Is Health The Real Wealth?

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Is Health The Real Wealth?

“It is health that is real wealth and not pieces of gold and silver.” It’s on these terms that Mahatma Gandhi gave prominence long time ago to the crucial role of the health in the daily life of each other. Indeed, the production of health presents a central concern to the public policy. Nowadays, the health ratio to GDP is always growing (average of 8, 9% for the OECD countries in 2009 against less than 6, 5% in the 1970s) and, for example, the health care spending in USA is four times the amount spent in national defence. This is why; a good health management is a big issue for our society. Throughout this essay, we’ll focus on how health is produced and how useful is current resource allocation to health care in light of that production process. So before to go the heart of the matter, it should define what health is really. According to the World Health Organization (WHO), “health is a state of complete physical, mental and social well-being and not merely the absence of disease or infirmity”, a definition which was not amended since 1948[1]. Nevertheless, we’ll analysis if this definition is sufficient or not. The production, as for it, is explained by a production function which corresponds to a mathematical way to describe the relationship between inputs and outputs, here the health. Thus, we’ll begin to analysis the health production in light of health care production but not only and we’ll deal about the health measure. Then, in a second part we’ll discuss about this process and will speak about, among other, its efficiency, equity, accessibility and consequently if health care is the good way to work about health.

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Health production is not an ordinary production. Indeed, health is not a classic output, the way to produce or maximize it is not common and the way to measure it neither. Firstly, to define really what health is and to use it in a production function we need more than the WHO definition. If anyone has an idea of what the term means it’s more difficult to really define the concept itself. First of all, it’s a multidimensional concept; we need economic, medical, demographic, geographic or socio-economic notions to have a preview of the health. Health determinants are multiples: heredity, environment, medical care, socio-economic determinants, public policies, etc… Then, it’s definitely a subjective concept and it’s rather difficult to measure it because of the different health states existence for example. Anyway, health is an important factor for the public policy and for the “health makers” and the economists are tried to build some models to understand and above all predict it. The Grossman model (1972) is probably the most famous; he assumes rational health demand. Health is treated as a stock which degrades over time in the absence of “investments” in health, so that health is viewed as a sort of capital, actually this model is an adaptation of the Becker’s model. Health is both consumption (it makes people feel better) and an investment good (stock of health determining life, healthy time). The model makes predictions over the effects of changes in prices of health care and other goods, labour market outcomes such as employment and wages, and technological changes. Anyway, when we talk about health production we distinguish the inputs where health care is substantial nowadays and the output, the health. Indeed, health care appears as the most important determinant because of the money that it generates and some studies showed during the past (Fuch, 1930) that health care investment could bring some progress in health. Health care is so the most important determinant of health status according to the economists, it means, broadly speaking health care produces health. Here we heard health as a combination of health care, lifestyle, environment, human biology among other. Indeed, it was important to add other criteria to avoid an analysis focused only on health care. Thus, we have a growing curve, health is an increasing function of health care. Nevertheless, we have to notice the marginal product of health care is diminishing in size[2]. Anyway, with health and health care, the supply and demand classic vision doesn’t work. Health is a very special output and health care is different than the normal inputs. We used to say “Health is an imponderable”. Indeed, the health market must take in account so