The coronavirus pandemic has shown the world a clear cut picture that the health of a country’s population drives its global affluence. As the pandemic has progressed, the world has learnt adapt to the “new normal”. For the first time in many years, health has become a top priority for every country in the world. And to protect its civilians, the government is leaving no stone unturned. Be it better health policies, economic relief packages, spreading social distancing awareness or looking after the poorest of the country, the government has indubitably been scrambling.
The relationship between the healthcare system and the economic growth of a country is quite under appreciated. Just like other conventional factors like labor and physical capital, healthcare too is an integral contributor to productivity. It is treated differently as compared to other inputs because, healthcare is a multi dimensional asset. It is represented by various indicators such as infant mortality rate, maternal mortality rate, life expectancy etc. The impact of healthcare is seen in four major areas. These are, worker productivity, longevity, human capital accumulation, and by reducing the burden of a disease. A clear cut example of longevity can be the liberalization seen in India during the early 1990s due to the reduction in infant mortality rate. Another effect of health seen on economic growth, is that sick individuals are not able to perform at the peak of their mental and physical capabilities and hence, don’t contribute fully to the economy.
The economists at McKinsley Global Institute were sagacious enough to point out in their recent study, that wise investments in the healthcare policies for the world population can lead to a dramatic improvement in the quality of life, and decrease the risks of global pandemics. This will further lead to improvement in global productivity, output, and a massive $12 trillion economic opportunity. According to Harvard Business review, the global GDP can plummet by up to 15% due to poor health. During the coronavirus pandemic, the world has witnessed a decline of 30% in the global GDP. This is just plain disheartening.
70% of the estimated benefits can be reaped by a simple step in the direction of prevention. Clean and safe environment, accessible vaccines and medicines, and quality healthcare services should be the top priority for the governments in the world from now on. This feat can only be achieved if the focus of the countries shifts from disease treatment to better health promotion. Diseases such as diabetes, tuberculosis, hypertension, obesity etc. which contribute heavily to the patient burden of a country must be sought after with prime focus.
Furthermore, the study has revealed that for every $1 invested in healthcare improvements such as vaccines and heart medications, the countries could earn a profit of up to $3. The pandemic has shown us the mirror and revealed that rapid improvisation of healthcare infrastructure is possible. This can be proved by the examples of rapid COVID-19 hospital setups and the fast transition to digital consultation. Teaching billions of people the importance of proper hygiene is another feat achieved by governments all over the world. Moreover, due to the pandemic, tech companies, biotech companies, and pharmaceutical companies have hit the gas and are innovating at a much faster rate. Global collaboration has also helped the world to come together and fight major diseases.
Another startling data put forward by economists says that, if companies invest in communities where children can grow and live long happy lives, then this will help increase the global GDP by almost $600 million dollars by 2040. Healthy children who are capable of realizing their full cognitive potential are the future of the world, and companies can undoubtedly help shape healthy communities around them.
Economists are definitely reviewing the coronavirus pandemic as a global opportunity to rethink our investments in the healthcare sector and its possible outcome in the future. We are certain that with the right and timely investments in the healthcare division, the world will soon emerge victorious from this pandemic and have a buoyant economy soon.