Increasing Investments in Health Outcomes for the Poor October 2003

Transcription

1 Increasing Investments in Health Outcomes for the Poor October 2003 George Schieber Health and Social Protection Sector Manager Middle East and North Africa Region The World Bank

2 Overview of Presentation Why invest in health? How much are we currently investing? Are we getting value for money maximizing outcomes per dollar spent (e.g., the right interventions, the right people, and producing results in a technically efficient manner)? How much should be spent for a minimal package of basic health services? What outcomes and implementation constraints should be targeted? What is the gap? How much can countries afford? Where do countries and donors go from here?

3 Why Invest in Health? 10% increase in life expectancy at birth leads to 0.35% increase in the economic growth rate (CMH). Increases in health status accounted for 17% of the increase in productivity gains (NBER). Effectiveness of spending in improving health outcomes also depends on the policy and institutional environment with poor policy and institutional environments resulting in little gain, and conversely (WB, forthcoming).

4 Growth Is Not Enough Percent living on $1/day Target 2015 growth alone Primary completion rate (%) Target 2015 growth alone Under-5 mortality rate Target 2015 growth alone East Asia Europe and Central Asia Latin America Middle East and North Africa South Asia Africa urces:wdr 2004, Devarajan Notes: Average annual growth rates of GDP per capita assumed are: EAP 5.4; ECA 3.6; LAC 1.8;

5 Economic Growth Is Not Always Pro-Poor egative Growth Inequality Rises Positive Growth/Inequality Rises Anti-Poor Broadly Shared Not Pro-poor By Any Yrs g g20 Yrs g g20 Recession Growth Definition Yrs g g2 and Korea, Rep Costa Rica n, Islamic Rep Taiwan, China Tanzania vak Republic Hong Kong China Bulgaria er Singapore Panama rra Leone China Nigeria bia Malaysia Dominican Republic onia Thailand El Salvador via Mauritius Senegal ssian Federation Brazil Etiopía Colombia Mexico Ecuador Philippines Chile Peru egative Growth/Inequality Falls o-poor Recession Yrs g g20 Pro-Poor Biased Growth Positive Growth/Inequality Falls Yrs g g20 Yrs g g2 yana Gabon Trinidad & Tobago dan Indonesia India larus Tunisia Bangladesh dagascar Egypt, Arab Rep Nepal Ghana Jamaica ource: L. Cord, J. Lopez, and J. Page, ro-poor Growth and Poverty Reduction orld Bank, August Sri Lanka Honduras Hungary Bolivia Turkey Venezuela, RB

6 Source: WB, PREM, Poverty Reduction Group Economic Growth and Poverty Reduction Do we know what works? Poverty reduction can be achieved by economic growth and/or by changing the distribution of income While growth in itself is not a sufficient condition for poverty reduction, it is a critical enabling factor for significant reductions over time Most poverty reduction is in those countries that have experienced sustained periods of economic growth and those with lower initial levels of inequality and poverty A 1% rate of growth in average household income or consumption drops the poverty rate from between 0.6% to 3.5% Financial development, trade openness and increases in the size of government are associated with higher growth but increases in inequality, ceteris paribus Recent studies suggest that policy makers should focus on sectors, regions, and factors of production dominated by the poor; redistributive spending focused on the HD assets of the poor; and gender inequalities as there is evidence that improvements in these areas as well as lower inflation lead to both growth and progressive redistribution

7 Poverty Reduction and Growth Policy Macro policies that affect the value of assets (e.g., trade, inflation, exchange rate, etc.) and the overall price level and interest rates Policies that affect the efficiency and functioning of markets (labor, land, capital, product) thereby influencing wages, prices, incentives and transaction costs Pro-poor spending to raise the level of productivity and to protect the assets of the poor (education, health, other social and infrastructure spending, safety nets, agriculture investments, SME development, etc.) Policies designed to raise growth by affecting the pattern of growth (industrial policy) which could affect the poor through the above channels Source: WB, PREM, Poverty Reduction Group

8 Global Health Spending, Income, and ODA Region/income group Population, millions (2002) Per capita GDP (2002 $US) Health expenditures per capita, (2000) Public health expenditures (% of total health exp., 2000) Aid as a % of GNI (2001) East Asia & Pacific 1, Europe & Central Asia 476 2, Latin America & Caribbean 527 3, Middle East & North Africa 306 2, South Asia 1, Sub-Saharan Africa World 6,201 5, High income , N/A Middle income 2,742 1, Low income 2, Source: WDI, 2002 Notes: Regional aggregates exclude high-income countries (GNI per capita > $9,206); MENA health expenditures include Saudi

9 Higher Public Spending on Health Does Not Necessarily Mean Better Health Outcomes ublic spending and child mortality rate are shown as the percent deviation from rate predicted by GDP per capita

10 nterventions Must Address Inequities in Outcome (Deaths Deaths per 1,000 live births)

11 Share of government health expenditure (%) Interventions Must Address Inequities in Public Spending Poorest Quintile Richest Quintile Africa ECA South Asia Gwatkin, 2001

