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Cy Frank


Can Health Care Make Society More Productive?

Posted: 01/03/2013 4:21 pm

The road to reviving Canada's sluggish productivity may lead straight to an emergency department -- or an operating room -- or an immunization clinic.

Sound implausible? Only if you consider public health care from the tired and usual point of view -- which is that it is a consumption good, sucking ever-larger amounts of money out of a shrinking taxpayer pocket. Strike another commission, Canada.

But if you can accept the notion that public health care, if optimized, could be an investment good yielding future wealth as opposed to a consumption good using up current wealth and resources, the road to reversing our productivity slide seems suddenly to be freshly-paved.

Take a pass on the commission, Canada. Take a progressive look at public health care.

Health care is a form of human capital. Considered in the broadest sense, health care encompasses public education and prevention services as well as the delivery of care when illness strikes. As such, it is actually one of society's critical means of keeping our population productive.

The correlation between health and productivity has been illustrated in different ways. The Canadian Institutes of Health Research estimated the outbreak of severe acute respiratory syndrome (SARS) in 2003 took US$3.6 billion out of Canada's GDP and 1 per cent off its economic growth. Imagine the consequences -- both economic and human -- had SARS gone unchecked.

More recently, the Fraser Institute estimated that work-time productivity losses due to long waits at hospitals and to see specialists cost the Canadian economy C$1.08 billion in 2011. The cost tripled to $3.29 billion when time outside of the working period was included.

These examples are at the system level. Think of the value impacts, as well, at the individual level: having a worn-out joint replaced or having a heart attack treated can allow people to remain productive for years beyond what would have been their original "shelf life."

Canadians can't afford productivity losses. We've had two decades of sluggish productivity growth. The Conference Board of Canada reported last year that our productivity level has fallen to 80 per cent of the U.S. level from a high of 90 per cent in the mid-1980s.

If we can agree that efficient health care is an enabler of productivity and that productivity is key to wealth, the next steps should be easy: first, view public health care as a significant driver of our economy; next, consider our expenditures in health care as a potential investment yielding future wealth; and finally, manage those investments strategically to ensure we get maximal value for our money.

The latter will take much effort given the inefficiencies in public health care in Canada.

This would be a cathartic and defining shift for Canadians, who have been locked in a philosophical debate over public vs. private health care. In fact, the core issue should be how to get maximal value for all of our health dollars. This is not about spending more or spending less; it's about investing for value.

"Show me the value" should be the new mantra in public health care. Indeed, it seems to be gaining traction.

The premiers last year created a Working Group on Health Care Innovation to "enhance patient care and improve value for taxpayers." Ontario's government this year announced an action plan that will shift funding to "where we get the best value."

This summer, Alberta's health care agency, Alberta Health Services, launched its first group of Strategic Clinical Networks, a new concept in public health care in Canada. They will bring together medical practitioners, patients, business people, researchers and others in teams that conceive and carry out projects aimed at improving health care services to achieve outcomes for all Albertans and generating measurable value for the public money invested.

We appear to be finally moving away from viewing public health care as an economic burden.

The new view emerging is that of an extremely valuable asset -- an asset that is a big part of the economy and can be managed better and exploited more fully by drawing on the bright minds, unique perspectives and special skills that exist in the medical, business, social and academic communities.

As this asset strengthens, productivity will continue to grow and the important correlation between strategic health care investments and our economy will become abundantly clear.

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