The Economics of Solving Chronic Disease

If we look at chronic disease from this angle, it is an empowering proposition. It is clear that we need to focus policy and incentives at this level to correct the "market failure" at its source, first and foremost minimizing these negative externalities.
06/03/2014 06:48 pm ET Updated Dec 06, 2017

If you are reading this blog post expecting to hear the sorry tale of the cost of chronic disease, that will be only the starting point. What I hope to do differently is offer a solution for our predicament, rather than just further commenting on the problem.

Chronic disease is such a looming and obvious problem that is not only the biggest economic issue in the biggest industry in the world's biggest economy (American medicine), but also a problem that will be faced by every country as it "Westernizes." The WHO estimates that chronic disease management will cost $47 trillion over the next 20 years. Given the accelerating rate of change, this might prove conservative.

That is the economics of the problem. But what are the economics of the solution? It is becoming more and more clear that the answer is held in an economic concept that is fairly simple, so much so that it is shared pretty early in microeconomic training. It is the concept of externalities.

Externalities are defined as, "the cost or benefit that affects a third party who did not choose to incur that cost or benefit." The classic example of this is pollution. The first car ever produced created pollution but no one realized it was a problem until there were millions of cars and air pollution was noticeable. Have you been to Beijing recently?


By their nature and their definition, externalities are difficult to quantify and typically significantly underestimated. The impact of externalities grows as agents are more interdependent. There are also positive externalities, but we will come to those later.

Significant parallels exist between acute disease management and classical economics. A problem is identified, a solution is found and the doctor and patient enter into an agreement. Single cause, single "cure" and very little noticeable impact on the other people, other organs or systems.

Chronic disease is, in my opinion, driven by a cascade of negative externalities. These can come from many sources but include stress, food, toxicity or medical interventions. This explains why science is struggling to find and treat the cause of chronic and autoimmune diseases like autism, MS, lupus and rheumatoid arthritis. It also explains why iatrogenic disease is a major cause of death in America. We simplify the concept to "side effects," but it is really negative externalities expressing in an infinitely-interconnected system.

All chronic diseases share a pre-stage where you haven't quite "got" the disease, but it is on its way to being fully manifested. One example is pre-diabetes -- your blood sugar is a mess, you may have some symptoms that you then medicate for, but you are not diabetic until one day your "score" hits a certain threshold and then you are.

The same is true for cancer, where pancreatic cancer takes 20 years to develop to such an extent that is can be seen and then you "have" pancreatic cancer. So what do we call those people in the previous 19 years? Pre-cancer?

The least heralded of these examples is autoimmune disease. Because they are seen by different specialists (like a rheumatologist for RA, neurologist for MS, gastroenterologist for Crohn's and ulcerative colitis) autoimmune diseases are seen as separate, but if you add them all up, it is the biggest chronic disease in the Western world.

The emerging model for understanding autoimmune disease follows the same pattern of emergence as cancer and diabetes. There is a trilogy of causation that starts with genetic vulnerability, is exacerbated by one or more (likely a constant stream over many years of) environmental triggers. The third part that seals the deal for the long term is leaky gut. This term was once considered "quackery" but has since been backed up by a considerable amount of literature. This cascade of cause over a period over time makes it likely that you can have predictive autoimmunity, just like pre-diabetes or pre-cancer.

Furthermore, there are doctors who understand this trilogy and have tools to correct it and are actually reversing and arresting chronic and autoimmune disease, not just managing the symptoms. These Functional Medicine providers respect the body as a complex, interconnected system, rather than separate parts, operating in isolation. If we improve the function of one part of the body, there are knock on effects (positive externalities) to other parts of the body.

In this way we can see that every forkful of food that is eaten or stimulus that is responded to is either a positive or negative externality. Either you are eating nutrient-dense foods that offer benefit not only to the organs, but by their improved function, extra benefit to every other organ and system. Or you are eating foods that deliver negative externalities, either by influencing the integrity of the walls of the digestive tract, eventually causing leaky gut.

It is a vicious or virtuous cycle, and that part of it is more or less our choice.

Medicine can also be seen in this light. Yes, an acetaminophen for a headache once will be a net benefit to the host, as the beneficial reduction of pain offsets the price of glutathione depletion. But with a sustained period of use, the externalities catch up and the value proposition goes down. This is why it is a problem that very little long-term data exists on some of the most common uses of drugs and those that do mirror this worrying picture.

If we look at chronic disease from this angle, it is an empowering proposition. It is clear that we need to focus policy and incentives at this level to correct the "market failure" at its source, first and foremost minimizing these negative externalities.

The green shoots in medicine and chronic disease reversal are grounded in positive externalities, not only internally as described above, but also where one person's healthy changes influence others and lead to significant potential for large scale transformation. By focusing on the end result (treating the symptoms of the chronic disease) we are missing the opportunity to make a real difference at the level of the cause, which is where things need to change for us to actually solve this problem.

James Maskell is CEO and Founder of Revive Primary Care, an education and practitioner finder portal. He is also host of the monthly Functional Forum, a new TV show for doctors passionate about the Evolution of Medicine.