Health coverage: The dual benefits of saving lives and the economy

In 2023, a report jointly released by the World Bank and the World Health Organization has a figure that makes people gasp: Global health coverage can save US$100 billion per year and save 114,000 lives . This is not a charity advertisement, but a cold economic account. We are accustomed to treating health coverage as a moral obligation, but few people calculate it from a cost-benefit perspective. If I told you that health coverage is not only morally correct, but also one of the most economically cost-effective investments, would you take a second look?

QKPFX0 Where does the $100 billion come from?

Let's start with the $100 billion saved. The money did not fall out of thin air, but came from three main channels: reduction in direct medical costs, improvement in productivity, and rupture of the chain of disease transmission .

Direct medical costs are the most intuitive. Taking the United States as an example, medical spending will account for 17.3% of GDP in 2022, reaching US$4.5 trillion. A considerable part of this is the cost of post-treatment of "preventable diseases." For example, diabetes. The United States spends $412.9 billion on diabetes every year, while the cost of early screening and intervention is only about $1000 per person per year. This means that for every dollar invested in prevention, you can save $4 -6 in post-treatment costs. Globally, the return on investment for this "prevention versus treatment" is between 1:3 and 1:10.

Productivity improvement is more subtle, but the impact is more far-reaching. Health coverage means fewer sick leave, higher attendance, and a longer career. A 2021 World Bank study found that ** For every 10% increase in health coverage, per capita GDP will increase by 0.5-1%*. This figure may not seem large, but when put into the scale of the global economy, it is an increase of hundreds of billions of dollars. For example, in China, the new rural cooperative medical system launched in 2009 covers more than 95% of the rural population, directly promoting the flow of rural labor to cities and providing a steady stream of labor for the manufacturing industry. The logic behind this is simple: Healthy people are more able to work, and working people are more able to create wealth .**

The break in the chain of disease transmission is the third channel for savings. COVID-19 showed the world the destructive power of infectious diseases-reducing global GDP by $4.5 trillion. A core function of health coverage is early detection and isolation, which can significantly reduce the probability of a large-scale epidemic. Take tuberculosis as an example. 10 million people around the world are infected with tuberculosis every year, of which 1.5 million die. The cost of early screening and treatment is only US$200 -500 per person, which is much lower than the cost of later treatment and productivity losses. This means that for every dollar invested in tuberculosis prevention, economic losses of 30-50 dollars can be avoided .

The economics behind 114,000 lives

Saving 114,000 lives can easily be reduced to the moral level of "life is priceless." But there is a concept in economics called "Value of a Statistical Life"(VSL), which measures how much society is willing to pay to reduce the risk of death. In the United States, the VSL is about $10 million; in developing countries, the figure is between $1 million and $5 million. This means that every life saved is equivalent to creating economic value of 1 - 10 million US dollars for society .

11.4 Ten thousand lives × an average of 3 million US dollars = 342 billion US dollars . This figure has exceeded the $100 billion saved, but that's not all. Because the value of life is not only reflected in VSL, but also in long-term effects such as family stability, education investment, and social trust. If a child loses his parents, his investment in education may be reduced by 30-50%, which means his productivity and income-generating ability will be affected for decades to come. In turn, health coverage allows more children to receive education, thereby increasing the human capital of society as a whole.

What will the opponents of ## say?

Of course, there will always be people who will say: "Health coverage sounds great, but where does the money come from? The government deficit is already high enough. If we invest in medical care, will the finances be able to support it?" That's a good question. The initial investment in health coverage is indeed considerable, especially in infrastructure construction and manpower training. For example, India's Ayushman Bharat plan covers 500 million people and requires an annual budget of US$10 billion. This is a considerable burden for a developing country.

But here is a key point: Health coverage is not a one-time investment, but a long-term investment . High costs in the early stages will bring higher returns in the later stages. Take Thailand as an example. The Universal Health Coverage Scheme launched in 2002 faced great financial pressure in the first few years, but by 2010, Thailand's medical expenditure as a proportion of GDP began to decline, and average life expectancy increased from 71 years to 75 years. This means that health coverage is not a simple expenditure, but a self-sustaining investment *.

