Increasingly, more working-age individuals are suffering from illnesses, and this directly impacts the productivity of countries. Additionally, the decrease in the workforce exacerbates inequalities and negatively affects the most vulnerable populations.
Illnesses that severely affect productivity and absenteeism, such as diabetes and migraines, require a special approach since they impact the present and future stability of the labor market and economy, considering the demographic composition of Latin America, where the proportion of elderly individuals is steadily increasing. Other prevalent diseases, like obesity, are often underestimated and are treated more as conditions rather than diseases.
According to a study by the German economic research institute WifOR in collaboration with the Latin American Federation of Pharmaceutical Industry (FIFARMA), diseases on average deduct 3.5% from the GDP of Latin American countries. In some countries, this loss reaches up to 4.7% of GDP. The effect of health deficiencies on the active population is summarized as the socioeconomic burden (SoC) of a disease, referring to the decrease in human capital; that is, due to a reduction in the size, efficiency, and overall potential of the workforce. Measuring this burden allows for understanding the impact of diseases and the value of adequate health investments.
The report quantified the monetary value of the SoC burden for seven diseases: cardiovascular diseases, neoplasms, ischemic heart diseases, lower respiratory infections, breast cancer, type 2 diabetes, and migraines.
The relationship between health and economic growth is evident; however, it is overlooked in the budget allocations of our countries, according to this study. Health investments play a direct role in the supply of workers since the quantity and capabilities of the workforce depend on their health.
More than the number of patients treated or occupied ICU beds, the results of health investment should be measured in terms of the economic benefits obtained from preventing productivity losses. Healthier populations produce significant indirect effects beyond their direct employment sectors.
“These results confirm the importance of appropriate investment in health and that health strategies promote economic development,” says Victoria Brenes, Executive Director of Fedefarma. “For this reason, the health system must be considered as an investment for the medium and long term, with disease prevention programs, promotion of comprehensive health, and strengthening of health systems.”
Specific data from the study indicates that in 2022, labor force reductions linked to the specified diseases represented between 2.5% (Peru) and 6.4% (Argentina) of GDP. Economic losses from 2018 to 2022 ranged between US$12.5 billion (Costa Rica) and US$367.4 billion (Brazil).
Migraines and type 2 diabetes are the diseases that most contribute to the SoC burden, with diabetes showing an upward trend in the last decade. Cardiovascular diseases and neoplasms systematically impose a substantial SoC burden, which is especially high considering that the work of certain skilled workers cannot be easily replaced.
The study concludes that the health system should be considered not only as a means to treat diseases, but as a fundamental pillar for sustainable socioeconomic development and increased productivity. The analysis was applied in eight countries: Argentina, Brazil, Chile, Colombia, Costa Rica, Ecuador, Mexico, and Peru; but according to Fedefarma, it reflects how the region should consider increasing and improving the investments made in health.
Source: FEDEFARMA
The Future of Health Investment and Economic Productivity in Latin America
As the workforce in Latin America grapples with an increasing prevalence of chronic illnesses, the imperative for strategic health investments becomes clearer. Conditions such as diabetes and migraines are not merely health concerns; they pose significant challenges to productivity and economic stability. Recent studies underscore the financial toll of these diseases, estimating an average loss of 3.5% of GDP across the region, with certain countries experiencing losses as high as 4.7%.
Demographic shifts, particularly the growing proportion of older adults in the population, exacerbate these challenges. This evolving composition of the workforce necessitates urgent attention to public health policies. For instance, the rising incidence of obesity is often viewed as an individual issue rather than a widespread public health crisis requiring systemic intervention.
Health issues primarily reduce the potential and efficiency of the labor force, leading to substantial socioeconomic burdens. The concept of ‘socioeconomic burden of disease’ (SoC) quantifies this impact, revealing how chronic illnesses erode the workforce’s capabilities. Recent analyses have examined the effects of specific health conditions, highlighting cardiovascular diseases, cancers, and respiratory infections as major contributors to this burden.
Furthermore, the interconnection between health and economic growth urges policymakers to reconsider budget allocations towards healthcare. Investing in health is not just a moral imperative but an economic opportunity. Healthier populations can lead to stronger indirect economic impacts that stimulate broader economic growth beyond direct employment sectors.
The importance of health infrastructure as an economic driver is echoed by industry leaders, emphasizing the need for medium to long-term investments in public health. Initiatives focused on disease prevention, health promotion, and robust healthcare systems are essential for fostering a productive workforce.
Recent data indicate that labor force reductions due to specified health conditions saw fluctuations from 2.5% in Peru to 6.4% in Argentina of lost GDP, illustrating a significant economic risk profile that necessitates proactive health strategies.
Looking ahead, the role of healthcare systems in Latin America must evolve from solely addressing illnesses to being recognized as crucial components of socio-economic development. With the region’s economic stability at stake, the call for enhanced investment in health becomes not only a necessary step but a critical foundation for sustainable growth.