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Tuesday, 1 September 2015

Unit 1: The Economics of the NHS - Scarcity

Many economics teachers bring the economics of health care into their teaching at an early stage of a new course. It is a terrific issue to look at when considering the basic economic problem of unlimited wants and limited means, the factors of production used in providing health care and also the issues of opportunity cost and key decisions about who gets the care they need and how best to fund appropriate healthcare for the population.
The NHS originally launched with a budget of £437m (approximately £9bn at today’s value) and was designed to offer free-at-the-point-of-delivery, acute and emergency medical care for everyone – regardless of their status or income. The government spent £113bn on the NHS in England in 2014/15; a 1.8% increase in real terms on the 2013/14 expenditure.
Total health expenditure in the UK in 2012 amounted to 9.3% of GDP, of which 7.8% was government spending. The UK’s government spending as a percentage of GDP ranked 9th out of the 30 OECD countries with available data for 2012.
Each year data is produced on the base cost of a range of treatments provided by the NHS. The annual heat care report from Benenden Health has prompted a lot of media interest. They found that the majority of people vastly under-estimate the resource cost of providing different treatments. Drawing on data from this report and that made available by the NHS, I have produced a table below of a selection of treatments.
Examples of base cost for a range of treatments
Base cost – this is usually excluding the costs of pre-treatment, GP appointments, post-procedure care and follow-up care.
Costs are higher for patients who need an extended stay in hospital
Base costs for 2013-14 (costs have been rounded up for ease of use)
  1. Planned caesarean-section in NHS hospital £2,400
  2. Natural birth in NHS hospital £1,800
  3. Abdominal hernia repairs £2,300
  4. Hip replacement £8,900
  5. Liver transplant £70,000
  6. Gastric (stomach) by-pass £5,000
  7. One round of IVF treatment £6,000
  8. Bone marrow transplant £70,000
  9. Heart transplant £43,000
  10. Cochlear Implant £17,000
  11. Kidney transplant from heart-beating donor £15,000
  12. Kidney transplant from non-heart-beating donor £13,600
  13. Plasma exchanges (20 or more) £9,700
There are many options for teaching this.
A matching exercise to see if students can match the treatment with the cost
A discussion based around the concept of opportunity cost - for example a student could have a fixed budget of £200,000 and be asked to consider how that budget might be allocated to the treatments listed, justifying their rationale.
The data can form the basis for independent research on how costs can best be controlled in the NHS, whether or not people should expect to have most treatments available free at the point of clinical need. Choose an ambitious title for a piece of extended writing!
Suggestions for further reading and research
Sustainability of the National Health Service as a Public Service Free at the Point of Need (July 2015)
Articles on the NHS from the Guardian
Guardian: The Secret Doctor: people would use the NHS less if they knew the true price tags
Statistic: Public sector employment in the United Kingdom (UK) as of June 2015, by industry (in million individuals employed) | Statista

Wednesday, 19 August 2015

Unit 1: Why there are more hairdressers these days!

Although this almost sounds like a set-up line from the excellent Twitter feed @corbynjokes, it isn't. It results from an excellent piece of research by Deloitte's Ian Stewart, Debapratim De and Alex Cole, "Technology and people: The great job-creating machine" which was nominated for the Society of Business Economists 2014‑15 Rybczynski Prize.
The report looks at the implications of the adoption of technology on employment levels, and far from supporting the Luddite position that labour and capital are substitutes, it discovers that technology has been job creating. Even better, technology has replaced labour in occupations that are monotonous, dangerous or both and in their stead, jobs have been created in the service sector.
The findings of the report are covered in today's Guardian and it provides plenty of talking points: a change in the balance between 'muscle-power' workers and those in caring professions, sharp rises in the number of bar staff and, regrettably, the number of accountants, and a dramatic rise in the number of hairdressers and barbers.
In 1871, there was one hairdresser or barber for every 1,793 citizens of England and Wales; today there is one for every 287 people.

Sunday, 7 June 2015

Unit 3: Royal Mail Privatisation - A must read!

This is a revision presentation on aspects of the privatisation of the Royal Mail - an important milestone in the history of privatisation in the UK economy.

Unit 3: Monopolistic Competition - Revision Presentation

Monopolistic competition is a form of imperfect competition. It can be found in many real world markets ranging from clusters of sandwich bars, other fast food shops and coffee stores in a busy town centre to pizza delivery businesses in a city or hairdressers in a local area. 

Monopolistic competition is similar to perfect competition, some economist regard it as more realistic, because the products are differentiated.

Wednesday, 3 June 2015

Unit 4: Foreign Aid - Who do we give money to?

Thank you to Graham for this interesting article on who are the biggest recipients of foreign aid. Only read if you want some context for a Unit 4 question. This wont answer an essay for you.

Monday, 1 June 2015

Saturday, 30 May 2015

Unit 4: International Competitiveness

This is a revision presentation on international competitiveness which we define as the ability of a business or a country to compete effectively in international markets.