Health and the economy

We are at a critical juncture in efforts to promote development around the world. lf we are to meet the challenges of our times we need new forms of thinking and acting. The key to deal with a changing and increasingly complex reality is integration, and the starting point for integration is the acknowledgment of the crucial notion that social and economic policy are really two sides of the same coin. [ILLUSTRATION OMITTED] The recent evolution of global health epitomizes this idea. Indeed, many observers have remarked that the past decade can be seen as a new era in global health. The most important feature of this is the fact that health matters have stopped being the exclusive concern of domain experts. Instead, health has come to occupy a central place in the most pressing dimensions of the global agenda: economic development, national security, democratic governance, and human rights. In this context of growing global visibility for health matters, their relationship with the economy has become the object of intense scrutiny. For decades, the connection between health and economic growth was viewed as a simple, unidirectional relationship: economic growth promotes health through better living conditions, including investments in sanitary infrastructure and housing, improved nutrition, and increased access to education and health services. However, we now know that good health is not only a consequence but also a condition for sustained and sustainable economic development. Amartya Sen includes health in the group of what he calls "essential capabilities," or essential requirements for a life lived with dignity. Therefore, improvements in health are justified in their own terms. However, there is no contradiction between this statement and the observation that, in addition to its intrinsic value, health also has an instrumental value in contributing to other socially worthy objectives. Thus, good health reduces poverty, protects family assets, improves educational performance, increases labor productivity, enhances the investment climate and, through all of these things, stimulates economic growth. This point has been proven by several influential initiatives led not by health professionals, but by development economists. Almost 20 years ago, the World Development Report 1993 was devoted to the topic of 'Investing in Health'. This was probably the first major effort at making the case that health is an investment more than a mere item of expenditure. This landmark document was followed in 2001 by the Report of the Commission on Macroeconomics and Health, which concluded that a 10 percent improvement in life expectancy at birth is associated with an annual increase in economic growth of 0.3 to 0.4 percent. Yet things become yet more complex. The aforementioned figures refer to the direct effects of improved health on economic growth. Buta substantial part of these effects are mediated by the way health systems get organized and financed. And this opens up a whole new dimension of interactions between health and the economy: the institutional dimension. Above and beyond the direct effects of better health on economic growth, the health industry itself has become a major sector of the economy. Globally, health-related goods and services constitute 10 percent of the world economic product, around 6.5 trillion dollars. The OECD countries account for 84 percent of this expenditure, but even in the poorest countries health concentrates a large share of economic activity, with huge implications for the performance of the rest of the economy, including key variables like inflation, employment, and competitiveness. The relationship between health and the economy can lead either to a virtuous or a vicious cycle. Productive investment in equitable, efficient, and high-quality health services has a positive effect on all economic activity, because it raises the quality of human capital, improves productivity and competitiveness, creates jobs, encourages scientific research, and stimulates technological innovation. …