There is a strong economic case for universal health coverage

October 20, 2014

Jim Yong Kim, President, World Bank Group Financial Times, October 17, 2014

This op-ed was originally published in the Financial Times.

Leaders in emerging markets often tell me they want to improve their competitiveness while lifting people out of poverty and protecting a growing middle class from sliding back into it.

In countries including Brazil, China, Thailand and Turkey, universal health coverage has been a key investment. India is the latest to introduce universal health coverage to give its citizens access to essential services.

The economic case for universal health coverage is strong. The recent Lancet Commission on Investing in Health looked at broader measures of growth and found that from 2000 to 2011 health investments were responsible for nearly a quarter of growth in developing countries.

Universal health coverage protects the poor and near-poor from catastrophic economic and social costs related to health expenditures, which impoverish 100m people a year worldwide.

With increasing incomes and the emergence of a sizeable middle class, public expectations for emerging markets’ health systems are rising. Recent surveys in Brazil show that healthcare is a top concern. Meeting such expectations is a daunting task.

Advanced medical technologies are available to emerging markets; their ability to finance them is not. As fast growing health systems put pressure on scarce resources, countries must spend smarter for better outcomes while keeping budgets in check.

Demographics are a big factor. In China, the number of people aged 65 and over is expected nearly to treble from 123m to 330m by 2050, to a quarter of the population. As people age and lifestyles change, the burden of chronic diseases has risen sharply and accounts for 80 per cent of China’s overall disease burden.

Many health systems are ill-prepared. Diabetes is rapidly increasing in Indonesia, yet only half of public primary health centres are equipped to diagnose it. Many countries can’t provide timely access to emergency care for cardiovascular disease or cancer diagnosis and treatment. Our analysis of universal health coverage programmes in 24 countries shows that coverage and implementation are weakest for non-communicable diseases, in spite of the fact that they represent the bulk of the disease burden in emerging markets.

How can these challenges be met?

Emerging markets need to cut admissions to hospitals. In China, admissions nearly doubled between 2003 and 2008. The trend of shifting outpatient treatment to inpatient to maximise reimbursement is costly, inefficient and inequitable.

Reducing the cost and frequency of hospital visits, however, depends on having the right incentives. Evidence from Brazil and elsewhere shows that investments in primary care can reduce hospital admissions. Effective, community-based and patient-centred primary care – co-ordinated with a broader network of social services – can prevent illness, reduce complications and facilitate access to health services across the system. Recruiting and training more community-based health workers creates jobs, increases economic opportunities in poor and remote communities and enables task-sharing, so doctors and nurses can be deployed more efficiently.

Countries can work with the private sector to cut healthcare costs and expand quality care. I recently visited Aier Eye Group in China, which treats more than 2m people a year for common eye problems, using new technology and operational procedures. India’s Uttarakhand state is piloting a system in its most remote areas with an integrated service delivery network of public and private, community-based and mobile providers supported by telemedicine.

Emerging markets need affordable, smart and sustainable health financing models. Thailand and Turkey have made remarkable strides in using prepayment schemes to reduce out-of-pocket payments and to improve equity. In the Philippines, taxes on alcohol and tobacco have generated significant revenue for financing universal health coverage.

Many of the problems facing emerging markets are similar to those in high-income countries but the solutions are not. Providing effective universal health coverage systems requires countries to develop new models of healthcare delivery and financing to adapt to changing needs.

But the rewards are great. They will increase the health and wellbeing of people and provide a more secure and prosperous economic future.