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.