Health Economics

  • Organizations whose objective is assumed to be other than profit. Any trading surplus is not available for distribution to owners (or 'trustees'). In economics, it is nonetheless usually assumed that hospitals maximize something (like the utility of managers, or that of the senior doctors who work in them). Being non-profit is a characteristic of health care insurance that is sometimes (as in Canada) required by statute. The legitimate role of profit-seeking in health care provision has concerned health economists from the earliest days of the sub-discipline, both in order to understand better why the non-profit organization is so frequently found, even in market-oriented economies, and whether on balance and in what circumstances it can be counted as a good thing. Opinion amongst economists is unlikely, however, to reach a consensus, given the wider political connotations of the issue. The pioneering piece is Newhouse (1970).