Health economics and social value
What is health economics?
Health economics is a sub-discipline of economics that applies economic theories and methods to address real-world health and well-being challenges. It focuses on how to allocate resources effectively and fairly to improve population health, and considers factors such as equity, efficiency, effectiveness, and value for money.
Economic evaluation plays a key role by comparing the costs and consequences of different healthcare options to guide decision making on the effective allocation of scarce healthcare funding and resources. There are several types of economic evaluation, and the choice of method depends upon the economic question being addressed.
What is social value?
Social value is the broader value that organisations create through their day-to-day operations for society, communities, and the planet beyond financial and economic gains. It encompasses the positive impact of these activities on individuals, communities, the environment and overall societal well-being.
By using social value methodologies such as Social Return on Investment we can generate evidence on how valuable different changes to outcomes are for stakeholders, and this information can help decision makers focus on programmes and interventions which create greatest value for local populations.
The role of health economics and social value in public health
Approaches for capturing and demonstrating the wider societal, environmental, and economic impacts of public health services and interventions are increasingly being called upon to deliver broader value.
Health economics and social value-based approaches are central to this effort.
- Economic evaluations and modelling allow us to measure and evidence the value, cost-effectiveness and both immediate and long-term impacts of a programme or initiative on population health and well-being.
- Social value methodologies help capture the wider societal, economic and environmental benefits which traditional economic methods often overlook.
Together, these approaches play a key role in supporting policy and decision-makers to make informed investment decisions and prioritise resources effectively, ensuring that public health efforts deliver maximum value for individuals, communities, and society.
You can find out more on the social value of public health in the further information pages.
Investing in prevention
The challenges we face from rising chronic disease, widening health inequalities, and climate change related health impacts demand integrated solutions to protect the well-being of both current and future generations.
Investing in preventative approaches for health and well-being offers a way to reduce not only the economic burden of such challenges but also benefit people, communities, and the planet. Evidence shows that every £1 invested in public health interventions in Wales yields a return of £14, reducing the long-term burden and costs of ill health and enabling more efficient use of limited resources.
A strong and sustained commitment to prevention is key to maintaining resilient health and care services in Wales. Such investment can reverse the decline in the nation’s health, address the root causes of health inequalities, and enable the people of Wales to live longer, healthier, and happier lives.
Read more on sustainable investment in well-being and health equity.
Contributing to well-being and foundational economies
Wales is committed to building a well-being economy and has been recognised as a leading nation in the global shift towards well-being focused economic models. Find out more about Wales’ approach towards a well-being economy.
The Well-being of Future Generations (Wales) Act (2015) establishes the context and conditions for implementing a Well-being Economy and Foundational Economy, guided by national well-being goals and indicators that promote long-term societal, environmental, and economic well-being.
By incorporating a value-based approach to decision making, one that considers the social, economic, and environmental outcomes, we can help ensure that the broader co-benefits of investment across sectors are recognised and valued. This supports the development of an economy that places the health and well-being of people and the planet at its core.
Further information on well-being and foundational economies in Wales can be found here.
The Well-being Economics and Value team
The Well-being Economics and Value Team at Public Health Wales focuses on gathering, generating, and disseminating evidence using health economics and social value-based approaches to support the strategic prioritisation of resources and budgets, with an emphasis on preventative interventions to improve population outcomes and ensure long-term health system resilience.
Further information
You can explore key focus areas related to health economics and value through the further information pages available below. These provide evidence, tools, and practical approaches to support your understanding of health economic and social value-based approaches and their practical application.