Negative effects of high public debt on health systems facing pandemic crisis: Lessons from COVID-19 in Europe to prepare for future emergencies

Abstract

<abstract> <p>The investigation goal here was to analyze how the level of public debt affects preparedness of health systems to face emergencies. In particular, this study examined the negative effects of high public debt on health systems of European countries in the presence of the COVID-19 pandemic crisis. Empirical evidence revealed that European countries with a lower level of government debt as a percentage of GDP both in 2009 and 2019 (the period before the arrival of the pandemic) had lower COVID-19 fatality rates compared to countries with higher levels of public debt. The explanation is that high levels of public debt in countries trigger budget constraints that limit their ability to allocate resources to healthcare systems (e.g., health expenditures and investments), weakening health system performance and causing systemic vulnerability and lower preparedness during emergencies, such as with the COVID-19 pandemic. Implications of health policies are suggested to improve strategies of crisis management.</p> </abstract>

Effective health systems facing pandemic crisis: lessons from COVID-19 in Europe for next emergencies

“…Projected spending estimates suggest that between 2022 and 2026, governments in 17 of the 137 low-medium income countries will increase in national government health spending equivalent to an addition of 1% of GDP. Jacques et al (2023) show that public health systems have been center stage during the COVID-19 pandemic, but governments have invested relatively little resources in public health in recent years also because of fiscal austerity applied in modern economic systems to slow dynamics of public deficits and debts (Coccia and Benati, 2024). The analysis of the data here reveals, between European countries, that high investments in health system have vital role in the preparedness to face pandemic crises and in general emergencies (Coccia, 2020a.…”

“…Almeida (2024) suggests the existence of a trade-off between health system efficiency and health system resilience during the COVID-19 pandemic crisis. Instead, empirical evidence here suggests that a good governance supports, associated with appropriate expenditures and investments, efficient and effective health infrastructure, disease surveillance systems and tools of health policy responses that improve the prevention and management of outbreaks and the treatment of infected patients (Coccia and Benati, 2024; Kluge et al. , 2020; Sagan et al.…”

“…Jacques et al. (2023) show that public health systems have been center stage during the COVID-19 pandemic, but governments have invested relatively little resources in public health in recent years also because of fiscal austerity applied in modern economic systems to slow dynamics of public deficits and debts (Coccia and Benati, 2024).…”

“…Moreover, countries with good governance, in the presence of COVID-19 pandemic, have implemented effective public health contact tracing system, which associated with other interventions, they have mitigated the spread of novel viral agent and protected vulnerable populations in the initial phase of pandemic wave (Benati and Coccia, 2022a; Coccia, 2022b). Coccia and Benati (2024) maintain that high levels of public debt in countries trigger budget constraints that limit their ability to allocate resources to healthcare systems (e.g., health expenditures and investments), weakening health system performance and causing systemic vulnerability and lower preparedness during emergencies, such as with the COVID-19 pandemic. In this context, the group of Global Burden of Disease (2023) suggests that there is a unique opportunity to increase and sustain funding for crucial health functions, also including aspects for pandemic preparedness.…”

“…However, the effective role of healthcare expenditures and other structural factors of health systems on the impact of COVID-19 in society is hardly known (Coccia and Benati, 2024; Rađenović et al. , 2021).…”