GCC economic burden to hit $68bn by 2022, if governments fail to curb NCDs

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The $68 Billion Challenge – Quantifying and Tackling the Burden of Chronic Diseases in the GCC: report by Booz Company

Urgent Need for GCC Governments to Develop National and GCC-Wide Non-communi­cable Diseases (NCD) Agendas

If GCC governments fail to enact measures to curb the rising prevalence of NCDs, the total economic burden is expected to reach $68 billion by 2022

Rapid economic advances in the Gulf Cooperation Council (GCC) countries have led to the population adopting a seden­tary lifestyle. The result is a rising incidence of non-communi­cable diseases (NCDs), such as cardiovascular illnesses, cancer and respiratory diseases. NCDs have become the leading cause of death in the GCC. And, their prevalence – which is at epidemic levels – is undermining the societal gains stemming from economic develop­ment. In fact, with current prevalence rates, the total direct and indi­rect cost of the most common NCDs for the GCC will be close to US$36 billion in 2013 – one and a half times official healthcare spending. Given the magnitude of the problem, GCC governments must act rapidly. According to Booz & Company, they must develop national and GCC-wide NCD agendas that will enact short-term and long-term pro­grams before the epidemic imposes a heavy toll on their societies.

Vicious economic cycle caused by NCDs
Vicious economic cycle caused by NCDs.  Image courtesy- Booz Company

The economic development of the GCC countries has brought with it a significant cost – a rising incidence of NCDs. In effect, in little over a generation, GCC countries have improved their standards of living from developing country levels to those of advanced economies.

Non-communicable diseases have been linked to developed economy life­styles, namely bad eating habits, high-sugar and fat-heavy diets, and a lack of physical exercise. Increasing wealth has, of course, had positive public health effects, such as funding large-scale public health awareness and vaccinations campaigns to tame the threat of communicable diseases, such as polio, measles, rubella, and others. However, in the GCC, as elsewhere, these gains to public health and individual well-being are now being offset by the increasing prevalence of NCDs and associated mortality rates.

“The result is that NCDs have become the leading causes of death and disability, thus making the GCC one of the region’s worst affected by the global increase in chronic diseases,” said Gabriel Chahine, a Partner with Booz & Company. “This trend is projected to result in NCDs causing over three-quarters of all deaths globally by 2030, up from 63 percent in 2008, with significant cost implications for healthcare systems.”

A Chronic Problem
NCDs, also known as chronic diseases, impose a tremendous human and economic cost; their generally gradual development negatively affects individuals’ quality of life, diminishes their ability to contribute economically and drains healthcare resources.

Booz & Company’s Perspective focuses on five of the most common NCDs in the GCC, which were taken from the 14 NCDs listed by the WHO’s Global Burden of Diseases study.

Although diverse in symptoms, the five NCDs highlighted share common lifestyle-related or behavioral risk factors such as tobacco use, a fat-heavy diet, and physical inactivity:

·        Cardiovascular diseases are responsible for 29 per­cent of deaths from NCDs globally. 
·        Malignant neoplasms cause 13 percent of global NCD deaths. 
·        Chronic respiratory diseases contribute to 7 percent of global NCD deaths. 
·        Neuropsychiatric conditions are responsible for 2 percent of NCD deaths worldwide. 
·        Diabetes mellitus cause 2 percent of NCD deaths around the world.

Economic Burden
The economic burden of NCDs comes in two cost forms, direct and indirect. 

“Direct costs are typically those associated with the treatment of patients, such as consultations, medications, and clinical operations,” added Jad Bitar, a Partner with Booz & Company. “More significant is the indirect eco­nomic penalty that NCDs impose. From a national perspective, NCDs reduce life expectancy, which means less output. In addition to the immense burden on the patients, NCDs also affect the patients’ families, causing them to contribute less to economic activity. Chronic illness and shorter life spans deplete the qual­ity and quantity of the work force.”

Moreover, labor productivity is diminished because workers are less effective. Similarly, NCDs lead to increased absenteeism, because of work missed due to sick days.

Booz & Company used Harvard–WEF’s Cost of Illness approach to measure the direct and indirect costs of NCDs in the GCC. The Cost of Illness method is comprehensive and relies on tangible data. Booz & Company also collected data from local ministries, centers of statistics, and regional reports linked to the selected NCDs from all six GCC member states.

By developing an econometric model using the Cost of Illness model and the latest available and reliable statistics, Booz & Company was able to generate estimates for the direct and indirect costs of NCDs in 2013, and forecasts for the expected burden in 2022. 

“We calculated that the total direct and indirect cost for the five selected NCDs in 2013 will be around $36 billion for the GCC, rising to around $68 billion by 2022,” stated Chahine. “The burden is greater, and clearly less sustainable, when the total cost of NCDs is compared to healthcare spending. In 2013, the five top NCDs in the GCC will impose an economic penalty equivalent to close to one and a half times all six of the governments’ healthcare budgets.”

