Covid’s health legacy demands radical revamp of welfare systems

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The coronavirus pandemic will leave millions of people suffering from long-term sickness — threatening to place a lasting burden on advanced economies’ healthcare and social welfare systems, unless they radically revamp public policy.

Between 10 and 20 per cent of Covid-19 sufferers still exhibit symptoms after three months, some estimates suggest — a phenomenon dubbed “Long Covid”. In addition, health practitioners have warned of a “secondary epidemic of trauma”.

Even before the pandemic, welfare systems were failing to keep up with changes in the world of work, as technology drives a shift to flexible but insecure jobs. Meanwhile, the nature of illness is changing, as mental health problems become a far more prevalent cause of sickness leave.

Many people with long-term health conditions are unable to work — but for others, inflexible employers and benefits systems have left them economically inactive despite wanting a job. Many economists argue that it should be far easier for people to move in and out of work, and to increase or decrease their hours, in response to their health conditions, without having to undergo complicated and time-consuming medical checks and approval processes.

This would carry a cost — for the state and for employers. But the increase in economic output over the longer term would more than compensate for it. A working paper by OECD economists published in December argued that “greater efforts need to be made to transform disability benefits into an employment-support instrument”.

In many developed nations, the welfare system and employers are particularly ill-suited to cope with long-lasting, intermittent health conditions, in which a sufferer’s ability to work varies over time in often unpredictable ways. These are precisely the type of illnesses the pandemic will leave in its wake.

“The financing need that these conditions require is not really addressed well by either sick pay, unemployment benefits or the pensions system,” said Dr Hanna Kleider, a lecturer in public policy at King’s College London. “Long-term sickness is a problem in most OECD countries.”

Workers already report frustration with HR departments and managers who do not understand Long Covid, and sick pay provisions that were not designed with long-lasting, intermittent debilities in mind. Finding ways to help these people stay in work to the fullest extent possible will be a pressing challenge for public policy in the coming years.

Anke Hassel, professor of public policy at the Hertie School of Governance in Berlin, said systems of social support were ripe for an overhaul.

“For some people the welfare system is difficult to negotiate, particularly the disabled, carers and those with long-term illnesses — it is very bureaucratic and has to become more flexible . . . and respond to different needs better,” she added.

The pandemic also leaves governments and employers with heightened responsibility for workers who develop long-term Covid-related illnesses in the course of their jobs, Hassel added. “If you do get infected at work, is that a work-related injury? We have long had occupational pensions for industrial injuries, for example in manufacturing, but now the health-related implications of Covid are affecting very different industries.”

The International Labour Organization warned in a report published last week that the acceleration of changes to labour markets brought about by the pandemic risked leaving disabled people behind.

Short-term contracts, insecure employment, flexible working and multiple career changes are all common in a high-tech economy — and the pandemic has sped up the introduction of technology in many jobs. But digital economies often offer “fewer or no work-related rights or benefits such as unemployment benefit, work injury benefit, maternity and retirement, engaging in collective bargaining or benefiting from minimum wage regulations”, the ILO report stated. “The flexibility provided by these new forms of work comes at a cost.”

Manuela Tomei, director of the ILO’s conditions of work and equality department, said societies must ensure that “the talents and skills of persons with disabilities can contribute to the success of workplaces and societies worldwide”.

Otherwise, nations that fail to address the healthcare legacy of the pandemic will lose out economically — as will the millions of people across the world who face long-term health struggles in the years to come.

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