Key aims of the ARC Economic Design Network are to support research and scholarship in economic theory and experimental economics, and their application to the design of economic policy. One of the EDN targeted research areas is health economics. Achieving value for money in the health care system has emerged internationally and in Australia as the key policy issue.

"Policy-makers worldwide are on a quest to control national spending for health care and to enhance the value received for whatever is being spent on health care." (Reinhardt, 1997)

An understanding of how the health system works requires detailed knowledge of how agents behave within the system. Policy outcomes are the result of individual responses to incentives and constraints. Proposed reforms in the health sector often focus on moving from less formal arrangements and relationships between funders, purchasers and providers to more formal contracts with changed incentives and regulatory structures. Knowledge of the factors that influence the individual decisions of consumers and providers and how these decisions interact to determine health care utilisation and expenditure is crucial to developing and implementing good health care policy. Understanding how individuals value health care benefits is necessary for the social evaluation of policy initiatives.

The EDN Health Economics subgroup consists of economists researching health care markets in the Australasian region. The EDN brings the health subgroup together with theorists, experimental economists and policy makers with the aim of designing better health care policy.