100 Million People Impoverished by Medical Bills Annually
The United States isn’t the only country struggling under the weight of health care costs. Governments around the world — even those where health services have been admirable — are seeing costs soar and resources stretched to the limit.
In countries where individuals pay directly for services at point of delivery, health bills are pushing 100 million people into poverty every year, according to the World Health Organization (WHO).
One reason for skyrocketing health care costs is that between 20 and 40 percent of health spending is wasted, depriving many people of badly needed care. In some countries, half to two-thirds of total government spending on health is used for hospital care; globally, almost $300 billion is lost annually to hospital-related inefficiencies; and in some places, medicine prices are up to 67 times the international average price.
This year’s world health report gives governments guidance on ways to finance health care. Taking evidence from all over the world, it shows how all countries can adjust health financing so more people get the health care they need, and encourages the international community to support low and middle-income countries’ efforts to increase health coverage.
Dr. Margaret Chan, Director-General of WHO:
“No one in need of health care should have to risk financial ruin as a result. The report sets out a stepwise approach. We encourage every country to act on this and do at least one thing to improve health financing and increase health coverage over the coming year.”
WHO highlights three key areas where change can happen:
Raise more funds for health
If the governments of the world’s 49 poorest countries each allocated 15 percent of state spending to health, they could raise an additional $15 billion per year. In many cases, there is scope for governments to allocate more money for health. (In 2000, African heads of state committed to spend 15 percent of government funds on health. So far three countries have achieved this.)
More money can also be generated through more efficient tax collection. A review of 22 low-income countries shows that they could raise $1.42 billion through a 50 percent increase in tobacco tax.
The international community has a key role to play. An average of $44 per capita is required to ensure access to even a small set of quality health services in low income countries, but 31 countries spend less than $35 per person on health. If all donors joined Norway and others that have kept their promise to allocate 0.7 percent of gross domestic product to official development assistance, three million additional lives could be saved in lower income countries by 2015.
Raise money more fairly
Remove the key financial barriers to obtaining care. Countries like Japan that manage to ensure health services are available to the entire population have done so by reducing dependence on direct, out-of-pocket payments and increasing prepayment, generally through insurance or taxes or a mix of the two. The funds raised are then pooled, so that it is not just those who get sick who bear the financial burden. This is the model used in many European countries, with Chile, Colombia, Mexico, Rwanda, Thailand, and Turkey all making significant progress in the last decade — along with Brazil, China, Costa Rica, Ghana, Kyrgyzstan and the Republic of Moldova.
Spend money more effectively
Smarter spending could increase global health coverage between 20 and 40 percent. The report identifies ten areas where greater efficiencies are possible. One of these is the purchasing of medicines. (France has adopted a strategy of using generic drugs wherever possible, saving almost $2 billion in 2008.) More efficient spending on hospitals could boost productivity by 15 percent.
“Access to basic health care is a fundamental human right, as stated in the WHO Constitution, and not just a privilege to be enjoyed in a few wealthy societies. But this right hardly matches the reality. In many countries, the rich receive all the health care they need, while the poor are left to fend for themselves.
This situation needs to be corrected. It can be corrected, as this report shows. And it is being corrected in a growing number of low- and middle-income countries. As documented in the report, any country that gets the policies right can move towards universal coverage, often with remarkable improvements in health outcomes.” – Dr. Margaret Chan
Download the full report: World Health Report
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