ABSTRACT
Kenneth Arrow’s seminal 1963 article “Uncertainty and the Welfare Economics of Medical Care,” published in the American Economic Review, is widely regarded as the origin of health economics. The health economics field that has emerged in the subsequent 50 years has become a collection of market-based (demand for and supply of health goods and services) and non-market-based subjects. Despite a “broadening” of health economics to absorb ideas from other disciplines, the field has failed to pay adequate attention to ethics. Kenneth Arrow himself has called for greater attention to ethics in solving persistent health and health care problems for which economic tools are insufficient. The health capability paradigm is an attempt to integrate economic and ethical principles in an alternative analytical framework, enriching both health economics and ethics simultaneously. Social problems in health are so intractable that we must apply theoretical and empirical methods in both economics and ethics to analyse them. Health capability economics, as embodied in the health capability paradigm, offers a way forward.
