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Incorporating environmental impacts into the economic evaluation of health care systems: Perspectives from ecological economics

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Martin Hensher at University of Tasmania
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Abstract

Health care is responsible for a range of negative environmental impacts, including greenhouse gas emissions, air pollution, plastics waste, and pharmaceutical pollution of ecosystems through excretion and inappropriate disposal. Evidence on the scale of these impacts has been growing in high-income countries. To date, there has been only limited discussion of how environmental impacts might be incorporated into economic evaluations of health care programs, including health technology assessment. This paper considers why and how this aim might be achieved, using perspectives from both mainstream and ecological economics. There are strong arguments for using economic evaluation to internalise the negative environmental externalities currently being generated by health care, as well as precautionary arguments for health systems to better understand their exposure to their environmental impacts. The paper tests the feasibility of incorporating the costs of greenhouse gas emissions within costing for economic evaluation, and concludes that the use of shadow prices to achieve this aim is feasible. It suggests that this cost-based approach is preferable to more convoluted attempts to incorporate environmental impacts in the outcome component of health economic evaluations. The interaction between overuse, antimicrobial resistance and environmental harms of health care is identified as an area that would benefit from investigation using innovative economic methods. Until 28 th January 2020, you can read the full text of this article online for free via the Elsevier Share Link at: https://authors.elsevier.com/a/1aCIh3HVLKeNnE
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Hensher M. (2020)
Incorporating environmental impacts into the economic evaluation of health care systems:
Perspectives from ecological economics. Resources, Conservation and Recycling 154:
104623.
https://doi.org/10.1016/j.resconrec.2019.104623
Abstract
Health care is responsible for a range of negative environmental impacts, including
greenhouse gas emissions, air pollution, plastics waste, and pharmaceutical pollution of
ecosystems through excretion and inappropriate disposal. Evidence on the scale of these
impacts has been growing in high-income countries. To date, there has been only limited
discussion of how environmental impacts might be incorporated into economic evaluations
of health care programs, including health technology assessment. This paper considers why
and how this aim might be achieved, using perspectives from both mainstream and ecological
economics. There are strong arguments for using economic evaluation to internalise the
negative environmental externalities currently being generated by health care, as well as
precautionary arguments for health systems to better understand their exposure to their
environmental impacts. The paper tests the feasibility of incorporating the costs of
greenhouse gas emissions within costing for economic evaluation, and concludes that the use
of shadow prices to achieve this aim is feasible. It suggests that this cost-based approach is
preferable to more convoluted attempts to incorporate environmental impacts in the
outcome component of health economic evaluations. The interaction between overuse,
antimicrobial resistance and environmental harms of health care is identified as an area that
would benefit from investigation using innovative economic methods.
Until 28th January 2020, you can read the full text of this article online for
free via the Elsevier Share Link at:
https://authors.elsevier.com/a/1aCIh3HVLKeNnE
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... By contrast, the much larger group of products whose environmental consequences are primarily generic in nature would be more cost-effectively dealt with via appropriate generic analysis and policy instruments targeting these general mechanisms of impact. Such an approach requires two critical elements to be in place: (1) an effective environmental screening assessment to identify early on any intrinsic impact characteristics of products (10), and (2) genuine integration of HTA environmental assessment processes within a wider armamentarium of effective policy measures to control generic environmental impacts. Figure 2 also illustrates the increasing importance of resilience for HTA, especially as climate change impacts themselves increasingly become felt in supply chains (see Box 1). ...
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Article
Full-text available
  • Apr 2019
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We estimated future scenarios of health spending using an ensemble of linear mixed-effects models with time series specifications to project domestic health spending from 2017 through 2050 and DAH from 2019 through 2050. Data were extracted from a broad set of sources tracking health spending and revenue, and were standardised and converted to inflation-adjusted 2018 US dollars. Incomplete or low-quality data were modelled and uncertainty was estimated, leading to a complete data series of total, government, prepaid private, and out-of-pocket health spending, and DAH. Estimates are reported in 2018 US dollars, 2018 purchasing-power parity-adjusted dollars, and as a percentage of gross domestic product. We used demographic decomposition methods to assess a set of factors associated with changes in government health spending between 1995 and 2016 and to examine evidence to support the theory of the health financing transition. 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Health spending globally reached 8·0 trillion (7·8-8·1) in 2016 (comprising 8·6% [8·4-8·7] of the global economy and 10⋅3trillion[10⋅1−10⋅6]inpurchasing−powerparity−adjusteddollars),withapercapitaspendingofUS10·3 trillion [10·1-10·6] in purchasing-power parity-adjusted dollars), with a per capita spending of US5252 (5184-5319) in high-income countries, 491(461−524)inupper−middle−incomecountries,491 (461-524) in upper-middle-income countries, 81 (74-89) in lower-middle-income countries, and 40(38−43)inlow−incomecountries.In2016,0⋅440 (38-43) in low-income countries. In 2016, 0·4% (0·3-0·4) of health spending globally was in low-income countries, despite these countries comprising 10·0% of the global population. In 2018, the largest proportion of DAH targeted HIV/AIDS (9·5 billion, 24·3% of total DAH), although spending on other infectious diseases (excluding tuberculosis and malaria) grew fastest from 2010 to 2018 (6·27% per year). The leading sources of DAH were the USA and private philanthropy (excluding corporate donations and the Bill & Melinda Gates Foundation). For the first time, we included estimates of China's contribution to DAH (644⋅7millionin2018).Globally,healthspendingisprojectedtoincreaseto644·7 million in 2018). Globally, health spending is projected to increase to 15·0 trillion (14·0-16·0) by 2050 (reaching 9·4% [7·6-11·3] of the global economy and $21·3 trillion [19·8-23·1] in purchasing-power parity-adjusted dollars), but at a lower growth rate of 1·84% (1·68-2·02) annually, and with continuing disparities in spending between countries. In 2050, we estimate that 0·6% (0·6-0·7) of health spending will occur in currently low-income countries, despite these countries comprising an estimated 15·7% of the global population by 2050. The ratio between per capita health spending in high-income and low-income countries was 130·2 (122·9-136·9) in 2016 and is projected to remain at similar levels in 2050 (125·9 [113·7-138·1]). The decomposition analysis identified governments' increased prioritisation of the health sector and economic development as the strongest factors associated with increases in government health spending globally. Future government health spending scenarios suggest that, with greater prioritisation of the health sector and increased government spending, health spending per capita could more than double, with greater impacts in countries that currently have the lowest levels of government health spending. Interpretation: Financing for global health has increased steadily over the past two decades and is projected to continue increasing in the future, although at a slower pace of growth and with persistent disparities in per-capita health spending between countries. Out-of-pocket spending is projected to remain substantial outside of high-income countries. Many low-income countries are expected to remain dependent on development assistance, although with greater government spending, larger investments in health are feasible. In the absence of sustained new investments in health, increasing efficiency in health spending is essential to meet global health targets. Funding: Bill & Melinda Gates Foundation.
