Knowledge clips – Week 1
Knowledge clip A – Population health
Measuring health
• Length of life:
• Life expectancy
• Survival; probability of surviving a given year
• Mortality; share of the population that dies in a given year
• Quality of life:
• Health or well-being score; how do you rate your health
• Morbidity; count the number of chronic illnesses
Combinations: healthy life expectancy, disability-adjusted life expectancy
- Measuring both can be in negative and positive measures
o Take life expectancy and multiply that by quality of life
3 puzzles of health
Fact 1; health changes over time
- Still increasing; why did life expectancy increased
o Why not higher now?
o Are there limits to life expectancy (Oeppen and Vaupel 2002)?
No limit to life expectancy, as the front runner country
flattens out another will come in and take over
Fact 2: Why does health differ between countries?
- Most strongly for income under 25-30k per year life expectancy higher
than lower income countries
- After 30k life expectancy flattens out
- Hypothosis: Why does it seem to matter more among poor than richer
countries?
Fact 3: health differences within countries
- Mortality rate come down (1995 above 2016); all income groups benefit
from this
- Men benefitted much more than women
o Richest man have higher mortality than women
- Relationship upward sloping between richest and poorest
Still inequality in mortality rate
- Poorest group has lower life expectancy for the poorest
- Richest group has better life expectancy in good health
,Knowledge clip B – Economics (not exam material)
What do economists mean by model?
A model is a simplified version of (some part of) the world
• Assumptions
• Some aspects omitted to highlight others
Models used in this course have a few core elements
• A decision maker (or many)
• A set of resources
• A set of alternative allocations: the choice problem
• Do you spend an additional hour on work or on sports?
People make optimal decisions assuming:
• Set preferences: utility function
• Choice rules: utility maximization
• Full information
Ceteris paribus?
• Ceteris paribus: holding everything else constant
• Simplifying assumption, like other assumptions
• What happens to health if we increase medical care, holding
everything else constant
• Put all of the focus on the relationship to what happens to
health, if you change medical care
Why economics to study population health?
• Health is important component of welfare
• Health determines economic potential; healthier people more able to work
and more tax revenue
• Production of health is a resource allocation problem; can invest but which
has the highest ROI?
• Health is determined by behaviour that economics seeks to understand
,Knowledge clip C – Determinants of health
• Why does not everyone achieve full health?
• Why is there no standard recipe for maximizing health?
Health production function - Assumptions
A1: Health (h) is not given, but produced
A2: Production is at the level of an individual i: hi (mirco economic view)
A3: Health is produced using a number of factors, we can influence some of
these factors and medical care (m) is one of these:
hi = f(m, other factors)
A4: Utility maximization under constraints and utility is a function of health
Produce health as efficiently as possible, also because function contains
other things
Health and medical care
Health is a function of medical care
- Additional amount of care, increase of health (derivative is positive
- Difference between h2 and h4 is a result of 2 units of medical care
(increase is much smaller)
o Diminishing marginal returns to medical care
- What is the role of other factors?
o Shift the health
production
function up
and down
Younger at higher health production
function
Older, lower at the health production
function
Example: heart attacks
In the case of a patient with a heart attack (acute mycordial infarction),
treatment in the Netherlands has changed in both ways:
1. More effective, less invasive treatment (Cram et al. 2022)
2. More widespread use of highly effective medication after discharge
(Mackenbach et al. 2011)
, Mackenbach et al. 2011 hypothesize: key to improved life expectancy in the
2000s?
Knowledge clip A – Population health
Measuring health
• Length of life:
• Life expectancy
• Survival; probability of surviving a given year
• Mortality; share of the population that dies in a given year
• Quality of life:
• Health or well-being score; how do you rate your health
• Morbidity; count the number of chronic illnesses
Combinations: healthy life expectancy, disability-adjusted life expectancy
- Measuring both can be in negative and positive measures
o Take life expectancy and multiply that by quality of life
3 puzzles of health
Fact 1; health changes over time
- Still increasing; why did life expectancy increased
o Why not higher now?
o Are there limits to life expectancy (Oeppen and Vaupel 2002)?
No limit to life expectancy, as the front runner country
flattens out another will come in and take over
Fact 2: Why does health differ between countries?
- Most strongly for income under 25-30k per year life expectancy higher
than lower income countries
- After 30k life expectancy flattens out
- Hypothosis: Why does it seem to matter more among poor than richer
countries?
Fact 3: health differences within countries
- Mortality rate come down (1995 above 2016); all income groups benefit
from this
- Men benefitted much more than women
o Richest man have higher mortality than women
- Relationship upward sloping between richest and poorest
Still inequality in mortality rate
- Poorest group has lower life expectancy for the poorest
- Richest group has better life expectancy in good health
,Knowledge clip B – Economics (not exam material)
What do economists mean by model?
A model is a simplified version of (some part of) the world
• Assumptions
• Some aspects omitted to highlight others
Models used in this course have a few core elements
• A decision maker (or many)
• A set of resources
• A set of alternative allocations: the choice problem
• Do you spend an additional hour on work or on sports?
People make optimal decisions assuming:
• Set preferences: utility function
• Choice rules: utility maximization
• Full information
Ceteris paribus?
• Ceteris paribus: holding everything else constant
• Simplifying assumption, like other assumptions
• What happens to health if we increase medical care, holding
everything else constant
• Put all of the focus on the relationship to what happens to
health, if you change medical care
Why economics to study population health?
• Health is important component of welfare
• Health determines economic potential; healthier people more able to work
and more tax revenue
• Production of health is a resource allocation problem; can invest but which
has the highest ROI?
• Health is determined by behaviour that economics seeks to understand
,Knowledge clip C – Determinants of health
• Why does not everyone achieve full health?
• Why is there no standard recipe for maximizing health?
Health production function - Assumptions
A1: Health (h) is not given, but produced
A2: Production is at the level of an individual i: hi (mirco economic view)
A3: Health is produced using a number of factors, we can influence some of
these factors and medical care (m) is one of these:
hi = f(m, other factors)
A4: Utility maximization under constraints and utility is a function of health
Produce health as efficiently as possible, also because function contains
other things
Health and medical care
Health is a function of medical care
- Additional amount of care, increase of health (derivative is positive
- Difference between h2 and h4 is a result of 2 units of medical care
(increase is much smaller)
o Diminishing marginal returns to medical care
- What is the role of other factors?
o Shift the health
production
function up
and down
Younger at higher health production
function
Older, lower at the health production
function
Example: heart attacks
In the case of a patient with a heart attack (acute mycordial infarction),
treatment in the Netherlands has changed in both ways:
1. More effective, less invasive treatment (Cram et al. 2022)
2. More widespread use of highly effective medication after discharge
(Mackenbach et al. 2011)
, Mackenbach et al. 2011 hypothesize: key to improved life expectancy in the
2000s?
