Alberta Innovates- Health Solutions

The area of health economics was burgeoning when Dr. Donaldson decided to pursue his doctorate at the University of Aberdeen with his mentor, Professor Gavin Mooney. Governments examined their healthcare budgets in the light of future costs. With successes in medical research prolonging life and enabling caregivers to manage disease over the course of a lifetime, we can look forward to a good quality of life. But society will need more and more resources. Many governments and policy-makers have begun to study and act on ways to deliver increased effectiveness with available health care resources. Experts like Dr. Donaldson have found their niche.

"Economics is about resources, and we spend about 10% of our nation's resources on health and health care. So there's an obvious role for economics there," he says. His doctoral thesis was a method of determining public preference on issues, called "willingness to pay". Dr. Donaldson has tested the model in several European countries, and is now designing a study for Alberta.

He emphasizes that willingness to pay assigns a value for a product or service based on what people think should be paid for first in a health system. "For example, a health region might be able to fund only one or two out of a number of health services. By surveying the community about their maximum willingness to pay for each service, the health region will get a good idea of how strongly the public values each option and that information could help determine which service or services to fund."

In just 15 months, Dr. Donaldson has built a strong research program in health economics that includes Dr. Mingshan Lu, Dr. Chris Auld, Dr. Gillian Currie and Alan Schiell (recently recruited from the University of Sydney).

Members of the Health Economics Program are based in two departments: Economics and Community Health Sciences. One project of the program, initiated with three southern Alberta health regions, tests whether economic principles can help regions decide which health services to fund. The team hopes to develop an economic framework for setting budgets to optimize the health of the community.

Dr. Donaldson would like to see a bigger role for health economics in the healthcare system, particularly in helping people set priorities about the provision of services. "Economics can focus on really hard choices in health care and this can be controversial. As an economist I can highlight these choices, but it's the manager or doctor in a region who will have to make the decision about them. And that can have a political cost."

Health economics can also help in the organization of the healthcare system. Dr. Donaldson points out that regional health authorities have budgets for health care, but a separate arrangement pays doctors. The incentives that drive the health authorities have little to do with the incentives driving the doctors.

Economics does have a very real role in the health field, as Dr. Donaldson's research attests, and he wants to see that role grow.

Dr. Cameron Donaldson is an AHFMR Senior Scholar and holds the Svare Chair in Health Economics at the University of Calgary, where he is a Professor in the Departments of Economics and Community Health Sciences. He is also a Fellow of the Institute of Health Economics in Alberta and a Visiting Professor in the Department of Public Health at the University of Aberdeen.
Drs. Minshan Lu and Chris Auld are AHFMR Population Health Investigators in the Department of Economics at the University of Calgary.