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Article
  • Sep 2020
While vastly differing in scale, each nation's health sector directly and indirectly releases greenhouse gases (GHG) through energy consumption, transport, and product manufacture, use, and disposal. Until recently, however, the health sector has not been measured as a coherent segment of the world's climate footprint. A 2019 report by Health Care Without Harm, in collaboration with Arup, provides the most comprehensive global analysis of health care's contribution to climate change to date, based on full global coverage of spending data together with detailed information from 43 countries. It identifies key sources of health care emissions while allowing for comparison between nations and among many regions of the world. Among the report's key findings are that health care's climate footprint is equivalent to 4.4% of global net emissions; that the top three health care emitters-the United States, China, and the European Union-comprise more than half of the global footprint; and that 71% of emissions are derived from the health care supply chain. The findings inform a series of international, national, and subnational policy recommendations for health care climate action, and it identifies opportunities for further research and methodological development to support the health sector in its efforts to understand and address its climate footprint. Additional findings from 2020 will also be presented. Ultimately, these estimates of health care's climate footprint provide the baseline information needed to devise pathways and track progress toward health care de-carbonization across the sector.
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Quantifying hospital services by carbon footprint: A systematic literature review of patient care alternatives
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  • Mar 2020
  • RESOUR CONSERV RECY
Importance Reducing the carbon footprint of the healthcare sector can be achieved along with quality patient outcomes at lower environmental impact. Objective For the first time to categorize peer-reviewed articles that report quantitative improvement in greenhouse gas emissions related to medical devices and services, overview of trends, and identify some gaps for future research. Data sources Database searches resulted in 822 peer-reviewed articles (January 1, 2000 and December 31, 2016) on healthcare and environmental sustainability. Study selection A systematic review methodology identifies, critically evaluates, and integrates the findings. Articles reviewed 1) provided quantitative global warming potential (GWP) information, 2) were published in peer-reviewed journals, and 3) were related to one of the twelve hospital service categories. Results Patient care teams are substantially limited by a lack of data related to the environmental impact of their services. Of the one of three potential environmental scopes—travel-related energy, direct energy, and the procured goods and equipment embodied energy—only six articles covered all three scopes. Conclusions and relevance This research provides healthcare nurses, physicians, and administrators with the location of procedures, patient-based decisions, and other avenues to hospital sustainability improvements in twelve hospital service categories.
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Carbon footprint of Japanese health care services from 2011 to 2015
Article
  • Oct 2019
  • RESOUR CONSERV RECY
The carbon footprint of Japanese health care services, i.e. the domestic greenhouse gas (GHG) emissions caused by health care expenditures, including the associated fixed capital, were calculated using input-output analysis. In 2011 the total carbon footprint of these services was 62.5 × 10^6 metric tons of CO 2 equivalent (MtCO2e), which is 4.6% of total domestic GHG emissions. Medical services involving hospitalization accounted for the greatest share, at 15.7 MtCO2e. The second highest category, Medical services without hospitalization, accounted for only slightly less: 14.2 MtCO2e. However, the difference in emissions per patient between these two categories was considerable. On average, emissions per patient for Medical services (hospitalization) were 12 tCO2 e/patient, whereas for Medical services (non-hospitalization) they were only 2.1 tCO2 e/patient, or 5.4 times less. In terms of type of medical condition, the greatest annual emissions were associated with cardiovascular disease (6.2 MtCO2e) and neoplasm (4.0 MtCO2e). In terms of age, emissions attributed to patients aged 65 and over accounted for more than half of total health care emissions. By 2015, the total carbon footprint had increased to 72.0 MtCO2e, a rise of over 15% in four years. Although medical care and pharmaceuticals are the main factors responsible for this increase, emissions associated with nursing services have also risen, suggesting that demographic aging may be having a significant impact on GHG emissions. As a countermeasure, the potential annual GHG mitigation achievable through avoidance of unused prescribed medicines resulting in waste was estimated at 1.24 MtCO2e, comparable with the total carbon footprint of home medicines. To safeguard planetary health, in addition to implementing technological improvements to the supply chains of health care services, it will be necessary to provide citizens further options for achieving health promotion and GHG mitigation simultaneously.
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