CGP's Blogal Prosperity
December 16, 2010
by Jeremiah Norris
In WHO’s World Health Report 2010, subtitled “The path to universal coverage”, it outlines guidance on ways to finance health care and raise sufficient resources in order to move Member countries towards universal health coverage. To reach this objective, WHO proposes that user fees in the private health sector be replaced by prepayment and pooling, and that these be compulsory contributions. It states that such mechanisms mean that the rich subsidize the poor and the healthy subsidize the sick. However, that concept is currently under assault in every OECD country that has used it over the past 60 years. Other proposals by WHO to finance universal coverage include:
The feasibility of meeting any of these financial objectives is highly problematic, particularly because they are utterly reliant on multiple sovereign authorities in 189 Member States acting in concert with policy pronouncements from WHO, which bears no risk for any of its programmatic prescriptions. There are a number of other constraining features.
An underlying assumption of WHO is that far too many people in the developing world rely on direct payment for health services (or, out-of-pocket payments). These are private sector expenditures; WHO is recommending that major portions of this resource flow be re-directed into prepayment schemes, basically for public services.
Previous WHO studies documented the fact that even in the poorest countries the majority of health services are delivered via the private sector, e.g.: it is 65% in Bangladesh; 77% in Cambodia; 80% in Indonesia; 82% in Kenya; 84% in India; 78% in Vietnam, and 81% in Nigeria. Re-directing these payments into the public sector is a task for their local policy-makers, if they so choose to do so, rather than WHO.
Universal coverage isn’t just about finance. It is also about provision. Too often, public finance implies public provision as well. Medicare for the elderly and Medicaid for the poor in the U. S. are examples of public finance and private provision. Other countries have moved aggressively over the past few years to separate public finance and provision from healthcare, such as the Czech Republic, Poland, Singapore, Hong Kong, Japan, South Korea, Chile, Brazil, Colombia, etc. WHO remains enthralled to its ministries of public health in Member states which continue to champion public finance and public provision, an undertaking well beyond their management capacities.
WHO equates finance with resource inflows from ODA. But without internal capital generation, no healthcare system can operate on a sustainable basis. And capital is not just bricks and mortar. It is also about banks and investors willing to invest in the expansion of health care. If not, all efforts to move this mountain of debt off the shoulder of government will lead to little that is fiscally viable. Countries must begin to analyze the capital needs of their health sectors and determine how they can amend existing regulatory structures to attract greater non-governmental investment.
WHO states that “the path to universal coverage is relatively simple—at least on paper”. It then simplifies the process by proposing that international aid be given to the poorest countries, allowing them to get on “the path”. Universal coverage isn’t “relatively simple”, and WHO seems unaware of the differences between financing healthcare through compulsory general tax revenues and voluntary prepayment. For instance, the U. K. has had universal coverage since 1948 via its national health system, compulsory financed through the Exchequer. Over the years, some 20% of the covered population has opted out and into the private plans offered by BUPA (British Union Provident Association) through voluntary prepayment. In the 1980s, Chile—which was on universal coverage, allowed citizens to opt out into private healthcare plans. But it permitted them to transfer their portion of public payments into private health plans. The U. K. does not permit this transfer; thus BUPA prepayment beneficiaries continue to pay taxes to the Exchequer on their incomes to support universal coverage.
In 1978, WHO proposed “Health for All by the Year 2000”. During the next 22 years, donors poured over $99 billion into programmatic efforts to support the WHO initiative. Yet, when the year 2000 was reached, WHO was silent on any accomplishments. To this day, it hasn’t issued a formal report on “Health for All”. In December 2001 it published “Macroeconomics and Health: Investing in Health for Economic Development”. In reading through this multi-million dollar research effort, there isn’t one reference to “Health for All’ in the main text, the Notes, Appendix, Biographical Sketches, Reports and Working Papers, References or in the Glossary.
The programmatic experience of “Health for All” should have generated a wealth of “lessons learned”. Applied now to the concept of universal coverage, a valuable resource of this magnitude could have substantially grounded WHO newest proposal in a legitimacy otherwise difficult to obtain. More importantly, the application of this experience to its current proposal could have removed WHO from the trivialization of its comment that universal coverage “is relatively simple”.
There is one reference to “Health for All’ in the Executive Summary of WHO’s World Health Report 2010. Its otherwise absence reinforces the notion among skeptics that while WHO has a major influence on the allocation of donor health resources, it has only a limited ability to stay the course on any of its global health initiatives. The Director General of WHO, Margaret Chan, has an opening message in World Health Report 2010, saying at the end: “universal coverage is an admirable goal, and a feasible one—everywhere”.
“Health for All” was an admirable goal, too, but more expensive than realistic. External exhortations from a Membership Organization in the absence of legal enforcement authorities cannot compel internal revenue generation in sovereign states to finance WHO’s 20th Century remembrance of universal coverage. It is a bumper sticker on the well-trod path to another “Health for All”.
Jeremiah Norris is a Senior Fellow and Director of Hudson Institute's Center for Science in Public Policy. He specializes in public-private partnerships in development assistance, trade and development, and global AIDS, tuberculosis, and malaria policies.
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