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Viewpoint (February 2004)

Author:  Ravi Rannan-Eliya,  Director, Health Policy Programme, Institute of Policy Studies, Colombo, Sri Lanka 

Recent years have seen a resurgence in attention to the effectiveness with which health (and other social) services reach the poor. It would be welcome if policy-makers’ concerns with equitable access of the poor to health services were universally driven by a normative concern for equity of access and of opportunity in itself. Yet, such concerns can also stem from a purely instrumental perspective. Progress towards the Millennium Development Goals will be inadequate unless critical services reach the poorest households in whom the burden of ill-health is concentrated, and we know that progress in many parts of the world is already falling far short. The focus of the WDR 2004 on “Making Services Work for Poor People” is recognition of the centrality of this issue. Correspondingly, there has been a significant improvement in the availability of information on the extent of disparities in access across all regions.

Often implicit in much of this is the notion that medical intervention does matter in obtaining better health, and so it does matter if poor people do have access to such services. Too often, the well-established finding of strong statistical correlations between the level of living standards and population health outcomes has obscured the related finding that the bulk of mortality decline in the past century cannot be explained by changes in living standards. Where significant mortality decline has occurred in the developing world, it has always required that modern medical services first become available to communities. Income growth by itself will not deliver low mortality.

Yet, access to health care matters to the poor (and everyone else) for more than simply being an instrument to enable them to enjoy equity in health and in their capacity to realize their full human potential. Mostly forgotten in the early 1990s, as the debate went back and forth between those concerned with the “efficient” pricing of medical services and those concerned with the “maximization of health outcomes”, was the devastating impact that sickness can have on the welfare of households. I say forgotten, because this is in reality an old truth. Since Bismarck introduced the Prussian state into the business of ensuring sickness insurance, the concern with risk-protection and the related notion of social solidarity have been primary drivers of health policy in developed nations. Here in Sri Lanka, no slouch when it comes to achieving good health outcomes, the lack of risk-protection was also the critical rationale that drove the state to make its decisive intervention in the health sector in the 1930s. A devastating malaria epidemic during 1934-35 did more than simply kill and debilitate tens of thousands. Many Sri Lankans, were impoverished as their paddy fields were left untended as those who normally worked the fields were lying sick at home, and as other family members were forced to give up their work to tend the sick. Private markets and charitable action proved utterly inadequate in the face of this disaster, and Sri Lanka embarked on its distinctive emphasis on the public provision of hospitals.

This truth remains only partially appreciated across much of the developing world. In contemporary Bangladesh, with a level of hospital provision still one third of that of Sri Lanka in the 1950s, it is reported that sickness is the single most important cause of default amongst Grameen Bank loan recipients. In China, the country that has lifted more hundreds of millions out of poverty in a shorter time than anytime in human history, inadequate access to health care is the single most important cause of households returning back into poverty.

What these national experiences collectively demonstrate is that it is not simply a matter of chance, or of national resources and history, or of the state of market development whether a poor person in a poor country, or even a poor person in a not-so-poor country, is treated appropriately or cared for without further impoverishment when sick. The means by which health services are funded and delivered play a critical role. Public policy matters.

Later this month, policy-makers, researchers and others will gather in Washington, D.C. to discuss specific experiences in the “Reaching the Poor” Conference. This initiative is welcome. Yet, I hope that they and others will look for lessons beyond the success and failure of individual programs and projects. In the past two years, researchers in 15 Asian territories together with colleagues from The Netherlands and UK have been working in a collaborative partnership to systematically assess and understand the equity performance of Asian health systems. Partly inspired by the ECuity project, the Equitap collaborative study has focused on measuring performance with respect to equity in several key dimensions. These include equity in payments for health care, in the incidence of government health care spending, and in the distribution of overall health-care spending, the incidence and poverty impact of catastrophic medical care expenditures, and inequalities in health outcomes. Although final results are not due to be published until late-2004, early results suggest four key messages.

