Protecting Health of the Poor during the Global Crisis

The world is now confronted with the worst economic crisis since the Great Depression. Foreign investment and short-term credit are drying up. Every nation is grappling with the need to direct public resources toward economic stimulus programs. In the current tumult, it is easy to discount the value of a healthy population. But history shows that investment in health and nutrition will help mitigate the impacts of the crisis on the poor in the short term. Just as important, those investments in health are crucial for longer-term human capital building and future economic growth.

Data showed that infant mortality rose during the 1997-1998 Asian Crisis

Despite the numerous interests clamoring for attention, policy-makers must also ensure sufficient health expenditures during these difficult times. Child and maternal health as well as nutrition worsen during and after an economic crisis, with families cutting back on food consumption and on medical care. Between 1980-2004, an estimated one million excess infant deaths occurred in developing countries experiencing severe economic contraction. The 1997 Asian Crisis led to a 22 percent increase in anemia among pregnant women in Thailand. In Indonesia, prevalence of micro-nutrient deficiencies in children and women of reproductive age also increased during that crisis.

Worsening public health can also be traced to reduced use of essential health services. In times of economic crises, household incomes and insurance protection are reduced, leading to decreased utilization of health services. Costs of drugs and medical services go up during an economic crisis, especially if local currencies lose their value, making healthcare more expensive for the poor. During the 1997 Crisis, the cost of drugs went up by almost 61 percent in Indonesia. Cost increases were also evident in Thailand, the Philippines and Vietnam. For some countries, utilization rates for health services remained low for substantial periods after the national economy recovered. In Indonesia, for example, health utilization rates today have yet to return to pre-crisis levels.

Declining government health financing during crises have led directly to a reduction in essential health services and, in turn, deteriorating public health. Health and social services are among those that suffer the worst from budget cuts during crises. In most countries, public health financing fell more than out-of-pocket spending. In Argentina, Indonesia, and Thailand, public health spending declined due to a fall in both GDP and in government expenditure as a percentage of GDP. For future economic growth as well as for the health of the population, recovery measures require government commitments to protect social expenditures such as health, especially for the poor and the vulnerable. Unfortunately, in reality, these health safety net measures have been too often neglected.  This time around, the governments should have the foresight to prove the opposite can be true.

Sometimes crises can provide opportunities. The 1997 Asian economic crisis prompted Thailand to introduce a universal health insurance coverage plan (UC) that has had significant impact on health and access to health care for the most vulnerable of its citizens. In fact, the plan operates as an important social safety net for the poor and those in the informal sector. The current crisis has already sliced Thailand ’s economic growth rate to under 2 percent, and may severely test the health plan. The 2009 budget provides insurance coverage of 2,217 baht per capita for 47 million people.  Despite the pressure of falling government revenue, UC funding needs to be maintained and adequate increases provided for the next year. Unemployment may increase the number of people needing coverage. Cost-pressures can also be expected from increasing chronic disease and new medical technologies. Clearly, it will need strong commitment to sustain the UC scheme with adequate resources.

An international gathering in Bangkok this week brought together global health policy experts to discuss how to strengthen health focus of public policies. The Prince Mahidol Award Conference delivers a clear and important message that protecting and improving public health is not only a task for the health sector, but also for every branch of government and society that is interested in facing the current crisis and ensuring future economic development. Each nation is now beset by many immediate tasks, but in making the required urgent decisions each government must not lose sight of the vital long-term objective, a return to sustained growth. And that requires continued attention to public health. 

Mr. Schweitzer is the Director for Health, Nutrition and Population at the World Bank, a
co-sponsor of the Prince Mahidol Awards Conference 2009 in Thailand, in January. This op-ed first appeared in The Nation newspaper on January 30, 2009.