Ambulance and economics

I have recently been watching the BBC series AmbulanceIt is a fly-on-the-wall documentary following the West Midlands Ambulance Service interspersed with candid interviews with ambulance staff, much in the same vein as other health care documentaries like 24 Hours in A&EAs much as anything it provides a (stylised) look at the conditions on the ground for staff and illustrates how health care institutions are as much social institutions as essential services. In a recent episode, the cost of a hoax call was noted as some thousands of pounds. Indeed, the media and health services often talk about the cost of hoax calls in this way:

Warning for parents as one hoax call costs public £2,465 and diverts ambulance from real emergency call.

Frequent 999 callers cost NHS millions of pounds a year.

Nuisance caller cost the taxpayer £78,000 by making 408 calls to the ambulance service in two years.

But these are accounting costs, not the full economic cost. The first headline almost captures this by suggesting the opportunity cost was attendance at a real emergency call. However, given the way that ambulance resources are deployed and triaged across calls, it is very difficult to say what the opportunity cost is: what would be the marginal benefit of having an additional ambulance crew for the duration of a hoax call? What is the shadow price of an ambulance unit?

Few studies have looked at this question. The widely discussed study by Claxton et al. in the UK, looked at shadow prices of health care across different types of care, but noted that:

Expenditure on, for example, community care, A&E, ambulance services, and outpatients can be difficult to attribute to a particular [program budget category].

One review identified a small number of studies examining the cost-benefit and cost-effectiveness of emergency response services. Estimates of the marginal cost per life saved ranged from approximately $5,000 to $50,000. However, this doesn’t really tell us the impact of an additional crew, nor were many of these studies comparable in terms of the types of services they looked at, and these were all US-based.

There does exist the appropriately titled paper Ambulance EconomicsThis paper approaches the question we’re interested in, in the following way:

The centrepiece of our analysis is what we call the Ambulance Response Curve (ARC). This shows the relationship between the response time for an individual call (r) and the number of ambulances available and not in use (n) at the time the call was made. For example, let us suppose that 35 ambulances are on duty and 10 of them are being used. Then n has the value of 25 when the next call is taken. Ceteris paribus, as increases, we expect that r will fall.

On this basis, one can look at how an additional ambulance affects response times, on average. One might then be able to extrapolate the health effects of that delay. This paper suggests that an additional ambulance would reduce response times by around nine seconds on average for the service they looked at – not actually very much. However, the data are 20 years old, and significant changes to demand and supply over that period are likely to have a large effect on the ARC. Nevertheless, changes in response time of the order of minutes are required in order to have a clinically significant impact on survival, which are unlikely to occur with one additional ambulance.

Taken altogether, the opportunity cost of a hoax call is not likely to be large. This is not to downplay the stupidity of such calls, but it is perhaps reassuring that lives are not likely to be in the balance and is a testament to the ability of the service to appropriately deploy their limited resources.


Marginalism, reductionism, realism

There is a large literature documenting the socioeconomic gradient in health. Whether it be measured by education, income or some other metric, individuals of a lower socioeconomic status have worse health. Understanding and explaining this gradient is of great importance to improving public health; however, the way we approach investigation and application depends on our ontological and epistemological position which is often not addressed in practice but is implicit in any analysis we do.

Many have tried to explain socioeconomic gradients in health through either access to healthcare or genetics. But, gradients have widened over time within countries with little change to the genetic make-up of the population; and, there is often little difference in measured gradients between countries with universal healthcare funded through taxation (e.g. the UK) and insurance funded healthcare with known access issues (e.g. the US) (Dow and Rehkopf, 2010).

This then leads us to differences in risk factors for the main causes of death in Western nations. There does exist well documented gradients in obesity and smoking. But, gradients in exposure to risk factors often differ from gradients in mortality; for example, Southern European countries have a wider mortality gradient than Northern European countries but have a narrower obesity gradient (Mackenbach et al, 2008). Although, smoking may better explain this difference. To succinctly summarise this – it is a complex relationship.

Our aim as researchers is to obtain knowledge about this system to attempt to provide causal explanations of relationships between social and economic changes and biological outcomes. Clearly, we should have in mind that our explanations need to have a plausible biological aetiology. But, focussing here on solely the social and economic factors, we need to consider our ontological position.

The neoclassical approach posits individual, atomistic agents maximising utility by making rational choices about consumption and investment in health. This approach is exemplified by the Grossman (1972) model. Individuals ‘demand’ health on the basis of the cost of health capital and rate of depreciation. One immediate philosophical objection to this set up is the implicit dualism – the separation between the mind (the rational decision maker) and their body (their health). This dualism clearly makes little sense when mental health is considered. A more tangible objection arises since these models only consider agency and not structure. An implication of these models are that individuals’ choices about health related goods and behaviour are determined by their relative costs to the individual; there is little or no allowance for decisions to be affected by culture or society. It is ideologically individualistic.

Piero Sraffa, an influential Italian economist, developed a critique of the neoclassical approach (strictly speaking it was a ‘prelude to a critique’). One of his objections was with marginalism. He was writing about production in the economy and the problem of estimating the marginal product of a particular factor of production. He argued that the marginal product didn’t make sense since any change to the levels of any one of the factors of production would change the way it combines with any other factors of production, and the proportions they combine in. When we consider the aforementioned health ‘production functions’, we have the same issue. Merely altering income will not necessarily change health since the way in which income combines with, say, education or the local environment, will change. At the societal level, the way these interact are the result of institutions, ideology and culture.

Thus, when we estimate the effect of socioeconomic factors on health outcomes, we should, at a minimum, allow for differential effects by socioeconomic status. In interpretation and application, it may suggest that a policy of just redistributing income may not be enough – a better understanding of individual motives and heterogeneous culture is required to target policy. Many branches of economics that are considered heterodox, such as institutional economics, post-Keynesian economics and political economy analysis take account of social norms and economic institutions. But, the roles of sociology and psychology are also of great importance. This suggests the need for methodological pluralism, certainly when examining socioeconomic determinants of health, but also in general. It is perhaps best summarised by the following quote from Keynes:

The master-economist must possess a rare combination of gifts …. He must be mathematician, historian, statesman, philosopher — in some degree. He must understand symbols and speak in words. He must contemplate the particular, in terms of the general, and touch abstract and concrete in the same flight of thought. He must study the present in the light of the past for the purposes of the future. No part of man’s nature or his institutions must be entirely outside his regard. He must be purposeful and disinterested in a simultaneous mood, as aloof and incorruptible as an artist, yet sometimes as near to earth as a politician.