Chapter 7 Building Healthy Public Policy and Introduction to Health Economics

1. Chapter 7Building Healthy Public Policy and Introduction to Health Economics

2. Public Policy • “A course of action or inaction chosen by public authorities to address a given problem or interrelated set of problems” (Pal, 2001) • Act as a set of guidelines or as a framework for action • Made by elected officials • Three categories of policy instruments: • Do nothing • Act indirectly (e.g., educate, provide funds) • Act directly through state agencies and corporations or in partnership with private or nonprofit organizations

3. Public Policy Development • Not a linear process • There may be several iterations for each before a public policy is stated

4. Public Policy Development

5. Public Policy Development—Agenda Setting • The process through which problems come to the attention of elected officials or policy makers • The problem recognition stage • Decision-makers receive feedback from both external and internal sources • The way a problem is defined shapes the options available.

6. Public Policy Development—Policy Formulation • Experts and analysts pose solutions to the problem • Proposed solutions must align with the current political stream (social and political context) • The media play an influential role.

7. Question Which of the following events is most likely to prompt the agenda-setting phase of the policy development process? • Changes in the price of a common analgesic • Public outcry regarding media reports about surgical wait-times • Changes in the demographics of a Northern community • The completion of a community health promotion initiative

8. Answer B Rationale: Agenda setting is the problem identification stage of policy development in which problems come to the attention of elected officials or policy makers.

9. Public Policy Development—Decision Making • Policy makers select from among policy options. • Economic analysis is conducted . • Estimating both the costs and benefits • Policy development may or may not continue, depending on public opinion.

10. Policy Implementation and Evaluation • Evaluation includes processes by which results of policies are monitored. • Can lead back to a fuller understanding of either the problem or potential solutions. • Evaluations can help to assess whether social change has occurred and how it occurred.

11. Policy Communities • Made up of people who are concerned about a particular policy issue • May include members of the general public, representatives of organizations, government employees, and elected or appointed officials • Some members of the policy community interact on a regular basis, and these form a policy network. • These require a varied membership. • Discussion and analysis of power and equity must be a central focus. • It is important to develop partnerships.

12. Question Tell whether the following statement is True or False: Policy communities are made up of members of the public who are concerned about an issue and who are not government employees or officials.

13. Answer False Rationale: Policy communities may include members of the general public, representatives of organizations, government employees, and elected or appointed officials.

14. Economic Thinking • The study of the allocation of scarce resources • What a population wants, and what it values, defines its policy objectives. • Prior to economic analysis, the following questions must be answered: • Does a proposed treatment or intervention improve patient or population health? • Does treatment A provide a greater improvement in health than treatment B? • Is the treatment or intervention safe?

15. Concepts Central to Economics • People face trade-offs • The cost of something is what you give up to get it. • Opportunity costs • Sunk costs and fixed costs are not economic costs. • Decision-makers should think on the margin.

16. Question Which of the following costs would be considered to be a sunk cost? • Staffing costs of a health promotion campaign that has recently finished • Supplies and equipment for a proposed screening program • Purchase of new office space for a team of community health nurses • Purchase of pressure-reduction beds on a hospital unit

17. Answer A Rationale: A sunk cost is something that cannot be recovered no matter what happens and, as such, should not bear on the decision-making process once it has been spent. The costs of real estate and equipment are partially or wholly recoverable.

18. Concepts Central to Economics (cont’d) • Incentives matter. • Trade can make everyone better off. • Markets are usually a good way to organize economic activity.

19. Concepts Central to Economics (cont’d) • Governments can sometimes improve on market outcomes. • Externalities • Information asymmetry • Uncertainty with respect to the need and effectiveness of health care • An absence of competition • Markets that are missing