Traditionally, the topics of health and economics have been placed under the heading “health economics”. Parts I and II of the book discuss the key concepts of this field. In Part III, however, we aim to take a broader approach and have coined the term “medical economics” to encompass this.

Health economics has burgeoned since its origins in the 1960s. (For an overview, see Google Books Ngram Viewer.) Although a relatively new sub-discipline of economics that gained a wider reputation and had an impact beyond academia only in the 1990s, it is now an important contributor to all areas of health policy including decision-making about reimbursing therapies, improving quality and efficiency, analysing medical and public health decision-making, and discussions about funding and prioritizing medical care. In 1980, there were few textbooks about health economics available (in Germany, for example, there was only one). Nowadays there is a huge variety of books (more than 20 German books on the subject). Another example is the growth of professional societies, including the International Health Economics Association (IHEA), founded in 1994, whose biennial meetings are attended by 1,500 to 1,800 people, and the International Society for Pharmacoeconomics and Outcomes Research (ISPOR), founded in 1995, which now has more than 20,000 members.

The late Alan Williams of the University of York once astutely remarked: “They say that two things in life are certain: death and taxes. Health economics is the only academic discipline that deals with both of them.” This quote puts together the two topics we need to deal with: health and economics. Most people have an intuitive understanding of what “health” means, but when it comes to concretely defining and measuring it, things become ambiguous, and a clear definition remains elusive. We strongly believe any scholar of health economics needs to look into the subject of “health” – after all, providing and financing health does differ from the market for cars or haircuts.

“Economics” is even more complicated. Depending on whom you ask, you will get very different answers about definitions, methods and aims of economics. Economics covers not only “classical” topics like money, income, unemployment and inflation but has also been applied to almost all walks of life from marriage to sport, music and crime.