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World Development Report 1993 - investing in health.

The 1993 World Development Report, the sixteenth in its series, examines one of the central issues of our times. How to choose and implement public policies that will improve the health of the world's five billion people, and especially of the more than one billion living in poverty. The report highlights and documents the fact that better health is critical for raising productivity and economic growth rates. Good health, in and of itself, is also a fundamental goal of human development in every society.

Four Decades of Progress

There has been remarkable progress in improving health around the world over the past forty years. A child born today in a developing country can expect on average to live to be sixty-three; in 1950 she would have expected to live only to age of forty. The percentage of children dying before their fifth birthday has fallen by almost two-thirds over the past four decades. Smallpox has been eradicated. In the last two years, a case of polio has not been seen in the Americas.

Remaining Problems and Challenges

Despite these dramatic successes, many serious health problems remain and new challenges are emerging. Research undertaken for this report reveals that the global burden of premature death and disability in 1990 amounted to about 1.4 billion years of healthy life lost. This is the equivalent of every man, woman, and child around the world losing one quarter of a fully healthy life!! The continuing toll from specific diseases which are easily prevented or cured at low cost is staggering:

* Nearly 2 million children die each year of diseases such as measles, tetanus, and whooping cough that can be prevented with inexpensive vaccines.

* More than two million adults die each year of tuberculosis.

* Almost half a million women die every year from complications of pregnancy and childbirth.

New health threats are also arising today, threatening to undermine herd-won gains:

* Unless the Hiv Epidemic is controlled soon, the death toll from aids worldwide could reach more than two million persons a year by the end of the present decade.

* Malaria and tuberculosis are showing increased resistance to the drugs used to treat them.

* Current upward trends in smoking in developing countries mean that more than ten million people - mostly young adults today will die annually from lung and heart disease a little over 30 years from now.

Unfortunately, health systems around the world are not well prepared to deal with these monumental challenges. Those systems would perform much better if the right policies were adopted. Much of the nearly two trillion dollars devoted to health services is either spent on the wrong things, or wasted, or used primarily to help the better-off:

* Costly treatments are prescribed that prolong life only slightly, while inexpensive services that extend life greatly, such as immunizations, are under-funded.

* Waste occurs for many reasons, such as misguided hospital planning and weak selection and storage of drugs.

* In many countries, poor families have to travel long distances to health facilities and then wait for hours to receive low-quality care.

Policies to Improve Health

To accelerate health progress and improve the fairness and efficiency of health care systems in developing countries, the 1993 world development report recommends that governments adopt a three part approach:

First, Create a Positive Economic and social environment for Health: Families trapped in poverty and illiteracy fall victim to disease and early death far more than those that are better-off and better educated. Policies that reduce poverty - including, where necessary, economic adjustment measures - are a powerful engine for improving health. So are policies that give all children a solid primary education. This report joins many previous World Bank Policy documents that emphasize the importance of expanding schooling for girls. Families with increased incomes and more education for their members live in healthier housing; obtain cleaner water and better sanitation; and are better able to secure health care.

Second, improve spending on health, especially by Governments. This means focusing public expenditures on nationally-defined packages of cost-effective public health measures and essential clinical services. Research carried out for this report demonstrates suggests that if 2 per cent of world health spending - 30 to 40 billion dollars a year - was redirected to pay for these essential services, roughly a quarter of the global burden of illness could be eliminated. This would be equivalent to saving nine million infants every year.

To achieve this, developing countries will need to redirect existing government spending away from sophisticated tests and treatments to the services contained in the basic package. These include immunizations, basic care for sick children, and simple treatments for tuberculosis and sexually-transmitted diseases. Very few cost-effective interventions require sophisticated hospitals and specialized doctors. Governments will also have to reduce subsidies to public and private insurance schemes that at present cover only the middle class and wealthy. In the poorest countries, where governments spend on health an average of just six dollars per person annually, budgets for health must increase, and these public outlays must be targeted to those in poverty. Community participation, including small payments from families, is also important.

Third, Promote Diversity and Competition in the Supply of Health Services

Encouraging competition among government, private voluntary, and private for-profit health care providers can improve efficiency and consumer satisfaction. But the policy environment must be right, if competition is to work. Decentralizing Government health services and requiring competitive procurement of drugs, equipment, and maintenance services are two such policies. So are the adoption of legal and administrative measures that make it easier for the private sector to operate, and the use of subsidies for essential care provided by charitable hospitals in poor rural areas and urban slums.

At the same time, governments must build the capacity to regulate the private sector, something which is sorely lacking in most developing countries. And where health care cost inflation is a problem, especially in the middle-income countries, governments should promote the use of pre-set payment for Doctors and Hospitals. Runaway health care spending is an issue not only for these countries: The industrialized countries are also struggling today to contain health costs. The lessons from their experience are relevant for the developing world.

Health Sector Reform

What is needed, in short, is widespread reform of Government health policies and national health systems/ As we all know, the obstacles to such reform are immense. Opposition emerges from many quarters: drug companies and equipment manufacturers, urban elites, groups of health professionals, and others. But developing countries as diverse as Chile, Korea, Malawi, and Zimbabwe have shown that major reform is possible. Strategies for successful reform include enlisting the support of top political leaders, changing professional attitudes through education and training, and making changes gradually so that political support is maintained.

The Role of the International Community

The international community can also make an enormous contribution to this process. This is especially true in sub-saharan Africa, where donors pay for more than 10 per cent of health spending on average, and over half in certain countries. In the other regions, too donors can be an important catalyst for change, but only if they both increase and reorient their assistance for health. Although donors have expressed a strong commitment to human resources development in recent years, the share of aid going to health has actually dropped.

The World Bank's report recommends an increase of 50 per cent over the next five years, from 4 billion to 6 billion dollars a year, to cover the transitional costs of health policy reform and the cost of a vastly expanded efforts to control aids. Donor funds for health should also be re-directed toward building national capacity to plan and manage health services better and toward high priority research, both biomedical and in the social sciences.

In this way, two powerful forces for better health - improved health technology and improved health policies - can be harnessed together. If this is done, the future will be brighter around the globe. Millions of lives will be saved and billions of dollars will be used more effectively. And those in the developing world, especially the poor, will live longer and healthier lives. Difficult choices lie ahead. It is up to us to understand these choices better, and to choose well.
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Publication:Economic Review
Date:Aug 1, 1993
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