OECD Health Working Papers No. 32 The Prevention of Lifestyle- Franco Sassi, Related Chronic Diseases: Jeremy Hurst an Economic Framework https://dx.doi.org/10.1787/243180781313 DELSA/HEA/WD/HWP(2008)2 THE PREVENTION OF LIFESTYLE-RELATED CHRONIC DISEASES: AN ECONOMIC FRAMEWORK Franco Sassi and Jeremy Hurst 32 OECD HEALTH WORKING PAPERS Unclassified DELSA/HEA/WD/HWP(2008)2 Organisation de Coopération et de Développement Économiques Organisation for Economic Co-operation and Development 25-Mar-2008 ___________________________________________________________________________________________ English - Or. English DIRECTORATE FOR EMPLOYMENT, LABOUR AND SOCIAL AFFAIRS HEALTH COMMITTEE Unclassified DELSA/HEA/WD/HWP(2008)2 Health Working Papers OECD HEALTH WORKING PAPER NO. 32 The Prevention of Lifestyle-Related Chronic Diseases: an Economic Framework Franco Sassi and Jeremy Hurst JEL Classification: H23, H51, I12, I18 English - Or. English JT03242851 Document complet disponible sur OLIS dans son format d'origine Complete document available on OLIS in its original format DELSA/HEA/WD/HWP(2008)2 DIRECTORATE FOR EMPLOYMENT, LABOUR AND SOCIAL AFFAIRS OECD HEALTH WORKING PAPERS This series is designed to make available to a wider readership health studies prepared for use within the OECD. Authorship is usually collective, but principal writers are named. The papers are generally available only in their original language – English or French – with a summary in the other. Comment on the series is welcome, and should be sent to the Directorate for Employment, Labour and Social Affairs, 2, rue André-Pascal, 75775 PARIS CEDEX 16, France. The opinions expressed and arguments employed here are the responsibility of the author(s) and do not necessarily reflect those of the OECD Applications for permission to reproduce or translate all or part of this material should be made to: Head of Publications Service OECD 2, rue André-Pascal 75775 Paris, CEDEX 16 France Copyright OECD 2008 2 DELSA/HEA/WD/HWP(2008)2 ACKNOWLEDGEMENTS The authors would like to thank Donald Kenkel, Marc Suhrcke, Evi Hatziandreu and Edward Glaeser for comments on the ideas developed in this paper, and on an early draft presented at an Expert Group meeting held in Paris in April 2007. The authors would also like to thank all the experts who participated in that meeting on behalf of OECD member countries, as well as Loek Boonekamp, Linda Fulponi and Koji Miyamoto, for their valuable inputs. Finally, they are grateful to Peter Scherer, Elizabeth Docteur, John Martin and Martine Durand for comments provided on various drafts, and Gabrielle Luthy and Christine Charlemagne for editorial assistance. The authors remain responsible for any errors and omissions. The Economics of Prevention project is partly funded through regular contributions from OECD member countries. Additional voluntary contributions to the project were made by the following member countries: Australia, Denmark, Mexico, Netherlands, Sweden and Switzerland. The project is also partly supported by a grant from the Directorate General for Public Health and Consumer Affairs of the European Commission. The contents of this paper do not necessarily reflect the views of the Commission. 3 DELSA/HEA/WD/HWP(2008)2 ABSTRACT This paper provides an economic perspective on the prevention of chronic diseases, focusing in particular on diseases linked to lifestyle choices. The proposed economic framework is centred on the hypothesis that the prevention of chronic diseases may provide the means for increasing social welfare, enhancing health equity, or both, relative to a situation in which chronic diseases are simply treated once they emerge. Testing this hypothesis requires the completion of several conceptual and methodological steps. The pathways through which chronic diseases are generated must be identified as well as the levers that could modify those pathways. Justification for action must be sought by examining whether the determinants of chronic diseases are simply the outcome of efficient market dynamics, or the effect of market and rationality failures preventing individuals from achieving the best possible outcomes. Where failures exist, possible preventive interventions must be conceived, whose expected impact on individual choices should be commensurate to the extent of those failures and to the severity of the outcomes arising from them. A positive impact of such interventions on social welfare and health equity should be assessed empirically through a comprehensive evaluation before interventions are implemented. JEL Classification: H23, H51, I12, I18. Keywords: health determinants; non-communicable diseases; prevention; market failure; rationality; choice; cost-benefit analysis; cost-effectiveness analysis; health equity. 4 DELSA/HEA/WD/HWP(2008)2 RÉSUMÉ Le présent rapport appréhende dans une optique économique la question de la prévention des maladies chroniques, en mettant tout particulièrement l’accent sur celles qui sont associées au mode de vie. Le cadre économique proposé repose essentiellement sur l’hypothèse selon laquelle la prévention des maladies chroniques peut permettre d’améliorer le bien-être social ou d’accroître l’équité face à la santé, ou les deux, par rapport à une situation dans laquelle ces maladies sont simplement traitées lorsqu’elles se déclarent. Pour vérifier cette hypothèse, il faut accomplir plusieurs tâches d’ordre conceptuel et méthodologique. Il est nécessaire de cerner le processus qui aboutit à l’apparition des maladies chroniques, ainsi que les moyens susceptibles d’infléchir ce processus. Pour définir l’action à mener dans ce sens, il faut examiner si les déterminants de ces maladies sont simplement issus de la dynamique d’un marché efficient ou s’ils découlent d’une défaillance du marché et d’un défaut de rationalité qui empêchent les individus d’obtenir les meilleurs résultats possibles. Lorsqu’il y a défaillance, il est nécessaire de définir les mesures préventives qui pourraient être prises, mesures dont l’impact attendu sur les choix individuels doit être proportionnel à l’ampleur de cette défaillance et à la gravité des effets qu’elle produit. Il conviendrait d’examiner si ces mesures auront une incidence positive sur le bien-être social et l’équité face à la santé en effectuant une évaluation approfondie à l’aide de données concrètes avant leur application. Classification JEL: H23, H51, I12, I18. Mots clés: déterminants de la santé ; maladies non transmissibles ; prévention ; défaillance du marché ; rationalité ; choix ; analyse coûts-avantages ; analyse coût-efficacité ; équité face à la santé. 5 DELSA/HEA/WD/HWP(2008)2 TABLE OF CONTENTS ACKNOWLEDGEMENTS ............................................................................................................................ 3 ABSTRACT ................................................................................................................................................... 4 RÉSUMÉ ........................................................................................................................................................ 5 EXECUTIVE SUMMARY ............................................................................................................................ 7 INTRODUCTION .......................................................................................................................................... 9 Section 1 .................................................................................................................................................... 10 Chronic diseases: an economic problem? ................................................................................................. 10 1.1. The burden of chronic diseases on health and longevity ................................................................ 10 1.2. The implications for social welfare and the role of prevention ...................................................... 11 1.3. Will preventive interventions improve social welfare? Testing the hypothesis ............................. 13 1.4. The determinants of health and disease .......................................................................................... 14 1.5. Main messages and conclusions ..................................................................................................... 20 Section 2 .................................................................................................................................................... 22 Are interventions to prevent chronic diseases justified? ........................................................................... 22 2.1. Is there an economic case for intervention? .................................................................................... 22 2.2. Market failures in lifestyle choices: a neoclassical economics perspective.................................... 23 2.3. Failures of rationality in lifestyle choices ....................................................................................... 26 2.4. Market failures and the determinants of health .............................................................................. 30 2.5. Unintended health consequences of existing government policies ................................................. 31 2.6. Main messages and conclusions ..................................................................................................... 32 Section 3 ...................................................................................................................................................