Chapter 1 provides a contextual frame for the book. An inquiry into the key concepts of health and healthcare is followed by an illustration of the general health production function, that is, the association between increasing healthcare inputs and resulting health outcomes. The important message is the pattern of positive but diminishing effects of healthcare on health: more healthcare improves health, but at a diminishing rate. The production function is also illustrated at the macro level: when considering the poor countries of the world, a strong association is observed between increased healthcare spending and the country’s life expectancy. However, among rich countries we observe a strongly diminishing effect of increased healthcare spending. Some further international comparisons are included to show that the richer a country gets, the higher the proportion of wealth it spends on healthcare.
Estimating a Health Production Function for Brazil: Some New Evidence
