studies have found that cognitive
therapies not only reduce targeted symptoms but can also reduce nontargeted
symptoms like formal thought disorders (Turkington et al., 2006). These
improvements, however, are evident only on intensive intervention and do not appear
to benefit in the long term (Tarrier et al., 1999; Tarrier et al., 2000). With regard to
treatment adherence, cognitive techniques have shown to improve compliance and
reduce risk of relapse (odds ratio 2;1) when compared with supportive therapy (Kemp
et al., 1996).
B. Cognitive remediation: Cognitive impairment has been found to be the single most
important determinant of functioning in work, social relationships and independent
living Cognitive remediation involves the use of various exercises to improve
different cognitive functions like attention, memory and other executive functions.
The technique was originally developed for those with cognitive impairment due to
neurological damage like stroke, head injury or postoperative states. Interventions
include attention training, abstraction training, memory training, training using self-
talk, errorless training, social cognition exercise and many others. These interventions
can be provided programs manually or in a computerized form. Computer programs
have also been developed (Cogpack, CogReHab, Captains log) that provide these
interventions in various combinations and may also include other methods. A recent
meta-analysis (McGurk et al., 2007) concludes that cognitive remediation causes
robust improvement in cognitive impairment across a variety of programs and patient
conditions. Interestingly, other reviews accept that cognitive remediation helps
modest improvement in neuropsychological testing (Krabbendam and Aleman, 2003;
Twamley et al., 2003) but has no impact on functional outcomes. It appears that
practice rather than cognitive remediation accounts for observed improvement (Szoke
et al., 2008).
C. Family intervention: Individuals with schizophrenia, where the family expresses
high levels of criticism, hostility,or over-involvement are more likely to have frequent
relapses compared to people with similar problems but from families that tend to be
less expressive with emotions. Psychosocial intervention (family therapy), designed
to reduce these levels of expressed emotions within families, have been conducted
mostly in the UK. Other interventions include family group-counseling and home-
based crisis intervention. Family therapy, in particular single family therapy, has
shown to have preventive effects in terms of psychotic relapsed and readmission
(Pilling et al., 2002), in addition to benefits in medication compliance
D. Social skills training:. The term skills refers to acquired behaviors based on
learning experiences (Kopelowicz et al., 2006). Social skills represent constituent
behaviors which, when combined in appropriate sequences and used with others in
appropriate ways and places, enables an individual to have success in daily living
reflected by social competence (Bellack et al., 2004). Social competence can be
defined as the ability to achieve legitimate personal goals through interacting with
others in all situations: work, school, recreation, shopping, consumer services,
medical and mental care, and legal agencies (Knapczyk and Rodes, 2001). Thus,
social skills training are heterogeneous interventions aimed at improving activities of
daily living, hygiene and grooming, basic communication skills, job-finding, and
interpersonal problem solving, i.e. improving social competence.
Social skills and social competence can be viewed as protective factors in the
vulnerability-stress-protective factors model of schizophrenia (Kopelowicz et al.,
2009). Strengtheniing social skills and competence of individuals with schizophrenia
can reduce the impact of cognitive deficits, stressful events and social maladjustment.
Improved social competence confers protection not only against stress induced
relapse but also improves interpersonal support, social affiliation and quality of life
(kopelowicz et al., 2006).
Interventions involve simple advice while others require elaborate combination of
operant conditioning and social learning models. Steps involved in social skills
training are as follows:
1. Problem Identification: made in collaboration with patient by acknowledging
barries and goals of the patient.
2. Goal setting: Short-term, near-approximation goal that patient and therapist find
feasible.
3. Behavior rehearsal or role play: Patient demonstrates the verbal, nonverbal and
paralinguistic skills required for successful social interaction.
4. Corrective feedback: Required for behavior exhibited in role play.
5. Social modeling: Demonstration by the therapist of desired interpersonal behavior
in a form that can be learnt by the observing patient.
6. Behavior practice: Facilitate its use in real-life situations.
7. Positive social reinforcement: Contingent upon those behavior skills that showed
improvement.
8. Homework assignments: To motivate the patient to implement the learned skill in
real-life situations.
9. Positive reinforcement and problem solving: To address issues arising in patients
experience due to the use of acquired skills.
The onset of SMI usually occurs before adult social skills are learnt through natural
process. This reason, combined with the fact that learning itself may be impaired in
SMI (Harvey et al., 2004), skills training takes the form of special education and
precision teaching. Hence, repeated practice or overlearning is essential to ensure
assimilation and durability of social skills. Learning is facilitated when errors are
minimized and correct responses are abundantly reinforced (Kopelowicz et al., 2006).
To build up the social skills repertoire of an individual with SMI to a level of fluency,
the therapist will have to provide broad range of skills.
Social skills training has now been used for more than three decades in developed
nations. Studies on its efficacy in diverse treatment settings (inpatient, outpatient,
residential continuum), diverse practitioners (psychiatrist, psychologist, mental health
nurse, social worker) and covering a broad range of skills (illness management,
smoking cessation, securing and retaining job) have shown gratifying results
(Kopelowicz et al., 2006). In the last decade there has been further refinement in the
delivery of social skills training. Firstly, it is now understood that social skills training
is more effective when done in natural environment as opposed to classroom teaching
(Glynn et al., 2002). Secondly, evidence is emerging that cognitive remediation
potentiates skills training (Vauth et al., 2004). This has lead to integration of social
skills training as an essential element in comprehensive multidimensional programs.
E. Other approaches: Many ecological approaches have been developed with
advancement in delivery of community mental health services. Supported housing,
i.e. independent housing coupled with the provision of support services, offers
flexible and individualized services depending on individual demands (Rog, 2004).
Transitional employment, clubhouse and sheltered workshops provide prevocational
training that enable competitive employment (Rossler, 2006). Supported employment
involves placing an individual in competitive employment as soon as possible and
then provide indefinite support to maintain that position (Salyers et al.,2004)