The recognition of health economics as a specialised area of study within economics is often dated to the late 1960s and early 1970s, a period that coincided with the rapid growth of health care expenditure in all developed economies (Culyer and Newhouse 2000). Much of the increasing budget was borne by governments as new social programs were initiated to provide access for the poor, the elderly and otherwise disadvantaged groups. Yet there was no obvious gain in population health, and mounting criticism of the futility of, if not harm due to, modern medicine. Nonetheless, public demand for medical care continued to grow exponentially.
Economists' attention was thus drawn to the health sector. The analysis of health care as a special commodity, often dated to Arrow (1963), laid the foundations for the economic analysis of the health sector. There is nothing special about the economic analysis applied to this sector; as Fuchs (1989) has pointed out, it draws from finance and insurance, industrial organisation, labour, public finance, and welfare, but it requires also a detailed knowledge of health technology and institutions.
The field has grown rapidly and become increasingly specialised – for a description of its history, see Culyer and Newhouse (2000).There are now four health economics journals, the Journal of Health Economics (established in 1982), Health Economics (1992), the Journal of Health Care Financing (2000) and, more recently, the European Journal of Health Economics. The Journal of Mental Health Policy and Economics and Pharmacoeconomics are aimed at a particular clinical/policy audience. Social Science and Medicine carries a substantial health economics content, as do several health policy and technology assessment journals. In addition to the general economics journals, much health economics can be found in medical, public health and other journals aimed at health professionals.
In Australia, the beginnings of health economics are inextricably linked with the names of Deeble and Scotton and their work on the financing and delivery of health care.The policy impact of this was immense, providing the basis for universal, publicly financed health care, first as Medibank in 1975, and then as Medicare in 1984. However, from the 1960s to the 1980s, an academic base for Australian health economics was slow to develop; what little work was done was often prompted by official inquiries and constrained by the lack of data (Richardson and Wallace 1982). There have been substantial developments since then.The Australian Health Economics Society,