Health is Wealth

The swingeing cuts in health funding that have been – and continue to be - implemented over the past couple of years have seriously debilitated the public health service. Its overall prognosis continues to decline as does the outlook for those of us obliged to avail of its failing facilities. Even if the economic situation in Ireland should improve, the damage that has been inflicted on the health service will make it far more difficult and costly to restore in the future.

As we entered the New Year, the health service was once more on the front page for all the wrong reasons. Over 500 patients nationwide were forced to endure treatment while stranded on trolleys in hospital corridors due to a shortage of beds. Meanwhile, as is her wont in times of crisis, the Health Minister Harney was safely wrapped up in a bed far away with no intention of returning to the scene of yet another disaster.

Although such callous disregard for patients has left most people disgusted, there is still no sign of the political will required to ensure universal access to and equitable treatment in our public health service. The current political predilection to slash and burn the public service finances is further aggravating the situation.

In response, solid economic explanations need to be developed to support the argument concerning the importance of investment in the public health sector. Such arguments can help further clarify the importance of allocating sufficient financing to the health sector by detailing the cost outcomes.

As Brid O'Connor, CEO of the Mental Health Commission, explains:

Resources are not infinite, so choices must be made between alternative uses of the same resource or service... 'economic analysis is therefore a crucial aid to decision making on resource allocation and on priority setting'. While decisions on resource allocation are grounded in values, economics is a central tool in the making of these decisions.

However, in order to undertake a serious economic analysis of the true costs of health to the state, the wider economic impact and outcomes of ill health, such as any resulting decline in economic productivity, must be taken into consideration. Merely tabulating direct expenditure on the public health sector is insufficient.

The 2001 WHO Commission on Macroeconomics and Health highlighted the significant economic benefits to be realised through improving the overall level of health in a country. They argued that diverging economic growth rates could be explained to a large extent by population health status, even taking standard macroeconomic variables into account. The Commission calculated that up to 50% of the growth differential between wealthier and poorer nations could be explained by their contrasting incidences of ill health and varying lifespans.

Suhrcke et al confirmed these findings, noting that these benefits would be obtained through an increase in the availability of labour, higher productivity, improved levels of education, training uptake and superior course completion rates. This would also lead to an increased availability of funding that could be invested in physical and intellectual capital.

The European Commission found that improved standards of health lead not only to greater average life expectancies but, even more importantly, to increased 'healthy´ life expectancy, which boosts overall economic productivity and output.

Research conducted in several European countries between 1970 and 2003 revealed notable welfare benefits linked to increases in life expectancy. These ranged from 29-38% of GDP and far exceeded total national health expenditure.

O'Shea and Kennelly estimated the economic cost of mental health associated issues alone at €3 billion or just over 2% of Ireland´s GNP. One third of this figure was made of up healthcare related costs while the remaining €2 billion resulted from reduced economic output. Schizophrenia alone cost €460.6 million in 2006. Once again, the costs of lost economic productivity at €343 million far outweighed those of direct health expenditure at €117.5 million.

Recent research by the UK based Sainsbury Centre for Mental Health (SCMH) has tried to provide an economic weighting for the human and social costs of mental health problems. These costs refer to the reduced quality of human life resulting from health problems. The SCMH estimated that mental health issues cost the UK £105.2 billion (€125 billion) in 2009/10. Human and social costs made up 51% of these costs (£53.6 billion), economic output losses 28.8% (£30.3 billion) and health care costs 20.2% (£21.3 billion). Together with the Northern Ireland Association for Mental Health (NIAMH), the SMCH calculated the overall 2002/3 cost of mental health issues in Northern Ireland at £3 billion, more than the total expenditure on health and social care for all health conditions.

These studies clarify a number of issues. Firstly, failing to invest adequately in improving the health of the Irish population is not just an ethical issue, it carries with it serious economic implications. Secondly, the costs of healthcare are dwarfed by the costs of lost economic output. Thirdly, given that the costs of bad health are not just confined to providing healthcare but reverberate throughout the whole of the Irish society, we need to look at seeing how we can improve the overall level of health of the Irish population through tackling negative social determinants and health inequities between different social groups.