During the last century, Latin America witnessed one of the most notable demographic triumphs in the developing world: average life expectancy went from just 51 years in the mid-20th century to 77 years today. However, what should have been an unprecedented social dividend is becoming a financial crossroads for the region.
The reason is clear: we live longer, but we spend more years sick. According to the McKinsey Health Institute, the gap between life expectancy and healthy life expectancy is expanding rapidly.
If in the year 2000 the average Latin American lived ten years under the consequences of chronic diseases, today that figure stands at 11 years and is projected to reach 12 years by 2050.
“This growing gap between life expectancy and healthy life expectancy is accumulating massive health debt that acts as a direct brake on our economy,” warned Brad Herbig, director of health data and analytics at the McKinsey Health Center, during his intervention at Roche Press, which included the participation of The Star of Panama in Costa Rica.
Brad Herbig, director of health data and analytics at the McKinsey Health Center.
The invisible crisis
The most critical aspect for the fiscal outlook does not occur in old age, but during the years of maximum work capacity. More than 70% of the years lived in poor health in Latin America correspond to people of working age. Hypertension, diabetes, cardiovascular conditions and depression affect professionals and workers in full productive maturity.
Herbig underscored the seriousness of this dynamic in the business environment.
“This is an economic crisis, not just a clinical one. This translates into a person suffering a heart attack at age 40, someone struggling with chronic depression or lower back pain. These people end up working less, with lower performance or stopping working altogether,” mentioned.
Added to this scenario is an accelerated demographic transition. While it took Europe a century to double its population over 65 years of age, Latin America will do so in just 40 years.
The McKinsey analyst elaborated on the latest data on the region’s longevity in Roche Press.
The opportunity cost
Faced with this challenge, McKinsey analysts propose a change in the financial paradigm: stop treating health spending as a cost to be cut and start approaching it as a strategic investment with capital return.
The study estimates that scaling access to about 200 primary care and preventive health interventions would reduce the burden of disease by 30% by 2050. This would free up more than $700 billion in GDP for the region, equivalent to a 7% increase in projected gross domestic product by mid-century.
”For every dollar invested in scaling access to these interventions, there is almost $2.50 in economic return through improved workforce and productivity”Herbig highlighted.
He added that “Imagine what you could do with seven more years of good health, or what your loved ones could do. We have the opportunity to make this future a reality.”
Roche Press
Tax redesign
Currently, Latin American countries allocate only 5% of their health budgets to prevention, concentrating the majority of funds on curative and in-hospital medicine, which is more expensive and inefficient.
To reverse this trend in a context of fiscal tightness, three axes are proposed:
Align incentives: Reward health outcomes instead of the volume of procedures (such as the Sumar program in Argentina, which reduced in-hospital neonatal mortality by 74%).
Multisectoral action: Integrate ministries of Economy, Education and Agriculture in public policies (such as the food labeling law in Chile, which reduced the purchase of sugar by 9%).
Spending efficiency: Strengthen primary care and integrate data platforms to measure the return on money invested.
By closing his presentation, Herbig left a direct challenge for the region’s decision makers.
“Investing in health transforms both the well-being of the population and the economy. I leave you with a final question: When will we take advantage of this opportunity?” he sentenced.
