SOC 572 Health Care Financing in Developing Countries

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SOC 572 - Health Care Financing in Developing
Countries

• James G. Anderson, Ph.D.
• Purdue University

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Developing Regions of the World

• East Asia and the Pacific
• Europe and Central Asia
• Latin America and the Caribbean
• Middle East and North Africa
• South Asia
• Sub-Saharan Africa

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Global Spending on Health

• 2.3 trillion in 1994
• 9 of total global income

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Global Distribution of Income, Health Spending,
and Population, 1994
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Global Disease Burden Disability-Adjusted Life
Years (DALYs)

• 1.4 trillion DALYs
• 7 Industrialized nations
• 93 Developing countries

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Global Disease Burden in Millions of
Disability-Adjusted Life Years (DALYs) Lost, 1990
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Economic and Health Sector Indicators

• Per capita GDPs in developing countries less than
  10 industrialized countries
• Mortality under age five in developing countries
  is 10 times industrialized countries
• Mortality among adults in developing countries is
  two times industrialized countries
• Industrialized countries have three times as many
  physicians as developing countries
• Industrialized countries have six times as many
  hospital beds as developing countries

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Key Economic and Health-Sector Indicators, By
Region and Income Level, 1994
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Health Spending Patterns

• OECD countries spend 100 times as much as low
  income countries
• OECD countries spend 10 times as much as low
  income countries
• A disproportionate share of limited public health
  spending is being allocated to tertiary care
• Primary care services are inefficiently provided
  and of poor quality

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Health Spending, By Region and Income Level
(Country-Weighted Averages), 1994
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Health Spending and per capita GDP

• There is a strong relationship between health
  spending and GDP
• Income elasticity of per capita health spending
  relative to per capita GDP is 1.13
• Income elasticity of per capita health (public)
  spending relative to per capita GDP is 1.21

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Health Spending and per capita GDP

• For high income countries, income elasticity of
  per capita health spending relative to per capita
  GDP is 1.47.
• For middle income countries, income elasticity of
  per capita health spending relative to per capita
  GDP is 1.19.
• For low income countries, income elasticity of
  per capita health spending relative to per capita
  GDP is 1.00.

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Relationship Between Per Capita Health Spending
And Per Capita GDP, In Exchange Rate-Based U.S.
Dollars, 1994
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Public Share of Health Spending and Per Capita
GDP, in Exchange Rate-Based U.S. Dollars, 1994
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Health Spending As a Percentage of Per Capita
GDP, 1994
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Problems in Developing Countries

• Higher disease burden
• Severe resource constraints
• Limited administrative capacity
• Competing critical priorities

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Basic Issues in Health Care ReformLow Income
Group

• Limited government budgets finance most public
  health expenditures
• External assistance is a significant revenue
  source
• Options for formal insurance schemes are
  extremely limited
• Households rely on informal arrangements,
  extended families,and community support systems
• Key issues Innovative use of informal
  risk-pooling mechanisms expanding coverage to
  the poor

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Basic Issues in Health Care ReformMiddle Income
Group

• These countries show a tendency toward the
  expansion of multiple financing sources. Some
  are adopting social security schemes others, a
  national health service
• There is growth in private spending for private
  health services
• Many countries lack universal coverage
• Key issues Development of social insurance or
  other formal risk-pooling arrangements expanding
  insurance coverage to rural sectors

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Basic Issues in Health Care ReformHigh Income
Group

• All countries except the U.S. have achieved
  universal coverage
• Most countries have public financing that is
  either publicly managed or publicly mandated
• Private insurance is used to supplement core
  services covered by public financing
• Key issues Cost containment, efficiency, quality
  of care, aging population, patient satisfaction

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Reference

• G. Schieber and A. Maeda, Health Care Financing
  and Delivery in Developing Countries, Health
  Affairs, Vol. 18, No. 3, May/June, 1999, pp.
  193-205.