27th October 2017, Volume 130 Number 1464

Scott Metcalfe, Sanji Gunasekara, Kate Baddock, Lesley Clarke, for the New Zealand Medical Association

As the term of the new coalition government begins, the New Zealand Medical Association (NZMA) urges all parties to invest in the health of New Zealanders.

Last month’s release of the NZMA’s ‘Health as an Investment’ position statement1 makes this simple point: spending on health is a positive investment in the health, wellbeing and productivity of New Zealanders and our economy. Ultimately, health money saves money in many sectors.

Many health professionals are baffled by the frequent casting of public healthcare as a “cost” to government. This framing has to change. Health spending does not drain the economy. Instead, better health lifts the lives of individuals and their families/whānau, and grows our economy.

The NZMA statement describes the many benefits of health spending—both direct financial and indirect, where:

  • Better health is associated with increased labour supply and productivity.2
  • Despite known measurement issues,3 health has been shown comprehensively to be a major contributor to economic growth.2,4
  • Analysis of recent spending by government sectors in multiple countries in the European Union strongly suggests considerable economic gains from government spending on health and education—with (in the short term at least) a return on investment near $5 for each $1 of government spending on health.5

Our health system requires high levels of resources to meet the needs of individuals, family/whānau and the population. The NZMA statement also strongly supports an investment approach to health, as articulated in the New Zealand Health Strategy.6 This approach takes the long view, which accounts for full long-term costs,7,8 including life cycles; we have all been young, and we will all die.

Beyond the NZMA statement, and beyond looking for potential efficiency gains,9 we need evidence-informed10,11 discourse and funding choices within, and across, sectors.12–14

How we value long-time horizons, and take a consistent approach across government sectors, matters. So for starters, if balancing upfront costs with enduring benefits, the discounting of non-budgetary costs and benefits for time15 when using cost-effectiveness analyses should be at a social discount rate with a long-term rate of return that is riskless (ie, risk-free),16–21 not risk-adjusted.22 In short, using a lower discount rate than was used and promoted years ago. (Meanwhile, evidence-informed public policy has to balance robust evidence with social values,10 where value from other complexities6,23 (eg, clinical severity24) is not necessarily captured, measured or condensed in simple benefit-to-cost ratios.9,21)

Similarly, consistency across government sectors means treating like with like. How we value the gains from treatment or programmes or big projects can lead into how much we are prepared to spend. Thus, the same valuations of lives should apply to the health sector as to other government sectors, when helping determine funding. The NZMA calculates, for example, that the imputed values of lives saved for major strategic roading decisions in New Zealand have been 15 to 19 times that of some heath investments historically (see supplementary information).

Back to the NZMA statement, addressing the social determinants of health such as education, housing and poverty is crucial. Inequity in health is fiscal failure as well as moral failure,25 because health equity improves economic performance.26 It makes sense to invest in health by investing to improve health equity. Acting decisively to reduce health inequities benefits both our economy and wider society.25

We don’t, and won’t, necessarily get best health outcomes by investing in the latest (sometimes very expensive) health technologies or programmes. Instead, an evidence-informed approach10 is likely to get better outcomes from both continuing with public health actions that have good value27–29—and from improving access to, and uptake of, much currently-funded universal healthcare of value, so that everyone who needs care can and does get it.30 These outcomes are more likely when we better understand and address fundamental inequities in underlying social determinants.25,31

Finally, investing in health equity helps the health system. The increasing costs of healthcare are partly driven by increasing treatment costs for conditions largely preventable by focusing on the social determinants of health25—the conditions in which people are born, grow, live, work and age, their education, employment, access to healthcare, food security, housing, income, leisure, in homes, communities, towns, or cities—and their chances of leading a flourishing life.31 Addressing the social determinants of health not only achieves better health equity, but is crucial to the financial sustainability of the health system.25

Most of the social determinants of health lie outside the health sector, so this requires inter-sectoral and whole-of-government approaches.25 Action on the social determinants of health must be a major focus for both the health sector, wider government and society.25

In short, investing in New Zealanders’ health grows our economy—and fundamentally, isn’t better health and wellbeing the purpose of any economy?

Note: The NZMA published last month its position statement on Health as an Investment. The statement has been endorsed by the Association of Salaried Medical Specialists (ASMS) and the New Zealand College of Public Health Medicine (NZCPHM). The NZMA is grateful for their support.

Summary

Spending on health is a positive investment in individuals’ and family/whānau health, wellbeing and productivity, and saves money elsewhere in our economy. The NZMA’s ‘Health as an Investment’ position statement supports an investment approach to health that takes the long-term view, consistent across the sector and sectors. Addressing the social determinants of health is crucial, as health equity both improves economic performance and relieves pressure on the health system itself. This demands inter-sectoral and whole-of-government approaches.

Author Information

Scott Metcalfe, Board Member; Sanji Gunasekara, Manager Policy and Stakeholder Relations;
Kate Baddock, Chair; Lesley Clarke, Chief Executive, New Zealand Medical Association, Wellington.

Acknowledgements

Liz Springford, Frank Frizelle, Sharon Cuzens, Harvey White, David Galler, Marise Stuart,
Stephen Child,Ruth Spearing, Elizabeth Berryman, Buzz Burrell, Jan White, Magnus Cheesman,
Michael Chen-Xu, Catherine Hallagan, Deborah Lambie.

Correspondence

Kate Baddock, New Zealand Medical Association, PO Box 156, Wellington.

Correspondence Email

nzma@nzma.org.nz

Competing Interests

SM is employed by PHARMAC; the views expressed do not necessarily represent those of PHARMAC.

References

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  2. World Bank. Investing in health: World Development Report 1993. New York: The World Bank & Oxford University Press, 1993. http://documents.worldbank.org/curated/en/468831468340807129/World-developmentreport-1993-investing-in-health 
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