Rajiv Misra

Increasing Investments inHealth Outcomes for the Poor

Second Consultation onMacroeconomics and Health

Geneva, 28-30 October 2003

Pro-Poor Health Reforms - Why,What and How Rajiv

Misra

Rajiv Misra

• The experience of health reforms in developing countriessupported by international agencies has been mixed. Inmany cases, their benefits have not reached the really poor,and in some instances (e.g. indiscriminate privatisation anddecentralisation, cost recovery etc.), they have beenimpacted adversely.

• Part of the problem has been the inadequate appreciationof the role of the state in health in general, and in respect ofthe poor in particular, in the wake of economicliberalisation and increasing reliance on the market. Astrong reiteration of the state’s central role in health andtheir special responsibility in respect of the poor by theWorld Bank and WHO (WDR93, WDR97, and WHR2000)have helped to clear the air.

Introduction

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• The MDGs represent a new awareness and international consensus onrapidly alleviating some conditions largely affecting the poor. The CMHhas brought forward compelling evidence and analyses to underscorethe importance of better health of the poor for sustainable and equitableeconomic growth and rapid alleviation of poverty in low-incomecountries.

• What the poor countries need is not only greater public investment inhealth along with wide ranging systemic reforms, but also that thesespecifically target the poor. Unfortunately, even the donor communityoften shies away from investing in the most backward areas due to poorgovernance, weak health infrastructure and consequently higher risk offailure. The poor generally lack political influence and are unlikely toreceive desired attention without a special focus.

• This presentation attempts to explain the rationale (why), the mainingredients (what) and the methodology (how) of pro-poor healthreforms based largely on the experience in India having very diversehealth outcomes in different regions. The CMH arguments establishinglinkages between investments in health, and economic growth andpoverty are not repeated as they are already well covered in thebackground papers.

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Why?Besides the macroeconomic, ethical and equity arguments, thepoor need special focus for reasons listed below:

• The poor are subjected to a disproportionate, and to alarge extent avoidable, burden of disease from pre-transition diseases (infectious diseases, perinatal andmaternal conditions and micronutrient deficiencies), whichcan be controlled relatively quickly and cost effectivelywith available technologies. They also bear a much largerincidence of new threats like HIV/AIDS, and alcohol andtobacco related life style diseases. The consequence is ahuge disparity in income-based health status as broughtout clearly in the following tables.

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Poorest

20 % Richest 20 %

Poor / Rich Risk Ratio

Infant Mortality (Deaths under 12 months per 1000 births)

109.0 44.0 2.5

Under 5 Mortality (Deaths under 5 years per 1000 births)

155.0 54.0 2.8

Childhood Underweight (Percent below -2 sd z-score, weight/age, children under 4 years)

60.0 34.0 1.7

Total Fertility Rate (Births per woman age 15-49 years)

4.1 2.1 2.0

Source: Gwatkin et al, Socio-Economic Differences in Health, Nutrition, and Population in India, 2000. HNP Poverty Thematic Group of the World Bank, based on National Family Health Survey, 1992-93.

Reproduced from India Health Report, Oxford University Press, 2003.

Health Status Indicators –Comparison Between the Poorest and Richest

Quintiles of the Population, India, 1992-93

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Standard of living index

Infant Mortality (per 1000

births)

Under Five

Mortality (per 1000

births)

Total Fertility

Rate

Children Underweight (% below -

2 SD)

Children with

anemia (%)

Children with acute respiratory infection in

past 2 weeks (%)

Children with

diarrhea in past 2 weeks (%)

Anemia among women

(%)

Low 88.8 130 3.37 56.9 78.7 21 19.9 60.2 Medium 70.3 94.6 2.85 46.8 73.5 19.4 19.7 50.3 High 42.7 51.5 2.1 26.8 67.3 15.7 16.1 41.9 Low/High Ratio 2.08 2.52 1.6 2.12 1.17 1.34 1.24 1.44

Source: National Family Health Survey 1998-99 (IIPS 2000)

Reproduced from India Health Report, Oxford University Press, 2003

Health Outcomes According to Standard of Living,India 1998-99

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• Reliable income-based data on health status in India islimited. There is better data on the health status of theScheduled Castes and Scheduled Tribes, which representthe most socio-economically backward sections of societyeligible for affirmative action under the Indian constitution.The table below brings out the much higher level of infantand child mortality in these groups clearly indicative oftheir relatively poor health status.

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Health Indicators among SC/ST and Others(Rate per 1000)

Mortality Indicators SC ST Others

NeoNatal 53.2 53.3 40.7

Post Neo Natal 29.8 30.9 21.1

Infant <1 year 83 84.2 61.8

Under 5 Years 119.3 126.6 82.6 Source: National Family Health Survey II, 1998-99.

Reproduced from India Health Report, Oxford University Press, 2003

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• The poor are often concentrated in backward and remote areas havingvery weak health infrastructure. Also such areas often suffer most fromdegraded environment, poor sanitation and lack of access to safe drinkingwater, which combined with poor nutrition and hygiene makes themhighly vulnerable to ill-health.

• They have poor access to the private sector because of locationaldisadvantages and inability to afford the costs of the treatment.

• The employment of the poor is, by and large, in the informal unorganisedsector, making it difficult to organise any risk pooling arrangements, likehealth insurance. They are, thus, subject to the most regressive method ofhealth finance-fee for service paid as out of pocket expenses-a majorcontributing factor to the aggravation of poverty. A recent World Bank(2001) study on India concludes that out of pocket medical costs alone maypush 2.2 per cent of the population below the poverty line each year.

• With low literacy levels, poor health information and often persistence oftraditional beliefs and superstitions, the poor are ill equipped to makerational choices in health related matters.

