Poor health care threatens the economy
The Economic Bulletin of the Bank of Spain (BDE) warned yesterday, in its report "Economic effects of a possible lasting deterioration in the general health of the Spanish population", that in the last year there has been an increase in the demand for health services , whose causes and degree of persistence are still uncertain. If these dynamics "continue over time and are related to a persistent deterioration in the general health of the Spanish population, their economic impact could be significant."
The BDE specifies, as basic ideas, that on the one hand the latest waves of the health barometer of the Center for Sociological Research (CIS) show an increase in demand for this type of service. On the other hand, there has been an increase in employed persons who lose days of work due to illness, temporary disability or accident. And thirdly, it highlights that there is uncertainty as to the causes and degree of persistence of these developments, some of which appear to be heirs to the aftermath of the pandemic. All of this taken together makes the BDE fear that "to the extent that these developments may be lasting and be associated with a persistent deterioration in the general health of the Spanish population, they could require a structural increase in health spending that is still difficult to quantify and negatively affect, although with uncertainty, the potential product» of the Spanish economy.
As the Economic Bulletin recalls, the latest health barometer from the Center for Sociological Research (CIS) shows that, in recent quarters, there has been a substantial increase in the demand for health services in Spain. Between the average of 2018-2019 and November 2022, the percentage of the population that had gone to a family doctor, specialist or emergency room in the last 12 months increased by 12.1 percentage points (pp), 21.5 pp and 14.8 pp, respectively. These increases have been especially pronounced among the younger population groups. This increase in the demand for health services has been accompanied by a rapid growth in waiting lists. According to the same CIS study, the percentage of patients who have to wait more than a day to be seen when going to their GP has gone from 55.1% before the pandemic to 78.2% in November 2022. Similarly, in the case of specialist doctors, the percentage of patients seen with a delay of more than three months has gone from 25.8% before the pandemic to 37.9% in the last wave of the study. In line with the evidence provided by the CIS health barometer, the data from the Active Population Survey reveal a pronounced and continuous increase in sick leave in our country since 2020. In particular, in the average for 2022, 4.1 % of employed persons stated that they had not worked in the week prior to being interviewed, either due to illness, temporary disability or accident. With this, the growing trend observed in sick leave since 2020 is maintained, which clearly exceeds the percentages observed before the pandemic: -2.7% in 2019. This increase, very widespread by gender and age , has been relatively higher among the very young and among those of intermediate age.
However, the BDE report clarifies that some pieces of evidence suggest that at least part of the increase observed in health demand could be more lasting and be associated with the aftermath of the pandemic. On the one hand, there is evidence that the incidence in the population of persistent covid, understood as the prolongation of the symptoms of the disease beyond the first four weeks, would be quantitatively relevant. Thus, some recent estimates place said incidence at 5.4% of the population in the United States, 3.7% in Canada and Australia, and 3.4% in the United Kingdom.
If the recent increase in the demand for health services and sick leave were to last over time and were related to a persistent deterioration in the general health of the Spanish population as a whole, its economic impact could be significant. On the one hand, if they consolidate, these developments could require a structural increase – still very difficult to quantify – in health spending and in the demand for professionals in the health branches. On the other hand, the maintenance over time of these dynamics "could affect the potential output of the economy in the medium and long term through various channels, all of them subject to considerable uncertainty," the Bulletin reports.
If the health of a country's population were to improve, there are numerous studies that estimate that, in the long term, health interventions that are effective in reducing mortality and extending life expectancy "have a positive effect on Gross Domestic Product."
Other studies find significant positive health effects on growth in the long term. In these studies, the main channel of this impact is usually the increase in the incentives of young people to invest in their own human capital, when they expect to receive the return of the training received for more years.
A permanent deterioration in the health of the population could also influence the potential output of the economy through its impact on the stock of productive capital. For example, a common result in the literature on population aging is that a reduction in life expectancy tends to reduce savings and capital in the economy, while an advance in retirement age tends to increase them.