First, health systems matter. There are numerous examples of innovative projects that do well in getting medical care to poor clients in countries such as Bangladesh, Indonesia and China, but the millions who benefit are insignificant with respect to the hundreds of millions who are beyond the scope of such initiatives. The poor are badly served in general in these countries because the health system itself fails them. Only by addressing the systemic problems will most poor people be reached. The comparative experience of several countries at all levels of development in Asia reinforces this because it can be seen that similar systems have similar results regardless of the level of income per capita. Thailand illustrates this well. The past two decades saw considerable experimentation there in developing special schemes targeted to the poor, many of which, such as its health card projects, have inspired efforts elsewhere. Yet, in their totality these failed to substantially alter the reality of great inequalities. To confront these, Thailand has had to adopt a system-wide solution bringing insurance coverage to all its citizens, and substantially increasing public financing.

Second, public financing is the key to risk-protection, and lack of risk-protection is principally an issue for the poor, who are less likely to have access to savings, loan facilities and private insurance, and are more likely to be close to subsistence levels already. Across Asian economies, the greater the degree of public-financing (tax funding or social insurance), and the lower the extent of reliance on out-of-pocket financing, the lower the incidence of catastrophic expenditures, and critically the lesser the impact of these on the poorest households. Although specifics of institutional design and conditions may mediate the impact to some extent, it is the level of public funding and thus risk-pooling that counts.

Third, the emphasis given to targeting in official policy may be inversely related to actual equity performance. Within Asia, the territories that perform best with respect to the incidence of tax-funded government health spending (Sri Lanka, Thailand, Malaysia, Hong Kong SAR, some Indian states) are the very ones that most emphasize universal access. Other countries with apparently similarly tax-funded government medical services, such as Bangladesh, Indonesia and Nepal, do badly. One might speculate that relying on explicit targeting of special health programs to bypass inequitable access to most health services may be counterproductive because of the attitudes it induces in planners, providers and the public. When health ministries specifically earmark services for poor beneficiary groups, this may be well-intentioned, but it may segregate out the issue of reaching the poor. In such environments, addressing the barriers that affect the poor may be seen by officials as issues to be dealt with by specific program offices, or only on some days of the week when the pro-poor program has to be addressed. Relatedly, the successful tax-funded systems generally charge zero or very low-user fees from rich and poor as an extension of their policy of universal access. This tends to go in hand with and reinforce institutional provider cultures where charging for medical services in government facilities is seen as normatively bad. The charging of informal, or to be precise illegal, fees in ostensibly subsidized government facilities occurs in all countries, but it tends to be more pervasive and act as a significant barrier for the poor in those countries which have yet to reject the notion that official fees themselves are legitimate (Bangladesh, Indonesia, China, Cambodia). Changing provider norms is key since informal payments by definition are beyond regulation, but official acceptance of fees now or in the past may itself not help. Finally, amongst the public, programs that are seen as being meant only for the poor may lack the support of the non-poor whose political voice is most effective in ensuring the effective funding and operation of public services.

Fourth, adequate public expenditures for hospital facilities matter to the poor. Tax-funding for hospitals is the principle mechanism through which risk-protection is provided to the poor, since the poorest countries are largely not in a position to implement equitable insurance financing. Yet, hospitals are often unfashionable in public health circles. When policy-makers believe that they cannot afford to provide all services to the poor, it is often the case that they will target very basic primary medical care services, preventive care and outpatient clinics to the poor, and leave hospitals out of consideration. Hospitals often deservedly are seen as being palaces of sickness where vast quantities of public resources are consumed to treat a privileged minority of the urban dwellers and better-off. Yet, no health system will be equitable unless it can deliver hospital services equitably to the poor, and many countries do achieve this. This has often meant building many hospitals as possible in order to put them in the reach of most people. The challenge of making hospital services accessible must be confronted, and adequate funding must follow that.

Ravi Rannan-Eliya

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