Health care and the future of economic growth: exploring alternative perspectives

Abstract

The strong and positive relationship between gross domestic product (GDP) and health expenditure is one of the most extensively explored topics in health economics. Since the global financial crisis, a variety of theories attempting to explain the slow recovery of the global economy have predicted that future economic growth will be slower than in the past. Others have increasingly questioned whether GDP growth is desirable or sustainable in the long term as evidence grows of humanity's impact on the natural environment. This paper reviews recent data on trends in global GDP growth and health expenditure. It examines a range of theories and scenarios concerning future global GDP growth prospects. It then considers the potential implications for health care systems and health financing policy of these different scenarios. In all cases, a core question concerns whether growth in GDP and/or growth in health expenditure in fact increases human health and well-being. Health care systems in low growth or ‘post-growth’ futures will need to be much more tightly focused on reducing overtreatment and low value care, reducing environmental impact, and on improving technical and allocative efficiency. This will require much more concerted policy and regulatory action to reduce industry rent-seeking behaviours.

Socioecological System Transformation: Lessons from COVID-19

“…While the scale of the economic impact of COVID-19 appears to have come as a surprise to policymakers, it is consistent with emerging evidence that the world is transitioning into a "postgrowth" era, as global economic growth rates have slowed over a period of decades. This relentless slowing of growth has been driven by structural economic factors such as inequality and indebtedness; the demographics of aging populations; encroaching ecological feedbacks and limits; and by damage from major shocks (financial, environmental, and now a pandemic) whose frequency appears to be increasing [35]. This backdrop of "limits to growth" will become increasingly visible as the central constraint upon healthcare systems in the years ahead [36].…”

Can healthcare adapt to a world of tightening ecological constraints? Challenges on the road to a post-growth future

“…Cuba’s success from the perspective of population level health outcomes was experienced as “a time of exceptional hardship” during which structural and cultural changes to healthcare occurred only “as a matter of despair.”19 Yet overuse, overdiagnosis, and overtreatment are serious problems in modern healthcare systems,20 and carefully targeting reductions to eliminate overuse could improve healthcare outcomes, not undermine them 21. Ironically, Anthropocene pressures might provide the truly hard constraint that has so far been missing in efforts to transform healthcare systems to deliver real value and to drive out endemic low value and harmful care 1…”

“…Healthcare has been an integral part of the rapid growth in economic output, population, and use of resources seen in recent decades. Expenditure on healthcare has consistently grown faster than the overall rate of growth of gross domestic product (GDP) in high income countries and, more recently, in middle income countries too 1. Our achievements and technologies have brought unparalleled prosperity to many people, and greatly improved life and health prospects to most.…”

The federal spending power: Building forward after the pandemic

“…In addition to these classic calculations, there is growing recognition of the harms of austerity, 46 which risks economic recovery, socio-economic opportunity, and population health—as demonstrated by the harsh austerity measures imposed in Europe after the global financial crisis. 47 Even the bastions of neo-liberal capitalism—the IMF and World Bank—have recommended that governments continue to use debt-financing to invest in their economies and not move too quickly to slow the pace of these investments.…”

“…59 In this respect, modern monetary theory is one of several contributions to debates about economic growth since the global financial crisis in 2008. In the face of a halting post-crisis recovery and accelerating and unsustainable degrees of inequality and environmental degradation, contemporary thinking aims to put human well-being and planetary health at the core, 46 and to challenge “growth,” particularly as measured by GDP, as an adequate indicator of economic performance and social progress. 60 Such ideas add new meaning to the phrase, “the federal spending power,” offering a rationale for the greater policy room possessed by the federal government (the currency issuer) relative to provincial and territorial governments (currency users).…”