Global Health in Transition: A Synthesis: Perspectives from International Organizations (1996)

World Bank. 1993. World Development Report 1993: Investing in Health. New York: Oxford University Press. This is the 16th in an annual series on individual sectors and cross-sectoral themes. It was prepared in partnership with the World Health Organization (WHO) and benefited especially from WHO's technical expertise in the assessment of the global burden of disease and in the preparation of a number of comparative economic, epidemiologic, demographic, and institutional analyses that informed the Report. Production of the World Development Report (WDR) was led by a World Bank team, guided by a 22-member external advisory committee, and assisted in its development and review by 19 external consultations and a series of seminars within and outside the Bank. More than a dozen bilateral and multilateral foreign assistance agencies, foundations, and academic institutions provided financial and analytical support, and the process involved more than 600 individuals from many disciplines, countries, and institutional venues. The document includes extensive tabular material and a large bibliography of original papers and statistical analyses, as well as many academic and institutional sources, published and unpublished.

• To examine the interplay among human health, health policy, and economic development, and to explore in depth a single sector in which the impacts of public finance and public policy are of particular importance.

• To set the priority policy issues and actions that are likely to be most relevant for low-income, middle-income, and formerly socialist countries.

• To present a measure of global disease burden that could serve

in identifying cost-effective interventions and guiding resource allocations.

• A central assumption of the WDR is that the health sector differs from other sectors, such that there is justification for a direct role for government beyond its already large, indirect influence through policies related to water supply, sanitation, education, household income, and health system regulation.

• There are three rationales for a direct role, all related to government 's capacity to provide better outcomes in some respects than private markets can: (1) its ability to use investment in the health of the poor to reduce or alleviate poverty; (2) its ability to ensure that health interventions that are public goods, such as public health information and the control of contagious diseases, benefit everybody regardless of ability to pay; and (3) its capacity to act under circumstances of uncertainty, insurance market failure, and inequities in risks and costs.

• Even in the poorest countries, the past 40 years have brought great improvements in the two key indicators of health statuslife expectancy and child mortalitypartly because of growing incomes and increased levels of education around the globe and partly because of government efforts to expand health services, further enriched by technologic progress.

• Still, large problems remain: unacceptably high mortality, much of it preventable; a pace of progress that is uneven among and within countries and regions; and a growing burden of avoidable disability. There are serious new health challenges: mounting burdens of human immunodeficiency virus and AIDS and other emerging and reemerging infectious diseases; an increasing number of drug-resistant strains that cause disease; significant increases in noncommunicable diseases; violence; and continued use of health-damaging substances such as tobacco.

• All of these will make new demands on health care systems as mortality rates decrease and populations age. Most systems now have problems that, if left unresolved, will seriously hamper efforts to address misallocations of financial resources; inequities in services; inefficiencies; and, in middle-income countries, exploding costs.

• Thus, almost all countries confront some kind of health system reform. Such reform faces especially serious obstacles in low-income countries where, in competition for scarce national budgets, the dis

trict-level infrastructure often loses out to the special interests of physicians, politicians, trade unions, and urban populations.

• A core need in reform is new modalitiesfor financing health, determining priorities, reallocating resources, and providing the most compatible, cost-effective public health measures and clinical services. A plausible tool in this connection for national decision making and external assistance is the Disability-Adjusted Life Year (DALY). The DALY was developed as a way to measure the global burden of disease and combines loss from premature death with loss of healthy life due to disability. It can help guide resource allocations toward conditions producing the greatest burdens of disease and for which there are cost-effective responses.

• As for global resource allocations, after growing rapidly in the 1970s, aid for health declined as a share of all development assistance in the 1980s, despite widespread calls by donors for more investment. Donors are directing more of their funds through multilateral rather than bilateral channels, increasing from 25 percent in 1980 to more than 50 percent in 1995.

• Only 5 percent of all expenditures on health research worldwide goes to health problems unique to developing countries; less than 10 percent of all donor assistance for health goes to biomedical and social science research.

