This paper re-examines the efficiency-based arguments for optimal health insurance, extending the classic analysis to consider optimal coverage for prevention and treatment separately. The paper considers the tradeoff between individuals’ risk reduction on the one hand, and both ex ante and ex post moral hazard on the other. The authors demonstrate that it is always desirable to offer at least some insurance coverage for preventive care if individual consumers ignore the impact of their preventive care on the health premium. Using a utility-based framework, they reconfirm the conventional tradeoff between risk avoidance (by risk sharing) and moral hazard for insuring treatment goods. Uncompensated losses that reduce effective income provide a new efficiency-based argument for more generous insurance coverage for prevention and treatment of health conditions. The optimal coinsurance rates for prevention and for treatment are not identical.
Resource allocation and health financing
Save the Children called on African leaders to fulfil their promises made in Abuja in 2001 to spend at least 15% of their annual budgets on health. In the briefing ‘Not another one, not another day’ they look at how African governments, despite commitments in 2001 and 2005, still aren’t spending enough on health. It also shows that the EU is failing to support the development of health systems in Africa, with most member states still falling short of their commitment to spend 0.7% of their gross national income on aid. It includes a list of recommendations to get the AU and EU back on track to meet the Millennium Development Goals.
This paper estimates the impact of South Africa’s Child Support Grant (CSG) on child nutrition as measured by child height-for-age. It finds that large dosages of CSG treatment early in life significantly boosts child height. While income transfers such as those of the CSG should help immediately to redress poverty, the question remains whether they help facilitate a longer-term pathway from poverty. One way that they might contribute to this goal is by enhancing the durable human capital stock of the next generation. These estimated height gains observed in the case of South Africa suggest large adult earnings increases for treated children and a discounted rate of return on CSG payments of between 160-230 per cent.
Member states of the African Union pledged at the 2001 Abuja summit to commit at least 15% of national budgets to healthcare but 6 years later have largely failed to do so. This failure amongst others has resulted in the annual loss of an estimated 8 million African lives to preventable, treatable and manageable diseases and health conditions. In other words Africa has lost a staggering estimated 40 million lives since 2001 due to a failure to develop, implement and fund comprehensive Public Health policies alone. African governments are not yet all working collectively or quickly enough to analyse and resolve the long term big picture and real scale of Africa’s health catastrophe. Many appear to be relying mainly on international efforts from wealthy philanthropists, donor countries and facilities such as the Global Fund to resolve Africa’s accumulated Public Health problems. Some are also still focusing on only some specific diseases without long-term perspectives to ensure that Public Health is comprehensively promoted to resolve what are essentially interlinked symptoms of one problem – the lack of a comprehensive long term Public Health policy and planning across Africa.
Donor funding for HIV/AIDS has skyrocketed in the last decade: from US$ 300 million in 1996 to US$ 8.9 billion in 2006; yet, little is understood about how these resources are being spent. This paper analyses the policies and practices of the world’s largest AIDS donors as they are applied in Mozambique, Uganda and Zambia. The report offers a number of recommendations for how donors can improve their programmes to increase the effectiveness of aid. Recommendations for all three donors include: jointly coordinate and plan activities to support the National AIDS Plan, assist the government in tracking total national AIDS funds, focus on building and measuring capacity, and develop strategies with host governments and other donors to ensure financial sustainability.
The Board of the Global Fund to Fight AIDS, Tuberculosis and Malaria today approved 73 new grants worth more than US$ 1.1 billion over two years. The Board has also approved US$ 130 million for renewal of five grants that have reached the end of their five year life. More than 80 percent of the approved Round 7 grants are for low-income countries, with the majority of resources (66 percent) for Africa. Asia and the Western Pacific will receive 13 percent of the newly approved funding, Latin America and the Caribbean five percent, Eastern Europe three percent, and the Middle East 13 percent.
The act is intended to consolidate the laws relating to registered medical schemes; to provide for the establishment of the Council for Medical Schemes as a juristic person; to provide for the appointment of the Registrar of Medical Schemes; to make provision for the registration and control of certain activities of medical schemes; to protect the interests of members of medical schemes; to provide for measures for the coordination of medical schemes; and to provide for incidental matters.
A comparative approach was adopted to study four groups of informal economy operators (cobblers, welders, carpenters, small scale market retailers) focusing on a method of prepayment which could help them access health care services. Two groups with a total of 714 operators were organized to prepay for health care services through a group premium, while the other two groups with a total of 702 operators prepaid through individual premium, each operator paying from his or her sources. Data collected showed that the four groups were similar in many respects. These similarities included levels of education, housing, and social services such as water supplies, health problems, family size and health seeking behaviour. At the end of a period of three years 76% of the members from the two groups who chose group premium payment were still members of the prepayment health scheme and were receiving health care. For the two groups which opted for individual premium payment only 15% of their members were still receiving health care services at the end of three years.
This study highlighted financial difficulty as the major obstacle to obtaining treatment in one province of South Africa. There is evidence in support of providing ARV treatment free of charge to HIV positive patients who qualify, as occurs in other provinces in South Africa. It is also suggested that providing ARV therapy at more local clinics in the community would make treatment more accessible. Provision of several months' supply of medicines per visit would help to reduce transport costs and minimise patient expenditure. These interventions may reduce the incidence of patients lost to follow-up in this community.
A number of different methodologies will be tested as part of the Risk Equalisation Fund (REF) shadow process in South Africa, according to the Registrar of Medical Schemes Patrick Masobe, under whose control the shadow process falls. The REF is being set up to make sure that all medical scheme members, regardless of their age or state of health, pay the same to access certain basic healthcare benefits. Medical schemes that have a large number of younger and healthier members will have to pay into the REF, while schemes with many older and sicker members will receive payments from the fund.