Understanding the Costs and Benefits of Publicly Funded Health Programs: Insights from an Economist

Recent legislative changes in the United States have led to significant reductions in funding for various government programs, especially those aimed at promoting health and social well-being. In this context, health economist Dennis Scanlon, a distinguished professor at Pennsylvania State University, emphasizes the importance of systematically tracking the financial impacts of health-related investments. He advocates for all levels of government to monitor the costs and potential savings associated with programs that influence social determinants of health, enabling taxpayers and policymakers to better understand their true benefits.

The social determinants of health encompass factors beyond medical care, such as socioeconomic status, physical environment, and individual health behaviors. While the U.S. spends approximately $14,000 per person annually on healthcare—which accounts for over 17% of the nation's GDP—only about 20% of health outcomes are directly attributable to healthcare services. The remaining influence stems from social and environmental factors, including education, income levels, neighborhood safety, pollution, diet, sleep, and lifestyle habits.

Research indicates that these factors have profound impacts on health. For example, inadequate sleep and poor diet are linked to mental health issues, cardiovascular diseases, and diabetes. Socioeconomic challenges—such as poverty or unstable housing—can lead to chronic stress and limited access to healthy food or safe outdoor spaces, further deteriorating health outcomes. Therefore, investing solely in healthcare infrastructure ignores a significant portion of health influencers.

From a health economics perspective, it’s crucial to consider the tradeoffs involved in spending decisions—what economists call opportunity costs. Currently, programs like SNAP (Supplemental Nutrition Assistance Program), HUD housing initiatives, and local food banks operate with funding streams that are not comprehensively evaluated for their long-term impact on health. Without a unified approach, the full return on investment remains unclear, leading to inefficiencies and missed opportunities for better health outcomes.

Adopting an investment-focused approach requires connecting data across various agencies and programs to understand their interrelated effects. For instance, adequate nutrition, stable housing, and access to healthcare do not function in isolation; their effects on health are intertwined. When evaluating spending, policymakers need systemic data that can illuminate how investments in one area—like nutrition assistance—may influence healthcare costs decades later.

The debate over whether the U.S. should focus on individual responsibility or societal support in health is ongoing. While some advocate for personal choice, others endorse broad social investments—such as lead removal from paint and gasoline—that benefitted entire populations. A balanced approach recognizes the value of both paradigms, providing individual support within a framework of societal investments.

Enhancing our understanding of social determinants requires breaking down silos within government agencies. Better data collection, analysis, and integration across programs like HUD, SNAP, and Medicaid are essential for evaluating their combined effects on health and fiscal sustainability. Making evidence-based decisions will help eliminate waste and ensure that public spending truly promotes health and well-being.

In conclusion, viewing health programs through an investment lens not only helps optimize resource allocation but also aligns spending with the overarching goal of improving population health. The adoption of comprehensive data practices and cross-sector collaboration are key steps toward more effective and efficient health policy planning.