Does More Social Spending Reduce Healthcare Costs?

by birtanpublished on September 14, 2020

The u.s. spends a lot of money on health care we've talked about this we've also talked about how all that money doesn't get us better health outcomes in fact we're a pretty low on health outcomes when compared to other countries with similarly high incomes one proposed

Explanation for this is that it's a result of low investment in social programs that's the topic of this week's healthcare triage there are data support the idea that low social spending is hurting health outcomes 2009 study in

JAMA found that housing and case management services for homeless adults with chronic illnesses resulted in fewer emergency department visits and fewer days spent in the hospital another Johnston also in 2009 found that

Providing housing for homeless adults with severe alcohol problems decreased health and criminal justice spending from over 4,000 per person per month to just under 1500 after six months this number decreased even further to under

1,000 monthly per person after a year of housing at both points in time there were significant savings compared to controls even after factoring in the cost of housing we've covered social determinants of health before and we

Know they play a big role in improved health outcomes if we spend less than the things that promote good health it makes sense that we might pay for that on the backend with higher medical bills for sicker people however we don't

Actually have a lot of data from studies examining whether low social spending drives high health care spending in the United States that is until a new study was published this August and Health Affairs using data from the organisation

Of Economic Cooperation and Development or oecd researchers asked the following questions how much does the u.s. spend on social programs compared to other OECD countries do the data suggest that decreased social spending is associated

With higher healthcare spending and vice-versa is increased social spending associated with decreased healthcare spending researchers looked at 35 OECD countries between 1980 and 2015 this analysis of

Social spending took into account both public and private spending and excluded any spending not directly given to beneficiaries such as administrative costs they focused on social expenditures on factors that are known

Drivers of health this included active labor market programs like welfare-to-work disability and unemployment benefits family programs housing pensions and education programs health care spending included

Personal health care public health and preventive health services government insurance and out-of-pocket spending the researchers also accounted for potential confounders like poverty unemployment rates and the proportion of the

Population that was elderly the average GDP per capita across countries is approximately 40 1200 dollars with the u.s. coming in above average at about fifty six thousand seven hundred dollars because you know we're rich the country

Spend an average of 17 percent GDP on social spending the u.s. came in just under that at sixteen point one percent the country allocating the lowest percent of GDP to social spending was Mexico at four point seven percent and

The country allocating the highest percent was Denmark clocking in a 26.5% country spent on average eight point eight percent of GDP in health care there the u.s. is an outlier spending almost twice that at a whopping 16 point

Eight percent overall average social spending across countries increased during the period studied which was largely attributable to spending on progress benefiting the elderly which went from 4.8% of 1982 7% in 2015

Average spending on health care across countries followed the same trend increasing from an average of six point one to eight point eight percent overall the researchers found a significant positive correlation between the two

Expenditures meaning countries that spend a lot on social services also spent a lot on health care with the u.s. being a large outlier in health care spending this correlation held when examining the rising cost of each

Expenditure over time when looking at social programs individually significant correlations were found for disability benefits active labor market programs pensions and education so to answer the initial questions posed by the

Researchers US spending on social programs is pretty average compared to other OECD countries decreased social spending was not associated with higher spending on health care increased social spending was not associated with lower

Spending on this isn't quite what we would expect based on studies like those we mentioned at the beginning of the episode but there are things we should take into consideration especially given that this

New study is observational the author's point out that like-minded values may underlie the Association meaning placing high value on programs to benefit things like family and old age is consistent with placing high value on healthcare

Spending on those same things they also point out that their study looks at data on a very large scale which isn't great for picking up effects of specific social interventions or picking up effects in sub populations such as the

Elderly or homeless another important consideration mentioned in the articles press release is that these two expenditures may not be substitutes for each other meaning that maybe we shouldn't expect a decrease in one in

Response to an increase at the other at least on a national level so given that these particular data are telling us that social spending does not save us money in the long run should we drastically reduce the amount

Of money we're spending on social programs now health care costs are not the only potentially important outcome of social spending improving people's health is an established and very important outcome of this type of

Investment for example a study published in 2007 found that the supplemental nutrition program for women infants and children was protective against preterm delivery low birth weight and fetal death especially in women considered

High risk we also know that individuals who received food stamps as children have better metabolic health scores in adulthood and as mentioned previously housing and case management for chronically ill homeless adults reduces

Time spent in hospitals and if you need further convincing remember that social investments also have ripple effects that positively affect everything from the health of our economy to the health of subsequent

Generations through improving current health and well-being and children and adults is important enough on its own sometimes good things cost money we can't expect everything to also reduce spending

Hey you enjoy this episode you should watch this whole playlist we've done on social determinants of health and how important they are in the United States and all over the world we'd also like you to consider supporting the show of

Patreon.com we'd especially like to acknowledge our reefs associate Jo civets in our search and Admiral salmon the website to do that patreon.com slash healthcare triage

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