To spend or not to spend… or better, on what to spend…

Category:
November 19, 2013

 

The effects of the economic downturn seen since 2008 have been ubiquitous, affecting people and institutions the world over. The “global health” landscape was no exception exemplified by financial crisis at both the World Health Organization (WHO) and the Global Fund to fight Aids, TB and Malaria (GFATM) as well as many others. Belts have been tightened and breaths have been held in anticipation of the eventual green shoots of economic growth.

 

Well here we are – with the financial crisis just about coming into view in your rearview mirror we have politicians already beginning to talk about measures that need to be taken, not to prevent but rather mitigate the effects of the next financial crisis (a far cry from Gordon Browns erroneous proclamation of the “end of boom and bust” during his tenure).

 

Well, perhaps there is an opportunity for us to take a step back and ask the question: going forwards, might we want to do things differently? Can we shift our priorities and focus so that the parameters by which we measure economic success are a function of more than just “growth” but rather on improving factors (like health and wellbeing) that in the long-term contribute toward real economic prosperity. In the words of Robert F. Kennedy, GNP “does not allow for the health of our children, the quality of their education, or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages; the intelligence of our public debate or the integrity of our public officials…. It measures everything, in short, except that which makes life worthwhile.”

 

In this editorial, I’d like to focus our attention on the economic benefits of investing in health and have identified six ways that the returns on such investment, it seems to me, outperform the traditional back-massage give to big business in the ongoing belief in Ronald Reagan’s “trickle down” dogma.

 

Firstly, health improvements have intrinsic value, in-and-of themselves. A healthy population is a desirable outcome that is a recognised economic and developmental outcome (although often times less high profile than changes to GDP). As individuals we find it easy to recognise our preference for remaining healthy over becoming richer. It seems odd that we find it soo hard to recognise the same preference as a community.

 

Secondly, a decrease in childhood disease has a dramatic impact on attained education and later employment capabilities. More than a million children in Africa are “polyparasitized” (infected with a combination of malaria and other neglected tropical diseases). This has been shown to be associated with lethargy, impaired school attendance and even impaired brain function as a result of the associated malabsorption of nutrients. Some models suggest that the eroded economic opportunities for these children represents a drop in later income by as much as 17%.

 

Thirdly, healthy adults are more economically productive. A 10% reduction of malaria in endemic areas has been sown to be associated with a 0.3% increase in economic growth for example. In the USA it has been estimated that the increase in life expectancy between 1970 and 2000 contributed an additional USD 3.2 trillion per year to the national economy (after accounting for increases in healthcare costs during that period).

 

Fourthly, investing in health has the effect of reducing the additive healthcare costs associated with lack of care. For example, in the absence of Antiretrovirals for people living with HIV, healthcare costs associated with recurrent opportunistic infections (like TB) begin to sore. And of course the spread of the HIV epidemic is significantly mitigated by early treatment with Antiretrovirals, thus circumventing the costs associated with treating those who would have otherwise been infected by the virus.

 

Fifthly, there is the Keynesian “economic multiplier” effect. Money spent in the healthcare system in poor countries gets spent again and again. So for example, if a multilateral donor pays the salary of a healthcare working in a clinic in Uganda, she will then go on to spend that money on goods in a local shop. The shopkeeper will make a small profit which he might spend in the local market, and so on. The idea behind the Keynesian “economic multiplier” is that money injected into an economy (particularly from an outside source) has a value that is a function of the number of times that it is circulated and respent within that economy. Bilateral donors that insist that NGO’s hire consultants from the donor country or use goods and services from the donor country are missing an important opportunity to do good.

 

And finally, if we are to assume that the occasional economic crisis is inevitable and that we’re living in an age of cyclical boom and bust then surely we should be looking for opportunities to change the amplitude and periodicity of these economic oscillations and mitigate the devastating effects that they have on the most vulnerable people. Investing in health both domestically and globally ensures that in future times of economic turmoil, the number of vulnerable people living on the brink of survival will be far fewer and the number of economically productive people (the true engines of economic recovery) will be far greater.

 

Investing in global health requires a long term vision of the world we living in. Yes, its expensive and no, we don’t see results overnight and certainly not within the time-frame of a typical election cycle. So we need politicians and decisions makers to see a bigger picture and to embrace a more exciting vision of the future. A future in which our economic ups and downs are seen as more than just a line on a graph but rather the wellbeing of people whose health we have invested in and whose lives we consider to be valuable.

 

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