The Economic Case for Health

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The Economic Case for Health

Editor's Note: The Kansas Health Foundation worked closely with the Kansas Health Institute to develop the Economic Case for Health. The report was commissioned and released by the Kansas Health Foundation under the direction of Kavi Chawla, Project Advisor, and authored by the Kansas Health Institute. The report shows how better health strengthens jobs, productivity and growth - making health a smart investment for Kansas' economy and long-term prosperity.

Executive Summary

This study reviewed research on how health affects the economy. Health includes people's health outcomes, the factors that shape health, and the programs and policies that support health. The review examined four areas of economic impact:

1. Macroeconomics
2. Public finance
3. Private-sector firm performance
4. Individual and household impact

Thousands of studies were screened, and 61 were included that directly analyzed how health and the economy are connected. The findings help health care, public health and community leaders explain why investing in health can strengthen jobs, productivity and long-term economic success.

Why This Matters to Kansas Now

• Health indicators in Kansas have fallen behind the nation. This signals not just a health challenge, but a potential economic headwind for growth, competitiveness and fiscal stability.
• Economic strength depends on health. Health need not be viewed as a cost center, but as an economic strategy that affects families, companies and communities.

Bottom line: Health is a smart investment - one that strengthens families, boosts productivity and fuels long-term economic growth.

Key Points

Health is a Key Ingredient for Economic Success

Most credible research shows that healthier countries, states and communities post stronger gross domestic product (GDP) and attract more investment. When health improves, growth, jobs and competitiveness follow over the long run.

• A 10 percent reduction in mortality or disability burden is linked to about a 10 percent gain in GDP.
• Healthier countries attract more investment and are more competitive.
• Communities that gain life expectancy tend to see higher home values over time.

Healthier Companies Perform Better

Health hits the bottom line, mainly through lost productivity, which often exceeds medical spending. Companies that foster a culture of health see higher productivity and stronger performance. But employee health is shaped by more than the workplace - community conditions, such as safe neighborhoods, food access and strong public health programs, help people be healthy.

• Lost productivity from poor employee health often costs companies 2-4 times more than direct medical spending.
• Depression and chronic conditions drive large losses in workforce participation and on-the-job productivity.
• Companies with a strong "culture of health" have been shown to outperform peers on financial and market measures in some analyses.

Policies That Support Health Can Spark Economic Gains

Research consistently contradicts the conventional narrative that policies like smoke-free laws or junk-food taxes damage business. At worst, studies show little to no economic downside; in some cases, they point to long-term gains through productivity, public savings and healthier communities.

• A systematic review of smoke-free laws found no negative effect on restaurant revenues or employment and a slight increase across hospitality overall.
• In Australia, a junk-food tax was projected to add about $300 million in lifetime income gains for the country.
• U.S. simulations of healthy food incentives project billions of dollars in long-term productivity and income gains.

Poor Health Limits Household Prosperity

Better health and environments improve employment stability, earning potential and wealth, while health shocks and environmental contamination drive debt, bankruptcy and lower economic mobility.

• Early-life exposure to air pollution and punitive neighborhood environments reduces economic mobility, particularly for children from low-income communities.
• Access to preventive and restorative services (e.g., dental care) improves transitions from public assistance to work.
• Serious illness drives long-term financial strain; events such as cancer, stroke or heart attack reduce employment and income and increase risk of debt and bankruptcy.

Next Steps: Turning the Economic Case for Health Into Action

Health helps create a strong economy. Healthier people and communities boost productivity, support families and fuel long-term growth. This evidence can be used to communicate in economic terms that resonate with business leaders, elected officials and the public - translating "health talk" into "economic talk" about jobs, families and fiscal stability.

Strategic Moves for Leaders

• Communicate the economic value of health. Create systems to quantify the economic costs of poor health and economic benefits of health programs and policies. This may resonate with key stakeholders on their terms.
• Plan for the long game. The economic benefits of health improvements may take years to accrue. Plan for quick wins and show how they connect to long-term health and economic gains. This can help fuel momentum and support.
• Address the "wrong pocket" problem. Health benefits often accrue in other sectors. Communicate how various sectors benefit from health infrastructure and seek support and partnerships to maintain the health infrastructure.
• Work with business. Public health is more than a regulatory body. Work with employers to build healthier workplaces and grow the economy.

Bottom line: Treating health as an economic strategy opens new doors for partnership and investment. When leaders frame health as a driver of prosperity - not just an expense - they make a stronger case for action that benefits everyone.

Read the full report: Economic Case for Health