The Strategic Health Economy: Why Finance Ministries Still See Health as a Cost

Health is usually treated as a cost that governments must contain when budgets tighten. A session at the World Health Summit in Berlin on the strategic health economy set out to argue the opposite: that investment in health can strengthen productivity, technological leadership and resilience. Speakers from the European Commission, Japan’s health ministry, an African advocacy organisation, the Asian Development Bank and industry agreed on the premise. Most of the discussion, however, concerned why finance ministries still hear the strategic health economy as an expense.

The chair opened with a familiar estimate. Poor health is thought to cost the global economy around 15% of GDP each year through lost output, lost workers and lost years of productive life. The chair also cited a World Health Organization estimate that an extra $3 per person per year on non-communicable diseases could return more than $1 trillion to the global economy by 2030.

How the European Commission frames the strategic health economy

Wolfgang Philipp, principal adviser for health and crisis management at the European Commission’s Directorate-General for Health and Food Safety (DG SANTE), said the economic case has moved up the agenda in Brussels. The COVID-19 pandemic taught every policy portfolio the same lesson: when health fails, the economy fails. Demographic change is now teaching it more slowly, through a workforce that is becoming a binding constraint on growth.

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Philipp said the Commission’s role is to propose frameworks rather than run health systems, which remain national competences. He pointed to the Competitiveness Compass, which names life sciences as a strategic sector, the Life Sciences Strategy, which aims to make Europe the most attractive place for life sciences by 2030, the Critical Medicines Act, the Biotech Act and the European Health Data Space. He described the Draghi report as the foundation for much of this work.

“The health sectors are run by member states. What we can do is come up with overarching frameworks that create incentives and that create also possibilities to be taken up.”

The gap, in his view, is in budget logic. Health is still seen largely as consumption rather than as an investment that pays back through productivity, growth, labour participation and lower long-term care costs. He named three priorities: protecting health budget lines in the next multi-annual financial framework, measuring health as an investment, and using public purchasing power to shape markets.

Japan’s universal coverage as a foundation for growth

Satoshi Ezoe, senior assistant minister for global health at Japan’s Ministry of Health, Labour and Welfare, explained that Japan’s approach to health in foreign policy comes from its own history. Japan reached universal health coverage in 1961, while still recovering from the Second World War. The system began with civil servants and large employers, then extended to farmers and the informal sector until it covered the whole population.

Ezoe said people in developing countries often assume Japan could afford universal coverage because it was already rich. In his account, the sequence ran the other way: coverage laid the foundation for socioeconomic development. Japan now has around 100,000 centenarians.

Persuading finance ministries remains difficult. Ezoe’s answer was early engagement. Health ministries should not draft a plan and then sell it to the treasury. Finance ministries need to be part of the process from the start. Japan supports the Universal Health Coverage Knowledge Hub, developed with the WHO and the World Bank, which brings finance and health officials together. The initiative started with eight countries, five in Africa and three in Asia, and aims to produce national roadmaps. A related initiative, the National Health Compact, is designed to work at prime minister or presidential level.

“We need engagement of finance ministry from the beginning. Not just to make health plans in your health ministry and then sell that to finance ministry.”

Africa’s case: evidence, advocacy and political economy

Obiageli (Oby) Ezekwesili, founder and chief executive of Human Capital Africa and a former vice president of the World Bank’s Africa region, said health and education have long been treated as social spending rather than investment. Health ministers were rarely allies of finance ministers because there was not enough evidence to show that a finance minister could pursue growth without caring about human development.

“There’s no better pathway to productivity than to actually consider the false dichotomy between infrastructure as hard physical infrastructure and the infrastructure of human capabilities.”

She argued that the continent’s policy response is beginning to shift. Africa’s manufacturing share of global output remains below 5%, and the value it captures from the health value chain is also small. Ezekwesili said the informal sector accounts for more than 55% of economic activity on average across the continent, and that around 70% of those informal workers are women. She described informality as one of the main barriers to productivity.

