ii / PVUB-6563. Financing Health Services in Developing Countries qp,S / pA-7 n Agenda for Reform EIZl . .-.. . Financing Healtll Services in Developing Coun tries An Agenda for Reform The World Bank Washington, D.C., U.S.A. Financing Health Services in Developing Countries was prepared by John Akin, Nancy Birdsall, and David de Ferranti in the Policy and Research Division of the World Bank's Population, Health, and Nutrition Department. Important inputs were provided by Charles Griffin and by numerous staff memberT of the Population, Health, and Nutrition Departn'ent, especially Anthony Measham, William McGreevey, Mead Over, Vicente Paqueo, and Nicholas Prescott. Useful comments were provided by Brian Abel-Smith, Jere Behrman, Andrew Creese, Parvez Hasan, Anne Mills, Henry Mosley, Marcelo Selowsky, T. Paul Schultz, Alan Walters, and Herman van der Tak. The authors also benefited from discussion of the paper with staff of the World Health Organization. The authors are particularly grateful to Dirk Prevoo and Lauren Chester for invaluable research support, and to Noni Jose and Amelia Menciano for efficiently typing the many versions. The work was carried out under the general direction of John North. © 1987 The International Bank for Reconstruction and Development / THE WORLD BANK 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. All rights reserved Manufactured in the United States of America First printing April 1987 Second printing February 1988 The judgments expressed in this study do not necessarily reflect the views of the World Bank's Board of Executive Directors or of the governments that they represent. Library of Congress Cataloging-in-Publication Data Akin, John S. Financing health services in developing countries. (A World Bank policy study, ISSN 0258-2120) Prepared by John Akin, Nancy Birdsall, and David de Ferranti. Bibliography: p. 1. Medical care-Developing countries-Finance. 2. Public health-Developing countries-Finance. 3. Medical policy-Developing countries. 1. Birdsall, Nancy. II. De Ferranti, David M. Ill. International Bank for Reconstruction and Development. IV. Title. V. Series. [DNLM: 1. Developing Countries. 2. Financing, Organized. 3. Health Policy-economics. 4. Health Services-economics. W 74 A315f] RA410.55.D48A35 1987 338.4'33621'091724 87-10427 ISBN 0-8213-0900-5 Financing Health Services; in Developing Countries A World Bank Policy Study Contents Summary 1 1. The Health Sector and Its Problems 10 Health and the Health Sector in Developing Countries 10 Three Main Problems in the Health Sector 13 2. Policy Reforms 25 Charging Users of Government Health Facilities 25 Providing Insurance or Other Risk Coverage 32 Using Nongovemment Resources Effectively 39 Decentralizing Government Health Services 44 Problems and Pitfalls of Reforms 47 3. What the World Bank Can Do 49 Stimulating Consideration of Finance Policy Reforms 49 Expanding Lending 50 Conducting Research 50 Appendix Tables 53 A-1. Basic Indicators 54 A-2. Central Government Expenditure 57 A-3. Health Expenditure as a Percentage of Total Central Government Expenditure 61 A-4. Index of Constant Per Capita Central Government Health Expenditure 63 A-5. Health-Related Indicators 65 A-6. Population per Hospital Bed 69 A-7. Life Expectancy and Related Indicators 71 A-8. Urbanization 75 Technical Notes 77 Bibliographical Notes 83 References 85 v Boxes 1. Private and Public Benefits of Health Care 2 2. Organization and Financing of the Health Sector in Zimbabwe 11 3. Primary Health Care: Resources and Costs 18 4. The Urban Orientation of Public Health Spending 22 5. Financing Village Health Workers and a Revolving Fund for Drugs in the Gambia 29 6. Prepaid Health Care Organizations 33 7. Rural Risk Coverage: Thailand's Health Card System 35 8. Social Security Financing of Health Care in Latin America 36 9. The Chinese System of Financing Health 40 10. Public-Private Cooperation 41 11. Reforms of Health Financing Already Under Way 48 12. World Bank Health Lending and Sector Work 50 vi Summary Developing countries have achieved remarkable foreseeable future, government efforts to improve reductions in morbidity and mortality over the health are unlikely to rely on increases in public past thirty years. But continuing gains depend spending financed by debt or taxes, or on the real- largely on the capacity of health systems to deliver location of public expenditures from other sec- basic types of services and information to house- tors, even though such increases or reallocations holds that are often dispersed and poor. At the would be economically as well as socially justified. same time, rising incomes, aging populations, and What can be done? An alternative approach to urbanization are increasing the demand for the financing health care is proposed here. Even as conventional services of hospitals and physicians. governments continue to grapple with questions of These competing needs have put tremendous pres- the appropriate level of funding for health and the sures on health systems at a time when public appropriate allocation of total government re- spending in general cannot easily be increased- sources to health, this alternative approach de- indeed, in many countries it must be curtailed. serves consideration. Indeed, it makes sense even In most developing countries, public spending in in countries where the overall budget problem is all sectors grew rapidly in the 1960s and 1970s. But not severe. slow economic growth and record budget deficits Simply stated, this approach would reduce gov- in the 1980s have forced reductions in public emient responsibility for paying for the kinds of spending; public spending on health has increased health services that provide few benefits to society more slowly since 1980 and in some countries has as a whole (as opposed to direct benefits to the declined on a per capita basis. A case certainly users of the service). More government (or public) could be made for more public spending on health resources would then be available to pay for the in developing countries. Public and private spend- services that provide many benefits to society as a ing together in developing countries is on average whole. By relieving governments of the burden of less than 5 percent of that spent in developed spending public resources on heallth care for the countries; even if this money were spent as cost- rich, this approach would free resources so that effectively as possible, it would probably be insuf- more could be spent for the poor., ficient to meet critical health needs. But in most ficient to meet critical health needs. But in most 1. The categories of "rich" and "pocr" need to be de- countries the general budget stringency makes it fined in each country and will depend on a country's in- difficult to argue for more public spending. For the come structure and social objectives. 1 Individuals are generally willing to pay for di- tor, should be paid for by those who receive the rect, largely curative care with obvious benefits to care. Shifting this responsibility would also in- themselves and their families. Those who have suf- crease the public resources available for govern- ficient income to do so should pay for these ser- ment provision of basic curative and referral ser- vices. The financing and provision of these private vices to the poor, who currently have only limited types of health services (which benefit mainly the access to services of this nature. direct consumer) should be shifted to a combina- tion of the nongovernment sector and a public sec- tor reorganized to be financially more self-suffi- Health Sector Problems cient. Such a shift would increase the public re- sources available for the types of health services The characteristics and performance of the health which are "public goods"; these include currently sector vary tremendously among developing coun- underfunded health programs such as immuniza- tries. In most cases, however, the sector faces three tions, control of vector-borne diseases, sanitary main problems. It is argued here that each of these waste disposal, health education, and in some cir- problems is due in part to the efforts of govern- cumstances prenatal and maternal care, including ments to cover the full costs of health care for family planning (see box 1). The benefits of these everyone from general public revenues. The three largely preventive programs accrue to communi- problems are: ties as a whole, not just to individuals and their families. They will not be paid for willingly by * Allocation: Insufficient spending on cost-effec- individuals and should be the responsibility of the tive health activities. Current government spend- government. But most curative care, whether pro- ing alone, even if it were better allocated, would vided by the government or nongovernment sec- not be sufficient to fully finance for everyone a Box 1. Private and Public Benefits of Health Care Goods and services provided by the health system for the adequate provision of the "public" type of can usefully be classified with respect to who re- service-the so-called free-rider problem. That is ceives the benefits of them. At one extreme are why in most societies the health services with purely private goods, for which all benefits of use largely public benefits are funded by general reve- are captured by the person who consumes the nues rather than user charges. Only public involve- health service, and at the other extreme are purely ment will provide sufficient public goods (and public goods, for which all benefits are equally mixed goods with a significant public benefit). received by all members of society. An aspirin Health services with mostly private benefits, for taken for a headache is a good example of a purely which there is therefore great willingness to pay, are private health good. Spraying to protect all res- often equated with curative care while those with idents from a vector-borne disease closely approxi- mostly public benefits, for which there is little will- mates a purely public health good. Many actual ingness to pay, are equated with preventive care. health services are of a mixed type; the consumer (For ease of exposition they are also discussed in captures some purely private benefits, yet others these terms in this study.) But the correspondence is also benefit from that person's consumption of the not exact. For some preventive care, such as moni- service. The person who is vaccinated receives a toring the growth of infants, much of antenatal and private benefit of protection, but others benefit as perinatal care, and screening for hypertension, most well because they are less likely to be exposed to benefits are captured by the recipients of the service the illness. and their families. Well-informed patients are likely Consumers are almost always willing to pay di- to choose to pay for these services rather than forgo rectly for health services with largely private bene- them. For some curative care, such as the treatment fits. But they are generally reluctant to pay directly of the carrier of a contagious disease (tuberculosis for programs and services which benefit society or is an example), there are public or social benefits to communities as a whole. Consumers tend to wait others as well as private benefits to the patient. and hope that others will provide the funds needed 2 minimum package of cost-effective health activi- health services. Change in financing will not elimi- ties, including both the truly "public" health nate the need to improve management, administra- programs noted above and basic curative care tion, training, and supervision in the public deliv- and referral services. Although nongovernment ery of health services. Similarly, in its work on spending on health is substantial, not enough of health, the World Bank is concerned not only with it goes for basic cost-effective health services. As financing but with a wide array of issues associated a result, the growth of important health activities with the design of sustainable and effective health is slowed despite the great needs of fast-growing programs.2 The concentration on financing in the populations and the apparent willingness of present study by no means reflects a diminution of households to pay at least some of the costs of concern with the full range of issues. It does reflect health care. the belief that the reform of financing deserves serious consideration as one part of an overall re- * Internal