Normative Health Economics: A New Pragmatic Approach to Cost Benefit Analysis, Mathematical Models and Applications

This book modifies the existing economic theory of health analysis by integrating the issues and principles of moral philosophy in an extended framework. It also develops some operational mathematical models to show how the proposed framework for integration of moral philosophy in the area of health economics can be applied to health economics and policy evaluation.

On the application side, this book operationalises the social choice theory and new³ welfare economics in health economics by combining the human capital approach, the preference approach, scientific (or clinical) information, expert opinions as well as social value judgement, in order to estimate the social costs and social benefits (new³ cost benefit analysis) of listing decisions of the Pharmaceutical Benefits Scheme in Australia.

The book argues and demonstrates the advantages for adopting the principles of welfare economics, and operations research techniques for health sector planning. Computer programs based on the GAMS system and EXCEL are used to solve the models developed in this book.