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Prioritizing Health: A Prescription for Prosperity

by Dr. J. Remes, K. Linzer, S. Singhal, M. Dewhurst, P. Dash, K.A. Rutter, J. Woetzel, S. Smit, M. Evers, M. Wilson and A. Ramdorai

Health has not typically been part of discussions about economic growth, particularly in developed nations. But indications are that it will matter more than ever in coming decades.

Over the past century, improved hygiene, better nutrition, antibiotics, vaccines and new technologies have contributed to tremendous progress in global health. Recent innovations have led to dramatic improvements in survival rates for people with certain types of cancer, heart disease and stroke in many countries. Improvements in health have extended lives and improved quality of life, contributing to the rapid expansion of the labor force and labor productivity in the second half of the 20th century, which were key factors behind strong economic growth over that period.

As countries grew richer, they invested in better food and safer environments, creating a virtuous cycle of improved health and higher incomes. Economists estimate that about one third of economic growth in advanced economies in the past century can be attributed to improvements in population health. Research focused on more recent years has found that health contributes almost as much to income growth as education.
Despite the progress of the past century, in a typical year, poor health and health inequity continue to limit economic prosperity. This plays out in two ways. First, premature deaths limit growth by reducing the size of the potential labor force. Over 17 million people lost their lives prematurely in 2017. Second, poor health or morbidity makes it hard for those suffering from health conditions to be economically active and realize their full productive potential. For example, a total of 580 million person-years were lost to poor health among those aged 15 to 64 in 2017, leading them to be absent from work or quit employment altogether.

Overall, we estimate that the cost of ill health was more than $12 trillion in 2017, about 15 per cent of global real GDP. Health shocks such as the COVID-19 pandemic, H1N1 influenza and SARS can result in additional humanitarian and economic costs. COVID-19 and its repercussions, such as the shelter-in-place measures to control the spread of the virus, were forecast to reduce global GDP by three to eight per cent in 2020.

Health has not typically been part of economic-growth discussions, especially in developed countries where the recent debate has primarily focused on the cost of healthcare. But a number of trends suggest that it may well matter more for growth in coming decades.

First, improving health can counter the drag on growth that results from slowing population growth. Labor force growth globally is expected to slow from an annual rate of 1.8 per cent over the past 50 years to 0.3 per cent in the next 50 years. At the same time, the demand for highly-skilled knowledge workers is increasing. Improved health can help counter these longer-term headwinds by extending healthy life span for workers of prime working age and older, and by developing the physical and cognitive ability of children, the world’s future labor-force.

Second, health is no longer improving in all regions because obesity-related conditions and mental-health challenges are burdening people of all ages, including those of prime working age. In addition, persistent and in many cases growing health inequity creates a gap in health outcomes between the rich and poor within societies.

Third, healthier populations are more resilient in the face of new infectious diseases, like COVID-19, that can often present higher risks to people with existing health conditions. In this article we will present four imperatives for improving the world’s health.

How to Improve the World’s Health

The Institute for Health Metrics and Evaluation (IHME) projects that the global disease burden (measured in disability-adjusted life years known as DALYs) will decline at a slower rate than in the past. This particularly applies to mature economies where the population is aging and faces more age and income-related health conditions such as diabetes, cardiovascular disease and some cancers. However, greater health gains are expected in low-income countries, many of which lag behind higher-income countries in life expectancy and other measures of health, mainly from preventable and treatable causes such as diarrhea and malaria, nutritional disorders, and poor child and maternal health.

We estimate that the global disease burden could be reduced by 40 per cent by applying known interventions.Tweet this

We estimate that the global disease burden could be reduced by about 40 per cent by applying known interventions in broader segments of populations and with closer adherence to the most effective tools available. A reduction in the global disease burden of this magnitude would deliver significant health benefits. Child mortality could drop by 65 per cent by 2040. Cancer deaths could decline by 29 per cent, cardiovascular disease deaths by 39 per cent, and neglected tropical diseases and malaria deaths by 62 per cent. Overall, 230 million more people would be alive in 2040, half of them under the age of 70. For people at middle age, the shift could extend the number of years in good health by a decade, essentially making 65 the new 55. Every region in the world would experience an improvement in this range.