inefficiency of public programs. newed effort to improve the health status of the Nonsalary recurrent expenditures for drugs, populations in developing countries. fuel, and maintenance are chronically un- derfunded, a situation that often reduces dra- Four Policy Reforms matically the effectiveness of health staff. Many physicians cannot accommodate their patient Four policies for health financing are proposed loads, yet other trained staff are not productively below. They constitute an agenda for reform that employed. Lower-level facilities are underused in virtually all countries ought to be carefully con- while central outpatient clinics and hospitals are sidered. The four policies are best lthought of as a overcrowded. Logistical problems are pervasive package; they are closely related and mutually re- in the distribution of services, equipment, and inforce each other. Most countries could benefit drugs. The quality of government health services from adopting only some parts of the package, and is often poor; clients face unconcerned or har- some countries might wish to move more quickly ried personnel, shortages of drugs, and deterio- on some parts than on others. But in the long run, rating buildings and equipment. because the policies are complementary, all four merit consideration. * Inequity in the distribution of benefits from health services. Investment in expensive modern i Charge users of government health facilities. In- technologies to serve the few continues to grow stitute charges at government facilities, espe- wvhile simple low-cost interventions for the cially for drugs and curative care. This will in- masses are underfunded. The better-off in most crease the resources available to :he government countries harevunderfundede betterahof inogov - health sector, allow more spending on un- countries have better access both to nongovern- derfunded programs, encourage better quality ment services, because they can afford them, and druddporm,ecuaebte ult to government services, because they live in ur- and more efficiency, and increase access for the ban areas and know how to use the system. The poor. Use differential fees to protect the poor. rural oor benefit little from tax-funded The poor should be the major 'beneficiaries of subs.- , .,.expanding resources for and impr-oved efficiency dies to urban hospitals, yet often pay high prices in the government sector. for drugs and traditional care in the nongovern- ment sector. Some countries have had user fees for decades, and others, particularly in Africa, are now begin- Obviously these problems are not solely attrib- ning to introduce them. But the more common utable to the approach governments have taken to approach to health care in developing countries financing health. Nor will a change in approach to has been to treat it as a right of the citizenry and to financing health alone solve these problems. In the attempt to provide free services to everyone. This short run, for example, change in the way re- approach does not usually work. It prevents the sources are mobilized will not by itself correct the 2. See World Bank, Health, Sector Policy Paper (Wash- gross misallocation of health resources between ington, D.C., 1980), which deals with the health sector as a high-cost hospital-based care and low-cost basic whole. 3 government health system from collecting reve- sonable quality; if they are not, the problem of nues that many patients are both able and willing underutilization discussed below will only be ex- to pay. Thus the entire cost of health care must be acerbated. Second, user charges will not help im- financed through frequently overburdened tax sys- prove the overall allocation of government health tems. It encourages clients to use high-cost hospi- spending unless the freed revenues are actually tal services when their needs could be addressed at funneled into currently underfunded health pro- lower levels of the system. It deprives health work- grams that provide public benefits and into in- ers in government facilities of feedback on their creasing the number and quality of facilities to success in satisfying consumers' needs. It makes it serve the poor. This redirection of freed resources impossible to reduce subsidies to the rich by charg- requires a strong political commitment. Third, the ing for certain services, or to improve subsidies to poor who cannot afford new or higher charges the poor by expanding other services. must somehow be protected. In the short run-that is, as soon as administra- How can the poor be protected? Lower or even tive mechanisms can be put in place-countries zero charges in clinics located in urban slums and should consider instituting modest charges, focus- in rural areas are a simple, practical step. Com- ing initially on charges for drugs and other supplies bined with higher charges for hospital care, they and for private rooms in government hospitals. would not only protect the poor but also improve Where the current price is zero, even modest in- the targeting of existing government health spend- creases in charges could generate enough revenue ing. Another option is to issue vouchers to the to cover 15 to 20 percent of most countries' oper- poor, based on the certification of poor house- ating budgets for health care-enough to cover a holds by local community leaders (a practice that substantial part of the costs of currently un- appears to work well in Ethiopia). Other options derfunded nonsalary inputs such as drugs, fuel, to protect the poor include allowing staff discre- and building maintenance. By "modest increases" tion in collecting charges (although this is difficult is meant amounts which would constitute, even to do in the government sector) or, in middle- for poor households, 1 percent or less of annual income countries, using means tests (which often income, assuming two visits per person a year to a already exist for other programs). In a well-func- government health post for curative care. tioning system of referral (in which patients enter In the longer run, user charges provide a way not the system at a low-cost lower-level facility and, only to raise revenue but also to improve the use of only if they cannot be treated there, are referred to government resources. Curative services, most of a higher-level facility), a schedule of low or even which can be viewed as "private goods," currently zero fees at the lower level and referrals at no account for 70 to 85 percent of all health expendi- additional cost also provide protection for the tures in developing countries and probably 60 per- poor. The most appropriate option will depend on cent or more of government expenditures on each country's situation; experimentation with dif- health. Over a period of years, and once mecha- ferent approaches is likely to be required. nisms to protect the poor are in place (along with Provide insurance or other risk coverage. En- insurance systems to cover catastrophic costs for courage well-designed health insurance pro- all households), consideration should be given to grams to help mobilize resources for the health increasing charges for curative services to reflect sector while simultaneously protecting house- the cost of providing them. This would free re- holds from large financial losses. A modest level sources equivalent to perhaps 60 percent of cur- of cost recovery is possible without insurance. rent government expenditures on health for reallo- But in the long run, insurance is necessary to cation to basic preventive programs and first-level relieve the government budget of the high costs curative care for the poor. (At the same time, most of expensive curative care; governments cannot preventive programs should remain free of charge raise government hospital charges close to costs and be financed directly by government.) until insurance is widely available. Capturing the benefits of a policy of user charges requires attention to three complementary Insurance programs cover only a small portion steps by the government. First, user charges will of low-income households in most developing not work unless services are accessible and of rea- countries, especially in Africa and South Asia. 4 Outside of China, where the majority of urban * Use nongovernment resources effectively. En- residents are insured, no more than 15 percent of courage the nongovernment sector (including the people in the low-income developing countries nonprofit groups, private physicians, pharma- take part in any form of risk-coverage scheme cists, and other health practitioners) to provide (other than free health care provided by tax reve- health services for which consumers are willing nues). Most of these people are covered under to pay. This will allow the government to focus government-sponsored social insurance plans in its resources on programs that benefit whole the middle-income countries of Latin America and communities rather than particular individuals. Asia. Private insurance, prepaid plans, and em- ployer-sponsored coverage are all still relatively Government is an important provider of health rare. services in developing countries, but by no means A starting point for insurance in most low-in- the only one. Religious missions and other non- come countries is to make coverage (whether pro- profit groups, independent physicians and pharma- vided by the government or the nongovernment cists, and traditional healers and midwives are all sector) compulsory for employees in the formal active. Direct payments to these nongovernment sector. Then at least the relatively better-off will providers account for up to half of all health be paying the costs of their own care. A few low- spending in many countries. There is no "correct" income countries and most of the middle-income size for this nongovernment sector; its role in rela- countries in Latin America and Asia have already tion to that of the government sector is bound to taken this step, often through payroll taxes to fund vary among countries. However, governments re- social insurance that covers health. duce their own options for expanding access to Insurance programs in industrialized countries health care when they actively discourage and in Latin America have undoubtedly contrib- nongovernment suppliers or fail to seek efficient uted to rising health care costs. When schemes ways to encourage them. cover most or all costs, and patients and health Community-run and privately rnanaged cooper- providers perceive care as free, some unnecessary ative health plans should be encouraged. Capitaliz- visits and unnecessary procedures are likely, and ing such plans, providing temporary subsidies, and costs will escalate in the system as a whole. To providing administrative support should be con- avoid such escalation, compulsory insurance plans sidered. Any prohibitions or restrictions on in low-income countries should avoid covering nongovernment providers should be reviewed. Un- small, predictable costs (such as for low-cost cura- necessary paper work and the regulations relating tive care); they should cover only costs that might to nonprofit providers should be reduced. To pro- be termed catastrophic for an individual. (Where vide better care for the poor, subsidies to make practicable, the definition of the catastrophic ex- existing nongovernment facilities more affordable penditure level can be related to household in- should be considered as a cost-effective alternative come.) In reimbursable systems costs will also be to direct provision of these services by the less likely to escalate if consumers pay an entrance government. fee (or a deductible) and make a co-payment for Only the public sector can oversee and guide the each illness, and if there is competition among activities of nongovemment providers of health insurance providers. Without effective competi- services. In every country the government needs to tion, insurance providers will have little incentive take the lead in training health workers, testing to keep costs and premiums low, and higher costs them for competency, and licen,sing nongovem- will be passed through in the form of higher wage ment facilities. Governments must play a central bills for employers who provide coverage and role in research and development. They must set higher consumer prices. standards and regulations to protect the populace Avoiding cost escalation in government-run in- from untrained or unethical practitioners, espe- surance programs