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Global Health Economics: Concepts and Applications or Cool Things Justin Likes about Global Health Economics Justin Berk TTUHSC SOM Global Health Elective.

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Presentation on theme: "Global Health Economics: Concepts and Applications or Cool Things Justin Likes about Global Health Economics Justin Berk TTUHSC SOM Global Health Elective."— Presentation transcript:

1 Global Health Economics: Concepts and Applications or Cool Things Justin Likes about Global Health Economics Justin Berk TTUHSC SOM Global Health Elective 1/28/12

2 What is economics? The social science that analyzes the production, distribution, and consumption of goods and services The study of how people choose to use available resources The study of behaviorThe study of incentives

3 An example or

4 My Kingdom for a Horse?

5 Supply and Demand Activity Supplier: You just created a new medical invention: a talking stethoscope. You can set one price for it. Consumers: 5 of you would be interested in this invention. 1 is willing to spend $50 1 is willing to spend $40 1 is willing to spend $30 1 is willing to spend $20 1 is willing to spend $10 What price will the supplier set?

6 Supply and Demand Law of Demand – the higher the price of the good, the less people demand the good Law of Supply – the higher the price of the good, the more items you want to sell.

7 PriceDemandSupplyRevenues $5015 $4024$80 $3033$90 $2042$80 $1051$50

8 Red Shoes http://vimeo.com/27046074

9 Global Pharmaceutical R&D 1 country is willing to spend $5B for chronic care lifestyle technologies 50 countries are willing to spend $500M for chronic care lifestyle technologies 100 countries are willing to spend $10M for life-saving medicines that cure disease. Youre the CEO of Pfizer. It costs over $1B to develop a drug. Where do you allocate your R&D funds?

10 Why Health Care Economics is Different Infinite demand: Life or death decision Outcome uncertainty Information Asymmetry Moral hazard Social Externalities Health care is not health Third party payers

11 Moral Hazard People insulated from risk behave differently than people exposed to risk. RAND Health Insurance Experiment 4 fee-for service plans: -Free care -25% co-pay -50% co-pay -95% co-pay

12 Wealth is Health

13 UK Whitehall Study

14 Health and Wealth: A Bi-Directional Relationship Strong Economic Performance Higher Individual Incomes Purchasing of health promoting goods and services Improved Health Economics to Health Good health Human Capital Increases Individual Productivity Increases Overall Economic Growth Rate Increases Health to Economics

15 Top 10 Causes of Death in Low- Income Countries 1.Lower respiratory infections 2.Diarrheal Disease 3.HIV/AIDS 4.Ischemic heart disease 5.Malaria 6.Stroke / Cerebrovascular disease 7.TB 8.Low birth weight / Prematurity 9.Birth asphyxia / trauma 10.Neonatal infections We have cures!

16 Why are people still dying? PovertyInfrastructure Clean water No education WarBrain drain Basic resources

17 Economic Development is Health Health carePoliticsEducationInfrastructureGovernanceForeign policy

18 Top 5 Public Health Jobs (that have nothing to do with public health) 1.Teachers Education improves economy, decreases risky behavior Most studies suggest more important than race and income 2.Engineers Drill for water, build roads, develop energy infrastructure 3.Politicians (kinda) Good governance serves enormous factor for health development (Its usually negative.) 4.City Planners Create walking cities with access to healthy foods etc. 5.Journalists / Writers Inspire world leaders, increase awareness, mobilize social groups Martin Luther King, Thomas Paine, Nicholas Kristof, Oprah

19 Discussion: Issues in Global Health Economics

20 Structural Adjustment Plans Measures to promote market fundamentalism Privatization of state-owned industry Deregulation Austerity (cutting expenditures)

21 Tobacco Tobacco and smoking have a number of negative effects: Tobacco smoking kills Tobacco exacerbates poverty Tobacco contributes to world hunger by diverting prime land away from food production Tobacco production damages the environment Tobacco reduces economic productivity Developing world has 80% of tobacco related deaths. How do you address this?

22 Emergency Aid The village of Williamsville has been hit by a major typhoon. Farm land has been devastated. People are starving. There are two ways to get food to those in need: A private farming company operates in the neighboring town of Simón. They know people are desperate and will pay huge amounts for food and water. They see this as a business opportunity and are willing to cross risky terrain to deliver the goods for high profit. A coalition of NGOs and foreign aid can deliver food and water for free.

23 Economic Development for Dummies Need for foreign aid to overcome poverty and enter global marketplace Foreign aid causes harms. Searchers better than Planners. Military interventions to guarantee democracy, International Charters, preferential trade Development assistance = dependency, corruption, poor governance

24 Cool Global Health Business Solutions

25 Charity:water http://vimeo.com/22566556 Marketing Recruiting human capital Financing

26 Grameen Bank Micro-loans to the impoverished Promotes entrepreneurship and skill use Peer pressure within loan groups Women receive 95% of loans Borrowers have company equity 96% recovery rate 2006: Nobel Peace Prize 2011: government take- over

27 Riders for Health http://vimeo.com/31962921 Overcoming infrastructure challenges Avoids costs through prevention Improves supply chain logistics Improves quality and speed of care

28 CFWShops Approximately 20,000 children die each day because they lack access to essential drugs that often cost less than a cup of coffee. A short list of preventable and treatable diseases accounts for approximately 70% of childhood illness and death. Entreprenuers provided blue-prints for a micro-franchise like McDonalds Three-Point Franchise Test Standardization Scalable Economies of scale

29 Advocate for Change 2007: Deep price reductions for AIDS medications Clinton Foundation proved that MDR-TB could be treated in low-income countries negotiated mass price reductions from more than $30,000 per patient per year to less than $3,000. Green Light Committee (PIH, MSF, CDC)

30 How to Save the World 1)Make cool YouTube videos. 2)Small loans. 3)Ride motorcycles. 1)Copy McDonalds. 2)Yell a lot.

31 Cool Resources EpiAnalysis blog http://epianalysis.wordpress.com/ Acumen Fund (non-profit venture capital) http://www.acumenfund.org/ Unite for Sight http://www.uniteforsight.org/ Partners in Health http://www.pih.org/ Global Issues Blog http://www.globalissues.org/article/588/global-health-overview Quora http://www.quora.com/


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