As humans are living longer, new treatments appear, and more people develop chronic (long-term) diseases, health costs are soaring to the point of pushing 100 million people each year into poverty globally, especially among those who have to pay directly for health services, according to this year’s World Health Report by the World Health Organization (WHO). Even industrial nations with a tradition of universal health care cover are finding their resources stretched to the limit.
Dr Margaret Chan, Director-General of WHO, said:
- “No one in need of health care should have to risk financial ruin as a result. The report sets out a stepwise approach. We encourage every country to act on this and do at least one thing to improve health financing and increase health coverage over the coming year.”
WHO says more money needs to be raised for health, it needs to be raised in a fairer way, and then spent more efficiently.
Redirecting public funds – In some cases WHO believes national governments may be able to direct more funds towards health. Since the year 2000 pledge by African leaders to aim for a 15% of government spending to go on health, Liberia, Ruwanda and the Rep. of Tanzania have reached the target. An extra $15 billion for health could be raised if the 49 poorest countries on the globe upped their health spending to 15% of government expenditure – doubling existing resources for those countries.
Efficient tax collection – Indonesia is an example of a country that managed to raise 10% more tax by making its collection process more efficient. New sources of tax revenue can be found, such as for currency transactions and VAT (value added tax, sales tax). Ghana increased VAT by 2.5% to partly pay for its national health insurance program. A 50% rise in tobacco tax among 22 low-income countries could raise a further $1.42 million. If India placed just 0.005% tax on foreign exchange transactions it would raise over $370 million every year.
International cooperation – if all donors did what Norway does, allocate 0.7% of its GDP (gross domestic product) to official development assistance, by the year 2015 3 million more lives would be saved.
Financial barriers to obtaining care must be removed. Japan, and some other nations have managed to make sure health services are available to every one of their citizens by reducing dependence on direct, out-of-pocket payments, and raising pre-payments, mainly via taxes, insurance or a combination of both. The moneys are collected into a pool, so that that financial burden is not borne just by those who become ill. Most western European countries use this model. Mexico, Rwanda, Thailand, Chile, and Turkey are well on the way to emulating these countries. According to WHO, Brazil, Costa Rica, Ghana, China, the Republic of Moldova and Kyrgyzstan have taken steps in the same direction.
WHO believes that if money were spent more efficiently, global health care cover would increase by between 20% to 40%.
Buying medications – France’s strategy is to use generic drugs when possible, saving approximately $2 billion kn 2008.
Hospitals – hospitals take up over half of all government health care spending. Up to $300 billion is lost each year due to hospital inefficiency. A productivity boost of 15% in hospitals could be achieved if an efficiency drive were implemented, WHO argues.
The International community – ever since the Paris Declaration on Aid Effectiveness, things have improved. The aim was to harmonize aid around programs run by the recipient countries. Over 140 global health initiatives have been running in parallel to government-led programs over the last five years. Today, for example, the government of Rwanda can report on 890 health indicators, a very time-consuming process which is only possible thanks to aid harmonization.
WHO is presenting its report today to a ministerial conference on health financing, in Germany.
Written by: Christian Nordqvist