Investing in Public Health: A Smart Move for Economic Prosperity

This entry is part 31 of 40 in the series Wide World of Public Health Systems

The Wide World of Public Health Systems

The COVID-19 outbreak has served as an unpleasant reminder of the significance of health not just for individuals and communities but also for the economy.

Political leaders frequently prioritize the economy as a top agenda item, yet prioritizing economic growth at the expense of public health can be shortsighted. The COVID-19 outbreak has served as an unpleasant reminder of the significance of health not just for individuals and communities but also for the economy. In fact, health is an indispensable component of human capital and a fundamental driver of economic growth.

When workers are in good health, they are more productive and less likely to miss work due to illness or taking care of sick family members. Therefore, it’s clear that prioritizing public health is not only essential for individual well-being but also for boosting economic growth in the long run. The economic significance of public health is further underscored by evidence that highlights the devastating impact of chronic diseases on the US economy. Such diseases, which are largely preventable, can lead to indirect costs such as reduced labor supply and productivity, which are estimated to exceed $1 trillion annually. Furthermore, if health status deteriorates and investment in education and training declines, human capital and skill development could decline, leading to a potential reduction of up to $5.7 trillion in real GDP by 2050.

The United States currently allocates more than 17.8% of its GDP to healthcare, which surpasses any other country in the world. Public health interventions hold the potential to mitigate the need for costly medical interventions, but only between 2 and 5 percent of the national health dollar is spent on public health. It is estimated that total Medicare and Medicaid spending would be 8.5 percent and 11.8 percent lower, respectively, in the absence of obesity. By addressing obesity, not only can healthcare spending potentially be curtailed, but it can also lead to a reduction in expenditures for disability and unemployment benefits. Obesity is one of dozens of population-based preventative activities public health performs. Effective public health measures, especially those intended to optimize health systems, can generate considerable benefits for the economy. Nevertheless, policymakers and the general public frequently underappreciate the significance of such measures and fail to adequately fund them.

Prioritizing economic growth over public health can have limited and even adverse consequences, disregarding the essential role of health in human capital. A healthy workforce is a productive workforce, and investing in public health measures can yield enduring economic benefits. Policymakers should adopt a more comprehensive approach to economic growth, which integrates the crucial role of public health in promoting economic prosperity.

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Sezen Ozcan Onal
Sezen Ozcan Onal is a researcher at the Center for Public Health Systems. She is interested in applying a modern econometric toolkit to address policy-relevant questions in public health research. Dr. Ozcan holds a PhD in Economics from the University of Wisconsin-Milwaukee and a master’s degree in Economics from the University of Missouri-Columbia.
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