Resource allocation and health financing

The purpose of this report is to consider the legitimacy of the assumption that communities or societies with more unequal income distributions have poorer health outcomes. The report presents a critical review of the existing international literature on the relationship between income, income inequality and health, in terms of conceptual approaches, research methods and the policy implications drawn from it. The report also offers some guidance for judging between policy priorities based on the relative importance of income inequality versus other potential causal factors in determining population levels of health. An overview of the potential relationship between income, income inequality and health is set out, followed by a discussion of the methodological and technical issues required to explore these links.

Vicente Navarro, MD, PhD, DrPH
Director of the Public Policy Program jointly sponsored by the School of Public Health of The Johns Hopkins University
The major criticisms that can be made of the WHO report are conceptual and methodological in nature and can be made for each of the components (effectiveness, responsiveness, and fairness) of the single indicator of performance used in the report. Regarding effectiveness of health care, for example, the WHO report assumes erroneously that health care is the primary force responsible for the decline of mortality and morbidity in both developed and developing countries. That assumption is evident in statements such as "[If] Sweden enjoys better health than Uganda—life expectancy is almost exactly twice as long—it is in large part because it spends exactly 35 times as much in its health systems." Not surprisingly, the report concludes that what is needed to eradicate disease in less-developed countries is a greater investment in health care: "with investment in health care of $12 per person, one third of the disease burden in the world in 1990 would have been averted." Such statements reveal a medicalization of the concept of health that is worrisome and surprising, coming as it does from the major international health agency of the United Nations.

Mark Pearson, 2001. HSRC Health Systems Research Center, Institute for Health Sector Development (IHSD), DFID's Health Population Department, London, UK
The way in which a country finances its health care can have a major bearing on the access to health services enjoyed by its poor. National health policies generally set out a strategic goal of ensuring equal access to essential health services for all, on the basis of need and irrespective of ability to pay or some variation on this theme. Health financing impacts on this goal in two ways: on the supply side by ensuring that essential services are adequately financed and delivered, and on the demand side by reducing financial barriers to access and by making sure that funds are raised and services delivered in ways which are affordable to all. In a typical low income country, where only $3 - $5 of public funds per head is available for the health sector, such an ambitious goal is probably unrealistic no matter how well resources are allocated and used. In practice, there will often be significant inefficiency and inequity in both allocation and use of resources. This clearly raises the question as to whether, and how, financing policies could be made more pro-poor.

What are the implications for reproductive health of health reforms in low and middle-income countries? The last decade has seen a change in approach from supply-side health sector reforms to an emphasis on demand-driven and anti-poverty interventions. But has this increased access to reproductive healthcare and have services improved as a result?