Introduction

The discipline of health economics builds on the insights of microeconomic theory and has developed a substantial empirical basis. It has contributed significantly to addressing and understanding the profound health issues confronted in almost all countries, and has a large impact on the development, implementation, and evaluation of health systems policy. This article helps to investigate areas of interest to policymakers. It discusses the best way to organize and compensate health care providers and describes the rapid growth in expenditure in most developed countries. It discusses the factors that have driven this growth, such as population aging, general economic growth, and the adoption and use of new medical technologies. It surveys the successes and lacunae of the health economics research endeavor and hopes that such successes will be replicated and extended in the future.