is especially critical to avoid a cially in countries where professional associations related problem: political pressure to subsidize the and standards of professional conduct are not yet insurance system from general tax revenues. If this well established. Governments need to develop occurs, it makes the insurance program a benefit the legal framework for prepaid health systems, for the better-off, paid for in part by the poor. and they must disseminate information about 5 pharmaceuticals and health insurance options to tered centrally, although they can be, and some- help consumers deal effectively with nongovern- times are, contracted out to local governments. ment providers. Decentralization gives local units greater responsi- In some countries, including much of Latin bility for planning and budgeting, for collecting America and the middle-income countries of Asia, user charges, and for determining how collected it may be possible for the nongovernment sector to funds and transfers from the central government provide most or even all curative care as long as will be spent. (It often also implies greater respon- risk-coverage plans and subsidies for the poor are sibility for personnel management and discipline.) implemented. In others, including those in Africa Decentralization of financial planning should in- and the poorer countries of South Asia, where clude the general principle that revenues collected much of the population reslides in rural areas and in the form of user charges should be retained as where basic curative and preventive services are close as possible to the point at which they were closely and appropriately integrated, the govern- collected. This improves incentives for collection, ment will need to continue to provide curative care increases accountability of local staff, within limits in conjunction with its preventive care (for exam- ensures that the choice of expenditures (whether ple, combining treatment of a sick child with im- to fix the well or purchase drugs) reflects local munization). Ideally, these services should comple- needs, and fosters the development of managerial ment existing nongovernment services, including talent at the community level. The conventional those provided by traditional healers and religious public finance argument is that all public revenues missions. In all countries, in most areas of preven- should revert to the center for allocation where tive care where social benefits are large, the role of most needed. But this reasoning fails to take ac- government will remain predominant and indeed count of a critical factor: the system of collection ought to expand. itself affects the amount and use of revenues col- lected. In general, the higher the transactions and tralize planning, budgeting, and purchasing for information costs of collecting fees and adminis- tvralizen p health services, particularly the ser- tering revenues-that is, the smaller the amounts government helhsrie,priual h e- collected and the more frequent the collection, as vices offering private benelfits for which users are in the case of charging for drugs and simple cura- charged. When setting natiional policies and pro- tive care-the stronger are the arguments for plac- grams, use market incentives where possible to ing corethe ronues at the point forvice better motivate staff and allocate resources. Al- ing control over revenues at the point of service low revenues to be collected and retained as delivery. close as possible to the point of service delivery. Decentralization and greater financial control This will improve both the collection of fees and by no means imply, however, the complete finan- the efficiency of the service. cial independence of each individual facility. Gov- ernment facilities that provide integrated curative The government will have a continuing role in and preventive services in rural areas and to the providing health services in most nations. Efforts urban poor will continue to require central sup- to increase efficiency in the provision of these ser- port. In fact, in rural areas the appropriate unit for vices cannot be neglected. In countries where man- purposes of decentralized planning and budgeting agerial resources are scarce, communication is dif- is likely to be a regional or district office, not a ficult, transportation is slow, and many people are small health post. Eventually government hospitals isolated, decentralization of the government ser- in urban areas could transfer some collected reve- vice system should be considered as one possible nues to the center to supplement general revenues way to improve efficiency. and help finance other government health Decentralization is appropriate primarily for ser- programs. vices provided directly to people in dispersed facil- Control of revenues at the point of service deliv- ities, where there are user charges for drugs and ery also reinforces a more general principle: as fees curative care. Decentralizaition is less likely to collected in government facilities make largely make sense for tax-supported public goods, such curative services with private benefits financially as immunizations and control of vector-borne dis- self-sustaining, the freed government resources eases. These programs are mnore logically adminis- should be retained in the health sector (but not 6 necessarily at the individual facilities) until health of health problems that can besit be addressed by programs with public benefits and care for the preventive programs. If revenues from user charges poor are adequately funded. are channeled directly into underfunded nonsalary Decentralization of government health services expenditures-that is, into drugs., fuel, and mainte- will not be easy, and of the four policy recommen- nance-the efficiency of the existing government dations it is probably the least tried. Where other services will increase. User charges can also play a parts of the government are highly centralized, direct role in making the health system more equi- there will be considerable obstacles to decentrali- table: the rich, who benefit most from govern- zation. But there will be considerable benefits as ment-provided services, will now have to pay; the well since perhaps no other government service government resources thus freed can be redirected except agricultural extension is as highliy dispersed. into programs and facilities targeted to the poor. Where overall administrative systems are weak, Risk-coverage programs can provide more reve- the quality of staff in remote areas is poor, or nue to the system as a whole and allow the diver- positions are unfilled because of long-standing dif- sion of freed government resources to cost-effec- ficulties in attracting staff away from large cities, tive programs. By tapping the ability of the better- decentralization will have to be planned and intro- off to cover the major costs of their own care, risk- duced gradually. In some countries, where staff of sharing schemes improve the overall equity of gov- regional agencies, local hospitals, and clinics have emient health spending. little experience in managing revenues and expen- Using nongovemment resources effectively ditures, training in such skills and a trial period to helps mobilize resources from families, communi- test these skills will need to precede de- ties, and voluntary groups and allows government centralization. resources to be redirected to programs that pro- duce many benefits but for which individuals are The Policy Package and Health Sector reluctant to pay. The result of this redirection of Problems funds is both more efficiency and greater equity. Finally, decentralization can help mobilize more Table 1 summarizes the potential effect of each of revenue. Consumers will be more willing to pay the four recommendations on the problems in the and providers more willing to collect charges be- health sector. User charges for government-pro- cause of the link between revenue collection and vided services can help solve all three problems. better services. Decentralization can also help im- User charges increase resources for the system as a prove the use of government resources, by making whole and allow government resources to shift to government-provided services mnore responsive to more cost-effective (generally preventive) pro- the needs of their clients. grams. This shift alone will tend to benefit the The parts of this policy package rely on each currently underserved poor more than the rich, other for their positive effects. Charging fees at since the poor tend to suffer more from the kind government facilities will not be effective in raising Table 1. Effects of Policy Reforms on Three Main Problems in the Health Sector Internal Policy Allocation inefficiency Inequity Keep the present system 0 0 0 Institute user charges + + + and use freed government revenues to expand cost-effective services + 0 + and use new revenues to finance nonsalary costs 0 + + and use differential charges to protect the poor and reduce existing subsidies for 0 0 + the rich Provide for risk coverage + 0 + Use nongovemment resources effectively + + + Decentralize government health services + + + Note: 0 indicates no effect; + indicates alleviation of the problem. 7 revenue unless competitive incentives in both the and insurance-buying customers. Only govern- nongovemment sector and the decentralized gov- ment action can bring necessary changes in man- emment sector orient the system toward providing agement and training programs-for example, by quality care at affordable prices. The tendency to instituting more appropriate training of doctors allocate too much of the govemment health and placing greater emphasis on training paramedi- budget to high-cost hospital care, with negative cal personnel. effects on overall cost-effectiveness and on equity, Without reforms in financing, however, the nec- will be difficult to change until charges come close essary revenues may not be available to carry out to reflecting real costs. But charges at hospitals and the political decisions for reallocation both within other govemment facilities cannot be raised to re- and outside the health sector. Although reforms flect costs and recover larger amounts unless much will not automatically take care of political deci- of the population is insured. At the same time, sions, they will help make available the resources insurance and other forms of risk coverage will that make political decisions feasible. collect little revenue and in all likelihood fail if Nor is the finance policy package itself a simple free services remain available at govemment facili- one to implement. In countries where administra- ties. In the long run, the diversion of government tive capability is weak, the introduction of new resources to cost-effective basic services will be approaches will take time. Moreover, each of the easier if an active nongovemment sector is provid- four parts has potential drawbacks if implemented ing the bulk of curative care. An active, high-qual- without due care. User charges could deter those ity nongovemment sector requires the availability who would benefit the most from seeking care. of insurance. Risk-sharing schemes could raise costs and aug- ment existing disparities. Deregulation of the nongovemment sector and administrative decen- Reforms in Financing tralization could increase geographical inequality and decrease the quality of services. Implementation of these reforms will not by any Avoiding the pitfalls requires that political and means solve all the problems of the health sector. social boldness in innovating policies be comple- User charges in government facilities will not gen- mented by systematic and sustained attention to erate foreign exchange to pay for imported monitoring programs. In each country, specific ap- pharmaceuticals. Insurance programs will not by proaches to implementation need to be monitored themselves raise the quality of government ser- as they are tried; flexibility in such areas as the size vices. Decentralization will not eliminate the need of user charges and the approach to decentraliza- for difficult decisions at the center regarding the tion needs to be maintained. geographical allocation of new investments and health personnel. A strong naongovernment sector may not adequately serve the poor in remote rural Need for Further Analysis areas. Reforming the finance policy will have little im- As the reforms in finance policy are tried, monitor- pact without a political commitment by the gov- ing and operational research in each country emment to making the health sector more effec- should focus on the following kinds of questions: tive. As noted above, user charges (and other 1. How accessible are services now and how financing reforms) alone will not ensure that the good are they? What are nongovernment expendi- govemment resources thus freed will be used tures on health care? How much do people now wisely; decisions made largely in the political arena pay? How much can they afford? How would utili- will determine whether the freed funds are used zation of services be affected if prices were raised? for the poor and for services with public benefits, Would demand fall for important health services? rather than for building urban hospitals and buying Would utilization by the poor decline? expensive nonessential equipment. Political deci- 2. What fees should be charged and how much sions will largely govem whether the freed reve- revenue can be raised from them? What are collec- nues are used to improve the access to and the tion costs likely to be? What is a reasonable sched- quality of services sufficiently to attract fee-paying ule of charges at different levels of the system? 