• For developing economies, the WDR recommends a three-pronged approach:

  1. Fostering an environment that enables households to improve health:

     • pursue growth policies that benefit the poor;

     • expand investment in education, particularly for females; and

     • promote the rights and status of women.

  2. Improving government spending on health:

     • reduce government expenditures on tertiary care;

     • finance and implement a package of public health interventions;

     • finance and ensure delivery of a package of essential clinical services; and

• improve management of public health services.

3. Promoting diversity and competition:

   • encourage social or private insurance for clinical services outside the essential package;

   • encourage public and private suppliers to compete to provide inputs and services; and

   • provide information on provider performance and accreditation and on cost-effectiveness.

• For developing countries, the WDR suggests a range of health policy reforms:

  1. Low-income countries:

     • provide primary school for all children, especially girls;

     • invest in cost-effective public health measures;

     • shift health spending for clinical services from tertiary to district health facilities;

     • reduce waste and inefficiency in government health programs; and

     • encourage community control and financing of essential health care.

  2. Middle-income countries:

     • phase out public subsidies for better-off groups;

     • extend insurance coverage more widely and give consumers a choice of insurer; and

     • encourage payment methods that control costs.

  3. Formerly socialist countries:

     • improve the efficiencies of government health facilities;

     • find new ways to finance health care; and

     • encourage private health care and strengthen public regulatory capacity.

• For international assistance in health, the WDR recommends:

  • Immediately restore the share of aid for health to its pre-1985 level of 7 percent of total official development assistance, increasing in the next 5 years to 9 percent.

  • Improve the effectiveness of aid for health by better targeting

and management of assistance and by building local capacity to plan and manage health systems and support reform.

• Increase assistance for health research, focusing on the major health problems of developing countries.

• Stabilize funding, improve priority setting, and boost efficiency by developing a global mechanism for better coordination of international health research.

The World Development Report addresses the challenges to advancing health in developing countries directly, contributes ideas and methods that are relevant to the most pressing problems, and encompasses these in a strategic approach that is broad and clear.

The preparation of the WDR was based on the unprecedented involvement of key communities outside the World Bank and reflects a major change in the Bank's view of government responsibility in the health sector. Its advocacy of a relatively strong financial role for the state not only speaks to the state's functions in poverty reduction and education and the assurance of universal access to some basic set of services but also argues for a government role in the private market for health care and insurance. The argument that the public sector canand should use the financial, informational, and regulatory instruments at its disposal to improve efficiency and assure equity in cases of insurance market failure is new for the Bank.

A major contribution was the estimation of the global burden of disease by using the DALY, a unit that combines loss from premature death with loss of healthy life due to disability, which can be used to calculate the cost-effectiveness of interventions. The DALY was a major methodologic advance. As such, it will be argued, adjusted, and improved; in the interim, it is a widely applicable strategic tool that will nonetheless require thoughtful training and adjustments in its use at the country level.

The WDR lays out a reasoned package of ideas for health development that deserve consideration by donors and national policy makers, pointing out that they will have to wrestle with the reality that, in the health sector, there is no simple paradigm for policy choice. Both free markets and public sectors may fail in attempts to provide public health activities and clinical care, so that effectiveness in this arena will require strong private and public institutions, which are seriously lacking in many developing countries. Recognizing this, the WDR observes that the productivity of support to developing countries would

increase substantially were donors to direct more of their assistance to public health measures and essential clinical services, especially in low-income countries, and focus correspondingly on capacity building, research, and reform of health policy.

A related, critical question is the following: Can the ideas and methodologies recommended in WDR be absorbed by developing countries? Some will be able to adapt and adopt these approaches fairly straightforwardly into system design, financing, and management; others, principally lower-income countries, will not. Thus, strengthening capacity to absorb the concepts and approaches described in the WDR could be a logical part of a next agenda in health development.