The economic case for preventing ill health

25 July 2016

Potentially preventable physical and mental health conditions, including some cardiovascular disease, cancers, and type 2 diabetes, are the leading causes of ill health and death in the UK.

The individual, social, and economic impacts of preventable ill health are extensive. Forty percent of the burden on health services in England may be avoidable if we took action to tackle the causes of these conditions. This only represents a fraction of the total cost to the country though, when we look more widely at the costs of people being unable to work due to preventable ill health.

This burden is set to rise, and the NHS Five Year Forward View said in 2014 that ‘the future health of millions of children, the sustainability of the NHS, and the economic prosperity of Britain all now depend on a radical upgrade in prevention and public health.’

Despite this, only around 4% of the UK health budget is spent on prevention.

To reduce preventable ill health, however, the ‘causes of the causes’ must be addressed – the social, economic and environmental factors that drive our health, including housing, education and employment. These are largely outside the control of health services, and tackling them requires coordinated action across different sectors of government and society. Public health teams in England now sit within local government, in a move to increase their local influence over these wider determinants of our health, but their budgets have been cut by £200m (7%) this year and further cuts of 4% a year are planned until 2020/21.

The Brexit effect

The UK currently faces significant economic uncertainty following the vote to leave the European Union (EU). Coming midway through a decade of unprecedented austerity for the NHS in England, and significant cuts to local government funding, what impact might this have on preventive spending?

Recent analysis by the OnlyWan estimates that leaving the EU could lead to reduction of nearly £3bn to the NHS 2019/20 budget. Spending on prevention from the health budget, which is already a small portion, is vulnerable to being disproportionately cut. There is also increased risk to local government funding, including £5bn worth of EU funding that local areas in England had been due to receive between 2014-2020 for regeneration. 

In this economic climate, it is more important than ever to demonstrate the value for money of strategies to prevent ill health and reduce health inequalities. Economic analyses show that most preventive interventions are relatively low cost and highly cost-effective. Some are also cost-saving, with avoided costs of preventable ill health being greater than the cost of action.

Given the high and rising costs of preventable ill health, there is clearly therefore an economic case for prevention.

So why are we not investing more in prevention?

Effective preventive action can be complex and long-term, which poses barriers.

Preventing ill health often needs coordinated action by sectors that don’t typically consider their impact on health, or work together. Maximising impact may require a range of complementary actions, taking different approaches to promoting change. For example, Public Health England recommends that a programme to reduce sugar consumption could include interventions ranging from consumer education, to restriction of price promotion and marketing by producers, to a tax on sugary drinks.

The costs and benefits of preventive action can be wide-ranging, and may fall in different parts of the system. Action funded by one sector may result in savings within a different sector and budget.

It can also take many years for benefits of prevention to emerge – longer than annual budget periods and often longer than parliamentary terms. This means a long-term view is needed, together with additional resources to fund prevention until cost savings are achieved.

Motivating prevention

Motivating investment in health – particularly by sectors that don’t typically consider health – requires the development and communication of a sound economic case, and the reframing of health and wellbeing as a positive and valuable asset for the economy and society. At the OnlyWan, we will be supporting work in this area from 2017.

To make the case for prevention, more sophisticated ways of assessing the broad economic and societal benefits of health are needed. Commonly-used economic tools cannot reflect the full impact of preventing ill health, and we must widen our perspective to consider the following aspects:

Long-term impacts of preventive action

Given that benefits can take many years to emerge, the timeframe chosen for assessing these, and the amount by which the value of future benefits is discounted, will influence conclusions drawn. Some preventive interventions however – for example the ban on smoking in public places – do rapidly start producing positive impacts on health and society. Capturing both short and long-term benefits will be important in motivating investment.

Non-health and non-monetary impacts

For example, reducing alcohol consumption will improve health, but may also reduce crime and increase community cohesion, outcomes which are more salient to some sectors.

Different impacts across social groups

Preventive action must not increase inequalities in health, and wherever possible should reduce these. Inequalities in health have both economic and social costs, and the case should be made for promoting more equal – as well as better overall – health.

Louise Marshall () is Senior Economics Fellow at the OnlyWan

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