As health has moved to front-page news, the discussion is no longer just about the cost of care. It is about health as an investment. Healthy life years are the new currency of growth and prosperity. What's the evidence? Countries with the most healthy life years are also the most competitive, as demonstrated by the Competitiveness Index of the World Economic Forum (WEF).
The fact is we are living longer but we are not living healthier. For every year-increase in life expectancy, we live only 0.8 years in a healthy state. And when individuals live longer in a state of disability, it adds up to big costs for companies and economies. Globally, if no action is taken, we will lose US$47 trillion of cumulative economic output between 2012 and 2030 because of the impact of non-communicable diseases (NCDs) and mental disorders.
Where do we start? Some of the necessary actions are well within reach of an individual government; others will require governments and companies to work together. In order to encourage new investments in health, the WEF in collaboration with Bain & Co has identified some practical actions that governments and businesses can take. Tackling health literacy, balanced nutrition in childhood, and salt intake reduction could all make a difference, yet most stakeholders believe such interventions are too costly to implement. In our research we found the opposite. Even modest amounts of investment can generate returns that convert unhealthy life years into healthy ones.
To prove we can generate returns, we need a new way to think about the return on investment of healthy populations. We can measure ROI from an individual perspective ("iROI") as well as a population and/or societal perspective ("pROI"), but it is critical to bring all the key stakeholders together to create a common understanding of what it will take to measure change.
Some companies are already taking action. Centene Corporation's Start Smart for Your Baby® is a programme in the US that helps women have healthier pregnancies and has already led to a 4.5% reduction in extremely low birthweight deliveries. The average cost of $75 per participating mother has produced an iROI in the range of 300% to 500%.
Among NCDs, cardiovascular disease (CVD) is a leading cause of death worldwide. American healthcare provider Kaiser Permanente has demonstrated the potential for economic return on relatively modest actions. Kaiser set up a programme to treat 350,000 high-risk heart patients at a direct cost of $205 per year for each participating patient. The programme aimed to prevent 19 heart attacks or strokes per 1,000 participating patients per year, resulting in fewer unhealthy years for high-risk patients. The additional healthy life years have an estimated socioeconomic value of $7.8 million, leading to a potential iROI of 3,700%.
Sometimes a government agency can take the lead, as in the proposed population-based intervention of subsidies developed by Singapore's Health Promotion Board. The project provides government micro-subsidies for the use of healthier cooking oil used in meals sold outside, thus reducing the incidence of cardiovascular disease. The board estimates a potential economic return for Singapore of S$102 million (2.56 billion baht) by 2020 and a pROI of 1,100%.
When government agencies work collaboratively with private industry and academia, the impact on health can be significant. Last year, the World Health Organization (WHO) challenged countries to reduce their salt intake by 30% by 2025 to address the link between salt intake and heart disease.
Thailand has a long history of salt reduction initiatives dating back to 1960 when the government initiated the first study of salt and blood pressure. More recently, a collaborative of government, members of the food industry and academics called "Salt Net" has been working to get a voluntary reduction of salt in processed food and a food labelling programme to help consumers understand the level of salt in the food they buy.
For a brief period between 2005 and 2008 in which Thailand strongly promoted salt reduction activities, the country's death rate from stroke actually dropped. However, when funding for these programmes declined, so did the positive impact on health. Lessons learned from the Thailand experience underscore the need for multisectoral cooperation, sustained funding levels and compulsory food labelling in order to reduce the economic burden of heart disease.
Even modest reductions in salt consumption could produce savings. Although it is difficult to quantify specific savings for Thailand, data from other countries such as the US suggest substantial returns. As early as 2010 U.S. researchers estimated that a national salt reduction effort could produce estimated savings of $10 billion to $24 billion in healthcare costs.
Nestlé's investment in better understanding the causes and effects of malnutrition in the Philippines — paired with proposed government subsidies for the consumption of fortified cereal and milk — is another good example of how a collaborative effort can benefit both the public and private investors and ultimately improve overall population health. The expected benefit in terms of reduced medical costs, increased productivity and fewer unhealthy life years could lead to a pROI of 110%.
Working across sectors is complicated and messy, but each sector has a role to play. The role of the public sector is to set the right framework and incentives for sectors to work together. The private sector must then identify opportunities that can make a measurable impact and generate real returns. Projects that are already working at Centene and Kaiser, along with those undertaken in Thailand and proposed in Singapore, demonstrate how even modest investments and collaboration can make a difference. When healthy life years become part of the currency of growth, the future of healthy is within our grasp.
Norbert Hueltenschmidt leads Bain & Co's healthcare practice in Europe, the Middle East and Africa and is a partner based in Zurich. Allan Schulte is a partner in Bain's Bangkok office.