This post originally appeared on the Health Affairs Blog:
Kindig DA, Do You Really Mean "Health Expenditures?" Health Affairs Blog, 8/7/12, http://healthaffairs.org/blog/2012/08/07/do-you-really-mean-health-expenditures/, Copyright ©2012 Health Affairs by Project HOPE – The People-to-People Health Foundation, Inc.
Using the term health expenditures yields a narrow and seriously misleading view of what it will really cost to improve population health.
I’ve been worried about this for some time, but most recently while reading the excellent and important new report on For the Public’s Health: Investing in a Healthier Future from the Institute of Medicine Committee on Public Health Strategies to Improve Health. This is the third of three reports in a series; it addresses the critical issue, in a time of budgetary austerity, of resource needs and realistic approaches to addressing them in a “predictable and sustainable manner to ensure a robust population health system.”
In their first Recommendation, the report authors advise that the
Secretary of the Department of Health and Human Services should adopt an interim explicit life expectancy target, establish data systems for a permanent health-adjusted life expectancy target, and establish a specific per capita health expenditure target to be achieved by 2030. Reaching these targets should engage all health system stakeholders in actions intended to achieve parity with averages among comparable nations on healthy life expectancy and per capita health expenditures.
These are bold and challenging targets, worthy of critical policy attention. But here is where precise terminology is critical for population health advocacy. Throughout the report the term health expenditure is repeatedly used, referring to what is reported by the CMS Actuary in the National Health Accounts, and what we commonly refer to when we calculate the percentage that health takes of the overall GDP.
However, national health accounts only report national expenditures for health care and governmental public health. Calling these health expenditures could subtly lead many to infer that health care and public health are the only or the main expenditures necessary to improve health. But in the IOM report’s words,
The United States seems to lag behind most high-income nations in the deployment of socially protective strategies that appear to correlate with better population health. Excessive allocation of national spending on medical care services poses major societal opportunity costs and restricts funding opportunities for other essential sectors such as education, energy, water, transportation, agriculture, and employment. For example, the rise of medical care costs, and the recent recession, has contributed to a decline in state appropriations for public higher education.
Some will understand this population health resource perspective, but the terminology will lead many, perhaps unconsciously, down the path that health care — and even the doubling of governmental public health expenditures that the report calls for — are all that it takes to produce health. I would suggest ending the use of the term health expenditure; adopting the term population health expenditure for the total of all investments that will improve health; and using the longer and clumsier but more accurate term health care and public health expenditures for the numbers we currently get from the CMS actuary.
An accompanying explanation should note that evidence, data, and accounting systems do not yet exist to precisely estimate what proportions of non-health care and non-public health expenditures are health-outcome producing, but that this is a critical comparative effectiveness and health policy research priority for the future. The IOM report anticipated this need by also recommending the “development of a robust research infrastructure for establishing the effectiveness and value of public health and prevention strategies, including……the development and validation of methods for comparing the benefits and costs of alternative strategies to improve population health.” Drawing on cross-national evidence, the report mentions the recent work of Bradley et al, which argues that an important reason for the poor performance of the US health system is the relative proportion of non-health care social spending to health service spending; in other developed countries it is 2.0, while in the US it is 0.91.
While the term health care and public health expenditures is longer and more clumsy, it will constantly remind us that producing health and reducing disparities will require investments across all determinants, and it will prompt us to get on with new governance and business models that will allow us to accomplish this. If the Secretary does establish the IOM panel’s recommended targets, let’s hope that in the future they will indeed reflect the needed per capita population health expenditures across all determinants: medical care, public health, health behaviors, the social environment, and the physical environment.
David A. Kindig, MD, PhD is Emeritus Professor of Population Health Sciences and Emeritus Vice-Chancellor for Health Sciences at the University of Wisconsin School of Medicine and Public Health. Follow him on twitter: @DAKindig.