The Free State health department has announced that its financial situation has reached ‘dire proportions’ forcing it to postpone all non-emergency surgery until January next year and stop all non-critical staff appointments. HIV clinics are coming under increasing threat of being closed down, as they are considered part of the outpatient services that are being stopped. The Treatment Action Campaign said it also continued to receive reports from doctors who are turning critically ill patients away from their clinics because of antiretroviral shortages. Doctors predict a large number of people are going to die over Christmas, notably poor people, because government won’t commit money to solving the problem. The measures apply to all of its 31 health facilities, including hospitals and clinics.
Resource allocation and health financing
Millions of people in low- and middle-income countries cannot afford or obtain the medicines they need, according to this study. It is based on findings from 45 surveys carried out since 2001 in 36 countries, using a standardised methodology developed by the Health Advance Institute (HAI) and World Health Organization (WHO). Across the surveys, public sector availability of generics averaged a disappointing 38%. Even in the private sector, the availability of generics was far from ideal and sometimes unaffordable to many, yet implementing policies that increase the use of low-priced quality generics would help significantly. Policies to ensure competition and incentives for pharmacies to dispense low-priced generics are needed. Governments could also review all policies affecting medicine prices and availability.
Publish What You Fund is a new initiative to promote transparency of international aid. It consists of civil society groups from around the world, including organisations working on aid effectiveness and groups working on access to government information. They believe that, for aid to be effective, accountable and participatory, it must be transparent. Information must be available to recipient governments, affected communities and other stakeholders, as well as the general public. The campaign has been busy drafting a first set of principles. These principles have had one round of consultation (between July and August 2008) and were presented at the Accra High Level Forum on Aid Effectiveness (Ghana, 2–4 September 2008). You can add your comments on their website.
The Currency Transaction Tax (CTT) proposes a small levy on foreign exchange transactions and uses the money raised to finance development projects for the global public good. CTT is basically a tax on the benefits of globalisation. This study claims the tax would be easy to operate and difficult to evade since all foreign exchange transactions are completed in a few large centralised settlement structures. It estimated that a CTT of 0.005% on each transaction in major currencies would yield approximately US$ 33 billion. The money could be allocated for development and administered multilaterally. Critics say this tax will reduce foreign currency transactions and create inefficiencies in trading markets; however, it is specifically designed to raise money without disrupting the market.
Aid is ineffective and donors should raise the effectiveness of their aid by reducing the amount of ‘aid’ that is actually spent in donor countries themselves and by reducing the number of sectors and countries each donor tries to support. Thanks to today’s financial crisis, global trade might contract for the first time in decades and demand for poor countries’ exports will decline, while credit dries up, devastating poor producers’ livelihoods. Rich countries should start by eliminating wasteful agricultural policies that only help their own farmers at the expense of poor people elsewhere. Limitations to market access for the poorest and most vulnerable economies must be lifted. Rich countries may promise to provide 100% free market access, but maintain restrictions that make a mockery of their commitments.
The aim of this analysis is to explore the extent of fragmentation (when a large number of separate funding mechanisms result in health inequities) and its effect on universal coverage in the health systems of three African countries: Ghana, South Africa and Tanzania. It draws on the results of the first phase of a three-year project analysing equity in the finance and delivery of health care in Ghana, South Africa and United Republic of Tanzania. The analysis presented indicates that South Africa has made the least progress in addressing fragmentation. It recommends that, to achieve universal coverage, the size of risk pools must be maximised, resource allocation mechanisms must be put in place and as much integration of financing mechanisms as possible must be done to promote universal cover with strong income and risk cross-subsidies in the overall health system.
In the debate surrounding aid effectiveness in Africa, some have suggested that these countries ought to ‘wean themselves off’ aid dependency. This paper provides five strategies that African countries can employ to eliminate the need for donor funding for health. First, they can reduce economic inefficiencies. Second, they should institutionalise economic efficiency monitoring within national health management information systems with a view to implementing appropriate policy interventions to reduce wastage of scarce health systems inputs. Third, they can reprioritise public expenditures by, for example, cutting back on military spending and raising additional tax revenues by increasing the tax share to at least 15% of gross domestic product (GDP). Fourth, more private sector involvement in health development is required and, last, the fight against corruption needs to be stepped up.
This paper explores the factors associated with household coping behaviours in the face of health expenditures and provides evidence for policy-makers in designing financial health-protection mechanisms. Data from the 2002–2003 World Health Survey was analysed. The paper found that many patients finance their health care by borrowing and selling assets, ranging from 23% of households in Zambia to 68% in Burkina Faso. High-income groups were less likely to borrow and sell assets, but coping mechanisms did not differ strongly among low-income quintiles. Households with higher inpatient expenses were significantly more likely to borrow or sell than those financing outpatient care or routine medical expenses, except in Burkina Faso, Namibia and Swaziland. In eight countries, the coefficient on the highest quintile of inpatient spending had a p-value below 0.01. In conclusion, the health financing systems of most African countries are too weak to protect households from health ‘shocks’, like unexpected health costs that require them to borrow or sell their assets. Formal prepayment schemes could benefit many households, and an overall social protection network could help to mitigate the long-term effects of ill health on household well-being and support poverty reduction.
Basing drug reimbursement on cost-effectiveness provides too little incentives for research and development. The reason for this is that cost-effectiveness is concerned with immediate value for money. But since the price of a drug usually declines over time, the drug might well provide value for money as seen over its entire life cycle, even though its price during patent protection is too high to warrant reimbursement according to the cost-effectiveness decision rule. This paper shows in a theoretical model that welfare could be improved if decision-makers took a longer perspective and initially allowed higher prices than immediate value for money can motivate. It also discusses the real-world relevance of applying dynamic cost-effectiveness.
High levels of out-of-pocket payments have limited the ability of people to use services in poor countries. Evidence shows that removing or reducing user fees increases utilisation, at least in the short term, while out-of-pocket payments are often made by borrowing or by selling assets, putting people into debt and restricting their long-term economic survival. An important challenge therefore is to shift away from out-of-pocket payments through the development of prepayment schemes for universal coverage but, in resource-poor settings, additional funds will be critical. Some researchers claim that it is possible for developing countries to ‘wean themselves off’ international donor funding, essentially through the better use and management of domestic resources, but others believe it’s impossible for them to finance universal access without donor funding.