Macroeconomics and Health (CMH)

MacroHealth Newsletter

No. 12, January 2005


In the last issue, we highlighted the release of the report of the Mexican Commission on Macroeconomics and Health, "Investing in Health for Economic Development." In this month's issue we talk to two key Commission members who helped make this project a reality.

Name: Nora Lustig, President of the Mexico Commission on Macroeconomics and Health (CMMS)

Brief Biography: Dr Lustig is President of the Universidad de las Américas, Puebla, and professor of the Department of Economics in the same University. She is a member of the Mexican National System of Researchers at the highest level, and a member of the Mexican Academy of Sciences. Previously, Dr. Lustig held positions at the Inter-American Development Bank and the Brookings Institution and was a member of the WHO Commission on Macroeconomics and Health. Dr Lustig obtained her Ph.D. in Economics from the University of California, Berkeley.

Q. What have been your role and experience with the CMMS?

A. I am the President of the Commission. It has been a very good learning experience as well as an opportunity to build shared views with the rest of the commissioners.

Q. From the CMMS report, what were the key issues that emerged for improving the health of the poor in Mexico?

A. First, due to its direct and indirect impact, health is one of the important determinants of the incidence of poverty as well as its persistence over time, the so-called “poverty traps”. The latter occur because child health and nutrition are important factors that determine an adult’s level of education. Education, in turn, has a strong impact on income, and parent income and education affect the health and nutrition of their children. In Mexico there is evidence of a human development trap. Hence it is very important to support the programs which benefit mothers-to-be, mothers during the lactating period and small children.

Second, poverty traps that are created by adverse systemic shocks (for example, economic crises and natural disasters) not only expose numerous people to a situation of poverty, but also exclude them from contributing productively (or as productively as possible) to the economy of the country. To avoid these consequences, it is important to have an adequate social protection network (safety nets) that minimize the impact on families from systemic shocks.

Finally, poverty traps are also consequence of idiosyncratic shocks. Acquiring insurance is one of the ways in which individuals use financial markets to protect themselves from possible idiosyncratic adverse events (for example, illness, death, unemployment, or a bad harvest) that could temporarily or permanently reduce their consumption level. The problem is that, in Mexico, the social security system leaves more than 50% of the population unprotected. In addition, 90% of investment (spending) on health or the part of the private sector is out-of-pocket spending. The latter is inefficient and regressive. Hence the importance of implementing a universal insurance system and investing in public goods that reduce risks.

Q. What have been the achievements and impact so far of the Macroeconomics and Health process in Mexico?

A. The Commission produced several research papers, a full Report and Executive Summary. The latter is available in Spanish and English. This version of the Report will be used for consultation with governments and stakeholders.

Q. You were a commissioner for the original CMH. To what extent have its recommendations been put into practice in Mexico?

A. Mexico is a middle-income country, so the recommendations of the CMH are not all relevant. However, Mexico has been very receptive to the recommendations as shown by the creation of the Mexican Commission, launching a health insurance program which will include financial protection, and modernizing its health service delivery system.

Q. How are the MDGs guiding health and development policy in Mexico?

A. There is awareness in the relevant ministries (Health, Social Development) in the federal government regarding the need to not only reach the MDGs but to go beyond them: that is, achieving them in a shorter time span, setting goals at the sub-national level (states and municipalities) and including among the goals objectives that deal with new challenges such as chronic-degenerative diseases (cardiovascular diseases, diabetes and so on).

Q. What are the next steps for the CMMS?

A. In the next two months, members of the Commission will present the report in a number of fora, including the Ministry of Finance, to receive feedback. Subsequently, the final version of the Report will be published and the Commission will monitor the extent to which its recommendations are being adopted. Also, there are plans to publish the research results in a book geared to academic audiences.

Name: Eduardo González Pier, CMMS Executive Secretary

Brief Biography: Dr González Pier is Head of the Economic Analysis Unit at the Ministry of Health in Mexico. He joined Minister Frenk’s team in December 2000 as Coordinator General of Strategic Planning at Mexico’s Ministry of Health, where he actively participated in the formulation of the National Health Program 2001-2006 and in the recent reform to the Ley General de Salud, which institutes the System of Social Protection in Health. Prior to this appointment, he held positions at the Instituto Mexicano del Seguro Social and Grupo de Economistas Asociados, in Mexico City, and the International Monetary Fund and the World Bank in Washington D.C. Dr González Pier holds a Ph.D. in Economics from Chicago University.

Q. What have been your role and experience with the CMMS?

A. Since my incorporation to the Ministry of Health, one of my key responsibilities has been to better understand and further advance the links and synergies between health policy, in particular, and social policy in general, with economic policy. After the publication of the CMH Report in 2001, which clearly identified a new series of connections between health and economics, Minister Frenk opted to promote the creation of the CMMS, and offered me to participate in its inception and development.

Q. From the CMMS report, what key issues emerged for improving the health of the poor in Mexico?

A. The evidence of the existence of poverty traps and how they are related to the health sector has been one of the key issues emerging from the CMMS Report. Poverty traps can be prevented through human capital investments by means of well designed and targeted health interventions. Human capital depletion can be avoided by social protection strategies that comprise both the implementation of medical insurance schemes and ensuring the provision of public goods for health.

Q. What have been the achievements and impact so far of the Macroeconomics and Health process in Mexico?

A. The Macrohealth process has raised awareness and opened the dialogue on the instrumental value of health in the development process. The work of the CMMS was extremely positive as it convened researchers and specialists from different backgrounds around a central topic to produce integrated proposals to further take advantage of the macrohealth relationship for the case of Mexico. This new understanding of macrohealth has lead to a more integrated and fruitful dialogue between social and economic policy-making.

Q. Which factors have been very important to the success of the process?

A. First of all, the active participation of key stakeholders. Commissioners were selected among the most prestigious economists and social scientists in Mexico, which in turn ensured the soundness of the analytical work of the CMMS. It is also relevant to mention that these studies produced evidence-based and country-specific recommendations that, so far, have been very well received.

Q. How are the MDGs guiding health and development policy in Mexico?

A. The fact that the fulfillment of the MDGs constitutes a national commitment that goes beyond specific sectors has helped promote the integration and joined work of social strategies and sectors. This has, in turn, propitiated a more inclusive and long term vision of social needs and the better design of policy objectives.

Q. What are the next steps/challenges for the CMMS?

A. In 2005 the CMMS will focus on the necessary communication efforts to validate the Report’s findings and recommendations. Through this process we expect to receive comments and suggestions from different sectors of society (academia, public sector, health industry, NGOs, etc.) that will be incorporated to the Report in order to publish its final version by March. Additionally, the CMMS will concentrate on documenting the short and medium term impact of those policy recommendations suggested that might be put in place, so as to identify and promote future evidence-based policy formulation.