Communicable diseases spread from human to human through viruses, bacteria, parasites, and fungi via direct contact with an infected individual, the individual's discharge, or by indirect means (i.e. vectors). Treatment of communicable diseases is simultaneously a private good by reducing disability in treated individuals and a public good by reducing the likelihood of disease transmission between infected and susceptible individuals. Due to their inherent nature, optimal treatment of communicable diseases is difficult, if not impossible, to achieve without intervention from a social planner. In the three chapters of this dissertation, I identify the sources of potential inefficiencies that may occur in the treatment of environmentally transmitted diseases without vaccines and an emerging disease that has a newly developed vaccine. In the first chapter, I highlight how treatment inefficiencies may arise when there are several ways of treating the disease. I show that when recommendations of the different treatments are determined independently, there is excessive usage of public funds and overutilization of treatments. In the second chapter, I show the benefits of targeting public health interventions to specific geographical areas––which may differ for various reasons such as the timing of the outbreak, the age structure of the population, or the number of essential workers––when resources are scarce, rather than using some ad hoc rule based on, for instance, relative population size. I also investigate how robust the optimal allocation is when allocation decisions must be made before uncertainty is resolved (e.g. before the duration of immunity is known). In the third chapter, I examine potential unintended consequences that may arise when the main driver of some public health intervention is the economic benefits indirectly derived by it; this shows the importance of considering the impact of human behavior when designing public health policies. As a whole, this dissertation uses various examples to show why treatment of communicable diseases requires intervention from a social planner and how inefficient disease management can lead to dire economic and health consequences. It also offers different context-specific avenues to mitigate the impact of communicable diseases.