While we find that the overall potential to improve global health is substantial, known interventions vary widely in their capacity to battle specific diseases. Over 70 per cent of the health gains could be achieved from prevention by creating cleaner and safer environments, encouraging healthier behaviors and addressing the social factors that lie behind these, as well as broadening access to vaccines and preventive medicine. The remaining 30 per cent would come from treating disease and acute conditions with proven therapies, including medication and surgery.

To identify interventions with the highest health benefit at the lowest cost, we used cost curves. Overall, we found that over 40 per cent of health improvements can be achieved at a net cost of less than $100 for every additional healthy life year. Because the costs of delivering better health vary widely, we estimate them separately for four country-income archetypes:

  • In low-income countries, the most cost-effective interventions (lowest incremental cost of reducing ill health by one DALY) include childhood immunizations, prevention and treatment of malaria, safe childbirth, better nutrition, and cardiovascular disease prevention.

  • In lower-middle-income countries, midwife-assisted safe childbirth could deliver one per cent of the total addressable disease burden for 0.1 per cent of the total additional costs. Treatment for malaria and TB, and prevention of cardiovascular disease with support and education for lifestyle change and pharmacological prevention are also very important.

  • In upper-middle- and high-income countries, the greatest health improvement could come from increased use of preventive strategies for cardiovascular disease and diabetes, including weight management, smoking cessation, and prevention and treatment of substance-use disorders and low back pain, which includes supported behavior change and weight management.
  10 Innovations That Can Improve Global Health by 2040

1. Omics and Molecular Technologies
These technologies — key components of the Bio Revolution — are therapeutics or diagnostics that harness the various types of molecules within cells (such as DNA, RNA, and proteins). Some omics and molecular technologies (for instance, genome editing) engineer these intracellular components or analyze them (such as proteomics and transcriptomics).

2. Next-Generation Pharmaceuticals
Newer iterations of traditional chemical compounds (small molecules) and classes of molecules could be used as medicinal drugs, possibly with multiple and concurrent target structures. 

3. Cellular Therapy and Regenerative Medicine
Cellular therapy is a biological product, derived from living cells, used for therapeutic purposes to replace or repair damaged cells or tissues. Regenerative medicine has the power to restore diseased or injured tissues and organs, potentially decreasing reliance on transplantation.

4. Innovative Vaccines
Vaccines stimulate the immune system to respond to and destroy a bacterium or virus. Historically, they have eradicated or controlled the spread of infectious diseases around the world. In the future, vaccines may target noncommunicable diseases, such as cancer.

5. Advanced Surgical Procedures
These include treating injuries or disorders of the body with minimally invasive incisions or small instruments (including robotic surgery), as well as any technique that improves surgery-related processes outside the operating room.

6. Connected and Cognitive Devices
Portable, wearable, ingestible, or implantable devices can monitor health and fitness information, engage patients and their communities of caregivers, and deliver self-regulated therapies autonomously.

7. Electroceuticals
Small therapeutic agents can target the neural circuits of organs. Such therapies map neural circuitry with neural impulses (administered by an implantable device) delivered to these specific targets.

8. Robotics and Prosthetics
A wide variety of programmable, self-controlled devices consisting of electronic, electrical, or mechanical units and of artificial substitutes or replacements for body parts are now under development.

9. Digital Therapeutics
These preventive and therapeutic evidence-based interventions, for a broad spectrum of physical, mental, and behavioral conditions, are controlled by software.

10. Tech-Enabled Care Delivery
These ways to deliver care incorporate new and larger data sets, use new analytics capabilities to generate insights, and help providers apply them to patients to improve the outcome, experience, and efficiency of care.

