Computer Model Reveals Escape Plan From Poverty's Vicious Circle

KentuckyFC writes "Infectious disease condemns poor countries to an endless cycle of ill health and poverty. Now a powerful new model of the link between disease and economic growth has revealed why some escape plans work while others just make matters worse. The problem is that when workers suffer from poor health, economic output goes down. And if economic output goes down, there is less to spend on healthcare. And if spending on healthcare drops, workers become less healthy. And so on. So an obvious solution is for a country to spend more on healthcare. But the new model says governments must take care since the cost to a poor country can send the economy spiraling into long term decline. By contrast, an injection of capital from outside the country allows spending on healthcare to increase without any drop in economic output. 'We find that a large influx of capital is successful in escaping the poverty trap, but increasing health spending alone is not,' say the authors. And the amount required is relatively little. The model suggests that long-term investment needs only to be more than 15 per cent of the cost of healthcare. But anything less than this cannot prevent the vicious circle of decline."

Comments

Healthcare

[ledow]

Keep your people healthy and they'll live longer, work longer and pay more tax.

What kind of idiot hasn't realised this yet? (obviously, America)

Re:Healthcare

[ColdWetDog]

Oh we're quite 'healthy' - not at the highest level but more than healthy enough to be able to weather serious disease as best as possible. TFA is talking about real malnutrition / lack of clean water / lack of vaccines level healthy.

Now, how we go about spending money on 'health' is another topic that we've attacked numerous times and is much more complex. But, barring small pockets of severe poverty, we're pretty healthy.

Going back to TFA

How much cash does a country need to escape a poverty trap? Goerg and co say their model suggests that the money should be equivalent to halving the cost of disease treatment and prevention.

But this level of investment is not needed in the long term. Goerg and co say the same outcome can be guaranteed if the long term investment is equivalent to only 15 per cent of this cost.

I wonder if they're talking about nutrition / basic sanitation in theses costs. While not terribly high dollar, it's often hard to get levels of basic nutrition and clean water to really poverty stricken places and create the infrastructure to keep the resources up over time. That might be more expensive. Still and all it gives groups like the IMF a spread sheet number that they can plug in to force countries to do something other than create a mega dam for the Chinese.

Re:Healthcare

[Anonymous Coward]

Throwing more money at it like the current admin wants to do, according to this study anyway seems to be a waste of money

It's not the money you spend, it's how you spend it.

The US healthcare system is mired in being a for-profit operation controlled by large multi-nationals and insurance companies.

They have no interest whatsoever in providing good health care, they care about maximizing corporate profits.

Basically, America's system can't ever work, and never really will except for the rich. Everybody else is expendable and 'surplus population'.

Re:Healthcare

[ledow]

Spending money on cosmetic surgery, and the amount of money you literally PISS AWAY into insurers and intermediaries is the cause of your problem.

You're not spending money on making people better. You're spending money on keeping huge pharmaceutical companies in their monopoly on ineffective treatments.

How much do you think it *really* costs to diagnose and treat a broken leg? Now find out how much your insurers pay (who aren't "insuring", because they only charge you for your own personal expense, at great "middle-man" profit).

Stop pissing about, through out this "private" medical practice with insurers and so many middle-men, and put in place a national health service who offer any treatment that is effective and extends life / quality of life, which everyone contributes to from taxation, and everything else you pay for out of your own pocket.

You'll pay less tax. You'll never pay health insurance again unless you want to for something cosmetic. And you'll be healthier.

Come join the rest of the fucking first- and third-world.

Re:Healthcare

[Grishnakh]

Spending money on cosmetic surgery

Huh? That's not part of the US's problem at all. Cosmetic surgery isn't covered by insurance, it's at-will and paid directly by those who want it. It's totally irrelevant to the problems in the healthcare industry in America. In fact, if anything, it's probably more cost-effective and efficient because it cuts the insurance companies out of the equation.

and everything else you pay for out of your own pocket.

Yes, that's already how we do it for cosmetic surgery. It's everything else that's a disaster.

Re:Healthcare

[Anonymous Coward]

In a for profit health care system like the US has profit is maximized by having sick people paying for care. Profit is mimimized by having a healthy population that does not need the care.
Guess where the economic factors are going to push the health of the population?

Re:Healthcare

[torkus]

Very true. Talk to people in the healthcare field and they'll be able to list tons of examples of wasted money. Any patient on medicaid/medicare gets more treatments, pills, devices, etc. because the hospital, dr, or specialist can bill for it.

Example: 80-something comatose man in the final stages of lung cancer being given a colonoscopy ... just in case he might have ass cancer too. Seriously.

Healthcare is for-profit and must-CYA. Those are the two primary factors 90+% of the time. That's not to say there aren't doctors who care. Many do. But they're stuck working in a system that leaves them little choice but to go along if they want to continue practicing medicine (and paying off their insane student loans).

 

Re:Healthcare

[mcrbids]

Pay less? I doubt it, especially over the long term. It doesn't matter if we overpay the insurance companies or the state..both are experts at wasting other people's money.

The USA Spends more per capita (by far) than any other nation on earth. Yet our actual life expectancy is just 33rd.

Doubt all you want. I prefer to get some facts and base my opinions on them rather than "gut feelings".

Re:Healthcare

[Anonymous Coward]

The US healthcare system is mired in being a for-profit operation controlled by large multi-nationals and insurance companies.

I want to add "not-profit hospitals turning huge profits" and "chargemasters" to this list of reasons why healthcare is so screwed up. Time magazine again exposed this problem very well earlier this year. Total BS...

