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Strengthening Health Financing in Partner Developing Countries |
Published online as web appendix to Reich MR, Takemi K. "G8 and strengthening of health systems: follow-up to the Toyako summit." Lancet. 15 January 2009, DOI:10.1016/S0140-6736(08)61899-1 |
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Ravi P. Rannan-Eliya
1 Feb 2009 | 23 pages
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Abstract: Health expenses impoverish millions of households and seriously undermine efforts to reduce poverty in many countries, providing a policy linkage between health and social protection agendas. Additionally, inadequate funding for crucial public health functions in developing countries impairs human security in an interconnected world, as shown by recent global crises involving avian influenza and melamine. The 2002 Monterrey summit led to substantial increases in financing for health in developing countries, including a doubling of external assistance and increases even in Africa in government budgets. Despite this investment, trend rates of progress toward MDGs 4 and 5 have not improved substantially in most regions, and Africa and South Asia remain significantly off track. More money has not translated into better performance. Continued increases in investment are needed, but increases in funding need to be complemented by efforts to improve how money is spent. The global financial crisis reinforces the need to improve the returns on health spending.
Financing and payment policies make the crucial difference in improving the effectiveness of health spending. There is now broad consensus among technical experts that out-of-pocket payments for health care are unfair for poor people and can result in illness leading to financial difficulties and poverty for millions. Furthermore, mechanisms such as community-based health insurance, private insurance, and user fees have not proved viable pathways to scaling up coverage and social-health protection. As a result, implementation of an incremental shift to public financing that substitutes out-of-pocket financing, especially for poor and vulnerable groups in society, is crucial. Yet questions remain about how to effectively implement the shift to public financing from private out-of-pocket sources. The G8 can be an effective mechanism to ease better health financing policies in partner developing countries. Aid is more effective when appropriate policies are in place, which depends on country commitment and ownership. G8 nations have recognised these necessary conditions with their commitments to support new initiatives such as International Health Partnership and Providing for Health, which both promise to increase alignment with countries and support policies for public financing.
The present global economic crisis provides an ideal opportunity to bolster global commitments to health financing, even though this approach might seem counterintuitive. As the International Monetary Fund has urged, both G8 nations and developing countries will need substantial fiscal investments in the medium term to stimulate consumption and global demand. Public spending to expand health-care coverage represents for many countries one of the most efficient means to do so. At the same time, contractions in global trade and increases in unemployment will leave millions of people without adequate health-care coverage and undermine support for an open global trading system that benefits both G8 nations and developing country partners. This crisis, with the increased awareness that it brings of market failures that need government action, could in fact be the best time to invest in expanding health-care coverage through better financing policies. The commitment to policies for public financing should translate into support by the G8 for countries that decide to abolish user fees in their public sectors for maternal and child-health services, HIV/AIDS, tuberculosis, and malaria.
The G8 should provide clear directions to their aid organisations and multilateral development agencies to forge a coherent approach to the question of public financing for health, especially for the choice between taxation and financing for social health insurance, which should depend on country circumstances. The G8 should respond with three actions: (1) Complement its efforts on increasing money for health with efforts to improve the value of health spending through support for better country-led health financing and systems policies. (2) Build on the existing consensus among technical experts with an explicit G8 commitment to prioritise support for country health financing policies that place public financing for health, in the form of tax financing or social health insurance, as the core of efforts to expand coverage for poor people and vulnerable groups in society. (3) Invest in the ability of developing country partners to improve financing policies. This approach will need increased investments in building national capacity for assessment of health-systems policy and in the mechanisms to understand and share the lessons of best practice countries. |
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