Health is central to future prosperity
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A focus on:
Health is integral to wider economic prosperity, but health systems treat patients at the point of illness, when negative impacts are already entrenched.
Our vision:
Health should be valued as an asset. Investing in the population’s health rather than just treating illnesses would create greater resilience to future shocks and a more prosperous future for individuals and wider society.
Looking to the future:
Reposition health as an asset to our economies, central to reducing wider inequalities through clarifying the roles that the life sciences sector, governments and health systems could and should play, building partnerships and cohesion around investing in a healthier population.
Dr Rebecca Sloan
Senior Actuarial Consultant and Clinical Expert
Health and economic prosperity
Health is an established driver of prosperity for individuals and collective societies. Poor health can lead to a vicious cycle (Figure 1) negatively impacting prosperity by reducing the number of people within the workforce, thus reducing the productivity of businesses and the amount an individual is able to put back into the economy. Within the UK, for example, only 70% of those in poor health were in full or part-time employment compared to nearly 90% of the healthy population between 2016-17 (Figure 2).
More recently, the ONS found the number of ‘economically inactive’ (those unemployed and not able to start or look for work) people within the UK increased sharply in June to August 2022. One of the main drivers of this increase was due to long-term sickness (Figure 3). Long term sickness within the economically inactive has increased since the beginning of the pandemic.
Figure 1: ‘The vicious poor health cycle’ – how an individual’s poor health can contribute to lack of prosperity on an individual and wider societal level
Figure 2: Employment status of 25-54 year olds with and without a longstanding illness, 2016-17 Great Britain
Source: Institute for Fiscal Studies, ‘Living standards, poverty and inequality in the UK’, 2018
Figure 3: The increase in economic inactivity during the latest three-month period was driven by those inactive because they are long-term sick or students
Source: ONS, Employment in the UK, October 2022
The Covid-19 pandemic brought the impact of health on wider economic prosperity into sharp focus. Globally, economies witnessed large contractions of GDP as result of the pandemic. McKinsey forecast the overall impact of the pandemic and repercussions would result in a 3-8% reduction in global GDP.
Analysis by the IPPR Commission on Health and Prosperity identified that health factors were responsible for about a third of the 1.1 million workers lost to the labour market over the pandemic (Figure 4). The Commission estimated an £8bn drop in productivity over 2022 if the health of these workers is not addressed. McKinsey estimated that health improvements could add $12 trillion, or 8%, to global GDP in 2040 (Figure 5).
Figure 4: Causes of the loss of workers from the labour market during the pandemic (thousands), compared to pre-pandemic trends
Source: Patel and Jung 2021, cited in the IPPR Commission on Health and Prosperity, 2022 Note: The contributing factors are calculated compared to pre-pandemic trend, building on IES (2022) methodology and drawing on ONS surveys.
Figure 5: How GDP could rise by 2040 due to improvement in health conditions
Source: Exhibit 4 from 'Prioritizing health: A prescription for prosperity’, July 2020, McKinsey Global Institute, www.mckinsey.com. Copyright (c) 2022 McKinsey & Company. All rights reserved. Reprinted by permission. Note: Includes impact on older adults (only high- and upper-middle-income countries), informal caregivers (only in OECD), and people with disabilities (global).
Valuing health as an asset
Traditionally, health systems were designed to treat patients at the point of illness. In an age of communicable diseases being the primary driver of ill-health, this was more effective. However, with lives increasingly lived in poor health with several non-communicable diseases, recognising the importance of good health by valuing it as an asset, rather than simply measuring the absence of illness, could see a significant and lasting improvement, not only in health, but also in economic prosperity. Improving population health rather than just treating illnesses would also create greater resilience to future shocks for both individuals and the economy.
Since those living in the most deprived areas can expect to fall into poor health 20 years earlier than those in the least deprived areas, addressing poor health would have an additional benefit of addressing widespread systemic inequalities.
Specifically, health improvements have the potential to improve the prosperity of healthcare systems, employers (including life sciences) and governments by:
- reducing pressure on the healthcare system for emergency and ad hoc care;
- increasing health of employees leading to increased productivity, improved outputs and increased economic activity due to overall improvement in population health;
- improving the economy due to the positive impact on businesses and lower pressure on the system for support in health, income and living; and
- achieving ‘levelling up’ as a by-product of a focus on health.
Some attempts to address these challenges are already being made. For instance, in 2019, the New Zealand government brought in a specific wellbeing budget. This focused on five key areas: mental health; child wellbeing; supporting the aspirations of the Māori and Pasifika populations; building a productive nation; and transforming the economy. The concepts behind this budget go some way to bringing a focus on health into how we look at national outputs. However, there is still work to be done to truly understand the impact of such a budget and to ensure the outcomes are being measured in a fair way.
A possible solution to measuring such a budget is to use a health index. In 2020, the ONS launched the first health index, to measure the health of the nation in a holistic manner by looking at health more broadly than just illness. The health index has allowed analysis of the relationship between the health and wealth of the nation. This data driven approach allows governments to truly understand the health of the population and to track how health impacts the wider society over time, helping both government and businesses to understand the impact on local populations.
Businesses and employers, including the life science industry, have the potential to improve population health and address health inequalities interactions as set out in the Labonte model. This can be achieved both through their role as employers – creating health promoting environments for their employees and families, alongside ensuring their products do not worsen inequalities in health through inequitable access.
Addressing poor health has the additional benefit of addressing widespread systemic inequalities.
The life science sector has the additional opportunity too address the health of the globe.
The life science sector can address wider social determinants of health in addressing known health inequity for example by working to ensure fair access to medicines.
Business for Health was launched in the UK in 2021 with the aim of galvanising and empowering the business community to recognise that population health is not just something for the government to fix. In particular, it allows businesses to come together to develop employer-based solutions to improve both job quality (job security, opportunities to develop skills and working in a supportive workplace) and health.
More generally, businesses have begun to recognise the importance of data to ensure a healthy and happy workforce. Businesses that took part in a survey as part of LCP’s Employee Wellbeing report were able to understand the wider impacts of financial health on their employees, and have wellbeing strategies in place. But there is still more to be done with 57% of businesses recognising that they still want to do more.
The life science sector should have an additional responsibility as well as opportunity to address the health of the globe. The Drugs for Neglected Diseases initiative uses collaboration to broaden intellectual property to allow maximal health gain rather than profits. While initiatives such as this are commendable, commitment from the pharmaceutical industry to address health inequalities across the globe is required to achieve success.
Calls to action to recognise health as an asset critical to future prosperity
Investment is required (both intellectual and economic) to restructure health systems so the potential of health and healthy populations can be realised. This requires structural changes across governments, life science industry, employers and individuals.
Governments should:
- Provide a ring-fenced policy budget for public health which focuses on wellbeing and health rather than illness.
- Use holistic health index-type measurements to track how this changes over time and to measure success of wellbeing budgets.
- Provide data and analysis on the wider health of the population broken down by employment type and area to provide additional information for employers seeking to address their employees’ needs.
Life science companies should:
- Acknowledge their role as employers in promoting the health of their workforce building on initiatives such as Business for Health.
- Contribute to medicines research in a collaborative way (particularly anti-microbial resistance (AMR) or rare diseases) to allow fast access to novel medicines to improve health.
Health systems should:
- Use the advent of integrated care systems to set population health, rather than illness, as core metrics to drive and incentivise effective cross-sector partnerships across and within local areas.
- Be open to new reimbursement methods such as outcome-based agreements and other value based health care that can realign incentives around patient and population health.