© 2006 josé c. lacal; sandro galea public health futures.” public health futures...

© 2006 José C. Lacal; Sandro Galea http://lacal.net/PH.html “Public Health Futures.”

Public Health FuturesAn economic approach to maximizing investment in the health of the public.

José C. Lacal, MSPH CandidateUniversity of Miami (FL)

Sandro Galea, MD, MPH, DrPHUniversity of Michigan


Summary - 01

The health of populations is determined by a variety of factors, ranging from macrosocial factors (e.g., policies, assets) to individual behaviors (e.g., smoking).

As our understanding of the interrelationship between the health of populations and the economic factors that both influence, and are influenced by, population health, improves, it is becoming readily apparent that innovative public health efforts need to be considered that can result in improved health of populations.


Summary - 02

Unfortunately, public health efforts in the economic arena are frequently stymied by concerns that such efforts go beyond the "traditional" role of public health. This paper introduces an innovative framework that might help public health practitioners interested in structural economic interventions.

We propose a “Public Health Futures" funding mechanism similar to the existing commodities futures market as an economic framework to bring new actors to fund existing Public Health infrastructure. The proposed framework leverages well-known financing mechanisms widely used in both industrial and residential financial settings.


Summary - 03

This framework seeks to "securitize" the net present value of future population health improvements.

The proposed concept of Public Health Futures is designed to empower new actors with an interest in the future earning and purchasing power of today's youth to actively fund public health activities that have a high probability of delivering healthy, productive citizens (and taxpayers) in the future.

The strengths and limitations of this approach will be discussed.


Public Health v. Medicine’s Contribution

Improvements in life quality, expectancy

Medicine’s image as main contributor

PH’s poor PR efforts ROI of US’s health

expenditures: Highest in the world Low life span, QoLife

Thomas McKeown: “Reasons for the decline of mortality in England and Wales during the nineteenth century.” (1962)


Building Healthier Communities


Traditional PH Funding Challenges

Must find alternative funding models; and should build new partnerships.


USA: A Consumption-driven Economy

The US is a personal consumption-driven economy (>70% GDP). Based on large numbers of consumers with significant (and increasing over their lifetime) purchasing power drive the economic engine through their expenditure patterns.

But for young people today to become viable consumers tomorrow they must be provided with the necessary social resources (education, health, supportive homes) to empower them to earn enough future income to have a purchasing power equivalent of that of today's consumer.


USA: A Consumption-driven Economy

GDP (3Q 2006): $13,308.3B

Personal consumption expenditures:$9,355B - 70.3%

Gross private domestic investment – residential: $752.9B - 05.7%


Pauperization of Future Consumers

Unfortunately, current governmental and business policies in the US and on a global basis neglect young generations, with a clear and catastrophic effect in effectively pauperizing young generations.

Therefore lowering the future purchasing power of today's young people, and greatly reducing the future consumer base for all businesses. Given a society's limited resources, assigning resources away from children deprives today's young and future generations of the necessary resources to nourish their full economic potential.


US Federal Budget - Outlays - 2006

Who receives federal $$:Military: 18%Social Security: 23%Medicare: 14%Medicaid: 07%

Subtotal: 62%(w/o Interest Outlay)

Interest = 09% budget.

Education K-12 (2001):Federal: $21BStates: $181BLocal: $100B


US Federal Budget - Receipts - 2006.

Who pays federal tax Workers: 82%

(Individual + SS) Corporations:10% Estate tax: 01%

Significantly all adults, families with children fall under “workers” category above.


Modeling Future Consumers

FACT: Today’s children will be tomorrow’s consumers, taxpayers, and citizens.

PREMISE: An increasingly under-educated, chronically ill, over-fed, under-nourished, over-stressed young generation will make for a very poor consumer and taxpayer base in 10, 15, 20, 30 years.

CHALLENGE: How to fund preventive interventions in the next few years.


Cannibalizing our Children - 01

Millions without health insurance

Millions of single-parent homes

Increasing rates of asthma high blood pressure obesity emotional issues mental problems child violence single parenthood

Falling indicators: physical activity education nutrition family support

Raising entire “TV Generations:” baby sitting violence-fed growing butts talking “Pokenglish”


Cannibalizing our Children - 02

Growing prison population; impact on children.