The Role of Innovation

Today’s interventions are yesterday’s innovations. Without them, healthy lifespans would not be as long as they are. Innovation continues to be critical to tackle diseases without a known cure as well as help us increase uptake and adherence to interventions we know work (about 60 per cent of the remaining disease burden in our analysis). Leading the list of diseases without a known cure are mental health and neurological disorders, cardiovascular disease and cancers. The good news is that innovations that completely change the lives of patients continue to emerge and prove the continuing power of innovation. One example is the nearly 70 per cent reduction in premature death due to chronic myeloid leukemia in Switzerland from 1995 to 2017.

We have identified ten promising innovations-in-progress that could have a material impact on health by 2040 (see 10 Innovations That Can Improve Global Health by 2040). We estimate that these technologies have the potential to reduce the disease burden by a further six to 10 per cent, assuming aspirational yet realistic adoption rates by 2040, on top of the 40 per cent from known interventions.

Not only could some of these innovations be fully curative for some diseases, but by tackling the underlying biology of aging, they could significantly extend healthy life span by postponing the onset of several age-related conditions. This contrasts with innovations of the past 30 years, many of which reduced symptoms or delayed disease progression while prevention and cures were rare. Additionally, the innovations we have identified are more digitally-enabled than in the past. Realizing these innovations will require continual investment in research and development across pharmaceutical companies, medical and other technology companies, and academia.

The economic benefits from the health improvements we describe are substantial enough to add $12 trillion or eight per cent to global GDP in 2040. These benefits would arise through the labor market, both by expanding future employment through fewer early deaths, fewer health conditions and higher labor-force participation of healthier people, and through the productivity gains achievable by workers who are physically and cognitively healthier.

The COVID-19 pandemic has forced health onto the agenda of every organization and every household around the world.Tweet this

By 2040, 245 million more people could be employed. About 60 million of them would have avoided early death from cardiovascular disease, cancers, malaria and other causes, adding $1.4 trillion to 2040 GDP. Addressing mental health disorders, diabetes, or other conditions would no longer be a barrier to joining the labor force for an equivalent of about 120 million full-time workers, contributing an additional $4.2 trillion.

Another $4.1 trillion could be unlocked by expanding labor-force participation among three groups: older populations for whom better health can be an opportunity to work longer (about 40 million people); informal caregivers who no longer need to care for loved ones (12 million people); and people with disabilities who can go to work because workplaces have adapted to accommodate their needs (eight million people).

Lastly, improving health could drive up productivity and lift GDP by as much as $2 trillion by reducing presenteeism from chronic conditions such as low back pain, but also through investing in childhood nutrition, which improves the cognitive and physical health of the future workforce. Just addressing adolescents’ mental and behavioral health issues — which affect about 60 million young people globally — could unlock $600 billion by 2040 through raising their educational attainment and earnings potential.

The expansion of the labor supply in a healthy growth scenario could add 0.3 per cent to global employment growth. One-fifth of the new labor-market entrants would be in high-income economies, where this expansion could fully counter the projected slowdown in labor-force growth. The rest, 80 per cent, would improve health and increase the labor force in low-and-middle-income countries.

We estimate the total combined value of deaths averted and reduced ill health could be approximately $100 trillion without adjustments for income levels — eight times the estimated GDP benefits. This number is so high because people typically value good health above everything else. Improving health could also help narrow health disparities within and across countries. This in turn could also contribute to reducing income inequality within countries and strengthen the social contract.

The best part is that focusing on known health improvements could deliver an incremental economic benefit of $2 to $4 for each $1 invested. Realizing the benefits would mean shifting spending to prevention. Prevention of disease is typically less expensive than treatment and reduces the need for more expensive treatment later on, contributing to a high economic return.

It is important to note that our analysis should not be interpreted as calling for additional funding for healthcare as currently delivered, but as an alternative approach under which health needs are addressed early with proven, effective, typically lower cost approaches.

