V3I7P17

‘Cost of Illness’ Due to Destruction of Medical Labs During War on Gaza (2023-2026)

Samar Ahmad¹, Mohammed Migdad², Mohamed Buheji^3*

Abstract

This study provides a comprehensive Cost-of-Illness (COI) analysis of the destruction of medical laboratory services in the Gaza Strip during the Israeli aggression (October 2023–December 2024), with a structured comparative assessment of government and private sectors. Applying the COI framework alongside the Health System Shock Model, and drawing on primary field data from key informants in both sectors—supplemented by secondary data from WHO, OCHA, UNCTAD, the World Bank, and the Palestinian Ministry of Health—the study quantifies four interconnected economic dimensions of harm: Direct Costs (infrastructure destruction, equipment loss, rehabilitation expenses), Indirect Costs (diagnostic failure consequences including delayed diagnoses, unguided prescribing, antimicrobial resistance, and intergenerational genetic disease burden), Out-of-Pocket Payments (catastrophic household expenditure given 93% income collapse), and Market Failure (oligopolistic supply chain pricing of 233–400% above pre-aggression levels).

Key findings reveal catastrophic infrastructure destruction: 8 of 12 central government laboratories destroyed (67%), 40%+ private laboratory capacity collapse, and complete loss of the Public Health Laboratory. Equipment price inflation reached 194–400%, while supply costs rose 233–400%. Against GDP per capita collapse from $2,328 to $161 (−93%), patients face test price increases of 33–220%, rendering essential diagnostics financially inaccessible for a population living on $0.44 per day. The suspension of bacterial culture, antibiotic sensitivity, hormonal assays, and hemoglobin electrophoresis has generated substantial indirect costs through accelerated antimicrobial resistance, compromised surgical capacity (300 blood units/day demand with near-zero processing), and intergenerational thalassemia burden. Total direct health sector damage is estimated at $554 million, with private sector losses systematically undercounted. Indirect costs—including late-stage disease management, preventable complications, and productivity losses—are projected to exceed direct costs over a 5–10 year horizon.

The study contributes the first disaggregated COI analysis of Gaza’s laboratory sector, identifies oligopolistic market failure as a structural amplifier of economic harm, and documents the intergenerational economic consequences of diagnostic capacity loss. Phased recommendations address emergency stabilization, system rehabilitation, and structural resilience, including competitive import licensing reform, integration of laboratory services into universal health insurance frameworks, and establishment of a permanent international fund for diagnostic infrastructure. The findings demonstrate that laboratory service restoration is not merely a technical rehabilitation challenge but a foundational prerequisite for health system recovery and intergenerational health equity.

Keywords:

Cost of Illness, Medical Laboratories, War on Gaza, Health Economics, Market Failure, Diagnostic Services, Health System Resilience