3. What is the social and economic impact of poor health?


Key points

  • Poor health has significant social and economic consequences for society and individuals.
  • Health is one of the strongest contributors to people’s wellbeing and poor health can limit people’s participation in communities.
  • People with a long-term health condition have an economic activity rate of 68% –a fifth lower than for those without a long-term health condition.
  • The Community Life Survey (2017/18) found that disabled people or those with long-term limiting illness were less likely to have someone to socialise with or feel they belong to their neighbourhood.
  • Poor health results in high costs to a range of public services, estimated at £200bn or 7% of GDP in 2016/17. These costs have risen considerably in recent years.

3.1 Impact of health on wellbeing

The health of its population is one of any nation’s greatest assets. Good health improves people’s wellbeing, their productive capacity and their ability to participate in society. As such, it is an important contributor to a successful economy and a thriving society.

However, a study by Newton et al estimated that around 40% of health care provision in the UK is used to manage conditions that are potentially preventable. This is a lost opportunity for individuals and society.

Repeated studies have found that people’s health status affects their subjective wellbeing. Indeed, comparisons across countries show that health status has one of the largest impacts on a nation’s wellbeing. In the UK, people with ‘good’ self-rated health are more likely to be satisfied with life, less likely to be anxious, and more likely to be happy and feel that life is worthwhile.

3.2 Impact of health on communities and society

Good physical and mental health allows people to play an active role in society and their local communities. For example, the Community Life Survey (2017/18) found that disabled people or those with long-term limiting illness were less likely to have someone to socialise with or feel they belong to their neighbourhood. The same survey found that 13% of disabled people or those living with long-term illness often or always felt lonely, compared to 3% of people living in good health. A number of studies have also highlighted the often profound effects of living with multiple health conditions, finding that people living with multiple health conditions have poorer quality of life, difficulty with everyday activities and often experience isolation as a result of reduced mobility.,,

There is some evidence, too, that inequality can damage communities. For example, income inequality, which is closely linked to health inequality, is linked to higher rates of crime and lower social cohesion. It is important to recognise that these inequalities do not simply arise from different levels of education or employment, other barriers (such as discrimination) can limit people’s ability to access good employment and housing.

3.3 Economic impacts of poor health on workforce supply and productivity

Poor health has significant economic consequences for both society and individuals. For individuals, poor health can mean they are unable to participate in the labour market altogether, or it can limit the amount or nature of the work they do.

Figure 8 highlights the scale of the gap in economic activity between those who report a long-term health condition and those who do not, by age. In 2018, 31% of the working age population (aged 16–64) report that they have a long-term health condition. People with a long-term health condition have an economic activity rate of 68% – a fifth lower than for those without such a condition. As might be expected, it is a gap that gets wider with age, increasing from 5% for those aged 16–24 to 20% for those aged 55–64.

Figure 8: Employment rates for people with and without a long-term health condition, by age group, UK, 2019

Figure 8: Employment rates for people with and without a long-term health condition, by age group, UK, 2019.

Source: ONS, Quarterly Labour Force Survey (LFS), 2019 (quarter 1).

Poor health can affect an individual’s productivity through missed days of work or reduced performance. Analysis by the Health and Safety Executive shows that there were 26.8 million working days lost to work-related ill health in 2017/18. Although this was, on average, just under one day lost per worker across the entire population, this was not evenly distributed; those who were absent for health-related reasons were, on average, likely to miss 16.5 working days. Stress, anxiety and depression accounted for 15.4 million lost working days, with those affected missing an average of 25.8 days of work. A large proportion of the illnesses causing a loss of working days are likely to be avoidable.

‘Presenteeism’ – turning up to work when unwell – can also reduce productivity at work or lead to lower quality of work because people spend less time on tasks compared to those who are well. The European Working Conditions Survey 2015 found that 59% of workers in the UK reported working when sick at some point in 2015.

Poor health can also compound economic difficulties for the individual. For example, people who have excellent health have been shown to earn 4–7% more than those with average health after controlling for other characteristics, while people experiencing health shocks (measured by large declines in an index of different health measures) have been found to be more likely to enter retirement at younger ages.

Differences in employment because of people’s health status have consequences for individual incomes. For example, analysis from the Institute for Fiscal Studies has shown that those of working age in poor health are 50% more likely than healthy individuals to experience income poverty. Health status also has important implications at an aggregate level for the national tax base and economic dependency ratios (the number of non-working people for each person in paid employment). A population that is supported to remain fit, healthy and working for longer can both increase tax revenues through a larger, more productive workforce and can reduce the costs of supporting an ageing society.

Figure 9: Mortality rate by age and Townsend deprivation quintile, men

Figure 9: Mortality rate by age and Townsend deprivation quintile, men.

Source: Health Foundation analysis using ONS, mortality rates by deprivation decile.

Health inequalities are not simply an injustice for the individuals affected but are also a lost opportunity for the national economy. Less productive local areas of the economy are related to areas with poorer health. The causal links between low productivity and health in local areas are complex and poorly understood at present. A previous Health Foundation publication – The nation’s health as an asset outlined a programme of research that is currently underway at six research institutes across the UK to try to improve understanding of these issues. However, a population’s health is an important determinant of potential labour supply. As Figure 9 shows, by 65 years of age, 21% of men from the most deprived fifth of areas in England and Wales will have died: more than twice as many as men from the least deprived fifth (9%).

3.4 The cost of poor health to the public sector

Avoidable poor health carries a high financial cost for the state, manifesting across several different areas of government spending, including the costs of treating illness in the NHS, the costs of supporting people whose poor health means they need assistance from the social care system, and the costs to the social security system through a range of benefits. In analysis for the Chief Medical Officer’s annual report, the Institute for Fiscal Studies estimates the total cost of all of these at around £200bn or 7% of GDP in 2016/17. Moreover, the costs across these different areas of spending have been rising both in absolute terms and as a proportion of GDP. As recently as 2001, the cost was lower at about 5% of GDP, or £80bn in 2016/17 prices.

While not all these costs can be avoided, poor levels of health in a population have major economic and social impacts. Comparisons between areas with better and worse health give some indication of the scale of that impact. For example, there is greater entitlement to Employment Support Allowance (ESA), an ill health income-replacement benefit, in the most deprived 10% of areas – with 7.7% of the working age population in England in 2018 in those areas in receipt, compared to 3.3% of those in the least deprived areas.

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