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Chapter 5 The Production of Health

Chapter 5 The Production of Health. The Production of Health The historical role of medicine and health care The production function of health in the modern day The role of schooling. The production of Health .

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Chapter 5 The Production of Health

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  1. Chapter 5 The Production of Health The Production of Health The historical role of medicine and health care The production function of health in the modern day The role of schooling

  2. 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

  3. 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 (provider-caused disease) Dubos (1960) and Illich (1976): disability such as less effort to preserve health

  4. The historical role of medical and health care • The Rising Population and the rate of medicineMckeown (1976): the dramatic rise in population in England and Wales from 1750(1) Declines in birth rate(2) the decline in death rate

  5. 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

  6. Is medical research unimportant in history or present day? • The influence on health-enhance-enhancing practice • Different numerator and denominator: [Example] the effectiveness of a treatment for cancer • Successful medical intervention come late

  7. 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

  8. 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

  9. 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)? • Medical technological improvement • The small marginal effect of health care is worth if MR>MC

  10. 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 WorksTable 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

  11. 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 morbidity- work 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

  12. On the Importance of lifestyle and environment • Wolfe (1986): a positive relationship between health care and health in several countries after controlling lifestyleSimilar conclusion in Hitiris and Posnett’s study (1992) • Cigarette and health: negative production elasticityQ: 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

  13. the role of schooling • Education is measure by years of educating and diploma • Two theories(1)Grossman : efficient producer(2)Fuchs: self-section problem like time-preference • Empirical studiesBerger and Leigh (1989): schooling directly improve health but not from unobservables like time preference

  14. 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

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