Visible and invisible enemies: where we allocate our resources

di Priscilla Pajdo del August 10, 2020

TORONTO - Policy influencers (scientific community) and decision-makers have taken to using the metaphor of war against an invisible enemy, Covid-19, to lend weight to their priorities. This would be something most citizens intuitively understand. After all, the priority of national governments is to keep their citizens safe and to nurture their health.

Do they do enough? In keeping with the military metaphor, we looked into what countries spend to keep their citizens safe from invaders - both physical and pathogenic. In previous editions, we compared the rankings attributed to the quality of some healthcare systems around the world. Today, we restrict our observations to “healthcare spending” in the countries that form the G7: Canada, USA, France, Italy, Germany, United Kingdom and Japan (chart 1).

The economies of these seven countries are among the world’s most advanced. A comprehensive measurement for a country’s economic health takes into consideration its Gross Domestic Product (GDP) - measuring the total value of goods and services produced by a country in a year. Chart 1 ranks the G7 according to their relative GDP. A note to readers for reference point only: were we to include other countries, Italy would rank 10th).

We then break down what these countries spend as a percentage of the GDP on healthcare and military to protect the nation and health of their people (chart 2).

What stands out is the greater importance these countries place on the health of their nation. For instance, the amount the US spends on healthcare as a percentage of GDP is over four times the rate of military expenditures.

It is worth noting that the healthcare cost (USD) data in these graphs come from the Organization for Economic Co-operation and Development (OECD). The data is inclusive of government and compulsory healthcare expenditures. It excludes “additional expenses” such as private insurance and out-of-pocket expenses. Those “additional costs” tend to be highest in the US.

The majority of countries spend more on health care than military. In the case of the G7, the amount spent on protecting the health of the population is, on average, six times more than what is spent on military efforts. For instance, in 2018, Canada’s healthcare spending was 7.6% of GDP. That is over five times the rate our nation spent on military defence. Similarly, in Italy, military spending represented 1.3% of GDP. It spent nearly five times that rate on healthcare costs. But this was all prior to Covid-19.

Without contesting the veracity or level of the scientific accuracy of the medical-science research associated with Covid-19, it may appear that some countries were ill prepared for the onslaught of the invading pathogen.

For example, Canada has now dedicated about $343 billion dollars in the country’s Covid-19 Response Fund. These funds will go toward large-scale countermeasures to fight the socio-economic impacts of the virus. A relatively small sum is dedicated to actual scientific initiatives, including potential vaccines and medical therapies.

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