Affordable Healthcare in a growing economy

By: Giselle De Leon

 

Healthcare spending can lead to greater wellness opportunities, which can help to enhance human capital and increase productivity, boosting economic performance. Dr. Francesca Parise from the Laboratory for Information and Decision Systems at MIT, suggests, “In the field of healthcare, analytics technology is increasingly being applied. Analytics enables statistical and quantitative assessments of huge data repositories, allowing for evidence-based decision-making.” Overall, my preliminary findings point to a robust link between healthcare spending and economic variables such as earnings, GDP, particularly labor productivity. According to the findings, a rise in healthcare spending has a beneficial impact on economic performance. Based on this and previous studies Aghion et al, looked at the relationship among health and socio-economic growth by using an endogenous growth model, which states that a longer life expectancy boosts growth. As a result, judiciously investing in various parts of healthcare would increase revenue, GDP, and productivity, as well as reduce poverty.

While high-income countries spend an average of $3,000 per person on healthcare, low-income countries spend as little as $30 per inhabitant. It's also vital to think about healthcare spending per capita of GDP. Some countries spend more than 12% of their GDP on healthcare, while others spend as low as 3%. Healthcare spending is viewed as investing in human capital in the first scenario. As a result, a rise in healthcare spending is likely to be linked to an increase in GDP. Regular health treatments (e.g., annual medical exams, preventive screenings, etc.) are likely to boost labor and productivity, resulting in an increase in GDP. Both show how healthcare and GDP are linked in a loop.

The influence of health on savings is another important aspect of the relationship between healthcare spending and economic development. Good health can extend one's life expectancy and enhance one's motivation to save (for example, for retirement) and make greater company investments, all of which are helpful to economic performance.

Overall, the research adds to the growing body of knowledge about healthcare spending and economic success. It explains how the government may allocate healthcare spending in critical areas to boost economic growth while simultaneously enhancing the population's well-being. Overall, given the potential economic benefits of healthcare, global health coverage is an area that merits additional investigation.