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Normative Health Economics? David Hume’s dictum of 1739, “One cannot deduce an Ought from an Is,” has exerted a particularly strong influence on the scientific discipline of economics. It has laid the foundation of the distinction between “positive” and “normative” economics. Though perhaps overstated in its absolute form – it is indeed difficult to conceive an “Ought” that is not influenced in some way by what “Is”, and there are reasons to assert that many statements about “Ises” are subject to the inductive fallacy, as we accept or reject them on the basis of reasoning that itself reflects conventions and, therefore, judgments – Hume’s fundamental premise remains that “Oughts” cannot be logically derived from “Ises”. Some antonyms: “Is”: positive,
facts, objective, descriptive, science, (cf. Mark Blaug, 1992) In economics, a number of scholars tend to treat social welfare
theory as a “normative” science. As they turn to the
field of health economics, some of them are prepared to derive, from
this theory, “normative” statements on the efficient
organization of health service provision. This, of course, is perfectly
legitimate. It may, however, create distinct problems (and misunder-standings)
if and when theoretical foundations, limitations, For reasons closely related to the (implicit or explicit) value
judgments of social welfare theory, “extrawelfarism” has
emerged as a prevailing paradigm among health economists. As they deviate from social welfare theory, extrawelfarists have found themselves under attack from representatives of “pure” economic theory. Without doubt, this fact has contributed to a widespread perception that extrawelfarism does appropriately address egalitarian concerns that have been raised against the “normative” interpretation for welfare theory. This may be not quite correct. In any event, health economists often present their findings in a way non-economists – such as policy makers, physicians, patients, the public, and other groups of stakeholders – can only (mis)understand as “normative”. This may be the case for a number of reasons, including the need to simplify due to time constraints imposed on speeches and presentations, not allowing to explain critical value-loaded assumptions underlying an analysis. Sometimes, however, a normative interpretation of analyses is implied in a seemingly innocuous way, for instance by calling for more “consistency” in the implementation of the results of economic analyses. And on occasion, some economists do claim explicitly that their recommendations should be understood as prescriptive. To be sure: there is no substitute to economic analysis if and when the opportunity cost of any resource allocation, including the delivery of health care, is a concern. Thus health economic evaluations will play an increasingly important role. They will continue to provide crucial, and sometimes counterintuitive, insights into the trade-offs inevitably associated with any health care policy. The critical point merely is that the results of these evaluations will have to be interpreted with the assumptions and the methods employed in mind, and, as a result, may have to be moderated by values outside their scope. These issues surrounding the scope of health economic analyses are
addressed in more detail in the following paper (written in German): In: Hermes A. Kick, Jochen Taupitz (Eds.): Gesundheitswesen zwischen Wirtschaftlichkeit und Menschlichkeit, Münster: LIT-Verlag 2005, pp. 37-112. This subject was also addressed at the 5th World Congress of the International Health Economics Association (iHEA) in Barcelona, Spain, on July 13, 2005: Michael Schlander:
On a Less Serious Note Here are some popular jokes: … about economists … Curt Monash once reported: “I was standing with Ken Arrow by a bank of elevators on the ground floor of William James Hall at Harvard. Three elevators passed us on our way to the basement. I foolishly said ‘I wonder why everybody in the basement wants to go upstairs.’ He responded, almost instantly: ‘You’re confusing supply with demand.’” Q: How many Chicago School economists does it take to change a light
bulb? Q: How many mainstream economists does it take to change a light
bulb? Q: How many central bank economists does it take to screw in a light
bulb?
… about physicians … Q: How many doctors does it take to change a light bulb? Q: Hoy many surgeons does it take to change a light bulb? Q: How many veterinarians does it take to change a light bulb?
… about psychiatrists … Q: How many psychiatrists does it take to change a light bulb?
… about psychologists … Q: How many psychologists does it take to change a light bulb?
… about students of psychology … Who was Right: Pavlov or Freud?
Unbeknownst to most students of psychology, Pavlov’s first experiment was to ring a bell and cause his dog to attack Freud’s cat. From Gary Larson, The Far Side (1990).
… about real-life ethics … Towards a General Theory of Justice
“As far as I’m concerned, they can do what they want with the minimum wage, just as long as they keep their hands off the maximum wage.” From The New Yorker.
… about managers … Managerial Decision-Making: Science or Art?
“Your background in creative decision-making is interesting, but we’re looking for someone with a strong background in creative order following.” From The Wall Street Journal.
…and, perhaps inevitably, about health economists …
“The drug itself has no side effects – but the number of health economists needed to prove its value may cause dizziness and nausea.” Unknown source. This is one of the oldest cartoons circulating among health economists.
… and about health care analysts:
“It may well bring about immortality – but it will take forever to test it.” Unknown source – I found this cartoon
in a presentation by Martin
Buxton.
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