Health Economics and Finance: Critique of 'Too Much Medicine' Research

This report provides a comprehensive critique of the paper "Too Much Medicine": Insights and Explanations From Economic Theory and Research" by Hensher, Tisdell, and Zimitat. The critique begins by outlining the authors' central arguments, which focus on the overconsumption of medicines ...Read More

Running head: HEALTH ECONOMICS AND FINANCE
Health Economics and Finance
Name of the Student
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Author Note

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Executive Summary
The aim of the paper is to provide a critique of Hensher M., Tisdell J. and Zimitat, Craig’s paper
“ “Too Much Medicine”: Insights and Explanations From Economic Theory and Research”. The
critique first explores the main arguments fostered by this paper which revolves around how
recent medical practices lead to the overconsumption of medicines by patients which can be
detrimental to their health. The critique analyzes the various propositions of the authors with
regards the problems that may arise due to the recent trends of over application of medicines
when seen in the light of supply-induced demand as well as behavioral and ecological
economics. The critique then attempts to find the lack of information and the possible areas of
improvement in the paper. Finally, the findings of the authors of the paper have been integrated
with leadership in health management practices in order to arrive at possible ways of optimizing
the available health resources, deciding on an efficient framework for management, and bringing
about an all-round improvement in the health sector.

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Table of Contents
Introduction......................................................................................................................................3
Authors’ Central Arguments and Conclusions................................................................................4
Areas Where Information May Be Lacking....................................................................................5
Authors’ Conclusions and Implications for Health Leadership and Management..........................6
References........................................................................................................................................9

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Introduction
The expansive branch of economics that is concerned with the study of the efficiency of
healthcare and its impact on production and consumption behavior is known as health economics
(Phelps, 2016). The importance of health economics stems from the fact that health, if seen as a
consumable commodity, is crucial for every individual in a country while the resources to
produce healthcare services is scarce. A derived problem that has come to light is that of
excessive and unnecessary medical prescriptions to patients. Not only has this put pressure on
the already limited medical resources of the country, but has, more importantly, threatened the
health of patients by imposing risks of wrong medication (Hensher, Tisdell and Zimitat 2017).
This study is a critique of one such paper dealing with the issue of excessive medication. It
strives to evaluate the authors’ arguments and see if they are supported by evidence. It will also
be seen if the authors’ arguments comprise the necessary information required to affirm their
stance.

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Authors’ Central Arguments and Conclusions
Hensher M., Tisdell J. and Zimitat, Craig’s paper “ “Too Much Medicine”: Insights and
Explanations From Economic Theory and Research”, deals with the important issue of the trend
of prescribing excessive medication and treatments to patients which instead of being beneficial
to them, prove harmful. Health is the single most crucial element that guides the overall
development of an individual, and, as a result, that of the entire economy which is comprised of
these individuals in their multifarious roles as consumers, producers, investors, savers, regulators
and every other position in the economy. However, the resources available to provide a
satisfactory level of health care services to the people of a country is glaringly limited (Kobelt,
2013).
Health being an essential commodity makes its demand inelastic, meaning that the
quantity demanded of them does not sway as rapidly as the change in their prices. The demand
for proper health care is always high while their supply varies depending on available resources
and research (Ellis et al. 2017). Amid such a state of affairs, provision of unnecessary healthcare
facilities represents a majorly inefficient allocation of resources. This reflects a form of
overconsumption, which the authors define as a situation where the consumption of a
commodity, instead of increasing the level of utility, leads to a reduction of the consumer’s well-
being (Hensher, Tisdell and Zimitat 2017).
The inability to correctly detect the ailment in a patient may lead to the doctors
prescribing medicines which are either unsuitable or excessive to the point of being detrimental.
In this regard, the paper establishes the presence of demand which is supplier-induced. One
among this pertains to the various financial incentives, even involving unethical practices, that

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drive the clinical practitioners to prescribe excessive medication to patients in order to gain
profits (LaDuke 2013). Another inference, based on Behavioral Economics, states that health
professionals choose certain conventional methods of treatment to avoid uncertainty in the
results, instead of providing a more targeted treatment, resort to already established rational
choices. The viewpoint derived from Ecological Economics states that positional competition
among doctors leads to the principal agent problem, meaning that prescription of a medicine by
one doctor that has proved to have good results, led to the prescription of the same medicine by
another doctor for a similar case, notwithstanding its correct applicability (Siebenhuner, Rodela
and Ecker 2016). The paper concludes that it is cultural change which can shift these practices
observed in the clinical sphere.
Areas Where Information May Be Lacking
The primary area of concern with a paper that deals with the topic of misallocation of
health resources in the backdrop of inefficient clinical methods followed by practitioners is that it
questions the sense of ethics of doctors. The size of the data set considered in the study is not
large enough to deem the practice of too much medication as being dominantly prevalent in the
health care sector. Doctors are the lifeline of an economy because it is upon them that the
nation’s health depends. The issue raised by the authors of this paper, despite being highly
relevant, has the possibility of being misinterpreted in the medical field.
Research in this subject has been made since 1960’s, adding to the total number of
evidences that support the thesis statement. However, modern medicinal practices differ widely
from those that had been under operation since the past couple of decades, the relevance of
which cannot be necessarily taken into consideration in the modern clinical scenario. Also, when
the number of potential recipients of medical treatment is overwhelmingly larger than the

