Is welfare spending distinct from health spending?

Paul Christie, Co-Founder and CEO of Tachmed, examines the benefits of a more joined-up approach in health and welfare spending to combat threats to global health

According to one McKinsey report, health inequity worldwide remains a major problem – with huge disparities in access and outcomes between (and within) countries and regions.

The same report highlighted the fact that there is currently an 18-year gap in average life expectancy between low and high-income countries and a 30-year gap between the lowest and highest life expectancy.

Experts are increasingly looking at the role of social policy and welfare spending in combating this problem.

Dealing with never before seen disease outbreaks

The more that a country invests in its healthcare systems, scientific research and new technologies designed to improve the health of its population, the greater the reward.

While the COVID-19 pandemic revealed a lack of resilience of some health systems, it also highlighted how quickly whole nations can – when required, mobilise. While the response was undoubtedly far from perfect, it demonstrated how scientific breakthroughs and significant behaviour change are possible when the right resources are made available, and government departments come together.

One recent study looking at the prospect of another novel disease or infectious illness outbreak, such as cholera, influenza, and typhoid, found that, statistically, extreme events are not as rare as many hoped. Experts believe the annual probability of extreme epidemics occurring could increase thrice over the next ten years.

It is clear that bold action is required if nations are to improve how they manage and overcome threats to global health, and through smart investment in both welfare and health systems, this can be achieved.

The benefits of a more joined-up approach in health and welfare spending

The World Bank’s Human Capital Project is a key example of how investing in health and welfare spending can improve the overall prosperity of a nation. ‘Human capital’ refers to the knowledge, skills, and health people invest in and accumulate throughout their lives.

Investing in the population through nutrition, healthcare, quality education, jobs, and skills helps develop human capital, and this is key to creating more inclusive societies and ending extreme poverty and increasing overall economic output.

As part of the project, the Human Capital Index (HCI) was launched in October 2018 and updated in mid-September, 2020. There is also a significant research effort working alongside the HCI, designed to help countries take effective action and improve their score.

For example, credible measurement of education and health outcomes will reveal what has worked and where to target resources in future. It also increases policymakers’ awareness of the importance of investing in human capital, creating momentum for government action.

The intrinsic link between health and welfare spending

Of course, no government has unlimited resources, and effectively tackling the problems that put a strain on services, such as the ongoing management of chronic health conditions, requires a new way of thinking. By empowering a population to take charge of managing their health, significant resources can be saved across both healthcare and welfare services.

Given society’s increasingly digital and joined-up nature, the mass roll-out of at-home digital diagnostics technology would easily enable this to happen. Moreover, with a device in their home, people could proactively manage their health, reducing the burden on government services.

Whether keeping on top of an existing condition or identifying a problem before hospital treatment is required, prevention is the best form of cure. The deployment of this technology would also skip the delay of waiting for a GP appointment and subsequent referral – hopefully preventing their condition from deteriorating.

Results of the tests taken at home would instantly be shared via a secure connection with the relevant healthcare professional, and action taken accordingly; this might also involve notifying the relevant welfare service should the person need to take some time off work or require support to cover their living costs.

While adjusting to this new way of thinking may take time, as we saw during the pandemic, the population can quickly adapt if there is a clear incentive. With resources scarce and budgets stretched, transforming how a population accesses services can enable government departments to work smarter and operate as effectively as possible.