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Healthy, wealthy and wise: we need to recognize that health drives wealth


Is the formula for Canada’s success to be wealthy, healthy and wise or to be healthy, wealthy and wise?

The difference may appear subtle, but it gets to the heart of a question that has serious implications for the future of publicly funded health care: have we Canadians been missing out on the opportunity to use health care system as an engine of economic growth? More importantly, does the approaching demographic shift put our collective wealth at risk if our health system is ill-prepared for them?

Wealth as a precondition of health is solidly entrenched as the prevailing view. Indeed, our universal health system was created expressly so that Canadians at the lower end of the socio-economic scale could receive necessary medical services.

The mountain of evidence produced in favour of this argument has cast a long shadow over the impact of health on wealth. But in this dark shadow, intriguing kernels of evidence about health’s impact on wealth are taking root.

One of these is a study by David Bloom, economist and head of Harvard’s Global Health and Population department. He found that a country’s gross domestic product (GDP), the most commonly used measure of national wealth, grows by 4% with each additional year of life expectancy.

Closer to home, the Conference Board of Canada released in January the first in a series of briefings on health care as an economic growth engine for Canada. It cautioned that the focus in Canada on the cost of public health care is obscuring its benefit as an economic growth driver.

The briefing described the health care sector’s contribution to Canada’s wealth as two-fold. First, it improves the health of the population by treating and preventing illness leading to a more productive workforce, reduced absenteeism and higher numbers of Canadians able to work. Second, it creates jobs – 2.1 million of them in 2011 and they are largely recession-proof. The demand for health care does not fall off simply because the economy is ailing.

The health care sector’s total contribution to Canada’s GDP: a whopping $163.4 billion in 2011, according to the Conference Board. This means more than 10% of Canada’s wealth is tied to health care.

Even more beneficial is health care’s high degree of labour intensity. Almost $6 of every $10 spent in the health care industry goes to the paycheques of employees – twice the average of all industries in Canada.

Health care makes people well. It also contributes to our economic well-being. Impressive, a reader might say, but why is it so important to recognize this?

The strong relationship between health and wealth should be a major concern in Canada where the population is aging, birth rates are low, and chronic disease, which has long-lasting effects, has replaced short-term acute illness as the number one medical challenge.

Seniors require a disproportionately large amount of body maintenance and repair. This means Canada is in for a surge in demand for health care services as baby boomers – the largest demographic bulge in recorded history – enter old age in droves over the coming decade. This demographic – estimated at 30% of the total population – will live longer than any other generation. Seniors need to remain healthy and productive to help prevent a labour shortage.

Looking further ahead, the health of our children – a growing concern in the sedentary cyber age – foretells a rollback in wealth should they take over the workforce as adults with high morbidity levels. Today, one in four Canadian children is overweight or obese and these children are increasingly showing early signs of health problems, such as cardiovascular disease and type 2 diabetes, previously seen only in adults.

Recognizing that health drives wealth is the crucial first step to a public policy revolution that is needed to prepare for and manage under these changing circumstances. Policy must give much more weight to preventing health care problems recognizing that virtually all chronic disease – Canada’s number one health challenge – is preventable.

Prevention is crucial, but it is just one policy lever. We need to also incent innovation and embrace the changes innovation brings – from the way physicians are compensated to where, when and how services are delivered – removing impediments and putting creative evidence-based ideas into practice with haste, not trepidation.

Policy must open up new avenues to generate value for our investments in public health care. This isn’t wishful thinking. Significant quantifiable value can be had by improving the quality of services across all dimensions so that they are safe for and acceptable to patients, accessible within the optimal timeframe, efficient, effective and appropriate. A change in this key area would create opportunity to make measurement in all of these dimensions standard practice and accountability for results a simple reality that comes with the job.

A policy revolution in Canada would open up many questions. For example, is a flat team rate a more logical way to compensate health care professionals when they must work as a unit to manage a hip replacement patient? Should compensation be tied to patient outcomes? Are hospitals the ideal infrastructure for treating patients now that chronic disease, which requires long-term management by a multidisciplinary team, has become our greatest need? Is it appropriate for patients to delay surgery for a vacation making wait times appear lengthy? Can we inform patients sufficiently to give them greater decision making authority in the care they receive?

In the answers to these and other questions lies the potential not just for greater health, but also for greater wealth for Canadians.

Cy Frank is a Max Bell Foundation senior policy fellow and Chief Executive Officer of Alberta Innovates – Health Solutions.