8 3. What health insurance programs now exist? studies of the health sector as a whole. These stud- Who is covered at what cost? Are there informal ies have enabled the Bank to carry on a policy insurance systems within extended families? dialogue regarding systemwide health issues with 4. How equitable is the existing health system? government officials. What groups now benefit from what services, at In its sector work and lending in health, the what cost to the government purse?.What are prac- Bank has been concerned not only with health tical means of identifying and protecting those un- financing, but also with a wide array of systemwide able to pay for health care? issues, including the appropriate allocation of in- 5. How active is the nongovernment health sec- vestments in the sector given the criterion of cost- tor? Is the for-profit sector competitive? Are there effectiveness, the design of sustainable health pro- private physicians, pharmacists, and other trained grams, and the need to improve rnanagement and health practitioners in rural areas? What income training. Although this study concentrates on fi- groups does the nongovernment sector serve? nancing, this is no indication that concern with What are alternative means, and their relative these other issues has in any way abated. But there costs, for improving information to consumers is mounting concern in the Bank and in member about the quality and prices of private health ser- countries about the resource problem in health, vices? How can both public and private health and a conviction that the Bank, itself a financial providers be regulated and supervised so that their institution, can make a useful contribution to im- clients are protected from ill-advised and over- proving health in developing countries by encour- priced services? aging innovative health financing policies. 6. How can the management of government The Bank is currently making renewed efforts to health facilities be organized and overseen so that do so. A strengthened program of country sector resources are used efficiently and workers perform work includes attention to the health financing well? What steps can be taken to ensure sustained issue. General reviews of overall government ex- political and popular support for the reform of penditures increasingly include special attention to health financing? the health sector. Innovative lending programs in- clude assistance to countries in the development The Role of the World Bank and implementation of new health financing ap- proaches. Dialogue with other lending agencies is The World Bank began direct lending for health in more active, and a program of research and opera- 1980, and by 1983 it had become one of the largest tional evaluation on the effects of new approaches funders of health programs in developing coun- is planned. tries. Lending operations in more than thirty coun- The Bank consistently has advocated that over- tries have focused on the development of basic all economic policy be grounded in sound princi- health care programs, including expansion of pri- ples of finance and project selection; the agenda mary health care, provision of drugs, and support for the reform of health financing proposed here is for training and technical assistance. Lending oper- consistent with and reinforces those principles in ations have generally been preceded by systematic the health sector. 9 The Health Sector and Its Problems The main purpose of this study is to discuss new surveys of morbidity demonstrate extraordinarily and generally underutilized approaches to financ- high levels of largely preventable sickness. A 1974 ing health programs in developing countries-ap- survey of two typical rural Punjab villages in Paki- proaches that should help solve common prob- stan found 28 percent of the residents suffering lems in the health sector. In this chapter, after a from malaria and nearly 100 percent infested with brief introduction to the health status and the various parasitic worms. Children under five aver- health sector in developing countries, three main aged six bouts of diarrhea annually. A similar sur- problems are discussed. Four reforms of health vey at the end of the dry season in fifteen rural financing that would help deal with these prob- Malian villages found malaria present in 50 per- lems are described and evaluated in chapter 2. cent of the people and an incidence of 30 percent Chapter 3 discusses the operational research each for goiter, schistosomiasis, salmonellosis, needed to design programs appropriate to specific hookworm, and onchocerciasis. nations and to evaluate the effects of the suggested The health sector in developing countries con- reforms and looks at the World Bank's role in sists of a heterogeneous mixture of public, or gov- assisting countries with health finance policy. ernment, activities and nongovernment activities, including services providd i both modem and traditional practitioners (box /). The government Health and the Health Sector component itself is diverse, providing a broad in Developing Countries range of services through many different pro- grams. Governments typically provide free or low- The extent of poor health in developing countries cost curative care directly through ministry of is enormous. Mortality is much higher than in de- health institutions; they administer social security veloped countries, with low- and middle-income systems that provide free curative services to in- countries in 1983 experiencing average infant mor- surees through a second set of (often) government- tality rates about eight times higher, and female owned facilities; they support mental hospitals, life expectancy about a third shorter, than in the leprosaria, and hospitals for infectious diseases; industrialized nations. In pockets of Africa nearly a and they finance control programs for vector- fifth of all births end in death before age one. borne disease, water and sanitation projects, and Morbidity is also high. The few available sample other public health activities. 10 Box 2. Organization and Financing of the Health Sector in Zimbabwe Reliable and complete information on health sys- The Modern Health Sector in Zimbabwe, 1980-81 tems in developing countries is rare. Zimbabwe, a country with relatively good data, provides a typical example, although even for Zimbabwe assump- 100- m 7 l tions must be made in order to complete the picture. 90 - General information. Zimbabwe is classified by 80 - the World Bank as a lower-middle-income country. m - It occupies a position around the median of most 70 a developrnent indicators. Female life expectancy is about 59 years, infant mortality is 77 deaths per 60 - thousand live births, and there are about 7,000 peo- a_ ple per physician. It has a small population of about Q 50- 8 million, with only 21 people per square kilome- G ter, of whom about 30 percent live in cities. 40 - Hospitals. The country has a public hospital-based 30 - health system run by the Ministry of Health and local governments, along with a rural mission sys- 20 - tem, which is also hospital-based, and a network of urban and rural health centers. Large industries and 10- mines maintain hospitals and clinics for their own employees. The private modern sector, although 0 large, accounts for only a tiny proportion of hospi- CON ; < tal facilities. In the figure the bar representing the C° ' ,s total number of hospitals is divided into four sec- tions to show the proportion of hospitals owned by Government Missions the four components of the health system. industry and mines Private Clinics. For facilities other than hospitals, estimates are necessary. To determine the number of outpa- I tient facilities, shown in the second bar, it is as- ing in a different country.) About 592 percent of sumed that all hospitals provide outpatient services government physicians and nurses work in hospi- and that half the doctors classified as private offer tals; government clinics are almost completely clinic services. The number of clinics represented staffed by paramedics. Zimbabwe has a registry of by these two groups is added to the known number traditional healers that has so far tallied 11,000 of government clinics and estimates of mission fa- traditional doctors. The total number of physi- cilities to get an approximate total. Even this con- cians, nurses, medical assistants, and health aides in servative estimate of the size of the private sector the modern sector was just 11,159 in 1980. accounts for about 40 percent of outpatient facili- ties. The private clinic sector is large relative to the Revenue. Although government and mission facili- private hospital sector because public hospitals al- ties charge user fees, people earning less than 150 low privately attended patients. Zimbabwe dollars (Z$) a month are exempted. To offset the resulting loss of revenue in facilities not' Personnel. Zimbabwe requires annual registration under the Ministry of Health, the ministry contrib- of medical personnel. Apart from physicians and utes about 76 percent of the cost of rural clinics nurses employed by the government, missions, and (with local governments contributing the balance) industry, there is a large residual (in the third and and 85 percent of recurrent expenses in mission fourth bars of the figure) labeled "private." (Some hospitals. In addition, part of the cost of medical- of the individuals may be retaining their licenses even though they are not practicing or are practic- (Box continues on following page.) 11 Box 2 (continued) l care in private industry is borne by t;he government employers, but both receive tax rebates for part of through tax rebates. The Ministry of Health recov- the payments. ered about 4 percent of its total expenditure The government further subsidizes private insur- through user fees or insurance payments in ance by charging far less than actual costs for hospi- 1980-81. tal stays. For example, about 7 percent of total The private sector portion of each bar in the insurance expenditures went to the top Ministry of graph includes one known private expense, pay- Health hospital, where charges covered an average ments by insurance companies. The other compo- of only 28 percent of costs in 1979. Most insurance nents are estimates. Individuals are assumed to have expenditures go to private sector facilities and paid fees directly to private physicians amounting providers, even though the public sector supplies to 10 percent of total insurance payments, to have most of the hospital services. purchased pharmaceuticals totaling 50 percent more than the Ministry of Health bought, and to Public health and preventive care. In 1980-81 ap- have used the services of 20,000 traditional healers proximately 8 percent of the Ministry of Health and midwives often enough for each to earn Z$400 budget was spent on preventive services. a year, the average per capita income for Zimbabwe. These conservative assumptions gener- Conclusion. Zimbabwe's system is typical of other ate roughly a 60/40 split between government and developing countries. Public expenditures are nongovernment expenditures. Foreign aid ac- largely urban. Ministry of Health