Economics For Everyone| Successful countries find footing health bills ensures political stability
If you cannot pay for your daughter’s polio vaccination, should the government pay for it?
How about if she had cancer and you cannot afford the treatment? And what if the terminally ill one was not your daughter but you?
If you answered “yes” in any of those circumstances — and, hand in heart, 99 per cent of us would — you support “universal health coverage”, that is, the idea that people should not be left to suffer, or to die, just because they are poor.
What we usually debate — and vociferously so — is who exactly should be helped with taxpayers’ money (only the poor? their children?), for what type of illnesses (contagious? complex?), and to what extent (full? partial?).
These are ideologically super-charged questions. This is where conservatives’ passion for personal responsibility rubs liberals’ love for social solidarity.
No wonder universal health coverage does not exist in the US — where some call it “socialism” — and is being cut back in Europe — where most call it “a human right”.
But, while the debate rages in rich nations, successful developing countries like Brazil, Chile, China, India and Indonesia have figured out a way forward, and are moving ahead.
First, they have reached a political consensus: if you cannot pay for health care, the government will pay for you. For them, this is not just moral principle.
It is a way to ensure political stability. What is worse for economic growth: to use public dollars to fund health services for millions, or to have those millions demonstrating in the street?
Solidarity is good for business. Of course, this assumes that you can tell who is poor and who is not. Well, now you can.
Advances in biometric technology have made it easier and cheaper — about $4 per person — to identify individuals, to know their income, and to track what subsidies they are getting.
This may sound trivial if you live in Canada or France where you have an assigned social security number and “free” health care, courtesy of the state, from cradle to grave. But it is revolutionising social policy in the developing world.
Second, publicly-paid health coverage is being expanded beyond the traditional “basic” package — beyond things like vaccinations, maternal care and family planning.
As developing countries get richer, their pathological profiles change. Their people get sick from other things — diabetes, hypertension, cancer and heart disease become more common.
They also have fewer babies and live longer. So the old way of supplying health care needs to adapt.
You spend more public money on teaching people how to live — eat less, exercise more, quit smoking and use condoms.
You train more doctors to be specialists, rather than generalists. And you begin to worry about patents — can you afford the latest medicines produced by big-brand pharmaceutical companies, or should you challenge their intellectual property and produce a generic version of your own? Guess which way new global heavyweights like Brazil went.
Third, while the government may be paying for health services, it is no longer the only provider.
Building public hospitals and hiring doctors is becoming less important than making sure patients have health insurance, and can use it to seek medical care from whomever they want.
Many of the new providers are private — some for profit, some not. This allows governments to focus on, and do a better job in, areas where for-profit health enterprises do not want to go — say, remote rural villages.
(For the record: when the government itself cannot extend these services, it is usually private non-profit organisations that do the job — South Sudan, the newest country on earth, is a good example of that.)
Finally, as more private providers are paid with public money to supply health care, more emphasis is put on results and service quality.
Has the incidence of malaria actually fallen? How many births were assisted by a doctor or a nurse? What percentage of young people contract sexually-transmitted diseases?
How long do patients wait for treatment? It is usually easier to hold a contractor accountable than a civil servant.
And a contractor is usually more creative in finding ways to keep you from doing unhealthy things — Discovery Health, a private South African company, gives you “points” that you can redeem for discounts at the supermarket.
So, how much will it all cost? Believe it or not, universal health coverage need not be expensive. Remember, it all starts with “means-testing”, that is, with spending more on those who can afford less.
The average emerging economy already dedicates about five per cent of its GDP to health; roughly half of that is paid for by taxpayers.
And spending more does not ensure healthier citizens anyway — the US has the largest health bill in the planet (15 per cent of GDP), but for all its high-tech hospitals, it produces mediocre outcomes.
Of course, cost is only half of the equation — the benefit of living in a society where illness is not a sure path into bankruptcy, or death, must be worth something. The newly-developed countries have understood that.
Marcelo Giugale is the World Bank Director for Poverty Reduction and Economic Management in Africa. Follow Marcelo Giugale on Twitter: www.twitter.com/marcelo_WB
.....................................................................................................................
About this column: The world’s economic geography is changing rapidly and profoundly. We are witnessing a tectonic shift of economic power from West to East and from North to South. Developing countries are increasingly driving global economic development and Africa is now part of this momentum.
Marcelo Giugale, World Bank Director for Poverty Reduction and Economic Management in Africa, and Wolfgang Fengler, World Bank Lead Economist for Kenya, Rwanda, Somalia and Eritrea share their thoughts on development issues and their impact on Kenya and beyond. Their blogs at Huffington Post and the World Bank’s Africa Can will also feature in these columns.
