The Value of Prevention for Economic Growth and the Sustainability of Healthcare, Social, and Welfare Systems

Over the last decade, the EU economy has experienced slow growth, and it is not expected to grow substantially in the coming years. Additionally, the ongoing demographic and epidemiological transition is increasing pressure on public finances, particularly healthcare and social expenditure. The current permacrisis—encompassing geopolitical and climate-related challenges—exacerbates these issues and directly threatens fiscal sustainability through slower economic growth, increased government deficits, and consequently, higher public debt levels. Addressing these intertwined challenges is essential to ensure the long-term sustainability of healthcare, social care, and welfare systems across the EU.

In this context, there is a need to share a new paradigm that shifts the healthcare model from a reactive (treating sickness) to a proactive system (promoting health), leveraging investments in health prevention. At this critical juncture, on April 30, 2024 the EU has introduced the New Economic Governance Framework (NEGF), which provides an opportunity to consider investments in the healthcare sector—especially in prevention—as “social security investments,” similar to what has been done for investments in defence and the digital and green transitions. Given this new framework, including healthcare investments within the scope of the NEGF would not only allow for greater flexibility in an unstable economic scenario but also lead to increased spending in areas with positive effects on the health and well-being of the population. 

Preventive care, including healthy lifestyle promotion, screening programs, and immunization, enables long-term benefits by reducing healthcare costs and increasing productivity, ultimately adding substantial value to economic and social systems while supporting public fiscal sustainability. For instance, every euro spent on preventive healthcare generates a 14-euro return, and adult immunisation can return up to 19 times the initial investment.

As EU Member States prepare to submit their National Medium-Term Fiscal-Structural Plans to the European Commission by September 20, 2024, there is a critical window of opportunity to prioritise investments in health prevention. In the future, spending on preventive healthcare can be considered an “investment,” as it entails potentially higher growth and reduces future expenditure:

• In the short term, it is necessary for investments in prevention (particularly immunisation) to be recognised as beneficial for long-term fiscal sustainability and granted greater flexibility within the Member States’ fiscal-structural plans.
• In the medium/long term, new revised fiscal rules should exclude prevention and immunisation investments from the calculations of Member States’ deficit or debt levels when assessing compliance with fiscal rules.

It is imperative to recognise that the current permacrisis needs to be addressed and overcome with concrete solutions. In this context, embedding preventive healthcare – and in particular immunisation – into EU Member States’ fiscal strategies is paramount to promote the economic sustainability of healthcare, social care, and welfare systems, enabling them to adapt and flourish amidst the challenging and unpredictable conditions Europe is facing. Member States must seize this moment to advocate for and implement these changes within their fiscal plans.

The Position Paper "The Value of Prevention for Economic Growth and the Sustainability of Healthcare, Social, and Welfare Systems" realized by The European House - Ambrosetti in collaboration with Vaccines Europe and IFPMA explores the economic, fiscal, and health return of investments in preventive healthcare, which the NEGF promotes through its priority-based public expenditure evaluation process. 

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