Realizing the Healthy Growth Opportunity

Capturing the benefits identified herein would require dramatic changes that extend beyond what we typically think of as ‘healthcare’. It would necessitate change by governments and regional authorities, companies, innovators and communities to shape environments and societies in ways that promote healthy lives and capture the societal and economic benefits.

COVID-19 provides a unique moment to engage governments, companies and communities around the world in this endeavor. The pandemic has exposed deep vulnerabilities in healthcare systems, supply chains and social structures, and vast inequities that need to be addressed.

As societies emerge from the immediate crisis, we can aspire to do more than plug gaps and hope for recovery. We can build a better healthcare system and a stronger, more resilient global economy that delivers better health for all and shared prosperity for decades to come.

To help realize that opportunity, we have identified four imperatives:

1. Make Healthy Growth a Social and Economic Priority
As we have indicated, investing in health can be a critical lever for future growth and an important part of the economic policy debate. Instead of thinking of health as a cost to society, focusing on health as an investment can deliver significant social and economic returns. Governments around the world have a lead role to play and should consider developing and delivering ‘healthy-life agendas’ that deliver both health and economic benefits.

2. Keep Health on Everyone's Agenda
The COVID-19 pandemic has forced health onto the agenda of every organization and every household around the world. Keeping it there can deliver significant benefits. Long-term prevention and health promotion, which encompasses more than 70 per cent of the benefits we have identified, cannot simply be left to healthcare providers or systems. It is quite literally everybody’s business. Advancing healthy communities and healthy and inclusive workplaces will be critical.

3. Transform Healthcare Systems
The COVID-19 pandemic has exposed vulnerabilities in healthcare systems everywhere. Taking the opportunity to strengthen and reimagine systems may not only ensure better preparation for future crises but also deliver healthcare more effectively. The challenge is making and sustaining changes that shift to preventive health while ensuring resilience and flexibility. This will involve high-quality and holistic primary care and services that address behavioral and social health needs, like housing and deploying a broader range of delivery channels to reach people when and where they are most likely to benefit. The current incentives in many healthcare systems and organizations are not sufficient to ensure this transition and require a fundamental reassessment.

4. Double-Down on Innovation
As the world awaits a vaccine or an effective treatment for COVID-19, the vital role that innovation plays for health and the global economy could not be more evident. Innovations will continue to be critical to improving the health of the world’s population. 

Today, a little over a half of the $300 billion in global R&D spending on healthcare comes from the private sector. Promising innovations include genomics to deliver more targeted prevention and treatment; data science and AI to detect and monitor disease and enhance research; tech-enabled delivery to expand and reimagine access; and advances in the understanding of the biology of aging. However, realizing the full potential of the innovation pipeline may require shifting economic incentives to reward the areas with greatest need and highest return and building more collaborative approaches to R&D.

In closing

Realizing the healthy growth opportunity discussed herein will require a coordinated effort by all stakeholders — governments, companies and health institutions — to promote change within healthcare systems and beyond. But today, in the face of COVID-19, a unique opportunity to do just that has emerged. The benefits would be significant: a $12 trillion economic opportunity, hundreds of millions of lives saved, and better health in the global population. Could there be a more important objective than making the world both healthier and more prosperous? 

Dr. Jaana Remes is a Partner at the McKinsey Global Institute (MGI). Katherine Linzer is a Partner in McKinsey’s Chicago office. Shubham Singhal is a Senior Partner in the firm’s Detroit office. Their co-authors are Martin Dewhurst and Penelope Dash, Senior Partners in the firm’s London office; Kristin-Anne Rutter, a Partner in the London office; Jonathan Woetzel, a Director of the MGI; Sven Smit, Co-chair and a Director of the MGI; Matthias Evers, a Senior Partner in the Hamburg office; Matt Wilson, a Senior Partner in the New York office: and Aditi Ramdorai, a Consultant in the Berlin office.

This article appeared in the Winter 2021 issue. Published by the University of Toronto’s Rotman School of Management, Rotman Management explores themes of interest to leaders, innovators and entrepreneurs.

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