expenditures are counted for less than 1 percent of the total, a low almost entirely for curative care, and the govern- proportion for Africa. ment heavily subsidizes medical care for citizens working in the modern wage sector of the econ- omy. Available data have common shortcomings. Insurance. Private insurance is relatively well devel- There is little information on the private or tradi- oped in Zimbabwe and, along with medical services tional sectors, including who uses those services, run by mines and other industries, takes the place how much users pay, and how much is spent for of the social insurance systems that are more com- what drugs. For the public and private systems to- mon in Latin America and Asia. There are five vol- gether, it is difficult to distinguish patterns of usage untary insurance schemes covering about two- by different population groups. There is no infor- thirds of the resident Europeans but less than 1 mation about how facilities are distributed percent of the Africans. One of these schemes is for throughout the country, how busy they are, or public and parastatal workers. In these plans, half which income groups benefit from the public the cost of premiums is paid by workers and half by subsidies. Use of the government service system varies plete absence of services. For example, in the well- enormously among and within countries, depend- known study of Narangwal, India, in villages that ing on its effectiveness and its competitive environ- were not receiving project health services, approxi- ment. In the Cote d'lvoire the government system mately a third of the sick children were found to serves 90 percent of the outpatients; in the Philip- use private or traditional care.' The rest stayed at pines, which has a large modern private sector, the home. In project villages, where free primary government system serves at least 25 percent of the health services were aggressively delivered, the per- outpatients. According to recent surveys, however, centage of all sick children receiving any medical almost nowhere are government clinics and hospi- care increased, but a third of them still paid for tals the only source of care. At a minimum, they private or traditional care. compete with private physicians in urban areas and with traditional practitioners in rural areas; more often they compete with both. New government 1. Carl E. Taylor, R. S. S. Sarma, Robert Parker, and William E. Reinke, Child and Maternal Health Services in programs are thus often introduced into areas India: The Narangwal Experiment, vol. 2, Integrated where people have well-established patterns of de- Family Planning and Health Care (Baltimore, Md.: Johns mand for medical service; there is rarely a com- Hopkins University Press, 1983). 12 The nongovemment sector is no less complex and purchases of drugs account for half to two- than the govemment sector. Modern private care thirds of household health expenditures. is dominated by independent physicians. In Bang- Use of more than one source of health care is ladesh, C6te d'Ivoire, Indonesia, Malaysia, Peru, not at all uncommon. Anthropologists have ob- and Thailand, surveys show that private physicians served patients using free government care while account for at least 25 percent of outpatient visits. simultaneously paying for traditional care, paying In densely settled middle-income countries such as for ineffective traditional services or pharmaceuti- the Republic of Korea and the Philippines, as many cals before finally ending up in a free government as 40 percent of visits are to private physicians, hospital bed, and paying private physicians to refer even in rural areas. In many countries private phy- them to free government hospitals in the expecta- sicians are joined by government physicians who tion of getting better care. Inattention to the tradi- maintain part-time private practices, by nurses, tional and modern private sectors when planning midwives, and paramedics who work privately, govemment services probably contributes to and by various nonprofit and voluntary or- wasteful spending on duplicate care. ganizations. Although it is useful to emphasize features com- In Africa and parts of Latin America, modem mon to health systems in developing countries, it is nonpublic care is provided by religious missions important to point out that the countries are quite and other nonprofit groups. Private employers also different in ways that affect the delivery, accessi- provide direct care, often for the sound business bility, and financing of health care. Terrain, in- reason that it helps to maintain a stable work come levels, income distribution, literacy, popula- force. The Firestone company had by the late tion density, capacity to educate health 1960s built up impressive health facilities for its professionals, degree of urbanization, transporta- workers and their families in Liberia, including tion and communication systems, proportion of two modern hospitals, a nursing school, and for- wage earners in the population, and morbidity pat- mal programs for training laboratory technicians terns vary tremendously. In general, certain obvi- and other skilled personnel. In 1966 the system ous combinations of these characteristics-for ex- had more than 500 employees, and more than ample, low incomes, dispersed populations, and 500,000 patient visits a year were being accommo- illiteracy-conspire to make financing and deliv- dated. Over 25 percent of total visits were by pa- ery of medical care far more difficult in some re- tients having no connection with the company. In gions, including much of Africa. Even within Af- many countries-for example, in francophone Af- rica, however, there is great variation: some rica-social legislation requires that large employ- countries are characterized by relatively high and ers provide health services. rising levels of urbanization, extremely small geo- Also in the nongovernment sector are pharma- graphical areas, pockets of high incomes (espe- cists and traditional healers and midwives. Private cially in mining areas), and well-insured employees pharmacists, many of whom are primarily shop- in certain industries. keepers without formal training, are a source of informal advice and remedies. Traditional healers and midwives provide fee-for-service care in both Three Main Problems in the Health Sector urban and rural areas throughout the developing world, accounting for 10 to 50 percent of all medi- Problems in the health sector can be summarized cal visits in the countries surveyed. Even in areas under three headings: allocation-insufficient where trained midwives are available and where spending on cost-effective health programs; inter- women use modern prenatal care, traditional mid- nal inefficiency-wasteful public programs of wives may attend well over half of all births. World poor quality; and inequity-ineqjuitable distribu- Fertility Survey data for Peru, a middle-income tion of the benefits of health services. Piecemeal country, indicate that almost 60 percent of the efforts to address these problems, such as foreign children born in the late 1970s were delivered at funding of high-priority programs or the addition home. In Mali and the Philippines, which are of more supervisory staff to control quality, fail to among the few countries for which extensive address a fundamental cause-poor approaches to surveys of expenditures exist, traditional services financing. 13 Allocation: Insufficient Spending Figure 1. Average Per Capita Health Expendi- on Cost-Effective Programs ture, Selected Countries, 1981-82 Most countries have embraced an explicit social goal-to bring basic health services to their entire 80 population by the year 2000. But current public 700 - 670.00 and private spending on basic health services in developing countries is insufficient to meet this 600 - goal. Although private spending is substantial, lit- tle of it goes for the low-cost services which are 500 - most cost-effective in imiproving health: basic 400 health services, including immunizations, vector , control, health education, simple curative care and = 300 - referral, and effective drugs. Even if public re- sources were better allocated, current levels of 200 - spending would probably not be sufficient to fi- 100 / nance these activities. As a result, basic health ac- 100 8.84 30.93 tivities are unable to expand enough to meet the 0 47l / / 7/777_ great needs of rapidly growing populations, even Low-income Middle-income Industrialized though households have shown they are willing to pay at least some of the costs of health care. This section outlines the gap between actual and Note: Expenditure includes public and private spending. The selected countries are: required spending on critical health programs in Low-income: Burkina Faso, Burundi, Ethiopia, Mali, Niger, developing countries. The evidence of a gap is Pakistan, Rwanda, Senegal, Somalia, Sri Lanka, and Uganda. Middle-income: Botswana, Colombia, Ecuador, Egypt, Greece, largely circumstantial. Systematic studies of the so- Indonesia, Jamaica, Jordan, Lesotho, Morocco, Peru, Philippines, cial returns to various types of spending do not Portugal, Swaziland, Thailand, Zambia, and Zimbabwe. Industrialized: Australia, Austria, Belgium, Canada, Denmark, exist for health services, as they do for education. Federal Republic of Germany, Finland, France, Iceland, Ireland, There is therefore no simple way to quantify the Italy, Japan, Netherlands, New Zealand, Norway, Spain, Sweden, Switzerland, and United Kingdom. gap between actual spendimg on health and poten- Sources: World Bank data for all developing countries but tial spending that could yield a higher return. Egypt and Portugal; OECD (1985); and National Academy of Sci- ences (1979). ACTUAL SPENDING ON ALL HEALTH CARE. Public care is provided privately, expenditure by the pub- and private spending on health care in developing lic sector on health takes over 11 percent of the countries averages about $9 per capita in low-in- total government budget (appendix table A-3) and come countries and $31 in middle-income coun- much private care is paid for by public Medicare tries.2 These figures are low compared with an and Medicaid funds. Public sector health expendi- average of $670 in industrial countries (figure 1). tures per capita are larger in the United States than Much of the difference simply reflects differences in most other developed countries (table 2). As in overall per capita income; the proportion of d tota natonalincme dvote tohealh rages development occurs all nations raise additional total national income de oted to health ranges funds for health care with largely public benefits, from 2 to 12 percent in almost all countries, devel- and some, such as Sweden, publicly fund much oping and developed. Health spending is highly care with private benefits. income elastic; as incomes rise absolute spending Although governments are an important source on health care rises at an even faster rate (table 2). o As income levels rise in the poorer countries, the ofe by no means the dominant one. Direct private demand for public spending in the health sector is parenb no m ns theidoal nt fon Diretp at likely to rise more than proportionately, as it . half of all health spendiv g ia developu n g countrees, historically in developed countries. Even in the United States, where more than half the health compared with less than one-quarter in developed countries. There are large differences among de- 2. Dollar amounts are in U.S. dollars unless otherwise veloping countries. Expenditures by individuals ac- specified. count for over 70 percent of total health expendi- 14 Table 2. Total and Public Expenditures on Health, Selected Countries (current U.S. dollars) Total Public Total as Public as Country' Year per capita per capita percentage of GDP percentage of GDP Low-income Ethiopia 1981 2.81 1.52 2.01 1.09 Uganda 1982 9.73 1.91 4.23 0.83 China 1981 8.39 5.70 2.80 1.90 Sri Lanka 1982 10.25 6.14 3.20 1.92 Middle-income Zambia 1981 32.24 16.30 5.37 2.72 Indonesia 1982 15.03 5.70 2.59 0.98 Egypt 1977 16.53 6.98 5.17 2.18 Peru 1981 62.12 32.71 5.31 2.80 Industrialized Italy 1982 444.42 375.84 6.50 5.49 Japan 1982 605.63 433.65 6.01 4.30 Sweden 1982 1,172.74 1,076.16 8.21 7.66 United States 1982 1,402.65 591.14 9.38 4.49 Note: Public is defined as the sum of all central government expenditures on health, health expenditures through the social secunty system, and foreign aid (excluding foreign aid to nongovemmental organizations). All data are based on estimates. a. Countries in each category are listed in order of 1984 per capita income. Sources: World Bank data for all developing countries but Egypt; OECD (1985); National Academy of Sciences (1979); World Bank (1983); and Intemational Monetary Fund (1984). tures in Bangladesh, Ghana, India, Korea, Paki- Figure 2. Central Government Expenditure on stan, the Philippines, Syria, and Thailand and less Health as a Percentage of Total Public Expendi- than 30 percent in a number of poor African coun- ture, 1972-83 tries (table 3). Spending on nongovernment health care consists predominantly of fees-for-service and 14 payments for drugs. In Indonesia at least 23 per- cent of all health spending in 1982-83 was for . 