Health economics

Health economics is a branch of economics concerned with issues related to scarcity in the allocation of health and health care.
Four factors that are important to Health Economics: Government Intervention, Uncertainty, Asymmetric Knowledge, and Externalities.[1] Governments tend heavily regulate the Healthcare industry and also tend to be the largest payor within the market. Uncertainty is intrinsic to health, both in patient outcomes and financial concerns. The knowledge gap that exists between a physician and a patient creates a situation of distinct advantage for the physician, which is called Asymmetric Knowledge. Finally, there are many effects that happen between two parties without monetary compensation, called externalities, within healthcare, from catching a cold from someone to practicing safe sex.
The scope of health economics is neatly encapsulated by Alan William's "plumbing diagram"[2] dividing the discipline into eight distinct topics:
what influences health? (other than health care)
what is health and what is its value
the demand for health care
the supply of health care
micro-economic evaluation at treatment level
market equilibrium
evaluation at whole system level; and,
planning, budgeting and monitoring mechanisms.
What influences health? Health of a country or the residence of that country is greatly dependent not only on the geographic location but the legal and economic stabilities of the nation. With healthcare industry having such a major impact on the economy of a nation(roughly 10%), it becomes the indispensable attention of all governments.
A stable legal policy not only aids in the on time improvement of the industry but its impact on the society as well.The exclusive government body focussed on the industry enhances the research and development along with the underpinning infrastructure required.