World health report 2010

Online Q&A
November 2010

About 20−40% of global health spending is wasted. How can countries be more efficient?

The world health report 2010 – Health systems financing: the path to universal coverage focuses on 10 opportunities to improve efficiencies.

One area is hospitals. Another is medicines. In all cases, the report stresses governments be tough on accountability and on getting the best deal. This means taking steps like those seen recently in Kenya and the United Republic of Tanzania to improve quality standards for malaria drugs.

Getting the best deal means negotiating prices. In some countries, medicines cost up to 67 times the international average price. France saved the equivalent of almost US$ 2 billion in 2008 by adopting a strategy of using generic drugs rather than brand name ones wherever possible.

There are often several ways to prevent or treat a medical condition - and costs vary widely. In many cases, it is possible to move to less costly more effective interventions.

What are the components of a model health financing system?

A country is on the right track if the government is:

  • demonstrating the political will to develop the health financing system, to move closer to, or maintain universal coverage and is engaging all stakeholders including the population in the process;
  • allocating sufficient funds to health - this varies depending on the context. The average in Africa is just over 10%. The average proportion of total government spending devoted to health in Europe is almost 13%;
  • researching new sources of revenue, such as different forms of indirect taxation like sales taxes, so called "sin" taxes on tobacco and alcohol, and taxes on currency transactions;
  • setting up (or has set up) a system so that people pay for health care before they fall sick and draw on the funds when they are sick (through health insurance and/or taxation);
  • focusing on getting the best value out of every dollar it spends on health;
  • ensuring that vulnerable groups do not miss out on needed services.
What should donors do?

Donors need to keep their international promises. Donor assistance has increased substantially since 2000. But it is still a long way off the target that many developed countries set themselves of 0.7% of GDP.

Official development assistance from governments can be supplemented by a variety of innovative financing mechanisms - like the airline tax pioneered by France and the Global Fund's ProductRED campaign.

When funds are channeled to countries, this should be done in ways that explicitly help recipient countries establish their own financing mechanisms and institutions. This means a greater focus on supporting countries' own plans and it means not establishing manifold channels for holding, using and reporting funds in countries that compete with the mechanisms that already exist.

What is new in health financing in the report?

For the first time, The world health report 2010 suggests that all countries can further develop their health financing systems. If every country implemented just one of the report's recommendations, millions of lives would be saved.

The report also shows for the first time the amount of money that low and middle income countries could raise themselves through a variety of options. For example, simply giving more priority to health in government budget allocations could double government health spending in low income countries.

The report also quantifies the losses that result from just 10 common causes of inefficiency, offering enormous potential for obtaining more health for the money.

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