Better health, better wealth

Healthy people, prosperous lives: The first interim report of the IPPR Commission on Health and Prosperity – Full report 

Summary

The UK is getting poorer and sicker. The UK faces a challenging economic outlook. While the March budget had some improved economic news, the UK economy is still projected to shrink in 2023, inflation remains high and the fall in household spending power in the next two years is predicted to be the highest in 70 years (OBR 2023). At the same time, population health is going backwards. After rapid progress on life expectancy in the 20th century, the UK has rising rates of death and impairment – including higher prevalence of long-term conditions and greater rates of multimorbidity. Moreover, from 1960 to 2020, the UK has dropped from seventh to 23rd in the Organisation for Economic Cooperation and Development (OECD) on life expectancy at birth (OECD 2020). 

Good health has its own value – but this paper tests its relationship with prosperity. Good health is vital to an enjoyable and meaningful life, free from avoidable pain, anxiety and, in the worst cases, premature death. But it is also a crucial determinant of our economic prospects, both at an individual and a national level. This has been poorly accounted for by policymakers. In that context, this paper sets out to quantify whether better health could provide an answer to some of our most deep-rooted economic challenges and what policies could help ‘price in’ its value across all decisionmaking. 

Having conducted a multi-year data analysis that follows individuals over time, this report concludes that poor health harms both individual and national prosperity. Looking across the pre-pandemic and pandemic periods, we find that experiencing a physical health condition was associated with a drop in annual earnings of £1,800 (in 2014–19) and £1,700 (in 2020–21), and that mental illness was associated with a drop in annual earnings of £2200 (in 2014–19) and £1,700 (in 2020-2021)fall in earnings. We also found, between 2020–21, that the long-term physical illness of another household member was associated with a fall in annual earnings of £1,224. 

Lost earnings have a significant impact on Gross Domestic Product (GDP). We estimate that long-term-sickness-determined loss of earnings cost the UK economy £43 billion in 2021, equivalent to around two per cent of GDP. This is just one route by which health impacts on the economy. Lower business spend on overheads, business costs from sick days, lower production and the impact of short-term illness could be significant additions to this figure.

 We find that people leaving employment because of ill health is central to earnings loss and overall economic cost. In further disaggregating this result, we show that poor health was associated with over half of the 3.3 million exits from paid employment in the five years running up to the pandemic. The impact of health on employment exit was more pronounced among lower earners and women, particularly during the pandemic. This suggests that the impact of long-term illness on the labour market is not unique to the period since the pandemic and that explanations for current labour market challenges should not solely rest on early retirement. 

Good health doesn’t only matter because of its relationship with earnings, growth and consumption – it also determines which people and places share in prosperity across the UK. Illness is unequally distributed across geography, class, gender and ethnicity. Our findings show that better health could also help tackle the interplay between health inequalities and economic disadvantage. To explore this idea, we undertake an analytical experiment, exploring the impact on earnings 6 IPPR | Healthy people, prosperous lives of a 10 percentage point reduction in the incidence of illness among a range of sociodemographic groups. We find the following.

• This level of health improvement would increase women’s earnings at twice the rate of men’s – with both groups experiencing an average increase in earnings. 
• People from Bangladeshi or Pakistani backgrounds would see the largest average increase in income – worth 2.1 per cent of current income per person in this group, on average. 
• People with the lowest current incomes would see the sharpest increase in income from health improvement. 
• People in Wales would experience the highest rise in average earnings, worth around 1.8 per cent of current earnings on average. People in the West Midlands and North East would also see average earnings per person increase by around 1.7 per cent of current earnings. 

All figures are average increases in the whole population (not just the smaller group of people who avoid sickness). This reflects that health creation can be a means both to strengthen the economy overall and to make it work more fairly for everyone. 

There is real potential for health outcomes to get better across the UK. Our analysis is only valuable to policymakers insofar as UK health can actually improve. As such, we also explore what potential there is to do better. We show that the UK: performs worse on healthy life expectancy than similar countries; has seen a slower rate of growth in healthy life expectancy than comparable nations, and has a large proportion of preventable morbidity and mortality within its total ‘burden of disease’. That means the UK could become healthier, and so more prosperous. This could be achievable through more prevention, better treatment, faster access to care, and more effective employment support services and workplace interventions for people with existing long-term conditions, mental health problems or other impairments. 

The biggest barrier is not a paucity of policy or innovation, it is lack of capacity across government to make or sustain positive change. While better policy ideas or new innovations are always helpful, there is no lack of evidence-based interventions that could support better health in the UK. The more pertinent challenge is the level of willingness and commitment to sustained progress among UK policymakers. Other agendas have faced similar challenges, and successfully transitioned from a status quo of inaction to one of sustained cross-government, cross-society progress – specifically, the transformation of the UK climate agenda since the Climate Change Act 2008. Mission-orientated approaches have a strong evidence base, and success is most likely when they have an ambitious but stretching mission, combined with strong institutions, clear accountability, set delivery mechanisms and extensive accountability. 

We propose the UK government introduce a new Health and Prosperity Act1 to hardwire health across all we do. We recommend such a Health and Prosperity Act be a single piece of primary legislation actioning three core components: 

1. Set the mission: We propose a new, whole society ‘healthy lives mission’ for the UK. This would have two commitments, each covering a 30-year period. First, a commitment to make the UK the healthiest country in the world by the end of the period – replicating rapid success in countries like Japan (in the late 20th century) and South Korea (between 2000 and 2020). Second, a commitment to 1 In line with devolution, we do not suggest this is enacted from the centre on devolved nations. Rather, we suggest this is a framework for similar mechanisms and acts that are needed across the UK, and could be introduced by each of the four nations. IPPR | The first interim report of the IPPR Commission on Health and Prosperity 7 increase healthy life expectancy to at least the UK state retirement age across all regions. 
2. Design the institutions: First, a new legislative body – the Committee on Health and Prosperity – modelled on the Climate Change Committee (CCC) and designed to independently advise on the above mission (and hold all government accountable to it). Second, a ‘what works’ centre to rapidly expand the evidence base on interventions that support the health of the public, take a broader view of what evidence is ‘good enough’, and establish cost-efficacy of different interventions.
3. Create the right investment flows: First, a health creation fund, to put ‘what works’ evidence into practice and tackle health inequalities. Second, a health investment bank, to provide a reliable source of low-cost longterm capital for health-creating innovations – allowing us to ‘go for health’ as a national economy. 

We do not suggest these changes in government architecture and overall approach to health policy would constitute a silver bullet; the specifics of the policy programme will be critical. Instead, we contend the above proposals have the power to shift the default in the UK from apathy on actively pursuing good health to one where policy implementation, innovation and strategic investment is the norm.