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  1. Sharon Wilton, Project Share

    RE: forecasting

    As real as the stats and demographics appear in the context of “ predictable outcomes for “health” almost all are chaotic indicators impacted by the unpredictable emergence of epidemic threats ( pandemic can be managed)
    Considering the financial stability as a health indicator for supply of funds ( the lifeblood of commerce which stops everything if it bleeds out ) let’s bypass the altruistic …and look at the realistic.

    The only stable influencer of “ delivery of heath” will be the “management of wealth”.

    It was pharma that revealed the repetition of sameness permits the accrual of funds growing exponentially whenever there is no immediate demand upon it’s use. Millions converted to billions through the “ unmanned” use of the new worker ( technology that consumes nothing and produces all required)… This grows larger still as we move from management information systems to decision support systems

    RE: structuring “ sameness”

    A. Frontline

    That same “ repetition of sameness linked to cost” will return the wealth for “delivery” of health services supplied to the enduser client ( “person”).
    Considering the impact of *monopsony which occurs when a monopoly ( e.g. government) gives $ to the buyer ( “person”) not the seller. ( as a controller)

    *(def. a market similar to a monopoly except that a large buyer “not seller” controls a large proportion of the market and drives the prices down)
    This interaction of paying for sameness in the context of service delivery for the “ unchanging needs” ( IADL) will grow exponentially and sustain the wealth for the delivery of of service.

    Hence health is sustained by wealth( as a “tool” for the payor and a “controller” of the recipient)

    B.Knowledge Workers:

    Concurrently if health service components are packaged at the therapeutic level and that “ sameness result of adherence to a carepath” is “ even distribution of funds across the professional workload “ you have a second controller where wholesale and retail opportunities enter the world of the knowledge worker . “ Z “ is their workpath..
    The workpath for the service worker is “ E” ( pick a line, one or more ).

    The prosperity of all in a packaged world of Civil Society good”ness” is to follow the path that appositions people to experience good”will” (restoring community to the “inter”dependence required to sustain it.)

    RE: A. and B. as applied to your comment on a team package.

    Packaging of “work “ related to payment works when directed to an individual continuously performing same and paid directly by the acceptance of quality BY the immediate user. This is a dyad. ( this “E” team is frontline direct connect )

    Packaging of “ knowledge” related to payment when directed across an “ inter” disciplinary team requires “ packaging diversification in skill selection” ( not performance). The team should be nebulous with the ability to cluster and separate freely Any approach to one team member should trigger a payment to all in a cluster ( which enables the price to be packaged as it supports all team members proportionately whether their services are used ( higher%) or not ( lower %) .This permits wholesale ( automatic ) AND retail earnings connections ( “Z”)

    In both instances task work is horizontal and predictable , knowledge is vertical and case specific .
    The hand that holds the wallet is the hand that facilitates the accrual and dispersal of funds.
    That hand has to be P3.
    Nothing can be straddled that originates and applies in an alliance driven by the lowest level (“person” ) using the smallest revenue unit… and whose revenue is supplied by the highest level “ monopoly) and all distribution of funds is dependent upon inclusion.
    The retail line of the “Z” can and will be straddled but it will be constrained by herd mentality.

    I repeat:
    The prosperity of all in a packaged world of Civil Society good”ness” is to follow the path that **appositions people to experience good”will” (restoring community to the “inter”dependence required to sustain it.)

    ** Placing side-by-side two coordinate elements, the second of which serves to identify or rename the first.

    • Sharon Wilton, Project Share

      RE: Appositioning……..

      ….. on the basis of ” need” alone creates a despair in the professional worker who
      strives for excellence , self expression, and fulfillment of ambitions…. AND in the client who is always settling for whatever they can get.
      The supply side AND the demand side locked into a relationship of “need” become combative, disappointed, and ultimately despairs or isolates.

      This appositioning is inherently abnormal as ” needs” is a supply side event and in a provider /user dyad both are placed in competition against each other ( turning it into a demand side event).
      What has really fueled the breakdown of physician /client is this ” needs”-based position is coming from the ” demand side” ( the payor ).
      However, this is the rightful role of the public payor.

      Q- What can undo this dependency cycle?

      PREDISPOSING FACTORS

      • What has really fueled the breakdown of physician /client is this ” needs”-based position is coming from the ” demand side” ( the payor ).Some think it is the introduction of ” wants” based payment from a client …and this is true IF the client is a DIRECT recipient of physician services (KEY) on the “demand side” ( which means the buyer pays)

      • As larger private owners herd the physicians into clinic/ hospital /facility service models that capture ” needs”-based funds we have BOTH providers and users captured in the “supply side” .

