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Research: Poor Health Reduces Global GDP by 15% Each Year

July 08, 2020
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Executive Summary

Making prudent investments in global health will not only dramatically improve people’s quality of life, it’s a $12 trillion economic opportunity, according to new research by the McKinsey Global Institute. The Covid-19 pandemic has demonstrated that rapid transformation of our health care architecture is possible. Health care providers, pharmaceutical companies, and the med-tech industry can build on recent innovations, and companies outside the health sector are learning the importance of proactively shaping healthy communities.

Nicholas Rigg/Getty Images

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Covid-19 has put health on the agenda of every company. Businesses have adapted to remote work, reconfigured physical workspaces, revised logistics and supply networks, and changed operating procedures to cope with the pandemic’s effects. Never before has the direct connection between the health of the global population and our economic prosperity been so visibly demonstrated.

But what happens next? New research by the McKinsey Global Institute shows that making prudent investments in the health of the world’s population can dramatically improve people’s quality of life, protect against downside risks such as pandemics, and lead to large economic returns from increased output and productivity. The upside for the economy and society would be enormous: a $12 trillion economic opportunity, hundreds of millions of lives saved, and better health across the global population.

Further Reading

In a new report, Prioritizing Health: A Prescription for Prosperity, we estimate that poor health reduces global GDP by 15% each year — about twice the pandemic’s likely negative impact in 2020 — from premature deaths and lost productive potential among the working-age population.

Prevention is key to achieving health improvements. We find that 70% of the economic benefits could be achieved with cleaner and safer environments, supporting adoption of healthier behaviors, and more access to vaccines and preventive medicine. The remainder would come from treating diseases and acute conditions with proven therapies, including medication and surgery.

Making the shift to prevention is no small challenge. It would require not only shifting incentives in health systems from disease treatment to health promotion, but also making better health a social and economic priority. A focus on addressing chronic conditions such as diabetes, high blood pressure, obesity, and mental health, all massive contributors to premature deaths and lower quality of life, would be key.

What’s more, the shift to prevention can be realized at relatively low cost. We found that focusing on known health improvements such as vaccines and preventive medications for heart conditions could deliver an incremental economic benefit of $2 to $4 for each $1 invested. In higher-income countries, implementation costs could be more than offset by productivity gains in health care delivery. But low income countries would need to build out health infrastructure.

Insight Center

Now is the time for a health transformation. The pandemic response has demonstrated that rapid transformation of our health care architecture is possible. Rethinking patient and workforce flow in Covid-19 wards and the fast transition to digital consultations are just two examples. Plus billions of people around the world are demonstrating that behavior can readily change in certain circumstances, for instance, as they wear masks, prioritize handwashing, and reduce face-to face interactions to curtail the spread of the virus.

Furthermore, the pandemic has catalyzed fast-speed innovation and global collaboration, which if sustained could help the world address other major health conditions such as many cancers, cardiovascular diseases, and mental health disorders. As of July 2020, scientists had shared more than 50,000 viral genome sequences and almost 180 vaccines were in the pipeline, many representing cross-sector and cross-country collaborations.

Companies are playing a central role in the transformation. Health care providers, pharmaceutical companies, and the med-tech industry are at the heart of the pandemic response. They could build on recent innovations to help shape how nations remake health systems, including how collaboration and alignment of incentives can help advance broad-based health and prosperity.

Most companies outside health care are adjusting to new ways of working and serving their customers. Our research makes a strong economic case for why they should invest in the long-term health of their employees as well. In today’s work environment occupational risks are increasingly related to mental health stressors, sleep health, and high levels of sedentariness, with mental health a special concern as the pandemic and economic uncertainty take a toll. Research shows that chronic conditions, including low back pain, mental health, and migraines can reduce the productivity of workers by up to 5%. Companies should consider steps ranging from providing access to mental health resources to allowing greater flexibility in working hours and time off.

Last, companies can proactively help shape healthy communities around them. One of the most effective ways would be to invest in communities so that children can grow up and live long and healthy lives. For example, reducing behavioral health conditions among children would contribute almost $600 billion in 2040 to global GDP. Healthy children who realize their full physical and cognitive potential build the future knowledge workforce that companies depend on.

As countries emerge from the Covid-19 crisis, we have a once-in-a-generation opportunity to rethink the role of health in a post-pandemic future. Making health a priority and shifting focus to areas with highest return can improve resilience, reduce health inequity, and promote greater individual, social, and economic well-being.

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Summary | 14 Annotations
Research: Poor Health Reduces Global GDP by 15% Each Year
2020/07/08 22:09
Never before has the direct connection between the health of the global population and our economic prosperity been so visibly demonstrated.
2020/07/08 22:09
New research by the McKinsey Global Institute shows that making prudent investments in the health of the world’s population can dramatically improve people’s quality of life, protect against downside risks such as pandemics, and lead to large economic returns from increased output and productivity
2020/07/08 22:09
$12 trillion economic opportunity, hundreds of millions of lives saved, and better health across the global population.
2020/07/08 22:09
we estimate that poor health reduces global GDP by 15% each year — about twice the pandemic’s likely negative impact in 2020 — from premature deaths and lost productive potential among the working-age population.
2020/07/08 22:10
We find that 70% of the economic benefits could be achieved with cleaner and safer environments,
2020/07/08 22:10
t would require not only shifting incentives in health systems from disease treatment to health promotion, but also making better health a social and economic priority.
2020/07/08 22:10
We found that focusing on known health improvements such as vaccines and preventive medications for heart conditions could deliver an incremental economic benefit of $2 to $4 for each $1 invested.
2020/07/08 22:10
Plus billions of people around the world are demonstrating that behavior can readily change in certain circumstances, for instance, as they wear masks, prioritize handwashing, and reduce face-to face interactions to curtail the spread of the virus
2020/07/08 22:10
Furthermore, the pandemic has catalyzed fast-speed innovation and global collaboration, which if sustained could help the world address other major health conditions such as many cancers, cardiovascular diseases, and mental health disorders
2020/07/08 22:11
Most companies outside health care are adjusting to new ways of working and serving their customers. Our research makes a strong economic case for why they should invest in the long-term health of their employees as well.
2020/07/08 22:11
Research shows that chronic conditions, including low back pain, mental health, and migraines can reduce the productivity of workers by up to 5%
2020/07/08 22:11
Last, companies can proactively help shape healthy communities around them
2020/07/08 22:11
As countries emerge from the Covid-19 crisis, we have a once-in-a-generation opportunity to rethink the role of health in a post-pandemic future.
2020/07/08 22:12