Much has been made of the hiring of Stephen Duckett as the new CEO of Alberta Health. He has come in with much fanfare. His health care mandate is to improve access, efficiency and quality. As an economist, Duckett’s expertise is parsing down costs of individual medical procedures. Duckett did this in Australia and then implemented an activity based funding system where hospitals get paid for what they do. The more patients treated and the more procedures performed, the more money the hospital or medical clinic receives.

Activity based funding makes perfectly good sense to the business and scientific world. In this world you break things down to specific parts. You measure each part and look for ways of making them more efficient. You add up all the parts to reach the sum of the parts.

The problem is the real world doesn’t work this way. To narrowly focus on the individual part, you fail to understand how the whole process works. James Lovelock's Gaia hypothesis helped science in this respect, but the economic world still doesn’t get it. It doesn’t have to.

What you can’t calculate (pollution, cancer, global warming, social breakdown, mental illness, war and defence costs etc.) directly from a product or service is left entirely off the balance sheet. The price of a barrel of oil does not include any of these costs. Therefore the price of oil is artificially low, therefore we over consume it. Financial statements only capture a fraction of reality, at a great cost.

This is why Duckett will fail. He may save little bits here and there, but health care costs will still rise. Even after all the tinkering Duckett did in Australia they are still facing the same problems, long wait times and the ever increasing cost of health care. The problem is that activity based funding rewards illness instead of health.

Our health care problem is similar to the environmental problem. We are all for the environment, but for the most part we are unwilling to do much about it. We are unwilling to understand the cause of the problem. We are told that our way of life is sacred, even though it does not seem to have much meaning to it. Unless it is convenient, we are not willing to change our behaviour. We are blindly told that we don’t want to harm our economy. So we continue to drive and fly everywhere and rely on oil. We consume wasteful products that don’t last and end up in the landfill, often after just a single use. We continue to pump out cancer causing carcinogens into the environment. In our current economic system these actions increase GDP and are great for the economy.

The effect on our health is devastating though. Fifty percent of men and 33% of women will get cancer over their lifetime.  Non-Hodgkin's lymphoma over the last few decades has increased by 100%, brain cancer by 80-90%, breast cancer by 60-65%, and testicular cancer for men aged 28-35 by nearly 300%. Factoring in that we are living longer and that we have better ways of detection, cancer rates have still gone up 35% in men and up 27% in women over the last two decades. 

We just pump more money into health care - more doctors, more medical machines and more pharmaceuticals - treating the symptoms and hoping for a miracle cure. The primary cause of illness and cancer though is carcinogens in the workplace, the secondary cause is the environment. Yet we don’t do anything to stop this.

The more harmful products, the more pollution spewed out in making and transporting these products, the more cases of cancer that are produced by the industrial machine. It is more profitable to sell products that increase the risk of cancer because it is often cheaper to use synthetic cancer causing chemicals (cancer is externalized onto the health care system, the result of the mispricing of chemicals). For most products it is next to impossible to narrow down a specific product that can be identified as cancer causing. This means that they all stay in business and remain profitable. Was it the pesticide you used to kill those dandelions, or the chemical toilet cleaner, air freshener, and disposable floor wiper?

Unless we start working on the cause of our health care problems we are wasting our time. Instead, our government and Duckett focus on which services should be privatized. Privatization is a red herring. This is just about transferring more money into corporate pockets.

The escalating cost of our health care system is the symptom though. If we want to get serious about health care we need to focus on three things: fitness, nutrition, and the environment.

Over 23% of Canadians are obese. The primary cause is what we stuff into our mouths. We feast on junk food. Not only are these foods devoid of nutrition, they also make us fat.
 
The secondary cause of obesity is the amount of exercise we get. Transporting ourselves in cars and sitting at home in front of a TV watching commercials telling us to buy junk food and then going out and buying them is extremely unhealthy. Unhealthy people increase costs to our health care system.

Our society focuses just on these two factors, nutrition and exercise, because they are things individuals can control. You can eat broccoli and spinach. You can walk, run and ride your bike.

The problem is you can eat well and exercise and still become ill, you can still get cancer. You cannot control the carcinogens being released at work or into the environment. Cars spew out pollution that we all breathe. Vegetables are grown with chemicals that cause cancer. Our meat is laden with chemicals too. We work in workplaces making and delivering harmful products and services.

If we want to be serious about our health and our health care system costs, we need to start focusing  on the causes.

1. We need to grow organic food, the more local the better.

2. We need to make goods that are built to last and have multiple purposes throughout their life cycle, that are built cradle to cradle. Packaging needs to be significantly reduced. The goal should be zero waste. We should be using non-toxic materials in our goods.

3. I know it is as addictive as heroin, but we need to wean ourselves off oil. We need to transition to renewable energy sources.

Do not listen to Chicken Little. Our economy will not fall from the sky. It will just be transformed. The result will actually be more jobs and healthier citizens.

This will not happen overnight though. We need to be setting individual goals. More importantly we need a government to create legislation and tax policies that will help us get there, to compensate what our financial system cannot compute. We need to start taxing the bads and using that money to subsidize the goods. The media needs to be used to promote healthy foods, active living, and how to reduce our impact on the environment.   

Powerful, well financed, and influential industrial and professional lobby groups will do everything they can to stop real change from occurring. These groups profit handsomely from the status quo and our inaccurate pricing system that leads to the misallocation of resources. Lobby groups though can be defeated by something called democracy. It will not be easy or quick to defeat these lobby groups, but for the sake of our health they must be.

Creating and maintaining healthy lifestyles and a healthy environment will prevent illness and cancers from happening in the first place which will significantly decrease the stress on our health care system. Only by looking at the big picture we can create a sustainable environment and health care system.