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IOM: Tax Medical Services to Fund Public Health


Study says investing in wellness and prevention could close the healthcare gap between U.S. and other wealthy nations.

This article published with permission from The Burrill Report.

The United States should tax medical care services to fund the promotion of wellness and prevention efforts through public health departments, according to a new report from the Institute of Medicine.

The institute, which is part of the National Academy of Sciences and charged with providing objective advice to policymakers, issued the report as the third in a series of reports on ways to improve the health care system in the United States. It notes the United States spends more on health than other nations — almost $2.5 trillion in 2009 — but seems to get less than other countries for its investment. It scores lower than other wealthy nations on life expectancy, infant mortality and other indicators of population health.

The IOM argues that the chronic diseases that drive the bulk of U.S. health spending are conditions that could be decreased or prevented through the work of public health departments, but only a small fraction of U.S. health dollars goes to government-administered public health — just 3.1% in 2009. That works out to $251 per person in public health spending compared with just less than $8,100 per person in medical care spending.

It estimates that federal spending on public health should at least be doubled to about $24 billion a year from its current level of about $11.6 billion per year to meet the needs of public health departments. The funds raised by the tax should be used to improve environmental and social conditions that promote health and prevent diseases such as obesity that are largely outside the medical care system's ability to influence.

Already Minnesota and Vermont have used such taxes to expand access to medical care. The IOM says a tax on medical services is unlikely to have a substantial negative economic effect and will raise the funds necessary to strengthen public health departments. It points to past public health initiatives, such as tobacco control, as examples that investing in these efforts can decrease the prevalence of illness and injuries and over time may reduce clinical care delivery costs.

“Developing and implementing strategic population-based efforts to improve our health as a nation will increase the quality of life and productivity of Americans at the same time that it will contribute to moderating the expense of the clinical care system,” says Marthe Gold, professor and chair of the department of community health and social medicine at City College of New York and chair of the committee that produced the report. “The country's failure to maximize the conditions in which people can be healthy continues to take a growing toll on the economy and on society. As the backbone of the health system, public health departments could help communities and other partners engage in efforts and policies that lead to better population health.”

Copyright 2012 Burrill & Company. For more life sciences news and information, visit

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