      The “supply side” perspective is fueled by scholars like Regina Herzlinger ( Harvard )who wrote ” Market Driven Healthcare.( NOTE :with a P3 perspective i.e. public, private, voluntary sectors )

      More recently we have the work of Julio Frenk ( Harvard) who demonstrated the oblique approach ensuring clients needs are met with a ” demand side” perspective ( NOTE the focus on “inter”)

      http://www.plosmedicine.org/article/info%3Adoi%2F10.1371%2Fjournal.pmed.1000089

      (excerpt)

      Part of the problem with the health systems debate is that too often it has adopted a reductionist perspective that ignores important aspects. Developing a more comprehensive view requires that we expand our thinking in four main directions.

      First,
      we should think of the health system not only in terms of its component elements (like human resources, financing, hospitals, clinics, technologies, etc.) but most importantly in terms of their “inter”relations.

      Second,
      we should include not only the institutional or supply side of the health system, but also the population. In a dynamic view, the population is not an external beneficiary of the system; it is an essential part of it.

      A third
      expansion of our understanding of systems refers to their goals. …. improving health ; distribution; responsiveness; legitimate expectations of the population ;fair financing….

      Finally,
      we should expand our view with respect to the functions that a health system must perform.

      ( end of excerpt)

      Q -In what context do we perform those functions?

      So we have two big influencers ( supply and demand ) configured in the wrong context when the supplier of service dollars permits ” needs-based ” provision to become “pooled for profit”
      ……as the concept itself ( needs-based) is straddled by another ” supply side” level when the government payor partners only with the private sector as vendor.
      This is a perversion of both the private sector entrepreneural skillbase ( supply side) and the traditional relationship of buyer ( demand side) creating an unwanted ” flip” ( McLuhan) where the user is on the demand side and the provider is on the supply side.]

      Q- What to do?

      A. The “supply side” vision of Regina Herzlinger:

      P3 does NOT mean Public, Private Partnerships ( which now exists with hospitals/ facilities positioned to move past design-build-maintain- WITH the capacity to operate and own.

      P3 DOES mean Public, Private, Voluntary sector partnerships at both the PROJECT level ( specific governance roles) and at the PROGRAM level ( specific operational roles)

      B. The ” demand side” vision of Julio Frenk

      Julio Frenk, MD, PhD .Bridging the Divide: Comprehensive Reform to Improve
      Health in Mexico . Commission on Social Determinants of Health .2006

      (excerpt)

      First
      is the artificial division of health into sectoral and intersectoral. .. health is a social value for which all sectors are responsible and accountable.

      Second,
      we should go beyond the traditional stand-off between the vertical and horizontal approaches by extending the geometry metaphor to search for what Jaime Sepúlveda has called the “diagonal,” that is to say, as strategy in which we use explicit intervention priorities to drive the required improvements INTO the health system……
      …..diagonal health policy must be placed in the framework of a broader healthy
      policy,

      ( end of excerpt)

      Time has passed. Now the Population Health model encompasses all determinants ( medical, non-medical, social) which requires an integration of supply AND demand.

      “inter” professional teams leads to “inte”grated service delivery ( needs, wants and access -based )
      Needs, wants, and access is the demand of the marketplace.(demand)
      Needs met in the broader context of Population Health and Social determinants is the demand of the funder (supply)

      • Check the newly released Federal Social Finance report showing the programs for funding of Social Programs ( using all 3 sectors)
      • Check the ICD- 10 codes now including psychosocial ( design ” programs ” now for funding)

      PREFERRED OPTIONS

      Population Health puts the supply and demand in the same arena where providers and users experience the very important ingredient of being both ” wanted” AND “needed”.

      Funding flows in a reliable construct
      • Medical (provider to provider),
      • Non-medical ( provider to enduser client ),
      • Social determinants (P3 provider/client construct permitting independent circular flow of funds)

      At a personal level, a working level, or a governance level ..nothing is more exhaustive ( time, resources, energies) than living in a constant ” need” environment.
      To introduce the “wants’ element is much higher than enabling a marketplace event. It
      enables a personal plan of preferred interventions, fulfilled ambitions, and appreciations based on more than what you “do” for each other.
      The apposition becomes balanced and appropriate.

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