Terms Comparison
Michelle Ozete
HCS 552

Professor Harry Morris

Terms Comparison
Health economics assists as one of the processes that may be used to understand different matters related to health and health care. From an economics perspective, health economics is one of many subjects to which economic principles and methods can be associated to. Therefore, by describing the principles of health economics, we are actually describing the principles of economics and how they may be understood in the setting of health and health care. As Morris, Devlin and Parkin (2011) put it: “Health economics is the application of economic theory, models and empirical techniques to the analysis of decision-making by individuals, health care providers and governments with respect to health and health care”.
There are numerous descriptions of economics, but a description given in by Begg, Fischer and Dornbusch (2005) is most informative: “The study of how society decides what, how and for whom to produce”. In reviewing these topics, health economics tries to associate the same analytical methods that would be associated to any object or service that the economy creates. Noting, it also frequently asks if the issues are different in health care.
Resources, production, opportunity cost and scarcity
The meaning of economics as stated above includes the term “to produce”, highlighting that economics deals with both health and health care as a good or service that is manufactured, or produced. All production necessitates the use of resources such as bare materials and labor, and we can understand production as a course by which these resources are converted into goods:
The ideas to enable this productive development are resources such as employees, tools and capital, land and bare materials. The process of utilizing health care inputs for example health care professionals, therapeutic materials and a clinic - could be, for example, an amount of health care of a given quality that is delivered. How inputs are converted into outputs may be derailed by other factors, such as the setting in which the production occurs, also whether the clinic is openly or privately owned (Morris, Delvin, & Parkin, 2011).
The key component of economics is that resources are known to be restricted in number, but there aren’t any known limitations on the amount of outputs that is wanted. Acting as the vital driving force for economic movement and clarifies why health and health care can and should be treated like other goods. This matter, recognized as the issue of scarcity of resources signifies that verdicts must be completed considering what goods are manufactured, how they are to be manufactured and who will purchase them. Simplifying this, what should be understood is that no one can have all of the goods that they want therefore in selecting which goods they do want, they must understand that a trade must take place where they will gain but also loose.
The term economic goods is commonly used to describe goods and services for which economic investigation is believed to be related. These goods are defined as goods or services that are scarce relative to our wants for them. Health care is an economic good: one, because the goods used to offer it are established and only the use of additional resources to create health care if we deter them from other uses; also, because of people’s needs for health care, that is what the public would consume in the lack of restrictions on its capacity to pay for it, have no known bounds (Morris, Delvin, & Parkin, 2011). It is unknown where in the world there could be a health care system that dedicates sufficient resources to health care to support all of its residents’ wants. Obviously, in a nationwide health system, it is probable that the goal is to suffice the “needs” rather than “wants”.
Concluding: in the economy generally speaking, there are not sufficient scarce resources to suffice all of the wants that the public has, so we have to choose which wants are met and which are not met; in the health care system there aren’t sufficient health care resources to meet all of the health needs that people have, meaning we need to pick which needs are met and which are not met.
Economics proposes that scarcity and the resulting need to select are common and inevitable. This observation leads to a significant and vital economics perception, which is opportunity cost. If scarce resources are used to produce a good or service, those resources cannot be used to produce other goods or services (Begg, Fisher, & Dombusch, 2005). Opportunity cost develops from the profits that are fated by not manufacturing those additional goods. Keeping in mind there are numerous other uses for resources, the opportunity cost of utilizing resources in a particular way is known as the profits that would have come from their best alternate use. When economists discuss costs, they are commonly referring to opportunity costs. This is unlike the more common idea of financial costs, the costs of goods and services and of scarce resources in regards to money. At times, financial costs are utilized to estimate opportunity costs. Opportunity cost and financial costs are different forms of assessing costs. It wouldn’t be logical to estimate them individually and then add them together.
Conclusion
The crucial thing to understand regarding the perception of opportunity cost is within the name of the concept. Opportunity cost is the worth of the best opportunity forgone in a particular choice. It is not merely the total disbursed on that decision. The concepts of scarcity, choice, and opportunity cost are at the core of economics. A good is scarce if the choice of one alternate necessitates that another be given up. The existence of alternative uses obligates us to make decisions. The opportunity cost of any choice is the value of the best alternative forgone in making it.
References
Begg, D., Fisher, S., & Dombusch, R. (2005). Economics. San Francisco: Mc Graw Hill Higher Education.

Morris, S., Delvin, N., & Parkin, D. (2011). Economic Analysis in Health Care. Chicago: Harper Williams.