Financing health in countries

According to ILO Recommendation No. 202 on social protection floors, the minimum requirements in the area of social protection must include: a) access to a nationally defined set of goods and services, constituting essential health care and including maternity care, that meets the criteria of availability, accessibility, acceptability and quality; and b) basic income security (especially in cases of sickness, unemployment, maternity or disability).

In order to achieve the social protection on health, financial resources are necessary to establish health facilities, purchase drugs, vaccines and supplies, and ensure paycheck for the health workers. Many countries in the world have different ways of financing their health and the recent publication of the Lancet on “Past, present, and future of global health financing” has provided some evidence on how countries finance their health. The paper has also presented the scenario in 2050, and there is a slight reduction of total government health spending per total health spending estimates (from 74% in 2016 to 72.9% in 2050) and increase in the out-of-pocket spending per total health spending 2050 estimates (from 18.6% in 2016 to 19% in 2050). The paper has emphasized the requirement of sustainable and increase of government spending on health; however, it has not adequately addressed how this can be achieved.

The intention of this blog is not at all a review of the Lancet paper but to further analysis using the available data to provide an approach of sustaining and increasing government spending on health.  The Lancet paper has referred to some empirical studies on the linkages of government spending in relation to maternal and child mortality. I have used the government spending data and compared the countries results with the maternal mortality ratio, disease burden data and health-adjusted life expectancy (IHME Data – 2017) and under-five mortality data (UNICEF data – 2017). The results show that countries, whose governments spend high on health have better outcomes in terms of maternal mortality, under five mortality, disability-adjusted life years (DALYs) lost and health-adjusted life expectancy (HALE).

Figure: Government health spending per total health spending vs health outcome measures

The above figure visually demonstrates that those countries where the governments spend more on health have better health outcomes and this phenomenon is quite a common in those countries, where the governments spend more than 70% of the total health spending with a few exceptions. A few can argue that maternal and child mortality proportionately lower due to the government spending on the essential health services, but this is true for the health-adjusted life expectancy, which is more, and disability-adjusted life years lost, which is lower in those countries. These outcomes are not only possible to due to the financing of the essential services but due to the sustainable financing of the overall health systems and other socio-economic determinants. These phenomena are more evident in the Scandinavian countries, Japan, Belgium, Cuba, Canada, Nederland, United Kingdom, etc. where the government finance the health spending and have social protection mechanism in place.

How to increase and sustain government spending on health? WAY FORWARD

Health is often considered as a commodity by various states with a few exceptions, and many governments rely on different financing mechanisms. Health shouldn’t be considered as a commodity and countries must ensure it as a basic human right for their population. However, the current practices on health financing have so many interested players; it is challenging to ensure the health as a basic human right until and unless the state or the government considered it as a state business, finance it and strictly regulates these interested players for their services and cost.

WHO defines, the health is a state of physical, mental and social wellbeing not merely an absence of any diseases or infirmity. Any diseases or infirmity or absence of wellbeing is due to the imbalance of the epidemiological triad (host, environment and agent) and have ecological linkages. Any aberration in the impact of the ecological linkage on the health of the population. For instances:

  1. Deforestation leads to ecological changes (like climate change, global warming), which directly links to an increase of the vector population and subsequently increase the chances of vector-borne diseases.
  2. Absence of provision of safe water and sanitation leads to increase of water and food-borne illnesses.
  3. Road traffic accidents or injuries are mostly due to inappropriate regulations, fault in roads and transportation, maintaining traffic rules, etc.
  4. The industrialization has led to air and water pollution and global warming, and as consequences, we are facing various chronic diseases like cancers, respiratory illnesses etc.
  5. Cigarettes, alcohol, sugary industries have created a high impact on health to name the few at the end.

The government has sole responsibilities for the above examples either making them available, controlling or regulating them. When somebody breaks the rule or commit crimes, then they are penalized or charged and ensured their proper rehabilitation. However, the governments are not adequately regulating or taxing them for creating ecological disturbances (like deforestation, industrialization), which are the causes of an increasing number of health-related problems. Thus, the government should be accounted and the taxes and profits they generate from these should be used for financing health services like that of security.

Universal health coverage is human rights not a privilege as the security of people in many countries. Security forces are a government entity and pay every single penny. The government ensures adequate funding to security services, and there are not private industries and even if there are they are heavily regulated and taxed. Why are security forces not managed by private or insurance companies? There is not a single country in the world, whose police or army are managed by private or insurance companies.

The increasing dominance of drug industries manipulating drug prices in the market has made these drugs unaffordable to the public. Antimicrobial resistance and drug resistance tuberculosis, etc. are the challenges due to the indiscriminate use of antimicrobials and easy access. The limitation of regulation for the rational use and accessibility of the drugs in many countries have contributed to an increasing number of resistant pathogens, and we are running out of alternatives. It is like that of gun control. A place where guns are readily available has more shooting incidents than that of those places, where there are stringent gun laws.  

Why the government doesn’t manufacture all essential drugs, provide all essential services at free of cost like the government invest in weapons, production and provide security to the public. Why health cannot be done in the same way. We need health forces like security forces, who have their research institutes, pharmaceutical productions, vaccine developments, medical technologies and service delivery systems.

Government if cannot take the responsibilities of medical industries (pharmaceutical and biotechnological industries, hospitals) then they should use the tax they received from these companies to finance the health spending.

When people go to a police station for security or complain, they diagnose the problem and provide solution or security services, and no one is charged. But, when a person has a health problem, goes to a hospital for treatment has to pay an exorbitant price for the services. The prices of these essentials services will keep on increasing if the government doesn’t finance or regulates those interested players.

Dr Nirmal Kandel, MBBS, MA (Anthropology), MPH, EMBA

Disclaimer: Views are my personal and don’t represent the view where I work.