In the global scenario, the strategic health investments not only deliver betterment in health and improvement in the well-being of the people, but also create jobs, bolster economics and enhance the productivity of the nation as a whole. This shows that investing in health is economic and acts as a social catalyst. In the world scenario, there is a symbiotic relationship between the improvements made in health and its potential societal and economic gains. For the developing countries, the investments in health are a crucial investment that not only save lives, but also enhances the productivity, job prospects and human capital development (Barro 2013). The health investments are considered a debit or an economic drag for the developing countries; however, there is an increase in the evidence and notions that investments in healthcare provide economic growth for the developing countries. Therefore, the following report deals with the discussion highlighting the importance of investments in health by the developing countries and its associated opportunities and benefits for the economic growth in these countries.
Trends of health investment in developing countries
Despite of the progressive development made in the developing countries in the healthcare system, there is little being spend and health assistance is required in the low and middle-income developing countries. There is premature death and burden of illness that need to be addressed for controlling the communicable diseases and advancement in the health technologies. There is requirement of broader investments that also channelize the health workforce shortages and low productivity, information system and health management along with supply of commodities and drugs (Stenberg et al. 2014). Financing is the main crisis in the developing countries due to low domestic investment and stagnant international aid that left millions of people under crisis for access to healthcare services (Dieleman et al. 2015). In the low-income countries like Africa, tuberculosis, AIDS and malaria are the topmost threats to the health and well-being of the population.
The average health spending is low in the developing countries that range from US $164 to US$9019 in low and high-income countries respectively (Dieleman et al. 2014). This is substantially low in the developing countries like Somalia that is not expected to reach the minimum basic level and global target by the year 2040. The health spending in the developing countries nearly did not reach even the 50% of the average spending by the high-income countries from 1995, 2013 up to 2040 (Pickett and Wilkinson 2015). This shows that while the challenge for the developing countries to investment in health is daunting, there is a need for the sustainable financing and universal health coverage that would itself lead to the economic growth and productivity through strategic efforts.
Impact of health on the economy
The economic development of a country is strongly dependent on the healthcare performance and the healthcare systems as a whole. The health impacts like ageing populations, chronic illnesses prevalence and expensive health technologies usage pose tough challenges to the healthcare system and productivity of the nation (Keehan et al. 2016). The economic performance and health performance are interlinked. Poverty, mortality and infant malnourishment adversely affect the life expectancy and productivity of the developing countries, as these are the basic truth in these countries. Poor health education is also a major hindrance in the economic growth and in achieving the sustainable growth in the developing countries (Cutler, Huang and Lleras-Muney 2015). The illnesses hinder the institutional performance as low life expectancy damages productivity and adult training discouragement. The emerging communicable diseases are also an obstacle for the development of the countries along with the policy choices. Good health has a sizeable, positive and significant effect on the productivity and gross output of a country. Health is considered crucial in terms of human capital and an essential ingredient in the economic growth of a country. Unhealthy workers are mentally and physically less productive and earn lower wages. This also results in absenteeism from work, reduced working hours that strongly affect the developing countries where a major proportion of the workforce is involved in the manual labor as compared to the industrial countries (Hartman et al. 2014). Therefore, this shows that health has a great impact on the economy of a country, especially in developing countries that requires broader investments in the healthcare sector.
Health and income
There is a well-established relationship between income and health. Income is related to the health in three different ways; the individual income, gross national product of the developing countries and income inequalities among the countries. Income has a causal relationship with the health where there is direct effect on biological survival that requires material conditions, social participation and ways to control the life circumstances. The life expectancy has a direct effect on the income at the individual and at the national level. The severity of illnesses and high incidence of communicable diseases contribute to earlier deaths resulting in low life expectancies in the countries. Low income in the families makes it difficult for them to pay for the doctors, diagnostics, treatments and medications, as they have to struggle with the essentials like food, housing and utilities (Linden and Ray 2017).
The developing countries have high levels of poverty with low-income levels that tends them to dwell in substandard living conditions, less access to healthy food and great risk for chronic illnesses like heart diseases as compared to the high-income groups and developed countries. Income greatly affects the health and well-being of the people as high income would provide them an opportunity to buy healthcare goods and services in improving health and positive outcomes. It also has great psychosocial and behavioral impact as low income being at the bottom of social ladder and reverse causation in terms of poorer health outcomes in the low and middle-income countries. Poor health results in low income as poor health hinders people to participate in employment among the working age groups as witnessed in the developing countries (Gannon et al. 2015). Moreover, childhood health also affects the education, limiting of job opportunities and earnings. This illustrates that health and income are inter-related and affect each other at the individual and national level in the developing countries that faces poverty and prevailing low-income groups and requires greater investments in the health sector.
