Health and Healthcare Systems

The human costs of epidemics are going down but the economic costs are going up. Here's why

A health worker stands by ready to ask incoming passengers to remove any head gears before temperature screenings at the International Airport in Hong Kong April 27, 2009. Asia, a continent that has battled deadly viruses such as the H5N1 bird flu and SARS in recent years, began taking steps over the weekend to ward off a new flu virus.   REUTERS/Vincent Yu/Pool   (CHINA POLITICS HEALTH IMAGES OF THE DAY) - GM1E54R15DW01

Disease outbreaks are on the rise - and so are the economic and social impacts Image: REUTERS/Vincent Yu

Vanessa Candeias
Senior Director, The Hepatitis Fund
Ryan Morhard
Global Public Policy Lead, Takeda Pharmaceutical

This year marks the 100th anniversary of the deadliest epidemic in history - the 1918 Spanish Influenza outbreak, which killed around 50 million people.

More recently, several outbreaks with equally familiar names have made headlines: SARS, swine flu, MERS, Ebola, Zika, yellow fever, Lassa fever, cholera, drug resistant infections... the list could go on. In fact, every month the World Health Organization receives 5,000 early-warning disease signals from across the globe, around 300 of which need further investigation and of which 30 warrant more in-depth field studies to investigate their potential for causing epidemics.

The number and kind of infectious disease outbreaks has increased significantly over the past 30 years. And as global trade and travel increases, so does the international spread of disease - and so does the economic impact of outbreaks. According to World Bank estimates, the annual global cost of moderately severe to severe pandemics is roughly $570 billion, or 0.7% of global income.

 Emerging infectious diseases marked as needing urgent attention
Emerging infectious diseases marked as needing urgent attention Image: Center for Disease Dynamics, Economics & Policy

The outbreak of SARS in 2003 is estimated to have caused more than $50 billion-worth of damage to the global economy, having infected about 8,000 people and having caused fewer than 800 deaths. Likewise, the 2015 South Korean MERS outbreak that saw more than 16,000 people quarantined and claimed 38 lives lead to substantial changes in consumer behaviour. A 41% reduction in the number of tourist visits to the country, as well as people avoiding restaurants, theatres, and shopping centres, ultimately caused the Bank of Korea to cut its benchmark interest rate to a record low.

These experiences highlight one of the more remarkable trends in infectious diseases today. It’s true that while the number of outbreaks is increasing, medical and public health advances have enabled us to better contain the morbidity and mortality effect of these events. However, at the same time our collective vulnerability to the societal and economic impacts of infectious disease crises appears to be increasing.

In this way, behavioural impacts can be as disruptive as the disease itself. This phenomenon is recognized by the International Health Regulations (IHR), which unite 196 countries across the globe in a legal commitment to prevent and respond to acute public health risks. This agreement prioritizes both minimizing public health risks as well as avoiding unnecessary interference with international traffic and trade.

The spread of infectious disease is considered a top global economic risk. Analysis suggests that the expected annual cost of pandemic influenza is comparable with that of climate change. Notably, most economic losses are not typically caused by the disease directly, but rather by relatively predictable consumer reactions, labour shortages and cascading failures in the economic and financial sectors.

It is also the case that public-private cooperation is essential for effective epidemic readiness in several ways. While this is most obvious in the health sector - in the areas of healthcare delivery and development of medical countermeasures - past outbreaks indicate important contributions from the areas of supply chain and logistics, risk communications, travel and mobility, and data sharing. Accordingly, efforts to prepare for and respond to outbreaks should also pursue reliable and operational integration of essential public-private cooperation.

An analysis from previous responses to outbreaks highlighted five key principles for integrating public-private cooperation in order to mitigate the social, economic and business disruptions associated with infectious disease outbreaks:

1. Preparedness: Address known challenges and set up mechanisms for collaboration before a crisis strikes to facilitate a rapid, well-coordinated response. At the moment, the World Economic Forum has joined with partners, through the Epidemics Readiness Accelerator, to support efforts to strengthen pandemic supply chains; improve decision-making relating to risk, travel advisories, and border measures; ensure that private sector data is shared conveniently, readily available, and applied strategically for outbreak response; and to leverage private sector networks to augment and amplify public emergency communications.

2. Value: To ensure long-term value, collaborations are necessary at the intersections of private-sector business objectives with public-sector needs. For example, the Harvard Global Health Institute and the World Economic Forum have joined forces to develop a first-of-its-kind Outbreak Readiness and Business Insight Tool (ORBIT) to enable business leaders to better understand the expected costs associated with infectious disease outbreaks, and to suggest pathways for public-private cooperation to both mitigate these costs and strengthen health security more broadly.

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3. Trust: Create trust-based relationships in advance of an emergency to enable better ways of working during an outbreak. The first-of-its-kind Pandemic Supply Chain Network connects various organizations involved in emergency supply chain operations to ensure the timely delivery of critical health supplies to the people who need them most.

4. Agility: Keep organizational processes and structures flexible and transparent for quick action in an emergency. For example, following a high-level pandemic simulation, health, travel, and tourism leaders have come together to create a communication platform and related tools to share information, facilitate expert consultations, strengthen public-private cooperation and improve decision-making in the event of an outbreak.

5. Innovation: Encourage the ongoing development of innovative ideas and solutions to improve emergency preparation, response and recovery efforts. CEPI, the Coalition for Epidemics Preparedness and Innovation, is one such mechanism that - with the support of the World Economic Forum, Gates Foundation, Wellcome Trust, Norwegian Government and investment from sovereign investors and philanthropic institutions - has brought together the public and private sectors to develop vaccines in order to prevent deadly infectious diseases from becoming global health emergencies.

As the international community works with unprecedented intensity to build key capacities to strengthen global health security, establishing and integrating reliable public-private cooperation to facilitate readiness is a vital area of progress and opportunity.

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