Below are the first 10 and last 10 pages of uncorrected machine-read text (when available) of this chapter, followed by the top 30 algorithmically extracted key phrases from the chapter as a whole.
Intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text on the opening pages of each chapter.
Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.
Do not use for reproduction, copying, pasting, or reading; exclusively for search engines.
OCR for page 12
6
Health Financing in sub-Saharan Africa
An important issue that came up repeatedly throughout the workshop was how the
epidemiological transition will affect health-financing systems and attempts to achieve
universal coverage. Riko Elovainio presented a conceptual framework for addressing this
question, based on the World Health Report 2010: Health Systems Financing: The Path
to Universal Coverage (World Health Organization, 2010), which outlines the types of
health-financing levers available to policy makers in three broad areas: raising funds for
health, reducing financial barriers to access through prepayment, and pooling of
resources (spreading the financial risks of paying for care across the population) and
efficiency.
In 2009 low-income countries around the world spent an average of 6.1 percent of
their gross domestic products (GDPs) on health in 2009, lower-middle-income countries
spent 6.2 percent, and upper-middle-income countries spent 7.0 percent. The region of
sub-Saharan Africa spent 6.1 percent of its total GDP on health, far less than the 9.5
percent of GDP that the countries of the OECD spend on health.
In terms of U.S. dollars, low-income countries spent $25 per person on health in
2009 versus the more than $4,600 per person spent in high-income countries. In the
Africa region of the World Health Organization (which includes all countries of Africa,
not just the low-income countries), per capita health spending was $83, less than 2
percent of the average spending in high-income countries.
Elovainio commented that economic growth will facilitate additional spending on
health in the low-income countries. The International Monetary Fund projects that,
beginning in 2012, economic growth across the whole of sub-Saharan Africa should
average 5 percent per year, which corresponds to a per capita GDP growth rate of around
3.5 percent per year (International Monetary Fund, 2011). This suggests that even if
health receives the same share of GDP as it does now, health expenditures will grow, but
it is likely that health spending will receive an increasing share of GDP and thus grow at
an even greater rate.
All of the countries of sub-Saharan Africa have ways in which they can raise
more funds domestically for health spending if they chose to do so. The pressure to find
new funding sources is especially high in countries in which large informal economic
sectors make it difficult to collect revenues, either in the form of taxes or in the form of
health insurance contributions. This situation is often accompanied by tax collection
systems that are inefficient and inequitable. Wage-based deductions are generally the
easiest to administer and collect, and thus they offer the greatest potential for achieving
an equitable system in which people earning more would pay more. However, in those
low-income countries in which a relatively low (although usually growing) percentage of
the workforce has formal paid employment, other options also need to be pursued. These
other options might include "sin taxes," that is, taxes on harmful products such as alcohol
12
OCR for page 13
and tobacco, which have repeatedly been shown to be effective in reducing consumption
and improving health (see, e.g., Chaloupka, 1999; Wagenaar, Salois, and Komro, 2009).
Data from 22 low-income countries suggest that a 50 percent increase in the excise tax on
tobacco would bring in $1.4 billion of additional revenue to those countries (Stenberg et
al., 2010). Such taxes are now also being explored for use in discouraging the use of
foods high in sugar or salt. The share of the resources from sin taxes allocated to health
spending--that are, in economics terms, hypothecated for health spending--will be, of
course, one of the main issues from the health financing point of view. Intuitively, the
case for allocating a large percentage of sin taxes to health spending seems compelling.
From the point of view of national ministries of finance, however, this is not always the
case, and ministries of health will need to be persuasive in order to receive at least a part
of the revenue. Furthermore, ministries of health need to ensure that the eventual
hypothecation of sin taxes to health spending will not lead to cuts elsewhere in the health
budget. The same questions concerning hypothecation are, of course, equally relevant to
other earmarked taxation mechanisms that do not fall under the "sin tax" category.
Judging from the examples of countries that have already introduced them, a
variety of other direct or indirect taxation mechanisms are also feasible. Ghana, for
example, increased its value added tax by 2.5 percentage points; these revenues that go
directly to the National Health Insurance System. Gabon introduced a specific tax on
certain profitable economic sectors, such as agencies that receive and transfer money
overseas; revenue from this tax is hypothecated to cover the insurance contributions of
people who are financially unable to contribute to the national health insurance fund. In
2009 Gabon collected the equivalent of $25 million with this levy on highly profitable
corporations (Musango and Aboubacar, 2010).
13
