Macroeconomics In Healthcare - Essay Example

Around the world there are great differences in per capita health care spending, though spending alone does not always result in improved health and life expectancy. In the poorest of economies, particularly those in sub-Saharan Africa, it is estimated that providing a basic level of health care to “the 2.7 billion neediest people would cost $57 billion per year by 2007” (Ivinson 551). It is estimated that the global community currently provides roughly $2 billion per year to health in the poorest countries. For the poorest economies, spending does appear to make a difference. Gro Harlem Bruntland, Director General of the World Health Organization, believes that “health has a central role in the world economy. Yet, few finance officials and development economists have so far explored the potential importance of health investment as an instrument for reducing poverty” (Ivinson551). Improved health is potentially advantageous to poor economies. Increased life expectancy can lead to increased productivity and economic stability for many poor families, assuming that opportunities for work and education are readily available. However, in some of the poorest economies, opportunity for increased income from work is very limited. In some areas, basic infrastructure such as roads, utilities and means for production does not exist. Often political corruption prevents those who are healthy and physically able to work for many years from realizing their true income potential. Even relocation to areas with more work opportunities are difficult with limited income and few safe roads. In those areas, it is a combination of increased spending on health care, increased development of infrastructure and acitivities which remove or reduce corruption that must take place simultaneously for the poorest economies to benefit overall. Improved health care alone will not bring about much change in economic conditions. In some developing nations, global companies who depend or raw materials now realize that stripping farmlands and forests not only jeopardizes the health and well being of residents, but also increases the financial burden of those same corporations in finding new sources of raw materials. Organizations like Gap, Inc. now work to lessen environmental and health impacts of cotton production. Gap has joined the World Wildlife Fund in efforts to reduce or eliminate the use of pesticides in cotton production. Pesticides not only rob the soil of nutrients, they impact the health of cotton field workers and their families, residents of local villages, local wildlife populations and possibly workers in fabric and garment production facilities. In this instance, health care spending alone would do little to improve health and economic conditions. Pesticide use increases the cost of health care, while contaminating the surrounding soil and drinking water. So the increase in health care spending of $34 annually on each of the 2.7 million poorest citizens might be in vain in such economies where pesticide use is common. Global corporations who rely on raw materials from poorer developing nations should feel an obligation to help reduce the health and environmental impact of production. Otherwise, countries and organizations that provide money for health care may find their efforts are in vain. Improved health can reduce the spread of disease. From this perspective, spending on health care alone can improve economic conditions, if disease is likely to affect a large portion of the population. “Most of the disease burden can be traced back to just a few diseases for which effective medical interventions do exist” (Ivinson 551). While this is true with diseases such as Dysentery and Malaria, which are treated and eradicated with antibiotics and anti-malarial drugs, it is not true of all diseases. Increased screening for HIV and education on protection has been somewhat successful in preventing widespread HIV infection in Thailand. However, it would be more effective if prostitution were eliminated. To do this, an economically comparable opportunity to earn an income must be provided. Again, this goes beyond merely providing money for more health care. As long as women must work to support themselves or their families, prostitution provides the greatest income in some economies. In areas of Africa, such as Tanzania, HIV infection is also very prevalent for the same reason. Access to condoms is limited. Condoms are sold for several times the cost in the US. For women just getting by, the cost is greater to them than the risk. Without economically viable work alternatives, spending on health care alone will also fail to improve the economy here as well. Bruntland’s 2000 Commission on Macroeconomics and Health provides many examples of links between medical and economic well being. The report indicates that good health care guarantees a strong economy, while a strong economy guarantees good health. “Conversely, weakness or negative growth in either one will undermine efforts to improve the other, creating a downward spiral” (Ivinson 552). Though economists argue whether the US economy is in a downward spiral, it may provide one of the best example for at least the latter half of Bruntland’s statement. Wages in the US have declined in the past few years. This is due to many factors such as offshore manufacturing, shifts in the labor force, improvements in lean manufacturing methods and increased use of contract workers. Without skills or additional training, many former production workers have found themselves taking low paying service sector jobs. Often these jobs do not offer health care benefits. When they do, the cost takes such a large portion of wages earned that many decide to risk going without care. Bureau of Labor Statistics information shows the manufacturing sector as having experienced