Producing Health Care, Decreasing Health Status

Presenter: Alan Diener, Public Health Agency of Canada

Abstract

While it is understood that there are many determinants of health, health care continues to receive a great amount of attention. In recent years, the percentage of GDP devoted to health care has increased in all OECD countries. Notwithstanding the possibility that further expenditures on health care may not be the most effective way to improve health status, is the fact that the production of health care itself creates environmental effects which are responsible for many adverse health outcomes. The health care industry damages the environment through its heavy energy and resource use not unlike other large industries. As well, the health care industry poses unique threats to the environment through its use of many hazardous and complex chemicals, and the associated waste, including that which is toxic, infectious, and radioactive, produced by these items. Thus, current production, and consumption, of health care may lead to future adverse health impacts at the population level. In fact, over time, health care, particularly, industrial medicine has become more and more about its own technical prowess and less and less about the health of populations. As the focus of health care has moved away from disease prevention it has also ignored its own effects on the environment and thus on population health. In this paper we conceptualize the relationship between the production of health care, health status and the environment in the context of Grossman’s (1972) model of health as a capital good. We conclude that not adequately accounting for the adverse environmental health effects associated with the production of health care results in a sub-optimal quantity of health care being demanded; Too high a quantity is consumed leading in an inefficient allocation of resources. In addition, that health care which is produced, is done so in a technically inefficient manner. Properly accounting for the environmental health impacts associated with health care would result in a lower demand for health care and an increased demand for the other determinants of health status, while a different mix of medical care inputs, one which focuses on green health care (i.e. technologies that have reduced environmental impacts), could be used to achieve a greater level of health stock. Indeed, the actual amount of health care produced must be decreased and that the type of health care offered must be changed if the health care industry is to play an active role in improving both population health and the health of individuals.