Petroleum and Health Care: Evaluating and Managing Health Care's Vulnerability to Petroleum Supply Shifts

Abstract

Petroleum is used widely in health care-primarily as a transport fuel and feedstock for pharmaceuticals, plastics, and medical supplies-and few substitutes for it are available. This dependence theoretically makes health care vulnerable to petroleum supply shifts, but this vulnerability has not been empirically assessed. We quantify key aspects of petroleum use in health care and explore historical associations between petroleum supply shocks and health care prices. These analyses confirm that petroleum products are intrinsic to modern health care and that petroleum supply shifts can affect health care prices. In anticipation of future supply contractions lasting longer than previous shifts and potentially disrupting health care delivery, we propose an adaptive management approach and outline its application to the example of emergency medical services.

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