Transcript Chapter 5 The Production of Health

Chapter 5 The Production of
Health
1. The Production of Health
2. The historical role of medicine and health care
3. The production function of health in the modern day
4.
The role of schooling
The production of Health
• Two features
1. The trivial contribution to historical
decline in death rate
2. Small marginal contribution
• Health Status=f(Health Care, Lifestyle,
biological Enviroment, Human Biology)
note : difficulties of measuring HS
Figure 5.1 Production of Health
• The law of diminishing marginal returns
• Q: Would the health production function
eventually bend down (i.e. negative
marginal product of health care)?
Cochrane (1972): Iatrogenic (providercaused disease)
Dubos (1960) and Illich (1976): disability
such as less effort to preserve health
The historical role of medical and
health care
• The Rising Population and the rate of
medicine
Mckeown (1976): the dramatic rise in
population in England and Wales from
1750
(1) Declines in birth rate
(2) the decline in death rate
What caused the mortality rate
decline?
• The availability of Medical Intervention after the
majority of the mortality decline
(Figure 5-3)
• Reduction in exposure to infection:
Public health measures such as immunization,
quarantines, standards for sanitary water
supplies and sewage system….
• Improvement in the human host’s ability to resist
inflection: the improved nutrition
Is medical research unimportant in
history or present day?
• The influence on health-enhanceenhancing practice
• Different numerator and denominator:
[Example] the effectiveness of a treatment
for cancer
• Successful medical intervention come late
What does health care contribute?
• Bunker, Franzier, and Mosteller (1994)
1. Disappointing in preventive health care
2. Effective in treating pain, discomfort and
the gains to quality of life
The Production of health in the
modern day
• how to measure health
(1) mortality data (accuracy)
(2) morbidity (illness) rates
• Eliminating Biases: Reduced Form Versus
Structural form
Empirical studies about Mortality
rate
•
Table 5-2 shows that a significant but
small contribution of health care to
reduce
• Does health care provide little benefit?
 On the fat of the production curve
(assuming constant technology)?
(1) Medical technological improvement
(2) The small marginal effect of health care
is worth if MR>MC
• Issue of race and gender:
In table 5-3, Hadely reports the health care
production elasticity for Medicare
population
=> higher elasticity for females and blacks
• Prenatal Care Works
Table 5-4 shows that WIC program reduce
white (blacks) neonate mortality rates of
0.425 (1.330) per 1000 lives
• The world’s pharmacies:
OECD countries with higher drugs
consumption have greater life expectation
Morbidity Studies
• The Rand Health Insurance Experiment
(RHIE): the grater portion of health care bill
pay, the less health care buy.
=> the more health care, the more health?
• a measure of health status and morbiditywork loss days per employed per year
(Table 5-5)
(1)Newhouse et al. (1993): little or not effect
(2)Valdez et al. (2005): not significant
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On the Importance of lifestyle and environment
Wolfe (1986): a positive relationship between health care
and health in several countries after controlling lifestyle
Similar conclusion in Hitiris and Posnett’s study (1992)
Cigarette and health: negative production elasticity
Q: can health affect the decision to quit smoking?
1.Jones (1996): Preventive motive (healthy people) and
curative motive (ill individual)
2. Folland (2006) : family or community social capital
Maternal smoke and drugs use causes significant harm to
newborns.
Evans and Ringel (1999): taxing cigarette
The pollution effects on health are sizable in both in
industrialized and lesser developed countries (Cropper et al.
1997) and similar cases seen in Schwartz and Dockery(1992)
Earlier studies suggest that richer American have better
health
?Deaton and Paxson(2001): technology ; Pritchett and
Summer (1996): only extremely low incomes
the role of schooling
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Education is measure by years of
educating and diploma
Two theories
(1)Grossman : efficient producer
(2)Fuchs: self-section problem like timepreference
Empirical studies
Berger and Leigh (1989): schooling
directly improve health but not from
unobservables like time preference
• Berman and Wolfe (1989): the estimated
positive health effect on the woman’s
schooling
Does it also affect children’s health?
 Yes but not significant in Wolfen and
Behrman (1987) after controlling childhood
background