Health and economic welfare
Health greatly affects the growth and welfare of a country through economic burden of the diseases and labor productivity. It has direct impact where child health affects the population’s future income through health education. It also has indirect impact that is witnessed at the family level. The macroeconomic studies at the country level suggest that increase in life expectancy would enhance the growth rate and decrease in life expectancies would decrease the gross domestic product (GDP) per capita affecting the economic growth of the developing countries (Meara et al. 2015). In the developing or middle-income countries, the increase in maternal and child mortality rates is affecting future of these countries that is compelling them to invest in health and enhance economic welfare. In the developing countries, the detrimental effects of health is accountable in terms of production losses, illnesses among the workers, malnutrition among the adults and children leading to absenteeism from schools and inequality in assessing the healthcare services for treating illnesses.
According to Organization for Economic Co-operation and Development (OECD) states that there is a relationship between health investments and health policies that drives efficient economic growth. The addressing of the health financing and investors is greatly associated with the health and economic welfare. Poor health outcomes hamper the GDP by reducing the labor force and productivity as a whole. Lower GDP is linked to reduction in the labor productivity and factors like adult illness, malnutrition that reduce the investment in the national capital (?tef?nescu-Mih?il? 2015). Healthier populations can make better contribution in the economy of the country that would boost the economic development in the developing countries. This depicts that positive health outcomes contribute to the economic welfare of the developing countries with healthy workforce and progress towards economic development.
Importance of investment in health
There are many addressable challenges that developing countries face in terms of investment in health. There is lack of private and foreign investment, mismatch in capital, adequate healthcare insurance coverage, health policies and human capital pipeline. The health sector requires opportunities to invest in the healthcare sector in the developing countries by the potential investors to assess the market failures and sound organization for addressing the targeted population healthcare needs (Sengupta 2016). The following section deals with the importance and opportunities of investment in health as the most critical investment that can be made by the developing countries.
The health investments provide opportunities along with education that acts as great equalizers in the access to health that aid in pursing the economic growth and development in the developing countries. It also translates into productivity where healthy populations are associated with populations that are more productive. For example, United States survived the economic crisis due to the healthcare sector that added jobs at the time of recession. On the other hand, the Ebola crisis not only hampered the West African economics into deep tailspin, but also affected the foreign investment scenario in Africa that depressed the economic growth and trade in the country. The investment in healthcare sector can minimize, if not eliminate the economic crisis and severe economic jerks. Investments in health also benefit competitiveness for the emerging countries (Jamison et al. 2013). A competitive healthcare with innovative health ecosystem would have better competitors internally and internationally. Developing countries need to understand their own innovation and multitudes of venture capital, suppliers and healthcare facilities at the first level and ways to support them.
Investment in healthcare infrastructure by the developing countries is necessary through private and foreign direct investment (FDI) like in India (Flora and Agrawal 2014). It is an integral part of an effective and open economic system and a major societal catalyst. An effective and transparent policy is required that attract the foreign investors to invest in the healthcare infrastructure of the developing countries to build the human capital and productivity. It provides better access to technology and international markets with policy coherence through use of overseas development assistance (ODA) that builds the investment capacity and enhanced economic productivity. Health investment is an independent value that raises the standard of living of a country and better health conditions increase the efficiency and labor output of the emerging countries that can head towards economic development. Funding is also required as it is directly linked with the cost-effective interventions such as primary care and preventative measures that address the healthcare market failures.
Conclusion and Recommendations
For addressing the market failures in the health investment, there is requirement of economic strategies that enhance the health investment, labor force and economic productivity. There is requirement of health coverage for the poor that focuses on the cost-effective interventions. FDI is also a potent source of enhancing the health investment, economic growth and in raising the income level of the developing countries. The attracting of the foreign investors helps to address the poor health investment issue and maximize the benefits in the foreign presence in the domestic economy of the emerging countries. Therefore, it can be concluded that investment in health infrastructure is beneficial and crucial investment for the developing countries for their economic growth and nation’s productivity.
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