In this study, researchers investigate the relationship between improvements in health and the growth of an economy. The negative effects of ill health on the economy are clear, as high levels of sickness decrease the size and capabilities of the workforce through impeding access to education and suppressing foreign direct investment (FDI). The researchers present evidence that investing in health improvements can result in a significant increase in GDP per capita in four ways: Firstly, healthier populations are more economically productive; secondly, proactive healthcare leads to decrease in many of the additive healthcare costs associated with lack of care (treating opportunistic infections in the case of HIV for example); thirdly, improved health represents a real economic and developmental outcome in-and-of itself and finally, healthcare spending capitalises on the Keynesian 'economic multiplier' effect. The paper ends with a call for the recognition of health as a major engine of economic growth and for commensurate investment in public health, particularly in poor countries.
Resource allocation and health financing
Kenya’s Central Organisation of Trade Unions (Cotu) has launched an appeal after it lost a High Court case seeking to block public health insurer, the national Health Insurance Fund (NHIF), from raising member contributions. NHIF plans to raise monthly contributions for high-income earners by more than 600% to help the government offer universal access to health services, as stipulated in the Constitution. It plans to raise monthly contributions for those earning a gross salary of Sh100,000 and above from Sh320 to Sh2,000, which represents 2% or less of total income. Lowest-paid formal sector workers earning a salary of less than Sh5,999 will contribute Sh150. Cotu’s main argument against the new charges is that the NHIF has in the past not managed the funds to the best interest of members and should not be entrusted with more money until it demonstrates that it has the capacity to improve the quality of services offered.
This article charts Malawi's progress in achieving universal health coverage (UHC) and the problems it has experienced since external funding was cut in 2011. Between 2004 and 2008, offering specific healthcare services without charge (in maternal and child health) resulted in a 75% increase in live births in facilities and a 13% reduction in mother and baby deaths, with knock-on effects on society. In 2009, the government announced new commitments to extend this to an additional 860,000 Malawians over the next four years, including 80,000 more women delivering safely. Malawi – like Sierra Leone, Gabon and Rwanda – offered proof that UHC in this area was feasible in low-income settings. However, in July 2011, in response to evidence of the government's mismanagement of aid and violation of human rights, the United Kingdom (UK) and the United States announced they would be cutting aid. The impact on health has been devastating, with regular drug stock-outs and a lack of essential medical supplies and a shortage of anti-retrovirals. The UK International Development Committee is currently conducting an enquiry into the development situation in Malawi, but in the meantime external funders are turning to civil society organisations to deliver for their communities.
South Africa is considering introducing a universal health care system. A key concern for policy-makers and the general public is whether or not this reform is affordable. In this paper, the authors consider three reform scenarios: universal coverage funded by increased allocations to health from general tax and additional dedicated taxes; an alternative reform option of extending private health insurance coverage to all formal sector workers and their dependants with the remainder using tax-funded services; and maintaining the status quo. Findings suggest that universal coverage is affordable and sustainable in the South African context, but would require substantial increases in public funding for health care. Universal coverage, if funded through general tax allocations and a dedicated surcharge on taxable income, would result in the most progressive financing incidence when compared with the status quo and an alternative financing reform of extending private insurance to all formal sector workers and their dependants. Such an approach to financing universal coverage would also achieve the most equal distribution of benefits from using health services across socio-economic groups when compared with other reform options.
In this study, researchers developed a model to assess the impact of possible moves towards universal coverage in Tanzania over a 15-year time frame. The model estimated the costs of delivering public health services and all health services to the population as a proportion of Gross Domestic Product (GDP), and forecast revenue from user fees and insurance premiums. Findings indicated that expanded financial protection in Tanzania will have a significant effect on utilisation levels, especially for public outpatient care. Universal coverage, offering a minimum benefit package to the population through the two largest health insurance schemes, would require the share of government allocation to health to increase to 18% initially (driven largely by the health system strengthening costs required to support additional demand, combined with costs of expanding cover among the informal sector). Reserve funds from the National Health Insurance Fund (NHIF) could be used to finance universal coverage or additional resources could be generated through increases in the rate of value-added tax (VAT) or expanding the income tax base. The authors emphasise the fact that regulation of health care to control costs is paramount to the feasibility of universal coverage, as this affects the overall cost of expanding coverage as well as the extent of the revenue surplus available from the NHIF.