12 - EZ 1972 household purchases of medicines, and another 35 * \ 1983 percent was for fees to modern and traditional 10 private practitioners. x Between 1972 and 1982 the proportion of cen- Q 8 tral government expenditures devoted to health / declined for developing countries as a group, while 0 6 it increased in developed countries (figure 2). For _ the poorest countries, the declining share of gov- einment expenditures going to health translated f 2 Bh into real declines in public resources for health, and even larger declines in per capita spending, 0 _ _ because of the rapid growth of population. Low-income Middle-income Industrialized SOURCES OF FINANCE. Spending by ministries of Source: World Bank (1986). health is supported almost exclusively by general tance accounts for a relatively high proportion of tax revenues. Social security institutions, which are capital costs in the poorest countries but is rarely most prevalent in Latin America, are almost always available for operating expenses. financed by payroll and other earmarked taxes. In the nongovernment sector, physicians, tradi- Cost recovery in government facilities usually cov- tional healers, traditional midwives, and pharma- ers only a small fraction of expenses. Foreign assis- cists are financed by fees or in-kind payments. 15 Table 3. Public and Nongovernment Health Expenditures, Selected Countries (U.S. dollars per capita) Country Total Publica Nongovernmentb Nongovernment/Public Developing c Ethiopia, 1981 2.81 1.52 1.29 0.85 Mali, 1981 4.45 2.05 2.40 1.17 Burkina Faso, 1981 7.41 5.07 2.34 0.46 Niger, 1984 4.84 3.58 1.26 0.35 Burundi, 1982 4.23 3.52 0.71 0.20 Uganda, 1982 9.73 1.91 7.82 4.09 Somalia, 1982 9.10 4.48 4.62 1.03 Rwanda, 1982 7.07 5.18 1.89 0.37 China, 1981 8.39 5.70 2.68 0.47 Sri Lanka, 1982 10.25 6.14 4.11 0.67 Pakistan, 1982 11.18 3.23 7.95 2.46 Senegal, 1981 17.73 11.09 6.64 0.60 Zambia, 1981 32.24 16.30 15.94 0.98 Lesotho, 1980 8.99 7.94 1.05 0.13 Indonesia, 1982 15.03 5.70 9.33 1.64 Philippines, 1980 18.23 4.83 13.39 2.77 Morocco, 1982 23.53 10.60 12.93 1.22 Egypt, 1977 16.53 6.98 9.55 1.37 Zimbabwe, 1980 29.58 17.81 11.77 0.66 Swaziland, 1983 52.22 20.90 31.32 1.50 Thailand, 1979 19.56 5.86 13.70 2.34 Botswana, 1978 36.65 20.74 15.91 0.77 Peru, 1981 62.12 32.71 29.41 0.90 Ecuador, 1984 46.11 28.35 17.76 0.63 Jamaica, 1980 61.93 41.62 20.31 0.49 Colombia, 1978 69.60 46.42 23.18 0.50 Jordan, 1982 59.34 34.24 25.11 0.73 Portugal, 1982 134.86 95.88 38.98 0.41 Greece, 1982 173.16 146.19 26.97 0.18 Industrialized c Spain, 1982 301.34 218.22 83.12 0.38 Ireland, 1982 449.58 421.01 28.57 0.07 Italy, 1982 444.42 375.84 68.58 0.18 New Zealand, 1982 421.51 373.66 47.85 0.13 United Kingdom, 1982 513.35 453.73 59.62 0.13 Belgium, 1982 531.14 490.09 41.05 0.08 Austria, 1982 641.85 404.76 237.09 0.59 Netherlands, 1982 842.75 671.12 171.63 0.26 France, 1982 935.00 664.34 270.65 0.41 Japan, 1982 605.63 433.65 171.98 0.40 Finland, 1982 695.71 554.37 141.34 0.25 Iceland, 1982 1,012.15 870.45 141.70 0.16 Germany, Fed. Rep. of, 1982 871.80 702.79 169.01 0.24 Denmark, 1982 748.75 646.80 101.95 0.16 Australia, 1982 843.33 555.22 288.12 0.52 Sweden, 1982 1,172.74 1,076.16 96.58 0.09 Canada, 1982 1,010.82 750.25 260.57 0.35 Norway, 1982 934.20 912.50 21.71 0.02 United States, 1982 1,402.65 591.14 811.51 1.37 Switzerland, 1982 945.50 618.46 327.05 0.53 Note: Because the sources use different definitions of public and nongovemmental, data for developing countries are not directly comparable across countries. a. Public is defined as the sum of all central govemment expenditures on health, health expenditures through social security institutions, and foreign aid (excluding foreign aid earmarked for missions and nongovemmental organizations). b. Nongovemment is defined as the sum of private expenditures on health care, expenditures by missions, and expenditures by Nongovemmental Organizations. c. Countries in each category are listed in the order of 1984 per capita income. Sources: World Bank data for all developing countries but Egypt and Portugal; OECD (1985); National Academy of Sciences (1979); World Bank (1983); and Intemational Monetary Fund (1984). 16 Mission facilities are financed from three sources: resources for health (limited in part by low per user fees, generally high enough to permit substan- capita income) and the tendency in both the gov- tial cost recovery; subsidies from affiliated ernment and nongovemment sectors to allocate churches; and in most African countries direct sub- what resources there are to high-cost, relatively sidies from the government. They also often bene- ineffective care. fit from the low salaries of religious personnel. Why has this mismatch between resources and Third-party payment mechanisms are rare in de- problems occurred? In a centralized system, with- veloping countries outside of Latin America, so out any pricing mechanism to assist in resource reimbursements from insurance programs (either allocation, investment over the long run can di- government or private) account for only a small verge considerably from needs. Even though hos- share of private sector revenue. However, prepaid pitals have a valid and important role, it is likely health care programs organized by central govern- that, if cost-effectiveness is used as a criterion, too ments, communities, or private companies are be- many government resources are spent on them. coming increasingly common in nations such as Much more of the burden of this spending could Brazil, Jamaica, the Philippines, Thailand, and be borne by the actual beneficiaries of the less Uruguay. essential care. In Niger about half the government health budget goes to hospital services in urban REQUIRED SPENDING FOR &RITICAL PROGRAMS. areas. Another 40 percent is spent on provincial Estimates of the cost of a package of basic health facilities in the main towns, and just 10 percent is interventions-such as immunizations, prenatal spent in rural areas where over 80 percent of the care, and education about healthful personal hab- population lives. The 50 percent of the budget its-vary widely. Excluding water and sanitation, devoted to hospitals in 1984 benefited 350,000 one detailed evaluation suggests annual costs on hospital patients, while the other half of the the order of $10 per capita (see box 3). This is not budget provided services for more than 10 million large compared with total government and clients. nongovernment spending on health of at least $10 In Swaziland the seven most common causes of per capita in most countries. But most current hospitalization are gastrointestinal diseases, com- spending, government and nongovermment, is for plications of pregnancy, respiratory illnesses, tu- hospitals and other curative care and nonessential berculosis, malnutrition, measles, and skin dis- drugs; it does not address fundamental health eases. If the public resources tied up in hospitals problems. In most developing countries, health were redirected to lower levels of the health sys- spending goes almost completely to curative ser- tem, many of these could be treated earlier at a less vices provided almost exclusively by hospitals. Es- severe stage or prevented altogether. Similarly, in timates of the exact cost-effectiveness of alterna- Bangladesh specialized orthopedic, cardiovascular, tive types of services are crude, but there is little and eye institutions as well as a planned cancer doubt that costs per life saved are much higher in research center are publicly subsidized. Some spe- hospitals than in preventive services and commu- cialization is hard to avoid. But in a country with a nity programs (see table 4). life expectancy of only fifty years, the chronic dis- Yet spending on curative hospital services, espe- eases those institutions are designed to treat will cially private spending, cannot easily be redirected. affect less than 1 percent of the population. At the Nor should it all be redirected-at least some same time, Bangladesh estimates that every year spending on hospitals is required because they are 325,000 active tuberculosis patients over the age of a necessary part of referral systems. In a sense hos- ten receive no treatment, at least 90,000 children pitals serve the total population by being available under the age of five die of pneumonia, and to those who need (and can reach) them. And 136,000 infants die of tetanus. because hospitals treat the most difficult cases, Another symptom of insufficient spending on costs per life saved (or episode of ill health amelio- cost-effective health activities is the difficulty of rated) will inevitably be higher there than else- retaining trained personnel in critical public sector where in the system. health programs. Low salaries and poor amenities The allocation problem in the health sector is in the public sector contribute to a loss of person- thus rooted in a combination of limited overall nel, who seek jobs with the private sector and 17 Box 3. Primary Health Care: Resources and Costs The World Health Organization's Global Strategy 8,000 people per physician in the Philippines; even for Health for All by the Year 2000, published in if allowance is made for some waste in the United 1981, estimates that the cost of achieving primary States, a tenfold difference is dramatic. health care for all people in developing countries is Second, reallocating resources away from hospi- approximately $30 billion annually (or about $10 tal care is not easy. It is physically impossible to per capita) for twenty years (1980-2000). The turn a few large and costly hospitals into many amount now being spent on health services by pub- small primary-level health care units or to turn a lic and private sources combined in the same coun- nation's highly trained doctors and nurses into less tries is about $40 billion ($1.3.3 per capita) annually. trained and less expensive primary health care Given these needs and approximate overall spend- workers. Since such facilities and personnel cannot ing, could primary health programs be financed be transformed, new primary-level health care fa- simply by redirecting existing public, private, and cilities must be built and new lower-level personnel foreign aid expenditures in developing countries trained to carry out primary health care duties. away from hospital-based systems? Even if such facilities and personnel could be trans- Some such redirection might be possible. But it formed, a system without any high-level personnel alone will not solve the resource problem. and facilities would not be desirable. Some high- First, even if all hospitals were closed down and level facilities and personnel are needed to handle the money used for operating them were put into the referrals from the rest of the system. rural health services, the real inputs needed are sim- It is the financing of expensive hospital care that ply not widely available. Manpower is an example. needs change, not the existence of the care as such. The developed countries have slightly more than Governments must find ways to charge those who nine times as many physicians per capita and about are able to pay for the benefits of publicly provided eighteen times as many nurses per capita as devel- curative care, so that limited public funds can be oping countries (World Bank 1986). The United freed for critical health programs with public bene- States has 800 people per physician compared with fits and for subsidizing care for the poor. overseas, and make it difficult to staff publicly systems, there is plentiful evidence that scarce re- provided basic health services for the poor. India, sources are poorly used. Demand-side problems which is widely regarded