Public health is “the science and art of preventing disease, prolonging life, and promoting health through the organized efforts and informed choices of society, organizations, public and private, communities, and individuals” ¹ . The ambit of public health is not limited to the physical status of the individual or population alone, rather it encompasses the entire ecosystems responsible for health and health care including the social determinants of health. Health systems or the health care delivery system is one of the immediate drivers of healthcare, especially when the health of an individual or population is compromised and requires care. Resource constraints are the most important issue in public health and the pursuit of equitable allocation of this scarce good, forms the basic foundation of the economic theory. Health economics, thus, 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” ² .

Traditionally, the field of public health in India was largely restricted to actions of the public health systems, such as governance, financing, distribution of public resources, etc. The role of government in the private health system was largely limited to regulatory activities; however, little could be achieved as the enforcement of regulations were weak ³ .

India spent 3.8% of its GDP on health in the year 2015–16, but only 1.18% of this was on public health ⁴ . This implies that of the total health expenditure, public health accounted for merely 30.6%, while the remaining was out-of-pocket expenditure (OOPE) or private expenditure ⁴ . According to the latest estimates, the proportion of ailments treated by the public sector health facilities was 30%, contrasting with the private sector value of 70%; the proportion of hospitalisations in the private and public sector were 58% and 42%, respectively ⁵ . Due to the abovementioned facts, over the period, the public health practice as well as research was intrigued mainly with the affairs of public health systems.

In the year 2018, Government of India launched a health scheme known as, ‘Ayushman Bharat’ (Long live India), wherein one of the components is publicly financed health insurance, termed as Pradhan Mantri Jan Arogya Yojana (PMJAY). The scheme proposes to cover nearly 100 million poor and vulnerable households by providing health insurance coverage up to INR 5 lakh (approximately US$7,000) per family per annum ⁶ . This scheme intends to cover secondary and tertiary treatment from a list of empanelled public and private hospitals. With the launch of this scheme, the landscape of public health in India will widen as one of the stated objectives of the scheme is to harness the private health system for overall public health goals. With this the fundamental role of government also changed from being a provider to a purchaser as well, implying a substantial share of government revenue will be directed to the private sector. Available evidence documents the limited success of a similar publicly financed health insurance scheme in India. This scheme failed in reducing out of pocket expenditure and providing financial risk protection ⁷ . More importantly the major reason for failure of such scheme was lack of sufficient institutional and regulatory mechanism ⁸ . Based on these experiences, efficient management of resources and regulating the cost is also going to be a major concern during implementation of PMJAY. Therefore, proper regulation for cost and quality and ongoing economic evaluation of the scheme could be an effective mechanism to achieve the desired objective.

At this juncture, the role of the health economist becomes essential. The discipline offers a framework for measuring, valuing, and comparing the costs and benefits of different health interventions. By means of evaluation techniques, such as cost-benefit and cost-effectiveness analysis and actuarial valuation, regular and timely studies could be conducted to assess the financial and physical progress of various interventions introduced. Two concepts which are widely discussed in the area of health economics are efficiency and effectiveness; the former measures how well resources are allocated in order to achieve a desired outcome while the latter is used to compare drugs or programmes which have a common health outcome ⁹ .

Presently, India may not be able to cater to the sudden demand for health economists, as the discipline they practice has found little prominence compared to mainstream economics. Most of the universities or institutions restrict their degree programs in economics to specialise in microeconomics, macroeconomics, economics of development, public finance, etc. The availability of health economics as a separate degree or research program is negligible except for selective private institutes. Notably, health economics does find a place within the curriculum of public health education in many institutions ¹⁰ . Globally, health economics has acquired greater acceptance across universities and institutes and is offered as separate degree and research programs ¹¹ . The scarcity of professionals trained specifically in health economics has resulted in the filling of vacancies for health economists by professionals from medical backgrounds with public health training, doctorates in economics or demography or population health, researchers with basic or technical understanding of health economics or professionals with degrees in health economics from institutes outside India. Professionals trained in health economics from outside India end up having an edge and added advantage ¹¹ .

In this changing landscape of public health, the government’s role is shifting towards being both a buyer and provider of health services. Hence, the government is required to be especially cautious while dealing with the multiple providers ¹² . This situation will certainly increase the demand for health economists who can guide the policymakers and the consumers of health to avail the most efficient, cost-effective and equitable course for achieving the desired objective. Thus, building and strengthening the capacity in health economics is the need of the hour. A good start would be the introduction of masters’ degrees in health economics through the creation of centres of health economics within the economics departments of public universities and other institutions of eminence. Similarly, schools of public health within medical or non-medical institutions should start departments/centres of health economics. Such courses should be open to graduates of medicine, economics, public health and similar disciplines. Based on this foundation, research degree programs in health economics should be strengthened to produce the next generation of academics and researchers. Thus, the introduction of health economics as a discipline in India is presently vital and should be a policy priority.

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