Approximately 1.3 million children in the United States have mothers who are incarcerated.

Tremendous long-term costs of social neglect of children.


Silent Market Losers of “Unhealthiness”

Winners from illness-centric society: Pharma-medical industrial complex

Losers: Every other sector of society! Losing international competitiveness General Motors: single largest cost item

per new car is healthcare costs. Cities, states, federal government:

untenable future tax base. Losing consumer purchasing power.


Silent Market Losers of “Unhealthiness”

Mental illness: US$105B (lost prod.) Diabetes: US$130B (older adults) Etc.


Address Long-Term Economic Impact

Well-established economic and risk models for pricing the cost or benefits of a future event (or the avoidance of a future event).

PH: clear and well-validated evidence of the impact of current PH investments (or lack thereof) in future outcomes. Clear evidence of the impact on earning potential caused by poor health; and impact of low / poor quality education of children in their future economic prospects.

Many underlying socioeconomic, cultural, political and environmental determinants of health are modifiable.

In an era of smaller government ballooning public sector

deficits no appetite for tax

increases, and huge military build-up

How to secure funds for Public Health campaigns?

How to reach out to the Silent Market Losers?


How Car Insurance Works

T=00 Ta Ta+fix T=xx

Insur. Co.

OWNER

Body Shop

Maintenance

Operations


Principles of Futures Trading


Public Health Futures Brokerage


Today, EVERYTHING is Tradeable


Who Would “Buy” PH Futures?

Actors impacted by consumers’ purchasing power: Manufacturers Universities

Actors impacted by tax collections: State governments Municipalities


Investments in Saving the Environment

Environmental groups have been very successful “selling” the future value of environmental investments


Measuring Environmental ROI


Maine’s Environmental Funding


Challenges with Model, Open Issues

New message needed: “Save future generations for future generations.”

How to financially incentivize the few to invest in the “Common Good” that benefits the many over the long term?

How to monetize future benefits of today's investments in Public Health and education for children?

Historically, there was an acknowledgement of the value of such investments. At a time when bond issues for new schools are routinely defeated by elderly residents, there is a need to re-visit this assumption.


Conclusion – PH Agencies Must:

Frame funding in terms of economic ROI: short-, mid-, long-term.

Must develop economic models that clearly, convincingly articulate ROI.

Quantify economic loss of under-investments in early prevention.

Build bridges to new allies: Who suffers from sick consumers? Who needs healthy taxpayers?


Thank You

Remember, that the human being is the most important of all products to turn out. I am eagerly anxious to do everything I can to wake up our people to the need of protecting the soil, protecting the forests, protecting the water; but first and foremost, protect the people. If you do not have the right kind of citizens in the future, you cannot make any use of the natural resources. Protect the children - protect the boys; still more, protect the girls. Because the greatest duty of this generation is to see to it that the next generation is of the proper kind to continue the work of this nation.

(President Theodore Roosevelt, 1911).


Contact Information

This file (and all supporting data) available at http://lacal.net/PH.html

Revised versions updated monthly.

Public Health Futures economic model Model, and software, will be

released as Open Source

[email protected]


BACKUP


Disclosures

MPH candidate at U. Miami (FL). Don’t speak for current employer.

Public Health Futures concept: I developed idea; may be old hat. Will expand for capstone project.

Comments, suggestions welcome.


Learning Objectives

1. Recognize the direct and measurable economic impact of public health investments in the economic well-being of a country.

2. Articulate the negative economic impact that short-changing public health activities will have in the economic productivity of future US consumers.

3. Describe the proposed Public Health Futures funding model and articulate its strengths and shortcomings.


Message.

Generational health disparities.

Just asserting the evidence, and letting the chips fall where they may, is NOT enough. PH practitioners must be agents for social change.

Our duty as PH practitioners has not been fully discharged until we take action to address pressing problems.

Stiles, hookworm disease fighter.

To be continued..

© 2006 josé c. lacal; sandro galea public health futures.” public health futures...

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