ABSTRACT
This chapter deals the nature of the economic approach to the production of health and healthcare (an activity which hopefully contributes to the health of patients, and always contributes to the income of providers!). It addresses the issue of why health economics and the creation of economics-based medicine grows in influence slowly but inexorably, continually opposed by Luddites and commercial interests who feel, sometimes totally erroneously, threatened by the wisdom of the health economics tribe! The objective of investment in healthcare is to produce health, although you would never guess this from the way practitioners and managers fail to evaluate changes in the health status of individual patients and the population! These folk typically organise their lives and their careers around issues of spending (inputs) and processes (activity in terms of patients treated and waiting times targets). Health economics, both as a subdiscipline, and as an influence on health and healthcare policy, has grown slowly over three decades.