12 Observations on Current Spending Patterns There are large global inequities in health spending among countries There are large variations in health spending among countries at the same income level There are large variations in health outcomes among countries even for the same health spending and income levels There are large variations within countries in health spending, access, and outcomes for the poor vs. non-poor The private share of health spending, which averages 75% for lowincome countries, decreases as countries incomes increase There are clearly large differences in the efficiency of health spending related to both allocative ( doing the right things ) and technical ( doing things right ) efficiency

13 Investments are Needed Across Many Sectors to Maximize Results % growth government health spending % reduction U5MR % -10% -20% -30% -40% -50% -60% 0% 3% 5% 8% 10% 13% 15% 5% economic growth & 2.5% female education growth & 2.5% roads growth & 2.5% water & sanitary growth & 2.5% growth in all -70%

14 Choosing and Costing Effective Interventions Which interventions to choose? How to transfer them to many countries? How to implement them to scale? How much will they cost? What kind of supporting environment is needed? Can we monitor their impact?

15 Implementation Bottlenecks Must Be Addressed Human resource constraints Constraints to physical accessibility Supply and logistical problems Technical and organization capacity constraints MBB (Marginal Budgeting for Bottlenecks), a resource allocation tool, can be used to estimate the costs of removing system-wide impediments to service delivery Source: A Soucat, W.V. Lerberghe, F. Diop, S. N. Nguyen and R. Knippenberg, Marginal Budgeting For Bottlenecks: A New Costing Tool and Resource Allocation Practice to Buy Health Results,

16 How Much Can Developing Countries Afford? (Central Government Revenues and Tax Revenues as a % of GDP, circa 2001) Region/income group Total From tax revenues East Asia & Pacific Europe & Central Asia Latin America & Caribbean Middle East & North Africa South Asia Sub-Saharan Africa High-income Middle-income Low-income Note: Regional aggregates include low-income (GNI per capita < $745) and middle-income ($745 > GNI per capita < $9,206) countries Source: IMF, 2003

17 What Does the Future Hold? (Projected Annual Growth in Real Per Capita GDP by Region ) 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% SSA EAP SA ECA LAC MENA

18 How Can the Gap Be Filled? Improve equity and efficiency of current spending in terms of focusing on cost-effective interventions targeted to the poor provided through an efficient health care delivery system Undertake appropriate investments in other health related sectors Improve domestic resource mobilization Try to re-allocate private spending for optimal public purposes including appropriate user charges Obtain increased donor support and debt forgiveness through the adoption of effective macroeconomic and health sector strategies through PRSPs, MTEFs, SWAPS, Global Funds, etc.

19 What Does This Mean for Countries? Develop credible strategies and plans to foster economic growth, deal with implementation bottlenecks, and reach MDGs as part of PRSPs, SWAPs, MTEFs, and public expenditure programs Improve governance including giving voice to communities, consumers and openness to NGOs and private sector Enhance absorptive capacity through decentralization, efficient targeting mechanisms, and institutional reforms including having a clear fiduciary architecture and open reporting of results Improve equity and efficiency of resource mobilization and commit resources Middle income countries need to make the commitment to develop and implement effective health reform strategies relying on evidence-based policy, best international practice, and MDG+ goals and indicators Develop financing, management, and regulatory mechanisms for equitable and effective pooling of insurable health risks as a necessary concomitant to MDG and CMH intervention choices. Integrating vertical programs into a well functioning health system to maximize health-specific and cross-sectoral outcomes and reduce transactions costs Monitor and evaluate results

20 What Will Donors Have to Do? Harmonize procedures (procurement, financial mgt, monitoring & reporting) in order to improve impacts and reduce donor and country transactions costs Provide increased and predictable long term financing Finance recurrent costs Offer consistent policy advice Submit to common assessment of their own performance

21 Ottawa: A Shared Global Approach Build on existing funding modalities Use and further improve existing plans and mechanisms at the country level Address inequities within countries Scale up cost-effective interventions Tackle critical implementation constraints Apply a multi-sectoral approach Focus on results Country orientation, but global action is also needed

22 Annex

23 Why Invest in Health? Intrinsic value of health Philosophical view Cultural view Constitutional view Extrinsic value of health; economic perspective human capital A highly desirable state for which consumers are willing to pay A factor of production Source: Salehi,CMH

24 Why Invest in Health? Buys Buys more more health health services services Improves Improves life life styles styles Reduces Reduces job-related job-related risks risks Buys Buys more more education education and and other other human human capital-related capital-related services services Health Improves Improves political political stability, stability, investment investment climate, climate, and and productivity productivity Reduces Reduces medical medical spending spending Reduces Reduces fertility fertility Increases Increases labor labor supply supply and and female female labor labor force force participation participation Increases Increases saving saving Increase Increase in in the the years years of of healthy healthy life life expectancy expectancy Income Wealth Growth

25 There Is a Huge Global Mis-Match Between Disease Burden and Health Spending Low- and middle-income countries shoulder 85% of the total global burden of disease, yet account for only 11 % of global health spending Global distribution of health expenditures, 2000 Low - and middleincome countries 11% High-income countries 89% Burden of Disease in Developing Countries, 2001 Injuries 12% Total global health ex penditure: $2,390 billion Noncommun diseases 40% Communic. diseases 48% DALYs 1.25 million (85% total)

