The study of health economics is a branch that focuses on issues that pertain to the production and consumption of health and healthcare. These issues include questions about efficiency, efficacy, value, and behavior. The area of health economics is an important one to study since it is concerned with determining ways to improve health outcomes and lifestyle patterns via interactions between individuals, healthcare workers, and clinical settings. Health economists, in a broad sense, research the functioning of healthcare systems as well as behaviors that have an effect on health, such as quitting smoking, acquiring diabetes, and being overweight. In addition, they look into the factors that influence health. A big obstacle that develops in the subject of healthcare economics is the fact that it does not correspond to the usual rules that govern economics. This is one of the most important obstacles that arises in this sector. Both the cost of the service and its level of quality are often concealed by the third-party payer system, which is comprised of different entities such as insurance companies and employers. One further thing to take into consideration is the fact that the Quality Adjusted Life Years (QALY) measure, which is one of the metrics that is used for treatments the most often, is very difficult to quantify and is based on assumptions that are sometimes not warranted. It is generally agreed upon that Kenneth Arrow's seminal article, which he penned in 1963, was the driving force behind the birth of the area of health economics. The distinction between health and other sorts of commodities was made by his theory from a conceptual point of view. When compared to other subjects, the area of health economics is differentiated by a number of features. These elements include a significant engagement from the government, intractable uncertainty in several dimensions, asymmetric information, impediments to entrance, externality, and the presence of a third-party agent. Within the context of the healthcare sector, the patient's health insurer is referred to as a third-party agent. The entity that is responsible for bearing the financial obligation for the healthcare goods and services that are used by the insured patient is the business that is known as the health insurer. A number of different types of financial information, such as expenditures, charges, and costs, are assessed within the realm of health economics.