CEA 42nd Annual Meetings
Friday, June 6 - Sunday, June 8, 2008
University of British Columbia, Vancouver

Author/Presenter Alan Diener (Public Health Agency of Canada)
Co-authors Andrew Jameton (University of Nebraska Medical Center)
  Ted Schettler (Science and Environmental Health Network)
Title Producing Health Care, Decreasing Health Status
Abstract While it is understood that there are many determinants of health, health care continues to receive a great amount of attention. In recent years, the average percentage of GDP devoted to health care has increased in OECD countries. Notwithstanding the possibility that further expenditures on health care may not be the most effective way to improve health status, is the fact that the production of health care itself creates environmental effects which are responsible for many adverse health outcomes. The health care industry damages the environment through its heavy energy and resource use not unlike other large industries. As well, the health care industry poses unique threats to the environment through its use of many hazardous and complex chemicals, and the associated waste, including that which is toxic, infectious, and radioactive, produced by these items. In this paper we conceptualize the relationship between the production of health care, health status, and the environment in the context of Grossman's (1972) model of health as a capital good. We conclude that not adequately accounting for the adverse environmental health effects associated with the production of health care results in a sub-optimal quantity of health care being demanded; Too high a quantity is consumed leading in an inefficient allocation of resources. In addition, that health care which is produced, is done so in a technically inefficient manner. Properly accounting for the environmental health impacts associated with health care, would result in a lower demand for health care and an increased demand for the other determinants of health status, while a different mix of medical care inputs, one which focuses on green health care (i.e. technologies that have reduced environmental impacts), could be used to achieve a greater level of health stock.

CEA 2008 Conference | Conference Program