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It Pays To Invest In Health

Posted on 12 October 2012 by elainehuang

By Zofeen Ebrahim

TOKYO, Oct 12 (TerraViva) – Universal access to healthcare must change from just a slogan to a reality, say civil society groups here that are calling on the World Bank to push this higher up on the political agenda.

In discussions on global health at the IMF-WB annual meetings here, health experts from the academia, the private sector and non-governmental organisations explored why investing in health makes good economic sense. It plays a critical role in social stability even in times of austerity, and is also an important safety net central to sustainable development.

But currently, only eight of the world’s 49 poorest countries have any chance of financing a set of basic services with their own domestic resources by 2015.

Still, experts agreed that universal health coverage – which is much more than just provision of health services – have become very much accepted as basic services and rights that citizens needed access to.

Dr Sania Nishtar, president of Heartfile in Pakistan, said health was not only a rights issue that was enshrined in the constitutions of 119 countries, but had become a “high-profile” matter. Putting it more bluntly, Chan called health an electoral issue: “Politicians who do not talk about health won’t get votes.”

Since the early 1990s, when the WHO began talking about universal health coverage, Nishtar said, health has been redefined drastically and gained a “political momentum” never seen before.

This can be seen, for instance, in the debates in the U.S. electoral campaign over access to healthcare.

In short, winds of change are sweeping across the world, in countries big and small that are turning to or aspiring for a system that allows access to medical treatment to those who cannot afford it. There is a broad consensus among nations, says World Health Organisation (WHO) director general Margaret Chan, that “it is the right thing to do – politically, economically and socially”.

Since the WHO developed a health financing system in 2010, one that is capable of sustaining universal coverage, 80 countries have already sought guidance from it.

Using Japan as an example of a country that has put health on top of all social priorities, Keizo Takemi, senior fellow at the Japan Centre for International Exchange, said universal health coverage helped reduce poverty by helping bring social, economic and political stability.

With people living longer, lower infant mortality and an ageing population, the demand for healthcare here in Japan has taken a whole different hue.

Globally, 20 to 40 percent of resources spent on health are wasted.

Common causes of inefficiencies include de-motivated health workers, duplication of services, and inappropriate or overuse of medicines and technologies. In 2008 for example, France saved almost 2 billion dollars by using generic medicines wherever possible.

From the viewpoint of developing countries, however, resource challenges make it harder to aim for universal health coverage.

“Juggle, juggle, juggle,” is what Maria Kiwanuka, Uganda’s finance minister, has to do every single day in order to manage finite resources to deal with “ignorance, poverty and health”.

Grappling with high population growth, disease and poverty, against a backdrop of falling aid funds, she explained the endless debate that goes on within Ugandan government circles. “Do you spend on infrastructure provision or do you spend on salaries on the health sector?” she asked. Are roads, bridges, irrigation, electricity more important or is setting up a basic health facility more urgent, and how do you ensure a steady supply of drugs and a health provider to run that?

To her mind, investing in health means a “long-term” commitment with “high initial cost”, so the challenge is to find a way shift some of the healthcare responsibility from the shoulder of governments to the people. One idea is to make people contribute through taxation and/or insurance, to a pool of health funds, where the cost is shared by all.

But what Kiwanuka fails to mention is the miniscule share that many developing-country governments’ budgets have set aside for health.

According to the WHO, every year 100 million people are pushed into poverty because they have to pay for health services directly.

There are however also examples of formulas that may work in the developing world. Thailand has moved away from a system funded largely by out-of-pocket payments to one funded by prepaid funds – a mix of taxes and insurance contributions. In Kyrgyzstan, the pooling of general revenues with insurance payroll taxes has helped improve access to healthcare.

In addition, countries can consider introducing ‘sin taxes’ on the sale of tobacco and alcohol. Ghana funded its national health insurance partly by increasing its value-added tax by 2.5 percent. (END/ZTE/JS/TV/IPSAP)

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  • Official site of IMF-WB meetings
    Official site of IMF-WB meetings
  • Japan host site
    Japan host site
  • IPS Asia-Pacific site
    IPS Asia-Pacific site


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