COMMUNITY HEALTH STUDIES VOLUME X, NUMBER 4, 1986

FINANCIAL INCENTIVES FOR THE PROMOTION OF HEALTH

Robert Wallace

School of Social Sciences, Flinders University of South Australia, Bedford Park, 5042.

1 am not sure what I expected when I agreed to write a review of the Better Health Commis- sion’s findings on financial aspects of measures for health promotion. But I am surprised and disappointed by what I found. The Chapter “Financial Incentives for the Promotion of Health” is brief - a mere 9 pages of text. It does not comprise the considered views of the members of the Commission but is “based on” the conclusions of a one day workshop attended by invited participants. The chapter reads like the effort of a conscientious member of the secretariat, who has tried to knock the papers and discussions into shape, whilst doing justice to the diversity of views of participants.1 suspect that the editor(s)/author(s) (understandably) had difficulty in comprehending the jargon and mastering the diverse views of the participants, but was anxious to acknowledge the contribu- tions of all of them in the chapter without making any major howlers or mortally offending any of the participants.

The perceptive reader may be thinking that your reviewer did not give this chapter of the report a very high grade, but may be wondering whether he is of a harsh or uncharitable dis- position. So before we go further, gentle reader, what score d o you give the following sample paragraphs, each quoted in full?

“Although genetic makeup is currently unmodif iab le , t h e e n v i r o n m e n t , b o t h physical and social, can be shaped by financial and legislative forces. The appli- cation of taxes and subsidies a t the point of production can have broad intersectoral consequences for little impact on health status. Hence this strategy of intervention should not be embarked upon without careful analysis of the consequences.” (p. 127).

“Aberrant diet has been linked with a number of diseases. Substantial changes in the national diet have occurred without the intervention of financial incentives, some

and

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of which are judged by nutritionists t o be health-promoting. These changes are not equally spread across income/social groups and high prices may form barriers to change within low income groups. Taxation/ subsidy policies which result in minor price changes may be insufficient to promote healthier nutritional patterns in these groups.” (p. 128-9)

The introduction to the chapter states that health is the outcome of four major inputs: genetic makeup; lifestyle; environment; and health services. Genetic makeup and envi- ronment are then dismissed in the paragraph from p. 127 quoted above. The chapter proceeds to a taxonomic discussion of lifestyle and health services as they may be affected by changes in four financial instruments: taxes and subsidies; methods of reimbursement for health services; the schedule of medical benefits; and health insurance arrangements.

A s a prelude t o the discussion the author(s) correctly rebuke the N.H. & M.R.C. for asserting that health promotion will necessarily reduce total expenditure on health services. The workshop proceeded on the assumptiorl that better health is “a socially desirable goal and as such is worth paying for”. Of course we would all accept better health if we did not have t o pay for it - but we do. Many informed individuals consciously accept the price of greater prob- ability of worse health in order t o enjoy their chosen lifestyle. It is unclear whether the workshop concluded that such individuals should be treated as rational and left to enjoy their preferred lifestyle in peace. Where haz- ardous lifestyles are adopted in ignorance of the consequences, there is a case in principle for some expenditure to provide correct infor- mation, but just how much is a decision to be made in the light of the additional benefits from the extra expenditures. The chapter does indicate that the number of clear statements we can make about the links between lifestyle and health is very limited, and that even in those

COMMUNITY HEALTH STUDIES

rare cases where we can make clear statements (e.g. “Smoking kills” p. 127) the links between government actions and people’s responses is unclear. These problems for any “Better Health Campaign” are acknowledged. However there is n o comparable honest agnosticism on the issue of the linkages between use of health services and health status.

The taxonomic discussion of the effect of the four financial instruments whereby govern- ments might influence lifestyle is subdivided into the possible impact upon four activities - smoking, alcohol, nutrition and exercise. For each activity the discussion is summary. No new evidence is produced and in some cases the authority for the statements is not clear. The reader can form his o r her judgement on the value of the conclusions on smoking and alcohol. (The conclusion on nutrition from pp. 128-9 was quoted earlier). O n smoking:

A price increase in cigarettes as part of an anti-smoking campaign appears t o be more effective in reducing smoking than a price increase alone or a campaign alone. Therefore the use of financial incentives to emphasise the link between health and tobacco consumption may be most appro- priate if tax increases are used in concert with other anti-smoking strategies.

The evidence about the relation of alcohol consumption t o price is less clear than in the case of tobacco . . . There is a much wider range of alcoholic beverages than tobacco products which allows drinkers t o substitute if a price rise occurs in some alcoholic beverage but not in all such bev- erages. But the market appears divided into beer, wine and spirit sales . . .

Alcohol is already subject t o substantial taxes and there is the danger that extremely high tax rates would encourage a black market in the production and distribution of alcohol. (p . 128)

There are three pages devoted to the second determinant of health outcomes, the use of health services. Half of this space is devoted to H.M.O’s. The discussion is summary but, properly, suggests that the evidence as to the impact of H.M.O’s on health status (as against costs) is ambivalent. The general impression from the discussion is that, given Medicare, H.M.O’s are unlikely to have a major impact in Australia. It is suggested that “An increased use of preventive services in the total population can be most readily achieved by making them eligible for health insurance rebates in the

O n alcohol:

current fee-for-service system rather than attempting t o enrol people in H.M.O’s.” (p. 131). However just which preventive services are worthwhile funding is not specified.

The discussion on preventive services is ten- tative and circumspect. There are sentences which suggest that some participant(s) had argued that our Medicare system is flawed, and that it should be redesigned as a catastrophe cover instead of providing reimbursements for all expenditures including “treatment of minor illness which is more predictable with a lower cost to the individual”. But this is followed immediately by the statement that “As health insurance is applied to minor illness, maybe it could be adapted further to cover preventive care.” (p. 132) But what are the cost-effective preventive measures? We are told that research is needed both t o identify worthwhile preventive services and to establish what incentive and delivery systems may be effective in inducing a supply of these services. The report is properly sceptical of simply altering the medical benefits s c h e d u l e t o r e i m b u r s e d o c t o r s f o r “counselling”.

The chapter concludes with a list of recom- mendations and a sample is given here so that the reader may assess their value. “1. Financial incentives are neither necessary

nor sufficient to the promotion of better health.

2. The most effective role of financial incen- tives is as an adjunct to other health pro- motion strategies.

3. The provision of preventive medical services by medical practitioners is likely t o be substantially increased if such services are reimbursed.”(p. 134).

and “The workshop concluded that:

1. Remuneration for preventive services by allowing such services to attract Medicare benefits should be adopted in principle.

2. Taxes on alcohol and tobacco should be continued.”

Sadly, the chapter contains n o new data, n o new findings, no interesting insights and no imaginative kites are flown. This was probably inevitable given the procedure which produced it. There is little that my mother could not have told me without looking up from her knitting. That is not to be taken as an attack on moth- erhood. My mother is sensible - and I wished I paid more heed t o her advice - but she will resent having to pay other people t o tell her things she would cheerfully have told them for nothing.

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