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; the > 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 continental > social insurance schemes: a global budget to control health-care inflation; > 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 9%. > > > >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. Rate This Message: http://www.cryonet.org/cgi-bin/rate.cgi?msg=13667