Trade-offs and policy options – Using economic knowledge to inform public health policy


In May 2020, Mr. B., a 45-year-old Black American with a history of insulin-dependent type 2 diabetes, was hospitalized with SARS-CoV-2 pneumonia. He was a home care worker and traveled to his clients’ homes using public transportation. Mr. B. lived with his wife and two children. Her children were schooled remotely because of the Covid-19 pandemic. Before his hospitalization, MB had difficulty breathing and had a slight fever, but he continued to work as he was the only source of support for his family and needed money to pay for his insulin. Eventually, his symptoms worsened, requiring hospitalization.

Mr. B’s case reflects the difficulties that many people have faced during the global pandemic, which have brought into sharp focus the importance of public health interventions. Despite the development of effective SARS-CoV-2 vaccines, many experts have argued that preventative behaviors such as masking, frequent testing, and physical distancing continue to be key to reducing the spread of the disease. But adoption of these behaviors is far from universal, and the disease burden has fallen disproportionately on marginalized populations such as racial and ethnic minorities, low-income adults, and people with disabilities.

We believe that economics can critically inform public health efforts to address these challenges. Alfred Marshall, writing in 1890, defined economics as “a study of humanity in the ordinary affairs of life…[that] examines the part of individual and social action which is most closely linked to the obtaining and use of the material conditions of well-being. Simply put, economics is the study of the trade-offs that individuals, institutions, or countries face when making decisions under resource and time constraints. Although public health practitioners and researchers naturally focus primarily on improving health, economists view health as one, albeit important, part of what people can enjoy.1 This idea is a key aspect of the usefulness of economics to inform public health policy.

Key elements of economic models in public health.

Economic modeling can be complex, but the key concepts that can guide decision-making are intuitive and accessible to non-economists. MB’s case provides a useful starting point for understanding how we can use economic insights to increase population-level adoption of preventive behaviors and reduce health inequities (see chart).

The first step in building an economic model is to identify the relevant actors (i.e. the parties whose health and adoption of health behaviors one wishes to maximize). In this case, Mr. B. is the main actor. Next, we need to identify the benefits these actors derive from adopting a health-related behavior. Is adopting this behavior a priority? If so, how does it rank against competing priorities? People may overlook the benefits of a particular behavior, including how it improves their health. Conversely, they may not fully account for the true costs of their behavior to others or society (especially when that behavior increases the risk of making others sick) or the costs to public health services (c i.e. negative externalities). MB, for his part, believed that physical distancing was important to avoid infection for himself and his family, neighbors and customers.

Additionally, we need to understand the individual and structural costs and constraints that make adopting health-related behaviors more difficult for some people than for others. For Mr. B., the practice of physical distancing came with a significant opportunity cost: his work could not be done from home. Thus, physical distancing would mean the loss of much-needed wages. Structural constraints also played a big role in MB’s decisions. People of color are disproportionately employed in low-wage industries in which occupational exposures to SARS-CoV-2 have been high, but which offer relatively few worker protections such as health insurance and sick leave .2 For example, the home health care industry has successfully argued that its workers should be exempted from the Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020, lest its family leave provisions and paid illness won’t cause a shortage of workers. Additionally, black men like MB are often forced to weigh the competing risks of not wearing a mask and being more likely to contract SARS-CoV-2 or wearing a mask and potentially being subjected to profiling. racial. Economic analyzes must also consider cognitive or psychological costs.3 Changing recommendations and politicized messages regarding preventative behaviors (eg, the benefits of masking, what types of masks provide sufficient protection, and when masks can be removed) force individuals to analyze competing messages. Such analysis can be difficult for people who face many cognitive loads imposed by challenges such as precarious employment.

Applying economic analysis to the case of MB clarifies the benefits and costs of adopting preventive health behaviors in populations facing high morbidity and mortality from Covid-19. It thus offers useful information that public health decision-makers can apply to many different diseases.

First, information campaigns may be only marginally effective, as on their own they would do little to alleviate the fundamental trade-offs people face when embracing physical distancing or masking. Additionally, one-size-fits-all messages and implicit or explicit blame on individuals for not adopting preventive health behaviors can undermine trust, as this type of message can lead people to question whether decision makers are empathizing. towards them as they grapple with complex decision-making. during the current pandemic. This disconnect could further undermine other disease prevention efforts, such as contact tracing and vaccination campaigns.

Second, although the presence of externalities may motivate the use of policies such as physical distancing mandates (as well as incentives and penalties), economic analyzes suggest that the burden of these policies may affect groups unequally. . Mandatory business closures, for example, may have some infection control benefits, but the resulting loss of income may harm some populations (e.g. low-income workers like MB) more than others. others.

Third, an economic analysis of MB’s case highlights the importance of social and economic policies that can alleviate financial hardship. Policies such as paid sick leave, eviction moratoriums, cash transfers and enhanced unemployment benefits can help reduce the costs of practicing physical distancing, while boosting overall well-being over time. of crisis. These policies should be implemented with cognition and opportunity costs in mind, as cumbersome processes to apply for public benefits can make it difficult for people in difficult living conditions to access them.

Fourth, an economic analysis highlights the importance of intervening to reduce structural constraints. Policies to improve access to personal protective equipment for home health care workers, provide them with their own health care, and include them in federal relief programs can help reduce disease transmission among essential workers like MB who would otherwise not be able to miss work.

Fifth, viewing MB’s case through an economic lens sheds light on the variability of personal and community circumstances that shape the trade-offs involved in adopting preventive behaviors. While national studies and data are useful guides, public health approaches based on economic models that take into account the local context are essential to create effective policies for a given area or group.

The insights gained from applying economics to the case of MB can also be applied to broader macro-level trade-offs in public health investments. Nationally, government spending on health in 2018 was $93 billion, compared to health spending of $3.6 trillion (in 2018 dollars), or 2.5 cents for every dollar spent on care health. Public health spending has held steady or declined between 2008 and 2018, with the most dramatic reductions in state spending occurring in the areas of maternal, child, and family health and environmental health. The state’s average per capita spending fell from $80.40 to $75.83 during this period.4

Meanwhile, local health care systems are increasingly intervening to influence the social determinants of health, such as housing. The growing centrality of health care systems in the delivery of health care and social services may come with trade-offs. For example, while health care organizations have more financial resources than public health and social service agencies, they may be less effective or less efficient at addressing the social determinants of health than these agencies, which may have more knowledge and practical expertise in upstream health factors. .5 Understanding how these trade-offs inform the optimal allocation of scarce societal resources will be critical to improving population health, especially in marginalized populations. Trade-off discussions need to recognize that policymakers can assign widely varying weights to specific pros and cons in their decision-making (e.g. ongoing debates over school closures during the pandemic). Many economists would argue that the people most affected by a given policy or health condition should be the ones who should determine how to weigh the various pros and cons.

Public health practitioners come from a wide range of disciplines that reflects the multifaceted range of issues they must tackle. Economics adds significantly to these insights by clarifying key trade-offs and illuminating new policy options, including those that go beyond public health service delivery. A key contribution of economics to public health is elucidating the complex trade-offs that can affect health-related behaviors, which include non-monetary costs and benefits that are often overlooked by policy makers. Economic models can help public health policymakers develop more equitable policies that better reflect the lived experiences and realities of diverse populations.


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