Health economics: Choosing smart investments in healthcare systems
Health economics: Making every dollar count—efficient spending saves lives
Minister of Health Carlos Rivera faced an impossible choice. His country’s health budget could fund either a new cancer treatment program that would help 5,000 patients per year, or a national vaccination campaign that would prevent disease in 2 million children. Both were urgently needed. Both would save lives. But the budget only covered one.
“How do I decide?” he asked his economic advisor. “Do I tell those 5,000 cancer patients they don’t matter? Or do I leave 2 million children vulnerable to preventable diseases?”
The advisor opened a laptop showing cost-effectiveness analysis. “The vaccination program costs $2 million and prevents 50,000 years of healthy life lost. The cancer treatment costs $10 million and saves 8,000 years. Per dollar spent, vaccination saves six times more healthy life years.”
Rivera stared at the numbers. “So we vaccinate the children?”
“The data suggests that’s where you’ll have the greatest health impact with limited resources. It’s not about who deserves care—everyone does. It’s about maximizing the health we can provide with the money we have.”
This is the essence of health economics. According to WHO’s work, this area covers both technical and allocative efficiency: Costing and budget impact, global price tags and investment cases, cost-effectiveness analysis and health technology assessment, benefit package design and priority setting and resource allocation.
For more on healthcare resource management, see our articles on health financing and universal health coverage at ObserverVoice.com.
Three Pillars of Health Economics
WHO’s work focuses on three key areas:
Health technology assessment and Benefit Package Design – One of the key objectives for policymakers is to use existing and additional resources efficiently. This calls for prioritizing between and amongst interventions. WHO initiatives include: A survey on HTA and health benefit packages, The WHO-CHOICE (Choosing interventions that are Cost-Effective) project with Generalized Cost-Effectiveness Analysis methodology, The UHC Compendium, and The OneHealth Tool used to help countries examine costs and feasibility of strategic plans.
In May 2023, WHO released a landmark report charting route for reorienting economies to deliver health for all. In May 2024, the World Health Assembly adopted WHA 77.13 on Economics of health for all.
Costing and Technical Efficiency – The work on costing and technical efficiency explores questions around resource use in the health sector. Strategies for improving health and expanding access to health care services need to be examined from a resource perspective in order to ensure that they are feasible, efficient, affordable and sustainable.
Health and the economy – While measurements of morbidity and mortality are key considerations for estimating disease burden, they provide an incomplete picture of the adverse impact of ill health on human welfare. In particular, the economic consequences of poor health can be substantial. Analysis of the economic impact of ill-health addresses policy questions concerning consequences of disease or injury, from household income to a country’s GDP.
For more on health system analysis, see our articles on healthcare policy at ObserverVoice.com.
Essential Tools for Decision-Making
WHO provides multiple tools to help countries make evidence-based decisions:
AccessMod – This toolbox has been developed by WHO to assist countries to examine geographic aspects of their health system. It addresses the target population, availability coverage and accessibility coverage—helping identify where health services are unreachable.
EPIC – Economic projections for illness and cost of treatment is a model to estimate the burden of ill-health on economic performance through direct and indirect impacts that health has on the labour force and physical capital. EPIC may be used to conduct investment cases in health.
One Health Tool – The OneHealth Tool is software designed to inform national strategic health planning in low- and middle-income countries. It provides planners with a single framework for scenario analysis, costing, health impact analysis, budgeting, and financing of strategies for all major diseases and health system components.
UHC Compendium – The UHC Compendium is a database of health services and intersectoral interventions designed to assist countries in making progress towards Universal Health Coverage. It spans promotive, preventive, resuscitative, curative, rehabilitative, and palliative services.
WHO’s Health Financing and Economics department coordinates this work, with activities including providing guidance to countries on institutionalizing Health Technology Assessment.
Real-World Impact: Fair Share for Health
In March 2024, WHO published Fair share for health and care: gender and the undervaluation of health and care work, outlining how gender-equitable investments can help fully recognize the value of health and care work. WHO hosted report launch events and produced videos explaining the findings.
WHO also published Health labour market analysis in Tajikistan in May 2024, Health benefit packages analysis of AB-PMJAY SEHAT in January 2024, and Assessing employment effects for the health and care workforce in December 2023.
In October 2024, WHO marked International Day of Care and Support, emphasizing time for gender-equitable investment to better value and recognize care workers.
WHO produced infographics showing extending life expectancy, what will a healthier world cost, SDG Health Price Tag: Cost of reaching global health targets by 2030, and Health in the SDG Era.
WHO’s Economics Council issued a mid-term report in December 2022 and published case studies on the mRNA Vaccine Technology Transfer Hub in April 2024.
Global Resolutions Supporting Economic Analysis
The World Health Assembly has passed multiple resolutions supporting health economics: WHA 77.13 (2024) Economics of health for all, WHA 67.23 (2014) Health intervention and technology assessment in support of universal health coverage, and WHA 60.29 (2007) Health technologies.
Related WHO work includes financial protection and health taxes.
Minister Rivera eventually funded both programs—the vaccination campaign immediately, and the cancer treatment phased in over three years as additional resources became available. “Health economics didn’t tell me cancer patients don’t matter,” he explained. “It helped me understand how to save the most lives with limited resources today, while planning to expand coverage tomorrow.”
With WHO’s comprehensive approach to health economics, countries worldwide can make evidence-based decisions—ensuring every dollar spent delivers maximum health impact and bringing universal health coverage closer to reality.
For more information, visit WHO’s health economics topic page or explore related content at ObserverVoice.com.
Frequently Asked Questions (FAQs)
Health economics covers technical and allocative efficiency including costing and budget impact, cost-effectiveness analysis, health technology assessment, and benefit package design. It helps policymakers use resources efficiently by prioritizing interventions to maximize health impact with limited budgets.
WHO provides WHO-CHOICE for cost-effectiveness analysis, OneHealth Tool for strategic planning and costing, AccessMod for geographic access analysis, EPIC for economic impact estimation, and UHC Compendium for intervention databases.
Health economics helps countries prioritize interventions, design benefit packages, assess costs and feasibility of strategic plans, and allocate resources efficiently. WHO’s guidance on institutionalizing Health Technology Assessment supports evidence-based decision-making for UHC progress.
In May 2023, WHO released a landmark report on reorienting economies to deliver health for all. In 2024, the World Health Assembly adopted WHA 77.13 on Economics of health for all. WHO published Fair share for health and care in March 2024.
WHO analyzes how poor health affects economic performance through impacts on the labour force and physical capital. The EPIC model estimates how health changes affect effective labour force size, capital accumulation, and national income. This addresses questions from household income impacts to aggregate GDP effects.
- WHO Health Economics Topic Page
- WHO-CHOICE: Choosing Interventions That Are Cost-Effective
- OneHealth Tool
- UHC Compendium
- WHA 77.13: Economics of Health for All (2024)
Disclaimer: This article is an adaptation of publicly available information from WHO’s Health economics
health topic page (WHO, Geneva. Licence: CC BYNC-SA 3.0 IGO). WHO is not responsible for the
content or accuracy of this adaptation. This content is for informational and educational purposes
only and does not constitute medical advice. ObserverVoice.com is a news and information platform
— not a healthcare provider.
Observer Voice is the one stop site for National, International news, Sports, Editor’s Choice, Art/culture contents, Quotes and much more. We also cover historical contents. Historical contents includes World History, Indian History, and what happened today. The website also covers Entertainment across the India and World.
