A WELLNESS PRODUCTION FUNCTION ALLOCATING SCARCE DOLLARS FOR HEALTH OR LEISURE

OBJECTIVES:  To assess and quantify a wellness production function that demonstrates the optimal allocation of money to specific illnesses or leisure, an actual quality adjusted dollar spent. METHODS:  Medical Expenditure Panel Survey (MEPS) 2014 data were used to estimate a Cobb-Douglas production function with the Physcical and Mental Composite Scoress as the dependent variables and medical conditions, log-transformed healthcare expenditures and income among other factors as covariates. RESULTS:  The MMEPS data contained approximately 33,000 interviewees. The intercepts for PCS and MCS were 36.29 (P<0.01) and 38.38 (P<0.01). Expenditures for all he3althcare and pharmaceuticals were statistically significant, (All P<0.01). Income elasticities were 1.8884 for PCS and 1.60889 (Both P<0.01). CONCLUSIONS:  This analysis is not a drug to drug comparison of value. Rather, it is a multi-disease and wellness measure of producing change in PCS and MCS either by spending on a specific health condition (e.g., cancer) or something other than health that optimizes PCS ans MCS.