Another objection is: "Will health coverage lead to excessive medical care? When people have insurance, they abuse medical resources, ultimately driving up overall costs." This concern is particularly common in developed countries. For example, the U.S. medical insurance system wastes US$765 billion every year due to over-treatment and defensive medical care. But this is not a problem of health coverage per se, but a problem of the design of incentive mechanisms. If doctors 'income is linked to treatment outcomes rather than the number of treatments, the problem of over-treatment can be alleviated. For example, in the UK's NHS system, doctors 'salaries are linked to the improvement in patient health. As a result, medical costs have fallen and patient satisfaction has increased.

The Cost of Efficiencism

The matter of health coverage is essentially a victory for efficiency. We usually associate efficiency with "cutting costs" and "increasing output," but in the field of health, efficiency means completely different: It doesn't make you spend less, it makes you spend it right. The logic behind this is: Prevention is cheaper than treatment, and health is more productive than disease .

But efficiencyism also has a price. When we fully quantify health coverage as an economic indicator, it is easy to ignore things that cannot be quantified-such as an elderly man's smile, a family reunion, and the trust of a community. These things don't have a corresponding cell in an Excel sheet, but in real life, they're the real value of Health Coverage.

Dr. Li in ### Community Clinic

I know a rural doctor named Li Qiang who works in the mountainous areas of Guizhou. His daily job is not to treat serious illnesses, but to prevent minor illnesses. Every morning, he would ride a motorcycle to various villages to vaccinate the children, measure the blood pressure of the elderly, and perform prenatal checkups for pregnant women. There is a thick register in his clinic that records the health status of each villager.

Once, I chatted with him and asked him if he thought his job was worth it. He smiled and said,"Look at that old lady. Her son works outside and only comes back once a year. If I hadn't taken her blood pressure every month, she would have had a stroke. Her son came back and saw that she was still alive and gave me a chicken. How much is that chicken worth? But how much is her son's peace of mind worth?"

Li Qiang's story reminds me that Health coverage is not only an economic account, but also a personal account . Those things that cannot be quantified-trust, peace of mind, dignity-are the real rewards of health coverage. These things are the key to making a society more resilient and warm.

QKPFX5 Why is QK taking action now?

If health coverage is so cost-effective, why are 400 million people around the world without basic medical services? Why does the United States 'health spending account for 17% of GDP, but its health indicators lag behind many developed countries? Here are a few key reasons:

1. Short-term versus long-term game . Health coverage has a long payback period and usually takes 5-10 years to see results. Politicians usually serve only 4-5 years in office, which means they prefer short-term policies, such as tax cuts or infrastructure, rather than long-term investments.
2. Resistance from interest groups . The medical industry is a huge chain of interests, including pharmaceutical companies, insurance companies, hospitals, etc. These interest groups will lobby the government to block any reforms that could threaten their income. For example, medical insurance reform in the United States is strongly opposed every time it is advanced.
3. Information asymmetry . The benefits of health coverage are decentralized (everyone benefits a little), but the costs are concentrated (borne by the government or insurance companies). This means that it is difficult for beneficiaries to organize in support of reform, while opponents can easily form alliances.

But these obstacles are not insurmountable. Experience in countries such as Thailand, Rwanda, and Brazil has proved that health coverage can be achieved with sufficient political will and institutional design. The key is: Turn health coverage from moral obligations to economic accounts, from political slogans to enforceable policies .

's final judgment

In the final analysis, the issue of health coverage is a revolution in efficiency. It tells us that efficiency is not just about doing more with less, but also about doing the right thing with the right money. Under this framework, health coverage is no longer charity, but the most cost-effective investment -it saves lives and the economy at the same time.

But behind this revolution, there is a deeper question: ** Are we willing to sacrifice short-term interests for long-term benefits? * This is the price that all efficiencists must face. And health coverage gives us an answer: Sometimes, the most efficient thing is also the most human thing. **

Golden sentence : Health coverage is not charity, but the most cost-effective investment-it saves lives and the economy at the same time.