Health equalities Blog4. Billions lost in productivity taxes welfare payments & extra costs in NHS Dr Angela Donkin

2 March 2017

Work across Government to improve well-being and reduce costs – otherwise everybody loses.

In the fourth blog of the TAP series of nine on health equality Dr Angela Donkin, of the Institute of Health Equity argues that ;

  • maintaining incomes at a level for healthy living,
  • preventing or managing the negative impact of recessions,
  • reducing inequalities in health and well-being

should be the foundation pillars of Government policy. What could be more important?

There is a clear message that living in a deprived situation is likely to lead to costs to society - lost productivity, taxes, welfare payments and higher NHS costs.  In 2010 it was estimated that inequalities in health accounted for productivity losses of £31-£33 billion per year, and £20-£32 billion a year in lost taxes and higher welfare payments.  Additional NHS healthcare costs associated with inequality were estimated to be in excess of £5.5 billion a year.

One way to achieve this would be to take a health in all policies approach. ​Wales has one of the governments leading the way with its Well-being of Future Generations Act. It will make public bodies look to prevent problems and take a more joined-up approach.

Work across Government to improve well-being and reduce costs – otherwise everybody loses.

Dr Angela Donkin,  Institute of Health Equity

In my first blog for this series I set out some of the health related problems that can be associated with having an insufficient income to live a healthy life.  I’m going to continue with this theme today, but rather than focus on the costs to individuals in terms of their health, I’m going to look at the costs to society. For example, treating asthma, (higher prevalence for people living in cold damp homes), obesity (higher prevalence in lower income groups), and heart disease (higher prevalence in lower income groups) costs.  In 2010 it was estimated that inequalities in health accounted for productivity losses of £31-£33 billion per year, and £20-£32 billion a year in lost taxes and higher welfare payments.  Additional NHS healthcare costs associated with inequality were estimated to be in excess of £5.5 billion a year.(1)  

While it is perhaps a little over-ambitious to think that we can eradicate inequalities in health completely, there is a clear message that living in a deprived situation is likely to lead to costs to society - lost productivity, taxes, welfare payments and higher NHS costs.  Policies that sanction benefits and keep them low, may of course create some short term financial savings to Government, and provide incentives to work for some, but these policies can, and do, result in people struggling to make ends meet: increased stress, unhealthy living conditions, and health problems are likely to follow, pushing up costs.  Indeed, the most cited reason for needing help from food banks relates to issues with benefit sanctions(2). While the government have concerns over food bank figures stating that the figures may reflect increased supply as opposed to demand, it would be difficult to argue that there are long term costs to society associated with short term cost savings.  These costs need to be studied, modelled and avoided.  If the food bank figures are insufficient then someone should be tasked with improving the reliability of information on this. 

In addition, we also need to be aware of the impact of the macro-economic environment, I’ve just read of study about the Dutch working population. Before the economic downturn, job loss was not associated with harmful drinking. During the downturn, job loss for more than 6 months was associated with episodic drinking [OR 1.40 (95% CI 1.01; 1.94)], while current job loss was associated with chronic drinking [OR 1.43 (95% CI 1.03; 1.98)], with the associations clearer for men. (3) 

Maintaining incomes and preventing or managing the negative impact of recessions, and reducing inequalities in health and well-being should be a foundation pillar of Government policy. What could be more important?

So where are we, and what more could be done? Reducing inequalities in health is a goal that the Department for Health and Public Health England are tasked with in England. There is some good work being done in these Departments, however the levers for improving incomes and reducing deprivation lie with other Departments or parts of a local authority and with the business sector.  Arguably all Departments and local authority leads should be tasked with improving health and well-being through there policies.

That is not to say that nothing is done at present, the Government announced a much needed increase in the minimum wage, but it is set below the real living wage amount needed by households to reach a minimum acceptable standard of living.  Maybe better for those in work, depending on the interaction with benefits, but at the same time, benefit levels remain frozen.  More needs to be done. 

The NHS is at breaking point, in terms of capacity and finances. Preventing ill health by ensuring good early years support, use of policies that are effective in reducing gaps in educational attainment, supporting and legislating for good work and fair pay, and provision of quality, warm, free from damp housing (for example – see Marmot review(4)) would help to reduce the burdens on that system in the future.  We need to be taking a more holistic preventative long term view.  One way to achieve this would be to take a health in all policies approach whereby the health impacts across society of any policy are considered with tools such as health equity impact assessments.  Other countries are adopting this model.  The Welsh government have themselves just joined their ranks with some particularly forward looking legislation – the Well-being of Future Generations Act will make the public bodies listed in the Act think more about the long-term, look to prevent problems and take a more joined-up approach. Ultimately such a step is needed to reduce health risks to individuals and costs to society.

1.             Frontier Economics. Overall Costs of Health Inequalities. 2009.

2.             Cooper N, Purcell S, Jackson R. Below the breadline: The relentless rise of food poverty in Britain. Church Action on Poverty, Oxfam GB, Trussel Trust, 2014.

3.             Goeij M BJ-W, Otten F, Kunst A. Harmful drinking after job loss: a stronger association during the post-2008 economic crisis? International Journal of Public Health. 2017.

4.             The Marmot Review Team. Fair Society, Healthy Lives: Strategic review of health inequalities in England post-2010. London: Marmot Review Team, 2010.

 

 

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