as having a surplus of are created in part by low fees, which probably physicians and is a major contributor to the inter- contribute to poor use of referral systems. Supply- national migration of physicians and nurses, had side problems, including poor quality, are associ- vacancy rates of 30 to 90 percent for professional ated with highly centralized management. health service positions in rural states during the early 1980s. An inventory of government rural DEMAND: INAPPROPRIATE USE OF SERVICES. One health clinics in the Philippines in 1974 found a of the most obvious symptoms of inefficiency in third to half of the openings for physicians and health services is the widespread use of higher- nurses unfilled. Because of the inability to raise level facilities by patients who could be well served salaries to a level competitive with other opportu- at less sophisticated units. A typical pattern is for nities, public sector health systems in many coun- some facilities, usually central outpatient and inpa- tries have been forced to allow physicians to sup- tient facilities, to be crowded, with lengthy waiting plement their incomes through private practice, times, while other facilities, usually lower-level which often reduces their time spent in basic pro- ones, have few clients. In Colombia and Somalia grams. Another response to the situation is to hospitals at the highest level (tertiary care) in major make temporary government service compulsory cities had occupancy rates of over 80 percent in for recent medical and nursing school graduates. recent years, while local (secondary) hospitals had rates of 40 percent or less. In Rwanda the occu- pancy rate for beds in city hospitals averages about Internal Inefficiency of Government Programs 70 percent but is 30 percent in rural health centers. A World Bank mission in Somalia observed a In the government component of national health thirty-five-bed secondary hospital that had one 18 Table 4. Spending for and Cost of Various Health Services Approximate cost Percentage of total per additional expenditure life saved Services on healtha (U.S. dollars) Direct services to patients Curative 70-85 High Treatment and care of patients through health facilities and independent ($500-$5,000) providers (including traditional practitioners) Retail sale of medicines Preventive 10-20 Medium Maternal and child health care (for example, immunization, growth ($100-$600) monitoring, family planning, promotion of better breastfeeding and weaning practices) Adult care (for example, hypertension screening, pap smears) Community services 5-10 Low Vector control programs (less than $250) Educational and promotional programs on health and hygiene Monitoring of disease patterns a. Includes both nongovemment and public spending. Data on private spending are available for only a limitecd number of countries. Figures here assume 90 percent of private spending is for curative care and 10 percent is for preventive care. Sources: For the percentage distribution of total expenditure on health, see de Ferranti (1985). They are rough estimates by the authors of the present study. The cost per additional life saved is based on selected studies. Cochrane and Zachariah (1983) show that the cost per additional life saved of hospitalization ranges between $1,300 for hospital-based diarrhea treatment in Matlab, Bangladesh (1982), and $2,820 for treatments in large hospitals in Morocco (1971). Creese (1986) estimates the cost of single antigen immlunization programs at $2-$14; Bamum (1980), Barnum and others (1980), Barlow (1976), and Shepard (1982) estimate the cost of immunization programs per additional life saved at between $24 and $568, depending on the scope of the immunization program. Programs aimned at immunizing for only one or a few diseases had up to six times higher costs per additional life saved than total immunization programs. Walsh and Warren (1979), Faruqee andJohnson (1982), and Barnum and Yakey (1979) put the cost of primary health care interventions per additional life saved at between $25 and $508. Shepard and others (1986) estimate the average cost of diarrhea treatment at $500 per additional life saved. Barlow and Grobar (1985) estimate the cost of a malaria control program at $69.95 per additional life saved. Walsh and Warren (1979) estimate the cost of a malaria control program at $892.20 per additional infant life saved; basing the cost on overall reductions in mortality would have reduced the cost per additional life saved. Cost per additional life saved for vector control programs is inversely related to the case fatality rate of the diseases and is therefore higher for diseases such as schistosomiasis, onchocerciasis, ascariasis, and ankylostomiasis. However, econonic benefits in terms of improved productivity and reduced nutrition and health care needs are high. patient and another thirty-two-bed hospital with reinforced. Inappropriate pricing; policies result in no patients. In India health clinics that have eight inappropriate investment patterns, and the vicious to ten beds serve about 100,000 people. An evalua- circle builds on itself. tion of eight clinics in one district found 6nly one One reason Senegal's Sine Saloum Primary of eighty beds being used. Health Care Program nearly collapsed in 1980 was Consumers crowd themselves into modern ur- exactly this type of pricing problem. Village health ban institutions for obvious reasons. Personnel workers charged a flat fee for their services, but have more training, equipment and laboratories free treatment and drugs were also available at are more complete, a wider array of diseases and more distant government health posts. Village emergencies can be handled, toilets and running workers simply could not compete with free ser- water are available, and the institutions are located vices from more highly trained nurses and nurses' in cities where required drugs and related services aides. Moreover, they were slowly depleting their can be purchased. Consumers have little pecuniary stocks of pharmaceuticals because the flat charge incentive not to use the high-level facilities when per visit did not cover replacemerit costs. The situ- both high- and low-level facilities are either free or ation was corrected when the government insti- charge the same fee. The result: many services are tuted charges in the rest of the health system and delivered unnecessarily through costly facilities drug charges in villages were revised to reflect and personnel, and lower-level services that are costs. known by professionals to be appropriate for some diseases are inadequately used by consumers. DEMAND: RATIONING BY QUEUE. A study in Cal- Crowded facilities are then expanded to accom- abar, Nigeria, found the average visit to a govern- modate large patient loads, and inefficient use is ment clinic to take one and a quarter hours, which 19 is not in itself exceptional, but waiting times were health clinics in 1978-and in less than one-fifth in sometimes as long as eight hours. Data from facili- 1984. Throughout much of Africa many health ties in Uganda showed that about half the patients posts have deteriorating roofs, a nonworking were seen within two hours, but 10 percent waited water supply, and worn-out furniture and equip- more than five hours. Nearly a third of the patients ment. Drug shortages are common in public facili- in health centers, the highest-level facility in the ties, even when drugs are widely available in sample, waited more than five hours. An anthro- nearby nongovernment facilities. pologist in Cote d'lvoire observed patients in gov- Some apparent shortages stem from overly am- emnment clinics waiting hours to be seen for a few bitious plans and the natural temptation to accept minutes of attention; the time was often wasted foreign funds for buildings, equipment, and service because supplies or personnel were not available. systems that cannot be maintained. Even the ex- For the working poor-including mothers with pected benefits of sensible investments are often heavy demands on their timre for child care, other not realized, however, because operating costs are home activities, and agricultural work-the op- not adequately financed. portunity cost of waiting time can be high indeed. The long lines at some government facilities can SUPPLY: OVERCENTRALIZATION AND COSTS. Tax- mean not only that clients' time is poorly used, but supported health systems are highly centralized in also that there is unintended and inefficient ration- their financing and usually highly centralized in ing of services. Perhaps those who can most afford their management as well. These centrally fi- to wait receive the care, rather than those who nanced and managed systems tend to use resources need it most-although the better-off can usually inefficiently. A rural health demonstration project avoid the long lines for free services by going to in Mali consumed 63 percent of its planned oper- the private sector or using bribes or connections to ating cost in supervising village health workers and skip the queue. Long lines put pressure on provid- carrying out other administrative requirements ers to minimize the time spent with each patient, that replicated, at great expense, an existing decen- irrespective of the health problem. They are also tralized private distribution system. Centrally man- likely to be an indication of hidden inefficiencies, aged and funded health systems are also suscepti- including the loss of time by people reconnoitering ble to political disruptions. In Uganda the clinics to see if they have a chance of being treated government health system was destroyed when po- and the loss of care by needy people who cannot litical upheaval prevented the central authority afford to wait. from effectively managing or funding the system. Had there been no mission health system, health SUPPLY: UNDERFUNDED RECURRENT COSTS. Pres- services would have disappeared for most Ugan- sure to expand the system combined with insuffi- dans in the 1970s. cient funds to do so leads to cutbacks on critical complementary inputs. When public budgets must SUPPLY: LOGISTICAL PROBLEMS. Logistical prob- be cut, it is easier, especially in the short run, to cut lems in the supply of drugs, equipment, and fuel spending on fuel, drugs, and vehicle and building are the result not only of resource constraints but maintenance than on salaries. Because these inputs of highly centralized distribution systems. The dis- are usually a small portion of total costs (typically tribution of publicly funded pharmaceuticals is an less than 20 percent), they must be cut drastically example. Countries typically have central ware- to reduce total spending significantly. The price of houses through which all ministry of health a small financial saving is a large drop in the effec- pharmaceuticals flow. Brand name drugs are tiveness of workers. bought in small, expensive lots; drugs often spoil In Zambia "free" government-provided health in storage; lax inventory control results in thefts; services were reportedly inoperative because fuel pharmaceuticals are allocated to facilities without and drugs were unavailable; yet nongovernment regard to the demand for them; and there often are services flourished. About a third of all rural clin- no formal procedures for reordering drugs. In ics in the Philippines are located in dilapidated Haiti an analysis of drug supplies found that the buildings. In Tanzania working vehicles and bi- central warehouse flooded each fall during the cycles were available in only one-third of the rural rainy season, that there was no stock control or 20 reordering procedure, and drugs sent to local facil- services. Seven different groups were interviewed: ities bore only a chance relation to what was village women, village men, elementary school needed. teachers, traditional healers, male civil servants, In a few countries inefficiencies in distribution female civil servants, and nurses from the general show up in the form of high consumer prices. In hospital. Respondents complained of long waiting Burkina Faso consumers pay 60 percent more than times in government facilities, shortages of drugs, the retail price paid in France for similar the poor attitude and demeanor of nurses, and the pharmaceuticals. In Sierra Leone in 1983 average hastiness of physicians. They viewed petty corrup- prices paid by the government's Central Medical tion as commonplace in government health