Rethinking health economics

Standard health economics is an applied field of neoclassical economics. It has three central characteristics: first, it conceives health care interactions in terms of market exchange, albeit these exchanges frequently demonstrate “market failure†; second, it embraces homo oeconomicus: the value of actions rests solely on their outcomes, and following from this, third, health economics attempts to construct cardinal utility measures as a means of evaluation. Each of these characteristics, jointly and separately, has been subject to extensive criticisms. This chapter concentrates on one area of criticism that has not received the attention that it, arguably, merits. The standard approach usually overlooks the importance of “care†and “caring†in the provision of health and medical care. Care is challenging to define – it is instinctive, can be manifest as a range of particular activities, may be associated with a role, and therefore reflects obligations, duties and virtuous behaviour, among other properties. The standard approach cannot capture these features in its reductionist and restrictive framework. This results in the potential for an extensive misallocation of resources in the provisioning of caring services. The chapter advocates a reformed health economics founded on a concept of care – as opposed to market exchange – that properly treats the patient as a person.