The Dynamic Interplay Between Economic Crisis and Health: Insights from the COVID-19 Pandemic and the 2008 Financial Crisis

This article was exclusively written for The European Sting by Ms. Sadia Khalid, a dedicated professional with an extensive academic background, holding an MBBS and an MD degree. She is affiliated with the International Federation of Medical Students Associations (IFMSA), cordial partner of The Sting. The opinions expressed in this piece belong strictly to the writer and do not necessarily reflect IFMSA’s view on the topic, nor The European Sting’s one.

The intricate relationship between the economy and health is a dynamic interplay where each influences the other. While the prevailing belief is that the economy exerts a more substantial impact on health, the reciprocal nature of this connection cannot be ignored. The social gradient further moulds health outcomes, perpetuating inequalities. As the world grapples with successive waves of the COVID-19 pandemic, a looming economic crisis unfolds, characterized by sluggish development, diminishing incomes, and soaring unemployment rates. This crisis is exacerbated by economic lockdowns necessitated by widespread social isolation measures.

Contextualizing the Economic Crisis:

The current economic downturn, stemming from the COVID-19 pandemic, prompts a revisitation of the complex relationship between economic conditions and population health. Notably, it is crucial to recognize that the economic slowdown is an aftermath of measures taken to curb the virus’s spread rather than a direct consequence of the virus itself.

Learnings from the 2008 Financial Crisis:

To shed light on the potential health implications of the current economic crisis, we turn to the aftermath of the 2008 financial crisis that gripped European countries. This crisis rippled through public sectors, affecting the labour market, household income, education, health, and social policies. The repercussions included a significant GDP decrease, a rapid surge in unemployment, and a spike in public debt.

Impact on Health Systems:

The strain on health systems during the 2008 crisis was notable. Austerity measures led to a reduction in public health financing, forcing governments to make tough choices—implementing budget cuts, focusing on essential services for the most vulnerable, or pursuing active policies to prevent bankruptcies and stimulate economic growth. This economic constraint led to varied responses in health budgets, including freezes, slower growth, targeted cuts, and cost-sharing measures.

Socioeconomic Determinants and Health:

The crisis not only affected public budgets but also left a profound imprint on individuals and households. Socioeconomic determinants, particularly income and job insecurity, played a pivotal role in shaping health outcomes. Studies underscored the link between low income, job insecurity, and adverse health effects. Labor market conditions, demanding increased activity, and extended working hours also contributed to collateral health issues.

Effects on Access to Healthcare:

Reduced funding compelled healthcare providers to limit consultations, and inpatient treatments, and increase waiting times to cut costs. This led to diminished access to medical treatment, heightened unmet health needs, and a shift in healthcare financing structures. The crisis prompted cost-sharing measures, disproportionately affecting vulnerable groups, such as the elderly.

Health Outcome Consequences:

The multifaceted impact of economic crises, either independently or in combination, translated into changes in health indicators, including overall mortality, life expectancies, and increased risks of cardiovascular and infectious diseases. However, intriguingly, some studies contradicted these outcomes, reporting improved population health during economic downturns.

Unravelling the Unemployment Paradox:

Contrary to conventional wisdom, Latest research challenges the notion that unemployment, particularly long-term, inevitably harms health. Despite its potential to reduce income, erode professional status, and limit social interaction, research suggests that unemployment does not necessarily have a lasting adverse impact on population health. The intricate interplay of factors, including social benefits and budgetary interventions, may mitigate the health implications of economic crises.

The Debate and Future Directions:

The ongoing debate on the relationship between the economy and health remains open. Methodological nuances, such as the choice of dependent variables, may contribute to the observed inconsistencies in research findings. Objective measures like mortality or life expectancy often reveal countercyclical relationships, while subjective variables like self-assessed health status may exhibit procyclical associations. As the world grapples with the profound impact of the COVID-19 pandemic, the sensitivity of the global economy to disruptions becomes evident, emphasizing the timeliness and relevance of this discussion.

About the author

Sadia Khalid is a dedicated professional with an extensive academic background, holding an MBBS and an MD degree. She is an Early-stage Researcher (ESR), accomplished Medical Writer, and Research Engineer based at Tallinn University of Technology (TalTech) in Estonia.
Sadia’s research interests span a wide spectrum within the realm of medical sciences, including Molecular Medicine, Cell Biology, Infectious Diseases, Bacteriology, Hepatology, and Gastroenterology. Her work is underpinned by a strong belief in the mission of promoting public health, safety, and awareness.