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resources required to produce such health services, the primary concern should be the discovery
of methods to expand the resource base of such health products and services (Pan et al. 2013).
The paper should include more information on the ways in which the limited resources of the
economy should be optimized to provide medical services to as many people as possible. Thus
the segment which should be involved in this paper is a research on the ways in which the
current health care practices can be improvised in order to make a better match between the
patients and their treatment (Grol et al. 2013).
With regards the problem of overconsumption that results from those medical
practitioners who indeed use supply-side tactics to command demand for treatments via unethical
methods, or by accepting financial commission, the paper should involve more determining ways
in which such practices can be checked. This would call for stricter implementation of medical
laws by the governments, over and above the cultural change that has been discussed by the
paper. The use of conventional methods while treating patients to avoid experimenting is another
observation but the paper can involve a larger number of data sets from a wider geographical
context in order to affirm this proposition (Barnes, Golden and Price 2013). This is a qualitative
phenomenon which is likely to vary across countries and medical practices. Also, the paper
should concentrate more on the ways in which the principal-agent problem can be resolved by
using either applying models of game theory in practice or by incentivizing doctors in a way that
personal competition does not put the patients in danger.

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Authors’ Conclusions and Implications for Health Leadership and
Management
The authors conclude that the current scenario in the health sector is under the threat of
patients receiving excessive or irrelevant medication in the backdrop of there being very scarce
medical resources available. Not only does this take away from other patients the limited medical
resources that could have helped them if relevant medicines and treatment facilities were brought
under the realm of production, but more importantly, it puts the patients currently receiving such
excessive or unsuitable treatment under health risks (Vuong et al. 2018).
The three primary viewpoints that the authors have arrived at while making this study in
the recent trends of too much medicine are: supplier-induced unethical practices of garnering
demand for medical treatments even if they are irrelevant for the case in hand; the stand taken by
behavioral economics which postulates that medical practitioners sometimes avoid
unconventional methods of treatment in order to stick to pre-established “rational” ways of work
despite their not bringing about the desired results; and finally, the literature in ecological
economics imply positional competition which leads to a moral hazard created by the principal-
agent problem. The authors mentioned that the way these problems can be addressed is by an
assessment of health technology as well as its management. They also suggest a cultural change
that needs to be brought about in the medical field.
The analysis of these problems that the paper has brought to light brings the discussion to the
important concept of health management and leadership. Health management is a comprehensive
concept that begins with the recognition of the quantity of health resources that are currently at
the disposal of the country, followed by an analysis of their quality and the degree to which they
can be suitably applied to the present set of treatments, and finally, providing a sense of direction

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to the various departments in health organizations to allocate the resources efficiently, extract
optimal results, and give maximum benefits to the consumers but in a cost-effective manner
(“Strengthening Health Leadership and Management” 2019 ). This calls for remarkable
leadership skills which should ensure the trust of all the people involved in the association,
starting from the hospital staff and employees to all the partners and suppliers of equipment. The
management and leadership strengthening process can be brought about with the help of the
following steps:
- The hospitals should ensure a sufficient number of managers. For this, a thorough study
should be made of the medical requirements of the total number of patients in hospitals as
well as the total team of doctors and nurses requires to cater to them. The managers
should be hired in proportion to the hospital team. They should be given adequate
training in hospital management to ensure the best of the work they offer.
- The hospitals should make efficient evaluations of their budget, including the
remuneration to their employees, cost of hospital equipment, maintenance cost and a host
of other areas that require regular financial evaluation (Malehi, Pourmotahari and Angali
2015). Resource management is of extreme importance in order to ensure the success of
actual medical treatments.
- The working environment should be filled with motivation, and not pressure. Saving lives
is the most noble task one can contribute to and the managers should ensure that the
atmosphere in which the hospital operates is full of positivity, even amidst trying times.

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References
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simulation to healthcare operations management." In Handbook of Healthcare Operations
Management, pp. 45-74. Springer, New York, NY, 2013.
Ellis, Randall P., Bruno Martins, and Wenjia Zhu. "Health care demand elasticities by type of
service." Journal of health economics 55 (2017): 232-243.
Grol, Richard, Michel Wensing, Martin Eccles, and David Davis, eds. Improving patient care:
the implementation of change in health care. John Wiley & Sons, 2013.
Hensher, Martin, John Tisdell and Craig Zimitat. 2017. ‘ “Too much medicine”: Insights and
explanations from economic theory and research in Social Science and Medicine’, 176, pp. 77-
84.
Kobelt, Gisela. "Health economics: An introduction to economic
evaluation." Monographs (2013).
LaDuke, Rebekah D. "Academic dishonesty today, unethical practices tomorrow?." Journal of
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Jian-Ning Sun et al. "New perspectives on how to discover drugs from herbal medicines: CAM's

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outstanding contribution to modern therapeutics." Evidence-Based Complementary and
Alternative Medicine2013 (2013).
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Vuong, Quan-Hoang, Tung-Manh Ho, Hong-Kong Nguyen, and Thu-Trang Vuong. "Healthcare
consumers’ sensitivity to costs: A reflection on behavioural economics from an emerging
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