Question

Graphically illustrate the health effectiveness curve. Briefly explain the curve.

Answer 1

Health Effectiveness curve graphs the relationship between the amount of marginal health benefits and the amount of medical spending. The horizontal axis in this figure measures the level of medical spending. The vertical axis measures the marginal health benefit from the next dollar of medical spending. It shows improvement in the quality of health care based on the outcomes, benefits and harms, and appropriateness of drugs, devices,etc. The Health effectiveness curves thereby provides single and easily interpretable statistic for policymakers: at a given cost for realizing one extra unit of health effect, there is a certain probability that the treatment under evaluation is acceptable.

In the initial stages, spending on health care is can be very productive in terms of improved health care outcomes, but that productivity or marginal health benefits decreases as spending rises. The curve shows the value of improved health for each dollar in medical spending.

For example- At point X, when a person is spending Rs.10,000 on health care, each rupee of medical spending buys Rs.50 worth of improved health; at point Y, when individuals are spending Rs. 20,000 on health care, each rupee of medical spending buys Rs.10 worth of improved health. Beyond point Y, however, there is much less than Rs.10 in improved health for each Rs.10 in medical spending.