MSD Consumer Media Release; A new report titled “A Neglected Burden: The Ongoing Economic Costs of COVID-19 in Australia” reveals the economic costs of COVID-19 in Australia are substantial1,2 and highlights the need for Government to keep in place countermeasures that could mitigate the ongoing and future economic impact of the virus.
Findings from the report suggest the future economic cost of COVID-19 in Australia could range from AUD ~17 billion p.a. (~0.6% of GDP) to AUD ~56 billion p.a. (~2.2% of GDP), depending on the scenario that evolves.
COVID-19 could impose substantial economic costs, including direct costs on the healthcare system and productivity losses from missed work.
- Around AUD 17.8 billion in annual productivity losses may occur due to infections in working age adults, which is equivalent to around 7% of Australian GDP per year.2
- Infections in children may result in productivity losses in Australia of around AUD 7 billion per year.
- COVID-19’s impact on vulnerable Australians – older Australians, those with comorbidities and Indigenous Australians may cost approximately AUD 4 billion per year.
- 46 workdays could be lost for each person with long This will potentially cost the Australian economy around AUD 8,058 per person per year.
- At least AUD 3 billion in productivity losses per year in relation to healthcare workers infected with COVID-19. Frontline healthcare workers taking time off to recover from COVID-19 could exacerbate workforce shortages and may impact quality of care.
Royal Australasian College of General Practitioners (RACGP) Victoria Chair Dr Anita Muñoz says, “COVID is still a concern for GPs, particularly when they are treating vulnerable people like the elderly or those with pre-existing conditions. I feel it’s important for GPs to have an awareness of the broader impacts of COVID, as they remain at the frontline of caring for Australians with COVID. The countermeasures in this report are valuable in preparing for emerging variants and future waves should they arise.”
Professor with the Australian National University Quentin Grafton FASSA says, “We believe the costs of COVID are ongoing and require multiple interventions including but not limited to on- going vaccinations or boosters for all age groups and improved indoor air quality (with monitoring) to prevent or to reduce the severity of infections. It is our view that the benefits of these measures in reducing infections greatly exceed the costs of such interventions.”
Prashant Nikam Managing Director, MSD Australia and New Zealand says, “COVID-19 continues to have a significant impact on elderly and at-risk populations, and the consequences extend beyond just health issues. This situation is made even more challenging by what you refer to as “pandemic amnesia,” which is the tendency for people to forget the severity of the pandemic as time goes on. This report shows the direct and indirect burden on the economy is indeed substantial. A better understanding of these economic impacts may help improve how we navigate the future course of COVID-19 in the community in Australia.”
The report also highlighted the uneven distribution of costs across three different segments within each market studied; vulnerable populations, individuals affected by long COVID, and workforces of critical industries. Vulnerable populations such as those over 60 to 65 years, and adults under 60 with one or more comorbidities such as high blood pressure, cancer, and diabetes were likely to be disproportionately impacted. Furthermore Australia’s Indigenous communities were more susceptible to severe COVID-19 due to high rates of chronic illness and inequalities faced in accessing health services.
Meanwhile, individuals affected by long COVID experience prolonged productivity losses (increasing indirect costs) and reliance on health services (increasing direct costs). This in turn exerts a substantial burden on the health system, both in terms of capacity requirement and economic costs.
The health workforce is impacted by high levels of absenteeism and a risk of infection greater than that of the wider community. This has consequences for health system capacity and quality of care. Travel and tourism, as well as logistics sectors have also been heavily impacted due to workforce shortages.
The report also reviews potential policy countermeasures that could mitigate the ongoing and future economic impact of COVID-19 including community measures such as contact tracing and mask-wearing mandates, other infection control strategies, or medical responses like vaccines and medicines. Policymakers who strengthen their toolkit of countermeasures will be in a stronger position to ease the high costs of COVID-19, ensuring populations and economies are equipped to better manage future health challenges.
[The report, commissioned by MSD (tradename of Merck & Co., Inc., Rahway, N.J., USA (NYSE: MRK), suggests up to 96% of the total ongoing economic cost of COVID-19 in markets in Asia Pacific is due to indirect costs, rather than direct healthcare costs. The analysis used a similar approach to that of the One Billion Days Lost analysis recently published by McKinsey & Company to evaluate the economic costs of COVID-19 on the US labour force. Two types of cost were assessed: direct costs of illness, such as those incurred by health systems in operating treatment facilities; and indirect costs, such as productivity losses due to missed work.]