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What?• No health system can deliver, and no reform effort could

succeed in the absence of a minimum level of financialresources. The current level of public investment in healthin low-income countries is wholly inadequate and wouldneed to be stepped up substantially on the linesrecommended by the CMH.

• It is not merely a problem of insufficient but oftenmisallocated and misdirected public resources. A recentbenefit incidence study in India concludes that the rich havedisproportionately utilised public subsidies for healthostensibly directed at the poor.

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Share of Public Subsidy forCurative Care Benefiting Income Groups

10.10%13.40%

17.80%

25.60%

33.10%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

Poorest20%

2 nd Middle20%

4 th Richest20%

Income Quintiles

Shar

e of

Pub

lic S

ubsi

dy

Source: Who Benefits From Public Health Spending In India, unpublished paper,NCAER, 2000

Reproduced from India Health Report, Oxford University Press, 2003

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• The foremost priority should be local health deliverystructure, well-equipped and staffed with motivated healthworkers, categorical programmes to provide technical andfinancial resources, and effective management with a wellintegrated surveillance and monitoring mechanisms(Jha et al, WG5 CMH).

• The primary focus needs to be backward and remote areasinhabited by the poor. This is imperative to minimise hugeimbalances in development within the countries- a majorsource of social tension and unrest. Disaggregated health dataon these regions is not usually available, but a comparison ofhealth utilisation statistics between a relatively prosperousstate (Punjab) and a backward state (Bihar) brings out thedistortions quite clearly. While the poor suffer a much largerdisease burden, the lower utilisation is clearly due to lack ofaccess and financial constraints.

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Rate per 1000 of Treatmentduring last 15 days

State

POP<BPL In

millions

%BPL

Families

QI

QV

Total

Bihar

49

55

14

36

24

Punjab

25

12

63

94

72

All

320

36

28

61

42

BPL = Below Poverty Line; Q = Quintile; All = the whole country

Source: 52ND NSSO From Benefit Incidence Analysis (BIA) Study of NCAER, 2000Reproduced from India Health Report, Oxford University Press, 2003

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Rate per 100,000 of Hospitalisation

BPL = Below Poverty Line; Q = Quintile; All = the whole country

Source: 52nd NSSO From BIA Study of NCAER, 2000

Reproduced from India Health Report, Oxford University Press, 2003

State

POP<BPL in

millions

%BPL

Families

QI

QV

Total

Bihar

49

55

198

1728

722

Punjab

25

12

754

2998

1622

All

320

36

563

3447

1653

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• The foremost priority for investment should be HIV/AIDS,infectious diseases, maternal and perinatal conditions,micronutrient deficiencies and tobacco related illnesses,which disproportionately affect the poor.

• The complementary and synergistic development of otherhealth related sectors like education, sanitation, drinkingwater supply, nutrition and environment, is essential forderiving optimal benefits from the investments in health.

• The poor need to be provided easy access to health servicesand protected against the financial costs of serious illnesseither through direct provision of services by the state orthrough appropriate risk pooling arrangements, like healthinsurance.

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How?Each country, and in some cases, each region, would need todetermine the precise modalities of implementing the aforesaidreforms taking into account, inter alia, the socio-economic,political and cultural milieu, the level of development, theavailability of financial resources and the capacity of the healthinfrastructure. It is neither possible nor desirable to fit reformsall over the developing world in ‘one size fits all’ formula. Somecritical and essential elements of the reform package could be:

• Sustained advocacy for increased public investment inhealth and creation of awareness to mobilise politicalsupport. The political institutions, media and the civilsociety would need to be involved actively in this campaign.It is important that the support for health reform is non-partisan based on political consensus.

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• The domestic mobilisation of additional financial resources should be,to the extent possible, insulated from financial crises and politicalupheavals by reliance on earmarked funds and levies. Similarly, theexternal aid should preferably be placed at the disposal ofmultilateral institutions and special funds (like GFTAM), to protectagainst instability due to regime changes in donor countries. Theresource base as well as revenues must be capable of growth to copewith increasing population and rising expectations.

• The success of the health system depends largely on people’sparticipation and ownership. A decentralised institutionalarrangement, which makes health workers accountable to thecommunity they serve, needs to be developed. A top down approachis unlikely to work.

• The institutional capacity for planning, analysis and monitoring inthe ministries of health and subordinate organisations would needsignificant strengthening with additional expertise in public health,health economics and finance and epidemiology.

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• It would be difficult, if not impossible, to achieve the desired goalsthrough state action alone. Public-private partnerships wouldneed to be developed not only in public health interventions, butalso for provisioning of health services for the poor. Also theprivate sector, particularly non-profit, would need to beencouraged to set up facilities in backward and underserved areasthrough appropriate incentive mechanisms.

• A credible and dependable system of identification of the poorpopulation for the purpose of targeting special concessions andfacilities would need to be put in place. Disaggregated data onhealth status at different income levels would be critical tomonitoring the impact of the reforms.

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• The final determinant of the success of any health intervention isthe quality and commitment of the health workers at the cuttingedge. A careful assessment of manpower requirements,identification of current deficiencies, and the planning of remedialmeasures would be a key element of the exercise. Health workersneed to be motivated to work in remote and difficult areas bygenerous compensation combined with transparent and attractiveincentives.

• The systemic constraints impeding efficient delivery ofinterventions and optimal utilisation of services would needcareful identification and detailed blueprint for their elimination.The exercise would require many reforms in management systemsto improve accountability, efficiency and transparency.

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Conclusion

Pro-poor reforms are desirable not only from an ethicaland moral standpoint, they are the best strategy tomaximise returns from investment in health besidespromoting balanced, harmonious and participatorydevelopment. An international compact between thedeveloping countries, and development partners tosupport and actively promote the same within a definitetimeframe is the need of the hour.

Rajiv Misra

THANK YOU