Article

Recession's Health Repercussions

The 2023 Global Risks Report indicates that fears of a widespread recession this year have focused attention on economic risks. There tends to be less scrutiny however on the potential health consequences of an economic downturn. Yet past recessions indicate governments and businesses need to be on alert. Periods of economic decline are linked to considerable increases in excess mortality, with higher rates persisting years after the event. Emerging markets in particular experience significantly higher mortality rates during economic slumps (see exhibit).

Recession repercussions will add to existing crises for the health sector. The COVID-19 pandemic revealed vulnerabilities of health systems globally with many struggling with infrastructure and technology-linked challenges, while simultaneously seeking to address long-standing workforce-related issues that inhibit system resilience. As recession looms, healthcare systems must navigate a risk environment shaped by persistent, long-term trends (such as climate change and ageing populations) and challenges worsened by the pandemic (such as funding gaps and supply chain vulnerabilities).

Recessions can contribute to spikes in conditions ranging from depression, malnutrition and greater susceptibility to infections, to non-communicable diseases such as cardiovascular disease and cancers. A study linked 260,000 excess cancer-related deaths in OECD countries to the increased unemployment and reduced health expenditure due to the 2007–08 global financial crisis (GFC). The relentless stress of joblessness is associated with higher mortality, with a study in the US finding that workers affected by mass layoffs had notably higher death rates. Job losses can also drive spikes in domestic violence, substance abuse, and suicide. While women and children tend to be the victims of domestic violence, men experience disproportionately higher suicide rates – there were 12 times more excess suicides among men than women in the US during the GFC (see exhibit).

Worsening health outcomes may appear immediately or manifest in the years after recessions are officially over. As big rupture events subside, increased demand for support and treatment may follow with a lag – particularly for mental health related needs. Additionally, tightening budgets or loss of employment-linked health insurance can lead to households deprioritizing healthcare expenditure and postponing treatment, contributing to further deterioration of their health. 

Lingering symptoms: recession effects on health systems

Periods of economic uncertainty can also impact health systems’ financial resilience – either through deliberate spending cuts, declining GDP, or inflation-linked escalating costs. Constrained healthcare funding can coincide with periods of increased demand for care and thus reduce availability and quality of health services.

Health system-related impacts of recessions are influenced by a number of factors that differ depending on national contexts. For example, a government may invest in healthcare as a direct measure to tackle recession-related impacts at the height of the crisis, yet deprioritize the sector in subsequent years as many OECD countries did following the GFC (see exhibit). This may occur right when populations start resuming health utilization or certain health trends manifest. A study in the UK found that 330,000 excess deaths between 2012 and 2019 could be linked to austerity measures – spending cuts on social security and vital services – which adversely influenced social determinants of health resulting in poorer, sicker populations and intensifying pressures on health systems. But recessions can also encourage governments to invest in healthcare. In Japan,  the GFC spurred targeted investments in areas ranging from community healthcare revitalization funds to advanced medical technology.

The fallout of COVID-19 has exposed chronic vulnerabilities of many health systems around the world and their lack of preparedness to absorb acute shocks. While recession-linked impacts will ultimately be shaped by national contexts, a failure to prepare for the health consequences of a looming economic downturn puts already-suffering populations at further risk.