Re:Healthcare

[sg_oneill]

I live in Australia which has a hybrid UHC/Private system. Basically everyone pays for "medicare" (Which I guess would be called "medicaid" in the US) as a small addition to tax. Totally transparent, its just part of income tax and the contribution is income dependent. On top of that we have a private health system where you can get private health cover AS WELL which gives access to private hospitals (although in my experience the private hospitals are inferior to the excellent government ones, especially in emergency care). You have a choice here, but the govt system is largely excellent, however there might be waiting times to see specialists , sometimes in the months range for non essential stuff, and thats where private health cover is advisable. Fortunately private health insurance is well regulated and the doctor, not the health insurance companies , have final say in approving treatments.

Anyway, as you can imagine, when we have progressive governments, funding for the public system increases, and when you get conservative governments, that funding decreases.

But it backfires horribly to defund it, and ironically the actual costs increase.

I can giive an example. Under state labor, my local hospital had the 4 hour rule. In emergency, you would be seen within 15 minutes of ariving (or less if its urgent) , and within 4 hours either be seen by a doctor and sent home (maybe with medication or bandages or whatever) or admitted to hospital. In the case of borderline cases like Influensa, a patient would be sent to an Accute observation ward for overnight assessment. Its a great system that works brilliantly.

However in the last few years our state has had a conservative government that has systematically tried to defund the hospital. The end result is that waiting times have blown out to be multiple hours for non trauma cases in the emergency ward, and doctors are increasingly overworked and stressed out.

Last time I was admitted to emergency ward I was in with internal bleeding. Because I didn't *look* unhealthy it took 3 hours to see and diagnose me. This happened when I finally vomited blood and collapsed in the waiting room unconscious. I required surgery and a few weeks recovery. The doctor told me that if I had been diagnosed within half an hour of being admitted, it would have been a simple procedure and I would have been home within a day. As a result of underfunding, I cost the government *vastly more* in treatment costs then had I not. This is not a case of malpractice, the reality was the hospital was overworked and it took 3 hours to see me because thats how long it took to free up a doctor from all the other emergency cases.

It might seem paradoxical that properly funding universal healthcare is cheaper than not properly funding it, but it actually makes sense when you remember that prompt adequate treatment is almost always cheaper than trying to patch up some poor sod who's condition has been made worse by not treating it.

Re:Healthcare

[TheRealMindChild]

Any patient on medicaid/medicare gets more treatments, pills, devices, etc. because the hospital, dr, or specialist can bill for it.

You grossly overestimate how much medicare (and medicaid) provide, and ignore the cost of what you receive. Being on medicare, a chunk of your Social Security income is taken for part A. For me, that amount is almost $200 a month. I only get an allowance of ~$630 dollars a month to spend on the hospital/PCP/specialist. A trip to the hospital, and I owe out of pocket. If I visit my PCP (primary care physician) AND have a psychiatrist appointment, or a physical therapy appointment in the same month, I owe out of pocket. Essentially, I get a "free" ~$430 to throw at my medical care and the rest is up to me to cover.

Medicare Part B (drugs) is optional. It can cost anywhere from $120 to $300+ dollars a month, depending on what and how much you want. It is only beneficial to have if you are on a regimen of costly drugs that would normally go above what you would pay without it. Even if you opt to purchase part B, not everything is covered, and you have a varying copay.

Re:Healthcare

[Anonymous Coward]

Actually, the U.S. already spends more public money per capita on health care (via Medicare/Medicaid) than Canada does. So the problem cannot be attributed entirely to private health insurance.

Sure it can.

Because likely around half (or more) of every dollar being spent is simply lining the pockets of the insurance companies and the middle-men. There's simply no room to get savings from economies of scale, and the vendors can just gouge for every piece as they go. Because if those vendors don't show a steady (and unrealistic) profit, they will be punished by the speculative investors running the stock markets.

As it exists, your system is hugely wasteful because every asshole in the middle is taking his cut and contributing absolutely NOTHING to patient care.

Everything in the middle is just mark-up and waste -- which is why your system as it stands can never actually work for everyone.

The US health-care system is the economic equivalent of trying to build a car by purchasing all of the parts directly from car dealers, and then paying a bunch of mechanics to do the assembly. All you're doing is throwing money into the gaping maws of the middle-men.

The cost of your procedures and case is so high because you need to offset the sheer quantity of money you've been bilked out of in the process. And then all of those other absurd line-items in the bill amount to "because we fucking can".

Essentially, your system is designed to be ineffective and wasteful, because that's how the private companies want it. When insurance companies decide on the 'appropriate' level of medical care, it's a sucker's game from there.

The fact that you spend more money per capita mostly means you are wasting more on the structural problems in your health care system.

sending aid doesn't help, stop raiding countries

[dutchwhizzman]

Most "poor" countries to which we send aid, are being plundered just as hard, or even harder. Every time we send food aid to some poor African or central American country, the local farmers get no money for the little food they produce and the local market is ruined, stopping local production of food instead of encouraging it.

Every time we demand the lowest price for all the stuff we import from those countries, we make them find ways to produce even cheaper, lowering the standard of life there. This results in pricing that is so low that our own economy can't compete and we put import taxes on these goods. This results in the foreign producers being forced to lower their prices even more, again ruining their economy and health.

Instead of "sending aid" every time a famine or natural disaster strikes one of these countries, we should stop plundering them. Micro credits for local businesses there have helped a lot, investing in farming for local food supply helps. These people are perfectly capable of helping themselves, given half a chance.