Individual Decisions for Health

By Björn Lindgren | Go to book overview

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Investments in prevention

Health economics and healthy people

Donald S. Kenkel


Introduction

Over twenty-five years ago, health economics research had begun laying the foundation for now-familiar arguments about the importance of prevention in the health economy. After his compelling ‘tale of two states’ comparing mortality rates in Utah and Nevada, Victor Fuchs (1974, pp. 54-5) concluded: ‘The greatest current potential for improving the health of the American people is to be found in what they do and don’t do to and for themselves. Individual decisions about diet, exercise, and smoking are of critical importance…. Michael Grossman’s (1972) model provided a theoretical framework for the argument. Diet, exercise, and smoking could be considered as inputs, on par with curative medical care, used by households to produce increments of health capital. Kenkel (2000) provides an up-to-date survey of health economics research on prevention.

Research from a variety of disciplinary bases has also made prevention a prominent part of health policy. In 1990 the US Public Health Service published Healthy People 2000 setting out national health promotion and disease prevention objectives in eight areas: (i) physical activity and fitness; (ii) nutrition; (iii) tobacco; (iv) alcohol and other drugs; (v) family planning; (vi) mental health and mental disorders; (vii) violent and abusive behaviour; and (viii) educational and community-based programmes. Similarly, the OECD (1994) argues for ‘a broader approach to health policy, an approach which emphasizes the promotion of healthy lifestyles and the active consideration of the health consequences of government policies across a range of policy sectors’.

The goal of this chapter is to develop and begin to implement an accounting framework to summarize individual investments in prevention. National health accounts conventionally focus on ‘expenditures on activities whose primary intention (regardless of effect) is to improve health’ (Griffiths and Mills, 1993). In practice, national health accounts often focus even more narrowly on the health care sector, and as a result are dominated by expenditures on curative medical care such as physician services and hospitalizations. A study for the Centers for Disease Control and Prevention (CDC) is an important attempt to extend health accounts to include national expenditures on health promotion and disease prevention activities (Brown et al., 1991; CDC, 1992). They estimate that total

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