“At a time when money is tight, my advice to countries is this: before looking for places to cut spending on healthcare, look first for opportunities to improve efficiency, wrote Margaret Chan, director-general of the World Health Organization.”
The cost of healthcare is straining governments and individuals around the globe with the World Health Organization reporting that 100 million people a year are pushed into poverty by their medical bills. For governments, the challenges of funding healthcare are increasing because of aging populations, a growing burden of chronic diseases, and the introduction of more expensive treatments, WHO says.
In its annual World Health Report, the organization argues that part of the solution lies in focusing on ways of financing healthcare. It argues that smarter spending could increase global health coverage by anywhere between 20 percent and 40 percent. And governments need to think about new sources of tax revenue to fund healthcare.
Ghana, for example, has funded its national health insurance partly by increasing the value-added tax by 2.5 percent. A review of 22 low-income countries shows that they could between them raise $1.42 billion through a 50 percent increase in tobacco tax. India could generate $370 million per year by implementing a levy of just .005 percent on foreign exchange transactions.
“At a time when money is tight, my advice to countries is this: before looking for places to cut spending on healthcare, look first for opportunities to improve efficiency,” wrote Margaret Chan, director-general of the World Health Organization. “All health systems, everywhere, could make better use of resources, whether through better procurement practices, broader use of generic products, better incentives for providers, or streamlined financing and administrative procedures.”
The report identifies ten areas where greater efficiencies are possible. These range from purchasing generic drugs to addressing hospital-related inefficiencies.
But governments also need to think about how to make healthcare more available and affordable. Countries like Japan, which ensures health services are available to the entire population, have done so by reducing dependence on direct, out-of-pocket payments and increasing prepayment—generally through insurance or taxes or a mix of the two. The funds raised are then pooled, so that it is not just those who are unlucky enough to get sick that bear the financial burden. The report said this is the model used in many European countries, with Chile, Colombia, Mexico, Rwanda, Thailand and Turkey all making significant progress in the last decade - along with Brazil, China, Costa Rica, Ghana, Kyrgyzstan and the Republic of Moldova.
“As the evidence shows, countries do need stable and sufficient funds for health, but national wealth is not a prerequisite for moving closer to universal coverage, says Chan. “Countries with similar levels of health expenditure achieve strikingly different health outcomes from their investments. Policy decisions help explain much of this difference.”
November 24, 2010
http://www.burrillreport.com/article-a_global_healthcare_crisis.html