Healthcare is priceless – well worth more than we think

“Healthcare is priceless… or at least worth more than we think!”

In this blog, Dr Rishi Das-Gupta, CEO of Health Innovation Network (HIN) South London and Dr Anna Buylova, Lead Health Economist at the HIN, re-think productivity growth and the future of the NHS

Although many of us say that our own health is priceless, most of us probably baulk at the idea of putting a monetary value on health. However, health economists do this using methods like cost-benefit analysis and Quality-Adjusted Life Years to enable policymakers to understand what resources should be allocated to healthcare and how to use them most fairly. It is important that we don’t just think of the NHS and healthcare spend as a cost, but weigh this against the value that good health generates, including the monetary value.

Economic growth theories focus on labour productivity and technological innovation as drivers of increased efficiencies and long-term growth, and don’t factor in health. Traditional economic evaluation of healthcare in the UK usually adopts a narrow perspective focusing on NHS productivity, enabling the health service to run efficiently given constrained resources. The problem with this approach is that it does not capture the adverse productivity impacts of ill health on the economic measures such as Gross Domestic Product (GDP). So, while it is good for allocating resources to health in people who are not working, it neglects the impacts on the wider economy of a healthy workforce. Hence, our allocation of resources differs from some other countries where employers also fund healthcare. If we compare it to car repair it is like waiting until the car has broken down, then going to the garage and saying, “I have £100 to repair it - what should I fix?”, rather than realising that without it you can’t get to work and earn the money to repair it.

A new report, commissioned by the Health Innovation Networks and researched by Frontier Economics (a leading economics consultancy) suggests that there may be around £290Bn in economic growth available by “fixing health” i.e. addressing ill-health in working-age population (and those they care for) along with attracting inward investment to life sciences and improvements in personal well-being. The findings of this work, along with work by the Health Foundation REAL Centre and the NHS Productivity Commission, highlight the importance of ensuring services support the working-age population.

Overall, it is clear that conditions which prevent people from working, particularly mental health issues, musculoskeletal issues and long-term conditions (especially respiratory and cardiometabolic), are the areas where improving health would drive growth fastest. A limitation of our current NHS services is that they are focused on place-based care, which serves those who are no longer working quite well. However, they often require people to take time out of work to attend medical appointments and travel for tests.

Hence, a public discussion of several important issues alongside the NHS 10-year plan might include:

The last of these is core to our work at the HIN, and the health economists in our insights team work to evaluate service changes in terms of productivity improvement, patient outcomes and social impact. We also quantify the economic growth for companies we support in the digital health and life sciences sectors. However, we haven’t traditionally evaluated the wider impacts of healthcare innovation on the UK economy as a whole. For example, the HIN South London is currently working on calculating the total impact of congenital heart disease on the economy. We are incorporating wider productivity impacts in our analysis, such as productivity gains from reducing both informal care and school absences.

At the heart of this is an issue of fairness, where services available through the NHS are offered to all. However, the way we have traditionally delivered services (face to face, close to home, during working hours) may discourage working-age people from seeking care early, acting as a brake on economic growth. Investing disproportionately in remote and digital services and care at work might have a bigger impact per pound spent than other interventions. The NHS might be a good place to test this out; the Frontier Economics report indicates that there is a 5.6% productivity opportunity for NHS staff by improving their health and access to services. We are at a point where we have the tools at the HIN to evaluate this, but is it ethical to run such trials?