Investing in Social Well-Being Reduces Health Costs
Dec 13, 2010
and, determinants, social, stanford
Canadian Auto Workers (CAW) economist Jim Stanford recently made a good case for investing in social well-being that has the added advantage of addressing expanding health budgets.
By 2014, the federal and provincial governments must renegotiate the Canada Health Transfer (CHT). That means that it must be extended soon. Canadian Finance Minister Jim Flaherty is already on record as saying that he plans to clamp down on transfer payments as a step towards reducing the federal deficit. The obvious problem with that is that it just passes the problem along to the provinces, whose financial situation is even worse.
As Stanford relates, in the last few years researchers around the world have established a new field of scientific knowledge concerning the social determinants of health. There is now hard, empirical evidence that indicates that one’s economic status and social participation are directly related to their physical health. And that affects the costs of providing health care.
As he explains, “for concrete physiological reasons, human health suffers when people are subjected to prolonged hardship, stress and disparity. The physiology of this connection involves many body systems, including the impact of stress and unhappiness on metabolism, hormone production, circulatory function and other systems.”
What this means for the financing of health care is that addressing the underlying social problems that are directly related to poor health can lead to reduced expenditures. Diabetes, for example, has strong links to poverty and inequality. In fact, poverty is a greater risk factor in diabetes than diet or exercise. One out of every 10 hospital admissions in Canada are because of this disease and its complications.
But while Medicare shells out billions of dollars to treat diseases like diabetes, we cut back on money when it comes to supporting impoverished people so that they don’t develop it in the first place. “Penny-pinching in one fiscal envelope thus contributes directly to ballooning costs in another.”
Countries with very low poverty rates, like Sweden and Norway, for example, suffer from less than half the rate of diabetes as Canada. If we matched their social performance, we could slash about $7 billion per year from annual health care budgets. This math, adds Stanford, applies to many other socially determined diseases like hypertension, digestive maladies and mental health.
It’s time to take a serious look at a comprehensive, holistic approach to improving the living conditions of Canadians. We can’t afford not to.
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