Chapter 5 The Production of Health 1 The

Chapter 5 The Production of Health 1. The Production of Health 2. The historical role of medicine and health care 3. The production function of health in the modern day 4. The role of schooling

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

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 (providercaused disease) Dubos (1960) and Illich (1976): disability such as less effort to preserve health

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

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

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

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

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

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? Þ On the fat of the production curve (assuming constant technology)? (1) Medical technological improvement (2) The small marginal effect of health care is worth if MR>MC

• 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 Works Table 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

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 morbiditywork 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

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

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 timepreference Empirical studies Berger and Leigh (1989): schooling directly improve health but not from unobservables like time preference

• Berman and Wolfe (1989): the estimated positive health effect on the woman’s schooling ÞDoes it also affect children’s health? Þ Yes but not significant in Wolfen and Behrman (1987) after controlling childhood background