Health economics is the branch of economics which is concerned theoretically and practically with the health sector and related subjects such as e.g. the market for medicine and medico-technical equipment. In health economics, the universal basic problem is: Distribution of scarce resources to competing ends and establishment of rules for this. In this respect, (health) economics is knowledge about priorities based on the methodical an appreciative basis of economics. The essence is the absolute or relative scarcity and the existence of alternative uses for the limited resources. Many identify health economics with societal economic analyses: cost-benefit analyses or cost-effectiveness analyses. A great many analyses of this type have been published and these have been employed to an increasing extent in connection with decisions about introduction or alteration of the existing therapeutic or diagnostic methods. Health economics is, however, much more: theoretical and empirical analysis of the demand for health and health services, including the effect of payment-for-service; supplier and producer behaviour including questions about the existence and consequence of supplier-induced demand i.e. the professional health groups may, themselves, determine the extent of the demand and employment for their services to a considerable extent. Analyses of productivity and effectiveness and methods for measuring and assessing health status are two other typical subjects. Thus, in the course of the past 15-20 years, health economy has become established as an academic subject with its own professorships and scientific journals.