Resource allocation and health financing

WHO, UNICEF, UNAIDS, World Bank, UNESCO, and UNFPA, 2/1/02.
In December 2001, the Commission on Macroeconomics and Health presented the results of its two-year work to the World Health Organization in a publication titled Macroeconomics and Health: Investing in Health for Economic Development. The Commissioners present a new global blueprint for health that is both compassionate and cost-effective. Millions of deaths occur each year in the developing world due to conditions which can be prevented or treated. The Commissioner's outline a plan of action to save millions of these lives every year at a small cost relative to the vast improvements in health and increased prosperity. The Report shows that just a few conditions are responsible for a high proportion of the avoidable deaths in poor countries - and that well-targeted measures, using existing technologies, could save around 8 million lives per year and generate economic benefits of more than $360 billion per year, by 2015­2020. The aggregate cost of scaling up essential health interventions in low-income countries would be around $66 billion per year, with the costs roughly divided between high-income donor countries and low-income countries. Thus, the economic benefits would vastly outstrip the cost. Scaling Up the Response to Infectious Diseases: A way Out of Poverty takes up the Commission's challenge. It outlines how increased investment in health can be well spent, stressing how interventions, health system strengthening and behaviour change together can help achieve the goals we are setting ourselves. This report takes forward the Commission's action agenda. It will help decision makers see how we can turn increased investment in health into concrete results.

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.