On the question of how governments should act, she pointed to Rwanda, where results-based financing was piloted, and to the African Continental Free Trade Area, which gives access to a market of 1.5 billion people. She also cited the economic cost of malaria, which she said cost Africa about 2% of GDP, and the way a macro-level diagnostic changed the conversation with ministers. That work helped lead to the creation of the African Leaders Malaria Alliance, which now coordinates an Africa-wide response.

“Health advocates have to step up their game.”

Making the strategic health economy case to finance ministries

Cleo Kawawaki, director general for strategic fundraising at the Asian Development Bank, said she is not a health specialist and asked the health sector to frame its arguments in the language finance ministers use. She offered the example of transport: a public transport system costs more up front than a road, but the health benefits, including cleaner air and more walking, can be quantified and set against the cost. Her suggestion was to attach a health lens to every infrastructure project.

She also argued that ministers respond to short-term wins as well as long-run savings. A politician working within a three-year term needs to see results in that period. A loan tied to a policy reform, for example, can be cheaper than a conventional programme and can deliver an early result while improving the long-term position. Kawawaki used sugar taxes as an example of a policy that raises revenue and improves health at the same time.

“Human capital is a natural resource. If you’re not tending to your oil well, people would think you’re absolutely insane. But we’re not investing in health.”

Obi Ezekwesili responded that health is political, and that technical evidence often fails in cabinet discussions unless the political economy is understood. She said the people who matter most for reform are sometimes outside government, and that elites in many African countries buy private health care abroad when public services fail. She also argued that the health sector should make its case through economic teams, as she did when she worked on public procurement and later on education in Nigeria.

“Everything about health is politics. It’s political and we fail to realize that often.”

Industry’s view: access, sovereignty and fragmented markets

Michael, an economist with more than 25 years of experience in health policy, patient access and health economics across Europe and Asia-Pacific, spoke for industry. He said the World Health Summit is a room of people who already agree that health is an investment, and that the wider economy needs to hear the case too.

He argued that the dominant story has been that an ageing society is a problem. Instead, he said, governments could ask how to keep people productive for longer. Around 70% of non-communicable diseases can be prevented, and prevention is one of the most effective interventions available. Michael pointed to China’s five-year plan, which links clinical trials, manufacturing and innovation to a silver economy built on longer working lives and more healthy life years.

“The problem is you cannot have just one part of the equation.”

Michael also argued that governments have delegated too much authority to the institutions that manage health spending. Their job is to control costs, not to maximise health or investment.

“Their job is managing the budget and control cost.”

On access, he said Europe is not yet a single market for medicines. Each EU member state has its own reimbursement system, and some countries link market access to local research, local manufacturing or a minimum share of local patients. He said that conflicts with building a resilient global supply chain. Michael welcomed the Biotech Act but said the path to faster, more predictable access is still long.

Pandemic preparedness and the limits of consensus

Ezoe, who was Japan’s chief negotiator on the WHO pandemic agreement, described the talks on the annex covering pathogen access and benefit sharing. Countries agreed on the basic idea: access to pathogens and genetic information must be matched by some form of reward. Agreeing a workable system has proved harder. If the system is too rigid, industry will walk away, he said, so the aim is a practical arrangement that brings the private sector in.

Another panellist drew a parallel with civil-military cooperation in health security, where the two sectors use different terminology and hold different assumptions about each other’s capacities. In that setting, the speaker said, the first investment needs a real incentive to get started.

What the panel agreed on

Asked about the first step, speakers pointed to governance rather than new money. Ezoe called for a national health compact at head-of-government level. Ezekwesili said health ministers need to bring the evidence to economic teams. Kawawaki stressed packaging investments so that short-term wins and long-term savings sit in the same proposal. A further panellist said the status quo is not affordable and that the real question is who pays, a question that cannot be answered by one sector alone.

Philipp closed with a call to implement the frameworks already in place and to channel existing budgets in the right direction. The panel’s common line was that health is an economic driver and not just a cost, but that the argument has to be made in finance ministries’ terms, with evidence and with the right people in the room.

Source: World Health Summit session “The Strategic Health Economy” (PD 06), Berlin, 2026.