Importance of Economic Evaluation in Health Care: An Indian Perspective

Health economic studies provide information to decision makers for efficient use of available resources for maximizing health benefits. Economic evaluation is one part of health economics, and it is a tool for comparing costs and consequences of different interventions. Health technology assessment is a technique for economic evaluation that is well adapted by developed countries. The traditional classification of economic evaluation includes cost-minimization, cost-effectiveness analysis, cost-utility analysis, and cost-benefit analysis. There has been uncertainty in the conduct of such economic evaluations in India, due to some hesitancy with respect to the adoption of their guidelines. The biggest challenge in this evolutionary method is lack of understanding of methods in current use by all those involved in the provision and purchasing of health care. In some countries, different methods of economic evaluation have been adopted for decision making, most commonly to address the question of public subsidies for the purchase of medicines. There is limited evidence on the impact of health insurance on the health and economic well-being of beneficiaries in developing countries. India is currently pursuing several strategies to improve health services for its population, including investing in government-provided services as well as purchasing services from public and private providers through various schemes. Prospects for future growth and development in this field are required in India because rapid health care inflation, increasing rates of chronic conditions, aging population, and increasing technology diffusion will require greater economic efficiency into health care systems.