Health financing: the path to universal coverage

“ …Direct out-of-pocket payments at the time of [health] care are identified as the single biggest barrier to universal coverage.” This is a direct quote from of Margaret Chan, Director General of the World Health Organisation (WHO). She was talking at the launch of the 2010 World Health Report: Health Systems Financing – The Path to Universal Coverage,  in Berlin last week.

This seminal report brings together the latest evidence on health financing mechanisms and their impact on access to health care in developing countries. It unites all governments in the common goal of providing universal coverage of financial protection for essential health services as a prerequisite to realising the fundamental right to health care.

The report pitches health financing arrangements at the centre of issues associated with access, affecting both the individual’s demand for care, and the availability and quality of care provided by the health system.

While a consensus had already been reached on the regressive nature of health user fees, in this Report the evidence is consolidated with strong supportive statements from the WHO – the normative leader in global health. “User fees punish the poor. They are inefficient. They encourage people to delay seeking care until a condition is far advanced, and far more difficult and expensive to treat. And when people do pay out of pocket for care, financial ruin can be the result.”

As Dr. Chan stated at the launch: “The report reaches some new conclusions, settles some controversies, and ends some long debates”. Finally, after years of delusion about the capacity of user fees to raise significant revenue and deter ‘frivolous’ use of health services, the language is honest, clear and unforgiving.

Beyond the issue of user fees, the report provides evidence of how efficient, effective, and – crucially – equitable policies are feasible and essential. It documents the experiences of countries that have implemented variations of a mixture of mechanisms to extend financial risk protection to their populations.

To do this effectively, the costs of health care must be cross-subsidised, between rich and poor, healthy and sick. Due to this crucial factor, small community-based risk pools fail to provide sufficient protection, especially for the poor.

There was only one reference made by Margaret Chan to the private sector: “If publicly-financed services cannot cope with this demand, because of too few staff or two few medicines, people will turn to more expensive services offered by the private sector, cancelling out any real gains.” This last statement – “cancelling out any real gains”, along with the virtual absence of the private sector in the Report itself, reveals the failure of the private sector to serve the poor fairly and efficiently. Strengthening public health systems is a prerequisite to achieving universal coverage.

It also discusses areas where governments can make cost savings – by running hospitals more efficiently, negotiating drug prices better, expanding use of generics, and so on. The estimated per capita minimum cost to provide essential health services has increased to $44 and is likely to rise to $60 by 2015.

For this to be met, domestic resource allocation to health must increase, and donors must honour their commitments of increasing aid and adhering to the Paris Principles of aid effectiveness in doing so – for more on this, see our recent policy briefing. The Report calls for further exploration of innovative taxes and sin taxes on products such as alcohol and cigarettes, which, Dr. Chan says, “Frankly, WHO loves… as they raise money while also protecting health”.

I was thrilled to hear DFID speak out in support of the World Health Report. DFID announced that it will be allocating financial resources as well as a possible secondment of a technical expert to help governments implement the findings of the report.

This is the first public demonstration of the UK’s commitment to help governments introduce pro-poor health financing since the new coalition government has been in power. It recently discarded plans for the Centre for Progressive Health Financing.

Whether Providing 4 Health will be the technical hub through which the UK government offers support is yet to be seen. Save the Children will certainly work to ensure that this pledge for financial and technical support is realised, to extend access to essential services for children and their families in developing countries.