In this paper, the authors examined individual preferences for willingness to pre-pay for health care and willingness to cross-subsidise the sick and the poor in Ghana, South Africa and Tanzania. Household surveys in the three countries elicited views on cross-subsidisation within health care financing. In South Africa and Ghana, 62% and 55% of total respondents, respectively, were in favour of a progressive financing system in which richer groups would pay a higher proportion of income than poorer groups, rather than a system where individuals pay the same proportion of income irrespective of their wealth (proportional). In Tanzania, 45% of the total sample were willing to pay for the health care of the poor. However, in all three countries, a progressive system was favoured by a smaller proportion of the most well off than of less well off groups. The three countries had different experiences of health insurance and this may have contributed to the above differences in expressed willingness to pay between countries. Building and ‘living with’ institutions that provide affordable universal coverage is likely to be an essential part of the learning process which supports the development of social solidarity.
In January 2012, The UK’s Department for International Development announced a fivefold increase in its support for programmes to control neglected tropical diseases (NTDs). However, the authors of this paper point to a growing body of research that highlights hazards associated with current modes of implementing NTD control strategies, including undermining already-fragile health care systems, facing serious logistical problems and medical risks, and contributing in administrative failure. They draw on fieldwork in Uganda and Tanzania to shows that the specific political, economic, and social contexts in which mass drug administration (MDA) programmes are rolled out profoundly affects the uptake of drugs for the treatment of some NTDs. Average drug uptake in 2010 was well below 50%, an issue which remains unaddressed. The authors call for governments to deal with NTDs in a sustainable way that will involve a range of factors, including behavioural change, and promote an integrated bio-social approach, with more adequate monitoring and surveillance.
Flows of development financing from the BRICs (Brazil, Russia, India, and China) to low-income countries (LICs) have surged in recent years. The authors of this paper found that, though there are some differences across BRICs, the philosophies of most BRICs for development financing differ from traditional external funders (donors) in three main ways: BRICs, with the exception of Russia, provide financial assistance based on the principle of ‘mutual benefits’ in the spirit of South-South cooperation, while Russia and traditional funders emphasise the role of aid in poverty reduction. Second, BRICs, particularly China, view policy conditionality as interfering with recipients’ sovereignty and tend to provide noncash financing as a means to circumvent corruption, whilst traditional funders view policy conditionality as a means to ensure efficient use of aid. Third, different emphasis is placed on how to ensure debt sustainability, with some BRICs giving a greater weight to microsustainability and growth while traditional funders paying more attention to long-run macrosustainability. This difference is, however, narrowing with BRICs increasingly appreciating the importance of overall debt sustainability and traditional funders the need for investing in physical capital and seeing results.
In this interview with Irene Agyepong, Regional Director of Health for Greater Accra, she attributes Ghana’s success in rolling out universal coverage to genuine political commitment as well as demand from society for change. She identifies three major challenges facing Ghana: poor capacity, loss of health workers who migrate overseas and lack of financing. She gives advice to other countries wishing to implement universal coverage. First, they should build a strong health system as well as technical and administrative capacity and make sure that they retain that capacity to support universal coverage. Second, governments and external funders must realise that leadership has to come from within the country – externally motivated change is unlikely to work. Third, context and history matter. Countries need to tailor their systems to fit their context and history. Overall, stakeholders should bear in mind that universal coverage is a long-term goal.
As the need for anti-retroviral therapy (ART) grows without commensurate increase in the amount of available resources, it is critical to assess the health and economic gains being realised from increasingly large investments in ART. This study estimates total programme costs and compares them with selected economic benefits of ART for an estimated 3.5 million ART patients in low-and middle-income countries whose treatment is co-financed by the Global Fund to Fight AIDS, Tuberculosis and Malaria. Using 2009 anti-retroviral prices and ART programme costs, the authors estimate that the cost of maintaining these patients is US$14.2 billion for the period 2011–2020. This investment is expected to save 18.5 million life-years and return $12 to $34 billion to the economy through increased labour productivity, averted orphan care and deferred medical treatment for opportunistic infections and end-of-life care. These results suggest that, in addition to the large health gains generated, the economic benefits of treatment will substantially offset, and likely exceed, programme costs within 10 years of investment.