the greatest loss in jobs since 2001. Other Industries that have experienced loss are the service sector and the construction sectors. Increases have occurred in health care and administration jobs. A slight increase in the retail sector has also occurred. With the increase in health care jobs, the average observer might be inclined to assume That US residents are receiving improve health care. However, when taking into account the baby boomer population’s relatively large size, the increase in health care jobs can be explained by this population’s age and increased need for health care. Despite having the highest per capita spending on health care at $4,500, the US is ranked only 27th globally in life expectancy. Cuba falls just behind the US as 28th, though it spends a mere $158 per capita. It is noted that “Cuba has universal health care and one of the highest doctor-to-patient ratios in the world.  Although Cuba has limited resources and many economic problems, it has made health care a priority” (UC Atlas of Global Inequality). Other countries that achieve a longer life expectancy, like Japan, at just over 81 years, also are reported as having the lowest per capita spending on health care. Japan’s per capita spending falls below $2,000, which is less than half that of the US. The statistics would tend to refute Bruntland’s contention that increased spending on health care improves economic conditions. While US per capita spending on health care is extremely high, discrepancies Between spending and lifespan are average numbers, which fail to identify inequalities. “The US Health and Human Services department found that people with lower incomes and less education tended to die younger” (UC Atlas). Likewise, Japan’s low per capita spending may stem from the fact that its population of migrant workers hesitate to seek health care services for fear of deportation. Foreign workers in Japan, whether legal or illegal, face many social prejudices in education, health care, housing and other basic human needs in Japan. Both examples show the improved economic conditions in certain populations may indeed improve health care, supporting the second part of Bruntland’s argument. The poorest of the US population can sometimes receive free care through government programs such as Medicare and Medicaid. However, there are many “working poor” who cannot afford the high costs of benefits that employers offer, yet make too much for government programs. In this instance, higher wages would be the best solution, aside from some sort of Universal Health Coverage. It is often stated that the uninsured drive up health care costs by failing to pay for services. That may be true for hospital costs, when uninsured tend to wait until they absolutely need care. It does little to explain the high costs of health care administration, prescription drugs and medical supplies. Prescription drug costs have been notoriously increasing at extremely rapid rates over the past two decades, long before pharmaceutical companies began offering free or reduced cost programs such as those recently offered and promoted in the media. More Americans are now plagued with such problems as Adult Onset or Type II Diabetes, Obesity, Hyperlipidemia(high cholesterol), Atherosclerosis and AutoImmune diseases than ever before. Many of the diseases could be eradicated with lifestyle changes such increased exercise and dietary modifications. Americans rely on fast food with its high fat content, as they juggle work and family responsibilities. As more citizens need to work longer hours to maintain a decent standard of living, they forego many healthy activities. Previous manufacturing and construction jobs required much more physical exertion such as walking, bending and lifting, which reduced the likelihood of excessive weight gain. This phenomenon is occurring in most Western European nations as well, where jobs have shifted from one sector to another. Increased spending for health care does little to change lifestyles. Education, living wages and overall improved economic conditions for some will bring about improved health. Corporate social responsibility comes with a price, yet the costs to society in not taking responsibility have an overall negative effect on a society’s health and economic conditions. Comparisons of global health care costs indicate that the US model is less than satisfactory for some and not very cost effective. Other developed nations such as Germany, France and the UK spend less than half of the US per capita, yet life expectancies are higher. International Living’s annual Quality of Life Index considers for each of 193 countries “nine categories: Cost of Living, Culture and Leisure, Economy, Environment, Freedom, Health, Infrastructure, Safety and Risk, and Climate” (Harrison). With a decline in health, reduction in wages, less leisure time and increasing health problems, it is little wonder the US ranked fifth behind, New Zealand, Australia, Netherlands and France, the number one country in which to reside. France spends less than$2,500 per capita on health care, embraces a 35 hour work week and is increasing its contributions to a global society through agriculture, engineering and research. France maintains approximately 24 % of the European pharmaceutical market. Though past accounts of health care in France have painted a frightening picture, average life span is currently 83 years. Compared to the average lifespan of 77 years in the US, this indicates that some systems such as education and health care in France must be at least adequate. Comparisons of per capita spending on health care indicate that the US should have the best health care system in the world. However, accessibility, health education and high costs make it unavailable to may US citizens. The comparisons tend to refute Bruntland’s claim that increased spending