Director-General

The path to universal health coverage

Dr Margaret Chan
Director-General of the World Health Organization

Statement to the press at the launch of the World Health Report: Health Systems Financing: The Path to Universal Coverage
Berlin, Germany

22 November 2010

Members of the press, ladies and gentlemen,

Policy-makers in every country are continually reviewing the way health care is financed. They look at the way funds are collected, how funds are pooled to spread risks, which services are provided free and which are purchased, and how doctors, nurses, and other staff are paid.

They look for ways to cope with soaring health care costs, changing disease patterns, and the rising expectations and demands of their populations. They experiment with different schemes and policy options, sometimes with success, often with unintended consequences and surprises. They look for money, and they look for guidance on the best way to spend it.

I commissioned this World Health Report in response to a need, expressed by rich and poor countries alike, for practical guidance on how to improve the financing of health care. The need for guidance in this area has become all the more pressing at a time of global economic downturn and rising health care costs.

In every region of the world, the costs of health care are going up as populations age, chronic diseases increase, and new and more expensive treatments become available.

During my discussions with health officials, I heard widespread agreement that moving towards universal coverage is the right vision to guide health care reforms. Nearly all countries want to move in this direction, but do not know what policy options are most effective, what they will cost, or where to find the funds.

This is the first way this report differs from other advice on health care financing. The emphasis is firmly placed on moving towards universal coverage.

A commitment to universal coverage means, in practical terms, that all people within a country should receive some degree of financial protection from the costs of at least some basic health services.

This means, in ethical terms, that no one in need of health care, whether curative or preventive, should risk financial ruin as a result of paying for this care.

In my view, universal coverage is an admirable goal and a timely one. We have to bite the bullet. If health systems do not find the right answers now, the bill further down the line is going to keep getting higher.

Many policies for health care financing got the incentives wrong. They encouraged unnecessary tests and procedures, overprescribing of medicines, and longer than needed hospital stays. They let prevention fall by the wayside.

Obesity has reached epidemic proportions, also in several poor nations. Lifestyle-related chronic conditions, like hypertension and diabetes, are increasing with a dramatic speed and sweep. If left unchecked, these costly conditions can overwhelm insurance schemes and unravel safety nets for social protection.

Many policies for health care financing excluded the poor, whose health needs are usually greatest. Systems that rely heavily on direct payments, including user fees, at the time of care actually increase poverty.

This is a bitter irony at a time when the international community is pursuing better health as a strategy for poverty reduction.

Already today, the differences, within and between countries, in income levels, life expectancy, health outcomes, and access to care are greater than at any time in recent history. As the report notes, government expenditures on health care range from as little as $1 per person to nearly $7,000.

As the report also notes, higher spending on health does not guarantee better health outcomes. Policies make the difference.

Ladies and gentlemen,

The best way to finance health care has long been a confusing area for policy-makers. Different policy options have been debated for decades.

But when a country decides to aim for universal coverage, advice becomes more precise, the advantages and disadvantages of different policy options are clarified, and lines of action become more sharply defined.

The report does a number of things. First, it distils a vast amount of experience and economic analysis into a straightforward menu of policy options.

The report is short, at just 100 pages, but its advice is backed by detailed technical evidence set out in more than 50 background papers, which are being published on the WHO website today.

The report concentrates its advice on the three biggest questions facing any move towards universal coverage: how to raise more money for health, how to extend financial protection to the poor and sick, and how to deliver health services more efficiently.

It reaches some conclusions and ends some long debates. For example, direct payments at the time of care do not protect against the overuse of services. They do the opposite. They discourage the poor from getting even the most basic care, and they drive many who do get care below the poverty line.

The report sets out several new economic estimates and arguments, especially in areas where health systems waste money through inefficiency. It tackles inefficiencies as a way to stretch resources further.

For example, a policy that encourages the use of generic medicines could save around 60% of the costs of medicines in many countries.

The report advises, and it warns. Systems for health financing tend to resist change. Any reform will bring opposition from some powerful vested interests. The health care industry is a big and lucrative one.

Finally, the report addresses the need to make aid for health development more effective as a contribution to universal coverage. The best financial aid is channelled through domestic financing systems and institutions.

Doing so strengthens capacities and builds self-reliance. Failing to do so overburdens countries with high transaction costs and multiple, repetitive demands for monitoring and reporting.

Ladies and gentlemen,

The year’s World Health Report is designed to encourage every country in the world to adopt at least some polices that will extend coverage to more people, and reduce the number of people who risk financial ruin when they fall ill.

All countries, at all stages of development, can take immediate steps to move towards universal coverage and to maintain their achievements.

Countries that adopt the right policies can achieve vastly improved service coverage and protection against financial risks for any given level of expenditure.

Thank you.