States must invest in Health

July 17, 2013


*By Joanna Kozakou

States are under unprecedented pressure to achieve the correct balance between universal access to high quality Health services and adhering to budgetary constraints. As the European Union’s Commissioner for Health and Consumer Policy, Tonio Borg, aptly said, “Too often health is perceived as a cost, and not an asset for the future”.

The financial benefits – and not only – from investing in Health by far exceed any cost. It is not by chance that the World Bank came up with the phrase “Health is wealth” when referring to emerging countries, where the scourge of disease afflicts the workforce and hinders economic growth.

Could Health costs be considered as an investment instead of expenditure?

  • The 1% increase per capita in pharmaceutical costs from the introduction of new medicines is counterbalanced by a 3.7% reduction per capita in hospital costs. For example, an innovative treatment reduces surgical procedures, as well as recovery time in hospital units.
  • With the introduction of innovative medicines, life expectancy has increased on an international level by four years from 1990 until today. Each year added to life expectancy equals a 4% increase in a country’s GDP.
  • A healthy workforce is more productive (reduced sick leaves) and at the same time demands less care from the state. Cuts in health pose a threat to the quality of life, productivity and economic growth; while in contrast, a healthy workforce is a lever for social welfare and economic growth.
  • With the recent example of Greece, there is increased concern that drastic health cuts were imposed without being accompanied by a long-term policy and vision, and mainly without taking into account the consequences and burden on society and the economy overall (i.e. increase in AIDS sufferers).

Instead of solely centering its efforts on saving resources, the state must encourage more efficient measures, such as improving the cost of healthcare and implementing innovations which could improve the population’s health while at the same time setting the foundations for economic growth. Drastic cuts in healthcare may lead to serious negative consequences on the population’s welfare if they compromise access to quality care. Any other policy aimed at reducing costs in the health sector which is not preceded by an assessment of the financial benefits from treatments and citizens’ health ends up being unproductive for the system as well as the economy.

In Cyprus, the unprecedented crisis has created a pressing need for implementing a viable and effective national health scheme. Prerequisite to achieving this, as is the case with all health systems, is for the relevant bodies to understand that health expenditures can only be seen as an investment for the future.
