MHA@GW Module 5
Health Economics and Quantitative Methods
Module 5 Key Competencies
Business Skill and Knowledge
- Skills in conducting economic analysis
- Skills in quantitative analysis and interpretation
- Skills in strategic planning
- Personal and professional ethics
Health Care Knowledge
- Health care issues and trends
- Economic concepts and their application to the health care field
This module introduced me to the subject of economics, and it re-introduced me to the subject of stastical analysis. The economics content of the course gave me the understanding of what is meant when it is stated that the demand for health care is a derived demand. In the health care space, the demand for medical services is derived from the demand for improved health. This perspective in health care pressures administrators and providers to place emphasis on efficiency (how well are scarce resources used to produce medical care?) and effectiveness (to what extent do these medical care services result in improved health?)
In addition, this module gave me an appreciation of factors that differentiate healthcare from other sectors of the economy. These factors can be appreciated with a comparison example: From the consumer’s perspective, when shopping for an automobile the consumer has access to significant amount of data to make to facilitate the purchase decision such as the following: purchase price, sales tax, transfer fees. The consumer is able to decide about the tradeoffs between options such as leather seats and their associated costs. The consumer is also able to make product comparisons between multiple. Most importantly, the consumer is making the purchase decision directly even if the consumer has arranged to finance the purchase with a loan. In contrast, the consumer in health care has limited access to data to facilitate the decision to purchase services from preventative care, primary care, or inpatient hospital care. The consumer does not have direct access to cost or pricing in health care. In fact, the majority of health care consumers are “insulated” by the cost and pricing of health care goods and services as a third party (health insurance) pays a portion of these costs on behalf of the consumer.
The aspects of the module that involved statistical analysis re-introduced me to the mathematical precision that can be used to quantify the strength of associations between variables while also accounting for confounding variables.
One can use the Chi Square Test of Independence to compute the Odd Ratio. Using the same dichotomous variables from the Chi Square Test, one can then run a Logistic Regresssion to confirm the Odds Ratio that was calculated in the analysis that used the Chi Square Test. The "p value" will also be the same.
However, one must also consider the possibility of confounding variables. As such, a Multiple Linear Regression is used to introduce other variables such as "Age" to observe the changes in the Odds Ratios of all variables included in this analysis while also recalling that an Odds Ratio of "1" implies that there is no difference between the variables. The corresponding changes in the "p value" will enable one to make an inference regarding the statistical signifigance of the association between the variables.