Healthflation: healthcare sectors hostage to macroeconomic instability and cost of living crisis

Abstract

The hypothesis of the article is to recognize the fact that the impact of inflation on health deserves academic attention. Based on the statement that inflation negatively affects health, and the more negative this impact is, the more vulnerable certain groups of people are in terms of socio-economic status, we set ourselves the goal of defining the category of “healthflation”, which will allow us to actualize an important component of price instability. It is noted that health inflation, which manifests itself in a reduction in the purchasing power of economic agents, can occur: as a reaction to pandemics (where, as a result of the introduction of restrictions on the movement of factors of production, the supply of goods decreases, which provokes an increase in prices); asa reaction to a decrease in labor productivity due to a decrease in economic activity and a deterioration in health as a component of human capital; as a reaction to an attempt to implement large-scale projects aimed at improving the health of the population and/or projects to increase national security in the field of providing drugs of strategic importance, the center of production of which may be a country from the “unfriendly”list, which will allow it to use drugs as a weapon; as a reaction to a change in the structure of population expenditures due to a deterioration in health (reduction in consumption of certain types of services, increase in consumption of goods) and the use of preventive measures; as a reaction to the redistribution of budget expenditures due to a decrease in revenues (taxes, attracted investments), which forcibly reduces the volume of medical care provided, increasing household spending on private medical services.