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Health Economics with TAR & Population Education

Health economics is a branch of economics concerned with issues related to scarcity in the allocation of health and health care. For example, it is now clear that medical debt is the principal cause of bankruptcy in the United States. In broad terms, health economists study the functioning of the health care system and the private and social causes of health-affecting behaviors such as smoking.

Governments tend to regulate the health care industry heavily and also tend to be the largest payer within the market. Uncertainty is intrinsic to health, both in patient outcomes and financial concerns. The knowledge gap that exists between a physician and a patient creates a situation of distinct advantage for the physician, which is called asymmetric information.

Externalities arise frequently when considering health and health care, notably in the context of infectious disease. For example, making an effort to avoid catching the common cold affects people other than the decision maker.