The economic benefits of health and prevention in a high-income country: the example of Germany

Marc Suhrcke, Dieter Urban, Kim Moesgaard Iburg, David Schwappach, Till Boluarte and Martin McKee

Discussion Papers, Research Group Public Health from WZB Berlin Social Science Center

Abstract: This paper complements the current health policy debate, which is largely confined to the cost aspects of health systems, by considering explicitly the potential economic benefits of investing in health in general and via - chiefly primary - prevention. While concerns about high and rising health care costs are justified, we see a pressing need to also measure the benefits, ultimately enabling a complete economic assessment of the socially optimal level of resources for health. Despite the use of Germany as our point of reference, our approach and findings likely apply to a wider set of European highincome countries. Using new and already existing data, we find that in sheer health terms Germany has a lot to gain from more and better illness prevention. Assuming part of this existing burden can be reduced via effective preventive interventions, we find that the resulting economic benefits - expressed in people's willingness to pay for a reduction in mortality risk - would be substantial. We also gather Germany-specific evidence to suggest that the existing burden of ill health - whether caused by lack of prevention or treatment - negatively impacts a number of important economic outcomes at the individual and macro-economic level. Referring to work carried out in parallel to this project, we find that a number of cost-effective, primary preventive interventions exist to tackle part of the avoidable disease burden. Yet we note a deficit of economic evaluations, in particular in non-clinical interventions - a finding that underlines the role of government in the production of research on specifically non-clinical prevention. In light of the market failures discussed, from an economic perspective the role of government not only consists of research, but also - surprisingly to many - extends to actual interventions to address the health behaviour-related determinants of chronic disease. With the stakes as high and the economic justification for action in place, the case for scaling up preventive efforts in Germany, backed up by solid epidemiological and economic research, is hard to deny.

Date: 2007
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:wzbhea:spi2007302

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