The economic burden per capita for the different GCC countries in 2013 will range from $516 in Saudi Arabia, or 3.6 percent of non-oil GDP per capita, to $2,001 in Qatar, equivalent to 4.1 percent of non-oil GDP per capita. By 2022, the total cost per capita will reach $758 in Saudi Arabia and $2,778 in Qatar. The lowest economic burden will be in Oman, which, in 2022, will have a NCD per capita cost of $603. In comparison, in 2011 OECD economies spent $3,327 per capita on healthcare.

To tackle the crippling financial and human costs of NCDs, GCC govern­ments and other stakeholders need to identify and understand the underly­ing risk factors associated with these illnesses. 

“There are two kinds of primary NCD risk factors that are root causes of these illnesses: non-modifiable and modifiable, said Pierre Assouad, Senior Associate with Booz & Company. “In terms of policy responses, modifiable risk factors are the most amenable to change and have the highest impact on individuals. Non-modifiable risk factors lie out­side the control of the individual and are linked to age, hereditary/genetic conditions and other socioeconomic, cultural, and environmental deter­minants.” 

Governments, through appropriate regulations and policies, can improve some non-modifiable risk factors, such as environmental influences, including toxicity levels of products and air quality. Modifiable risk factors are behavioral in nature and include tobacco use, physical inactivity and an unhealthy diet. 

An Effective Strategy
“With risk factors growing and healthcare budgets already under strain, GCC governments need to sound the alarm within their societies and embark upon national programs to stem the NCD epidemic,” said Bitar. “The goal of national programs that combat NCDs should be to dissemi­nate positive behavioral messages that educate the population about imminent health risks, rather than to simply defensively focus on restrain­ing the growing incidence of chronic diseases.”

“GCC countries therefore need to urgently factor NCDs into their long-term health planning and they should aim for a better qual­ity of life for residents, a reduction in unnecessary medical costs and improved productivity”, added Assouad

Coordinate and Educate: Coordination is important because the nature and magnitude of the required interventions demand a centrally-led, collaborative effort involving key public and private stakeholders. Education is also vital to convince all stakeholders to accept the imperative of slowing the progression of NCDs; and education is the most effective tool for empow­ering patients and encouraging them to change their lifestyles.

Prevent and Cure: In practical terms, any national strategy should tackle NCDs at two different levels – direct curative care or early disease management and prevention.

Encourage Structural and Behavioral Changes: Preventative action to lower the prevalence of modifiable risk factors requires the development and implementation of a combination of short-term and long-term collaborative programs targeting structural changes as well as behavioral changes.

Short-Term Programs
Short-term programs should be rapidly designed and implemented by GCC governments. These efforts aim to alter or strengthen current structures to limit the impact of modifiable and non-modifiable primary risk factors. There are three main areas in which gov­ernments can make immediate changes: financial, regulatory and clinical.
–        FinancialThese measures financially reward, or penalize, individuals to reduce the impact of primary risk factors. This includes taxes on unhealthy products, such as fast food, soft drinks, and cigarettes, and subsidies for healthy ones, for example, healthy food at schools.
–        Regulatory: These measures involve adopting and enforcing rules and regulations that limit the availability and promotion of unhealthy products and ensure the availability of healthy alternatives in different settings, such as schools and government buildings.
–        Clinical: The aim of clinical measures is to leverage existing health services and infrastructure to limit the impact of primary risk factors. Clinical programs include comprehensive national screening programs to identify at-risk groups and to ensure early detection of NCDs.

Long-Term Programs
Stakeholders should design and launch long-term programs in parallel to ensure continuity of effort and sustainabil­ity of results. Long-term programs typically focus on behavioral change at the individual level and at the healthcare system level, and may have an effect on regulations and funding. There are three types of long-term pro­grams: youth, adult and professional.
–        Youth: The aim of these programs is to educate teachers and others (e.g., sports coaches) who care for young people and can educate them on NCD risks and healthy lifestyles. These programs can shape the behavior of the young within schools and their communities.
–        Adult: Programs aimed at adults will focus on select audiences to improve their knowledge and ability to manage their conditions and to reduce the impact of primary risk factors.
–        Professional: The aim of professional programs is to sensitize health providers about NCDs and direct them toward resources they can use to prevent, detect, and treat such diseases.

GCC countries must urgently take action to push back the rising tide of NCDs. Without comprehensive programs that enable better allocation of healthcare resources to treat the root causes of NCDs, as well as their symptoms, the human, the societal, and the eco­nomic burdens associated with these diseases will reach crippling levels. Governments will need to involve a wide array of public and private stakeholders in such programs to help create the optimal enabling environ­ment for lifestyle changes. They should also implement screening programs for all NCDs and utilize the wealth of information collected to design more effective and targeted interventions. Programs to lower risk factors and better manage NCDs necessarily involve a degree of innovation and experimentation. With proper moni­toring and measurement, successful schemes can be institutionalized, and lower-impact programs can be curtailed. Over time, investment of resources in effective programs dealing with NCDs should restrain the growth of GCC healthcare spending and improve the region’s health landscape.

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