Underfunding of public health – harmful to morbidity, mortality and GDP

Under-financing of healthcare systems and the impacts thereof are evident across all economic spectra, be it low-, middle- or high-income countries.² In the UK, for instance, insufficient funding has brought the National Health Service (NHS) to a breaking point.³ A critical consequence of this is chronic shortage of doctors and nurses. Over the past 4 years, approximately 20 000 doctors and 38 000 nurses have left the NHS, with many exploring overseas options in countries where employment in the health sector is better compensated.⁴ With the exodus, attracting new staff in a home market is a challenge. The ripple effects of healthcare workers moving from low-income to high-income countries are many. These include a weakening of the resilience of healthcare systems in poorer countries that continue to struggle to provide a robust care infrastructure for the local population.⁵ And among other challenges, staff shortages can lead to delays in appointments and treatments, as already experienced in the UK and other developed countries with sizeable L&H markets.⁶

In addition to staffing issues, a resilient healthcare system requires adequate infrastructure, including hospitals and medical equipment. As global temperatures continue to rise, a lack of climate-resilient healthcare infrastructure may become a more pressing issue. Essential services such as water, sanitation and electricity supplies may be compromised under more extreme climate scenarios that generate heightened risk of frequent flooding and other disruptive events (eg, an outbreak of dengue fever).⁷ In cases of extreme heat and related droughts, water cuts may be necessary to regulate the supply of hydroelectric power. In addition, water temperatures might be too high to cool nuclear reactors, resulting in lower energy output to hospitals and other industry sectors, and households.⁸

The availability of robust power supplies is also important if healthcare systems are to capitalise on the benefits that new digital technologies offer. This message is reinforced by the World Health Organization (WHO) in its Global Strategy on Digital Health 2020–2025,⁹ which advocates the use of latest digital-based technologies to enhance healthcare provision. Without reliable power, the software and hardware that are fundamental to digital services cannot operate effectively.

Ultimately, despite widespread acknowledgement and understanding of the roles of a healthcare system, and also consideration of the needs of ageing populations and related health vulnerabilities, in many countries levels of funding consistently fall well short of need.

Within the framework of the Sustainable Development Goal 3.8 on Universal Health Coverage, the WHO remarks that “the world is off track to make significant progress towards universal health coverage (UHC) by 2030 as improvements to health services coverage have stagnated since 2015, and the proportion of the population that faces catastrophic levels of out-of-pocket health spending has increased.”¹⁰

The lack of funding for healthcare – resulting in limited treatment and stretched resources – has arguably already shown in the increase in mortality rates during the pandemic and delays in clearing healthcare backlogs.¹¹ For L&H insurers, a potential worsening of morbidity and mortality trends is critical for risk assessment and underwriting outcomes. In the event of an epidemic or pandemic, even more so, as the insured population cannot be isolated from the prevailing health crisis impacting society at large.