leads to improved health and better economic conditions. If economic conditions for the ‘working poor’ in the US improved, more citizens might have access to health care benefits or at least be able to pay for some services. An often overlooked factor of health is a person’s outlook or mental attitude. Despair generally follows several months of joblessness and bleak economic conditions. Such negative mental outlook, if sustained over a period of time, will have negative effects on health. If just one manufacturer that currently has its production facilities offshore would move its production back to its original US community, economic conditions would improve and therefore, the health of many citizens in that community. Suppose, for example, a garment or shoe manufacturer employed 75 workers at an annual salary of $25,000. The company would be paying $1, 875,000 in salary directly to workers of that community. In turn, if each employee spent at least half of their incomes, or $12,500, this will in turn add $937,400 to the community in wages for business owners and their employees. The multiplier effect would not be limited to stores and local shops. It would also be spent in local clinics and pharmacies. Even with no health insurance, some contribution to health care in the community would be made. Again, improved economic conditions would have some effect on improved health and health care with respect to accessibility and improved mental outlook. The fault with this argument is that it assumes employees will earn a living wage, which will allow them to access health care or health insurance benefits, adequate housing, healthier foods and exercise facilities. “American workers require a living wage which is indexed to the local cost of housing” (Troxell). At the current minimum wage, most workers must access subsidized housing as well as subsidized health care or Medicaid programs. Foods such as fruits and vegetables are more costly than those starchy fillers that minimum wage workers can typically afford. “Previous studies also have shown a high correlation between stress-related illnesses, such as heart disease, high blood pressure and gastrointestinal disorders, and employment that is not interesting, not challenging and repetitious” (University of Florida Health Science Center). Such characteristics are commonly associated with low wage jobs. Low wage jobs often do not offer benefits, or offer them at a substantial cost that is unaffordable to most employees. They can also interfere with family responsibilities such as caring for and elderly parent or sick child. In this case, a multi-tiered approach, including government spending and workplace health programs offers the best solution for improved health care. Subsidized health care is necessary in cases where income or benefits prevent health care access by usual means. Workplace programs such as frequent job rotation, exercise facilities and health education programs can also help to improve health. Such workplace programs also help to reduce health care costs. “More than half (57 percent) of those surveyed believe wellness benefits are very or somewhat successful in reducing healthcare costs” (Principle Financial Well-Being Index). Bruntland’s basic theory is applicable in many cases, though not all. Some economies and classes of citizens around the world need more money for health care, whether through government subsidies or through increases wages. Improved health does improve economies, assuming that adequate opportunity to earn a living exists. Improved health leads to increased productivity. This is a particular challenge in underdeveloped nations as well as for those working in low wage jobs. Improved economic conditions can conversely allow for improved health. For the premise to work, certain specific conditions must also exist or be applied simultaneously. In underdeveloped areas, increased funds for health care must coincide with economic development in production and infrastructure. Such developments create more opportunity for long term sustainable work. In such instances, improved health leads to greater productivity and greater earning potential. Greater earnings put more money back into the economy. Economic development increases wages, which in turn increases accessibility to and affordability of routine health care. For those working relatively low wage jobs in their communities, employers must become good corporate citizens in relieving community and governmental burdens for health care. This is one of the causes for such high per capita spending on health care in the US. Other causes for such high per capita spending include high administrative costs and lifestyle choices. Reduction of administrative costs is more difficult to address, as the US health care system is quite complex. The only way to reduce the complexity is to develop a universal system, whether publicly or privately operated. Corporate wellness programs have been shown to reduce health care costs while improving health. Only a multi-dimensional approach will reduce per capita costs of health care in the US, while improving health and increasing lifespan. Works Cited Bureau of Labor Statistics. 8 September 2007 Gap, Inc. “2005-2006 Social Responsibility Report.” 8 September 2007 Harrison, Lee. “Quality of Life 2007.” 8 September 2007 Invison, Adrian. “Macroeconomics and Health: Investing in Health for Economic Development.” Nature Medicine 2002: 8, 551-552. Principle Financial Well-Being Index. Health Resource Publishing. 9 September 2007 Troxell, Richard. “Universal Living Wage.” 9 September 2007. UC Atlas of Global Inequality. “Health Care Spending: Large Differences, Unequal Results.” University of Florida Health Science Center. “UF Nursing Researcher. UF nursing researcher: Welfare to work does not improve mental health.” (October 2000). 8 September 2007 Read More