X-Message-Number: 13667
Date: Mon, 01 May 2000 18:41:14 -0700
From: Peter Christiansen <>
Subject: From Lancet - the Journal of the British Medical Association

> Health spending is an economic and social investment
> Malcolm Dean
> Lancet 2000; 355: 1081 - 1084
> >
> >Earlier this month, England's health secretary, Alan Milburn, went to the
> London School of Economics, the college which nurtured the architects of
> Britain's welfare state, to deliver a lecture on a theme which would have
> been familiar in a developing country, but one that is rarely heard in
> developed nations: health spending is as much an economic as a social
> investment. No-one can remember a British health minister making such an
> argument before.
> >
> >Milburn--a former minister in charge of government spending at the
> Treasury--said it was time to challenge the conventional orthodoxy that
> health spending was a debit, not a credit.  Health-care spending should be
> seen, as economists were belatedly recognising, as an investment that
> builds economic infrastructure.
> >
> >He noted that economic historians had concluded that perhaps a third of
> the economic growth rate in Britain between 1780 and 1979 was a result of
> improved health and nutritional standards. Also last month, researchers
> noted the striking finding that real income per person will grow at
> 0 3%-0 5% a year faster in a country where life expectancy is 5 years
> longer than in a state which is similar in all other respects (Science
> 2000; 287: 1207 [PubMed]).
> "This is significant at a time when growth rates over the past few decades
> have averaged only 2-3% and where there is every prospect of life
> expectancy increasing by a further 5 years over future decades", Milburn
> went on.
> >
> >Milburn also turned to the cost of sickness: 47,000 working years for men
> alone are lost every year in Britain because of coronary heart disease;
> total lost to all diseases is almost 250,000 years each year. "That's not
> just a health concern--it is an economic concern. If you changed the
> sentence to almost a quarter of a million working years lost to industrial
> action last year, then business would be banging on the Government's door
> demanding urgent action", said Milburn.
> >
> >He noted that ill health was a significant cause of unemployment and its
> attendant costs to the benefits bill. It accounted for 119 million days of
> certified incapacity, consumed 12 million family doctor consultations, and
> 800,000 in-patient hospital days. It led to unemployment, poverty, and
> further ill health. Figures released this month by the Office of National
> Statistics reported that 29% of adults in workless homes said their health
> was not good. The number of long-term sick and disabled wanting a job but
> not looking had risen to 750,000. This rise led the government to create
> "new deal" jobs, said Milburn. When Labour came to power, he noted, 4 5
> million adults lived in households where no-one was working--twice the
> number in France and four times the number in Germany.
> >
> >Milburn stated that to be regarded as an economic investment, health
> spending needs to meet two conditions: efficient organisation which
> included not placing an undue burden on the economy; and a preventive as
> well as a sickness service. He quoted the Organisation for Economic
> Cooperation and Development's praise for the UK's tax-based health system:
> "a remarkably cost-effective institution." And he pointed to three
> advantages that the UK's national health service (NHS) has over
> social insurance schemes: a global budget to control health-care
> low transaction costs; and clinically managed care with family doctors
> acting as gatekeepers to expensive specialist care.
> >
> >Milburn concluded by suggesting that the NHS should take on the private
> sector by expanding its occupational health services to save employers
> money through reduced absence from sickness. Any profit from this new
> service could be put back into free health-care provision.
> >
> >The speech coincided with new negotiations between the health secretary
> and his old department over a new 3-year spending agreement up to 2003-04.
> Heated arguments have been waged since the prime minister announced a
> commitment to raise UK health expenditure to the European average within 6
> years. UK health spending in 1997 was 6 8% of gross domestic product but
> there is division over the European average. UK officials argue it is 8%
> but the independent King's Fund says a population-based average would be
> >
> >There is, however, general agreement that the government will have to
> increase spending by more than the 5% a year that the prime minister
> mentioned in his announcement if any European average is to be met.
> Everyone in a service which  has only averaged 3% increases this decade
> regards that as welcome news.

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