26 There Are Large Global Inequities in Health Resources Source: WDR 2004

27 Higher Public Spending on Health Does Not Guarantee Better Access for the Poor

28 Total Health Spending Varies Widely By Income Level (Per Capita GDP vs. Health to GDP Ratio) 16.0% Total health expenditures (% of GDP) 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% Croatia Czech Rep. Finland Djibouti Portugal India Qatar Bangladesh Trinidad Botswana Libya Indonesia 100 1,000 10, ,000 Per Capita GDP, US$ Source: World Bank,WDI, 2002

29 Public Health Spending Varies Widely By Income Level (Per Capita GDP vs. Public Health to GDP Ratio) Public health expenditures (% of GDP) Croatia Czech Rep. Sweden Lithuania Lesotho Djibouti Tanzania Botswana Qatar Philippines Libya Bangladesh Trinidad India 100 1,000 10, ,000 Per capita GDP ($US) Source: World Bank,WDI, 2002

30 Child Mortality Varies Widely for Given Income Levels (Per capita GDP vs. Under-5 Mortality Ratio) 350 Sierra Leone Under-5 Mortality Rate (per 1,000 live births) Angola Botswana Eritrea Qatar Indonesia Lithuania Per capita GDP, US$ UK Source: World Bank,WDI, 2002

31 Child Mortality Varies Widely for Given Public Health Spending Levels (Public Health to GDP Ratio vs. Under-5 Mortality Ratio) 350 Sierra Leone Under-5 Mortality Rate (per 1,000 live births) Qatar Angola Eritrea Botswana 0 Indonesia UK Lithuania Public health expenditures (%GDP) Source: World Bank,WDI, 2002

32 Achieving Change in HNP Behavior of Individuals/Households Income Education Water Sanitation Nutrition Performance of Health System Clinical Effectiveness Accessibility and Equity Quality and Consumer Satisfaction Economic Efficiency Health Status Outcomes Fertility Mortality Morbidity Nutritional Status Macroeconomic Environment Delivery Structure Facilities (public & private) Staff (public & private) Information, Education, & communication Health Care System Institutional Capacity Regulatory & Legal Framework Expenditure & Finance Planning & Budgeting Systems Client & Service Information/Accountability Incentives Governance Projects and Policy Advice

33 How Much Should Be Spent for a Basic Package of Essential Health Services A few health conditions are responsible for a high proportion of the world s health deficit These conditions largely affect the poor Cost-effective health interventions to deal with these conditions exist; CMH proposes universal coverage for programs of essential interventions to be funded by public and donor contributions The costs per capita would be on the order of $38 per capita per person/year in 2007, leaving a donor financing gap of some $27 billion.

34 MDG Approach to Investments in Health Extreme Poverty Halve, between 1990 and 2015, the proportion of people whose income is less than $1 a day. Halve, between 1990 and 2015, the proportion of people who suffer from hunger. Primary & Girls' Education By 2015, boys and girls everywhere complete a full course of primary schooling. Eliminate gender disparity in primary and secondary education, preferably by 2005, and in all levels of education no later than Safe Water & Sanitation Halve by 2015 the proportion of people without sustainable access to safe drinking water. By 2020, achieve significant improvement in the proportion of people with access to sanitation. Child & Maternal Health Reduce by two thirds, between 1990 and 2015, the under-five mortality rate. Reduce by three quarters, between 1990 and 2015, the maternal mortality ratio. Communicable Diseases By 2015, halt and begin to reverse the spread of: HIV/AIDS Malaria & Other major diseases.

35 MDG Approach Highlights cross-sectoral links of health, education, water, sanitation, poverty reduction, and growth Focuses on health outcomes Estimated costs for assisting countries in reaching the MDGs are on the order of $50 billion per year with health estimated to be $15-30 billion overall including $8-15 billion in additional development assistance

36 How Much Can Developing Countries Afford? (Central government revenues (% GDP) vs. GDP per capita) Central govn't revenues (%GDP) Slovak Rep. Namibia Lesotho Czech Rep. Venezuela Thailand Mauritius India GDP per capita ($US) Source: IMF, 2003

37 But Rapid Gains Are Possible Promote economic growth Application of known and emerging interventions Changes in national policies, capacity building, and increased financial support Strengthen health systems Initiate complementary actions across sectors (education, water, energy, transport) Enhance donor mobilization and harmonization

38 What is the World Bank Doing? Record for FY98-02: Average of 22 projects per year, $1.3 billion in commitments -- 7% of Bank lending FY03 likely to end at $1.7 billion in new financing for 32 new operations Health disbursements doubled, from $560 million in FY98 to $1.2 b this year >30 country focused health studies a year

39 iversifying Analytical and Financial Instruments Stronger health dimensions of poverty analysis and programmatic (multi-year) sectoral analyses Expanded health involvement in debt relief and public expenditure dialogue Innovative financing: IDA grants and credit buy-downs, IBRD buy-downs (e.g., China TB), capital market devices Where governance is adequate, finance against outputs and other results, not inputs Greater use of sector wide approaches