ser- Stores ranged up to 314 percent above average vices. For example, respondents said that personal generic prices in the world market. connections were important in skipping registra- Similar problems arise in the distribution of fuel tion lines; that drugs bought in the marketplace and in vehicle maintenance. In the Gambia some were frequently stamped as property of the gov- vehicles use half their biweekly fuel allotment to emient stores; and that the only way to obtain drive to a depot to collect the allotment. In Ethio- adequate care was to arrange for private care after pia half the 1,025 health service vehicles are in- hours. operable at any one time. Over 40 percent of the A poor referral system, poorly trained health vehicles dedicated to rural service are at least ten workers, and lack of supplies and drugs are other years old. Fuel is allocated by vehicle, not accord- inadequacies. A 1984 survey in Tanzania showed ing to the area covered. In Zambia in 1982 only 26 that rural health clinic personnel referred only 3 percent of 550 vehicles were operative, and few of percent of their patients to a higlher level, when in the working vehicles could be used because of a fact they were not capable of treating 36 percent lack of fuel. of their clients. The nonreferrals were given drugs Primary health programs have taxed centralized that could not have helped them. distribution systems to the limit. A 1979 evalua- The skills of village health workers were evalu- tion of community health workers in India found ated in twenty-three states in India in 1979. They that 40 percent had never received their drug kits scored poorly in four areas: referrals, disease pre- and 60 percent had not received their community vention, emergency care, and general curative ser- health manuals. In Peru only 34 percent of village vices. Responses in these areas were on average health promoters had received their medicine kits. correct less than 30 percent of the time. A 1982 Ministries of health have been unable to deliver study in one Indian state found that 80 percent of support and supervision to dispersed health work- village health workers did not know how to mix ers. In immunization programs, logistical problems oral rehydration solutions. In Peru village health have caused vaccines to spoil as a result of the workers in a 1984 review displayed "dismaying failure to keep them refrigerated. In the late 1960s and alarming" ignorance of the symptoms of sev- in Nigeria, measles cases were increasing among eral important diseases. children with clear records of having been immu- nized. Tests of the measles vaccine found that only Inequitablc Distribution of Benefits one of twenty samples was capable of immunizing a child. Similarly, Chile experienced a measles epi- If public resources were unlimited, it might be demic in the late 1970s despite widespread immu- possible for the government to provide free health nization. Sampling of the measles vaccine found services for all. But government resources are not 100 percent to be effective at the central stores, unlimited. (And in any event, free services tend to but only 76 percent at local clinics. lead to waste and high costs.) Given the resource constraints outlined above and the high fixed costs SUPPLY: POOR QUALITY IN THE PUBLIC SECTOR. of certain kinds of health care, governments in Evidence of the poor quality of government ser- developing countries can provide only a very low vices is anecdotal and difficult to quantify. But it is subsidy per person for health care. In most coun- also impossible to ignore. In one African country tries a low average subsidy leads inevitably to ra- group discussions were undertaken to examine tioning-there is simply not enough for everyone. reasons for the underutilization of public health Providing free publicly funded curative services for 21 all translates into free and adequate services for to a still substantial 60 percent in 1980-81. Hospi- some and inadequate services, or none, for others. tals consumed 34 percent of the capital budget for health in 1970-71, and the proportion remained INEQUITABLE URBAN-RURAL DISTRIBUTION OF roughly constant throughout the following decade BENEFITS. In most developing countries 70 percent despite almost a 1,000 percent expansion of the or more of government spending on health goes to rural health clinic program. urban hospital-based care (see box 4). Hospitals Hospitals are located primarily in cities, since are inherently expensive. When their services are the market they serve has to be large enough to free, they create distinct subsidy patterns that are justify their high capital and recurrent costs. The difficult to modify. In Tanzania, which has since result of this location pattern is not surprising. 1972 pursued a policy of limiting hospital con- Even in well-functioning referral systems, in which struction in order to focus resources on rural many hospital patients come from rural areas, hos- health services, the share of recurrent expenses pitals end up serving primarily urban residents. In going to hospitals fell from 82 percent in 1970-71 developing countries 70 to 90 percent of hospital Box 4. The Urban Orientation of Public Health Spending Disparities in public spending between urban and little as $85 a year per capita in some regions, these rural areas are common. Per capita public expendi- costs are virtually unaffordable for many rural peo- tures on health care in urban areas are often more ple. By contrast, the majority of urban residents than three times as high as in rural areas. National benefit from compulsory, state-subsidized health health expenditure data are not usually sufficiently insurance-about 9 percent of the population are disaggregated to show intracountry differences. covered by the Government Insurance Scheme and Data from China, Senegal, and Peru, however, do another 57 percent by the Labor Insurance Scheme allow examination of spending patterns in those for state enterprise employees and their depen- countries. dents. These plans provide free medical care (no deductibles or copayments) for their primary bene- ficiaries, and the Labor Insurance Scheme reim- China. In China health subsidies have a pro- burses 50 percent of the costs for dependents. nounced urban orientation primarily because of state subsidies to urban beneficiaries of compulsory insurance schemes. Total expenditure per capita in Senegal. In smaller developing countries public in- 1981 was estimated at $6 for rural areas and more vestments and recurrent expenditures in the health than triple that amount, $19, for urban areas. State sector tend to favor the nationial capital area. In- subsidies to the health system averaged less than $2 equality in the availability of health resources is per capita in rural areas, but urban areas received compounded by the fact that referral systems rarely almost ten times as much, $15 per capita. Further- ensure equal access to health care by those living in more, private expenditures by rural residents were rural areas. Of the ten national and regional hospi- higher than by urban residents, about $3 as op- tals in Senegal in 1981, three, including a university posed to $2. hospital center, served principally Dakar and the Since the collapse of the rural cooperative insur- Cap Vert region. The Fleuve department in the ance system as a result of recent economic reforms north was served by three hospitals, while two in China, the great majority, of rural people now other departments, Louga and Senegal Oriental, have no insurance against the financial risks of ill had no regional hospital at all. The ratio of popula- health. These risks can be substantial in the Chinese tion served per hospital bed ranged from 426:1 in health system, which is characterized by a high de- Cap Vert to 7,254:1 in Casamanca. Fifty percent of gree of cost recovery-hospitals typically recover new investment funds are earmarked for the capital about three-quarters of their operating costs region. through user fees and drug sales. Recent survey The urban-rural distribution of supplies and per- estimates indicate that the cost per hospital admis- sonnel follows that of hospitals. Seventy percent of sion averages about $75 for urban residents and $36 Senegal's physicians and pharmacists, 60 percent of for rural people. With rural incomes averaging as its midwives, over 40 percent of its nurses, and 22 Box 4 (continued) virtually all of its dentists are concentrated in the are in poor operating condition. Many health cen- Dakar-Cap Vert region, where less than 30 percent ters are thirty to fifty years old and lack basic amen- of the population lives. In 1981 the Dakar-Cap Vert ities such as water, latrines, and electricity. hospitals received 70 percent of the hospital drug budget, which is 50 percent of the national drug budget. Health centers, the secondary level of Peru. National per capita public and private health health care, received 32 percent of the national expenditures in Peru amounted to about $59 in drug budget, which they are supposed to share with 1980. Although 27 percent of the total population health posts at the primary level. In practice the in 1981 lived in the metropolitan area of Lima, the latter receive little, and annual pharmaceutical sup- percentage of total public spending that was spent plies are usually exhausted at the health-post level there increased from 37 to 47 percent from 1970 to within six months, so that local populations have to 1981. Per capita Ministry of Health expenditures in purchase their own drugs over the counter. Lima were nearly twice that spent in the San Martin Overall, the Dakar-Cap Vert region received al- Amazonas department and over five times that most 60 percent of the national drug budget in spent in Cajamara, the most rural department. 1979-80. The Fleuve department, with 10 percent Of total public expenditures for health care in of the population, received 13 percent of the drug 1980 and 1981, 87 percent was spent on curative budget. The six other departments, with 60 percent care. In the 1978-81 period an aver-age of 11 per- of the population, received less than 30 percent of cent of the Ministry of Health's budget was spent the national drug budget. on capital expenditures, primarily for the construc- The rural health system has been relatively ne- tion of hospitals in cities. Two-thirds of all doctors glected because of the diversion of resources to live in Lima, which has only 29 percent of the urban curative services. Of the thirty-six health cen- country's population. In most rural areas there is ters in 1980, only twenty-four were considered op- only about one doctor per 10,000 or more erational. About half of Senegal's 492 health posts inhabitants. clients live within ten kilometers of the facility more often young families with children, for they use. As a consequence, in China, Colombia, which many health problems can be handled with- Indonesia, and Malaysia the average health sector out hospitalization. subsidy captured by urban households is up to five The extent of income bias varies among coun- times larger than that captured by rural residents. tries. In Colombia and Malaysia health subsidies If hospital services are free, the use of fees or appear to be roughly proportional to incomes, revolving drug funds to finance rural health work- with hospital subsidies favoring the rich and health ers will obviously exacerbate this imbalance. Self- center subsidies favoring the poor. In Indonesia, financing rural health programs in Senegal and the however, the poorest 40 percent capture only Gambia were added on to existing free urban sys- about 19 percent of the subsidies from public sec- tems. As a result, rural residents pay for low-level tor health centers and hospitals. care from a village health worker in addition to The pattern of public subsidies in Lesotho is subsidizing free, more sophisticated urban facili- similar to that of many other developing countries. ties, which serve mainly urban dwellers. In 1983-84, 84 percent of the buclget of the Minis- try of Health was absorbed by government-run INCOME INEQUALITIES. Because family incomes hospitals and health centers concentrated in the are significantly higher in cities, the urban bias of towns and lowland areas where higher-income cit- most health systems creates a distribution of facili- izens live. In these government f acilities fees are ties and personnel that favors the better-off. very low, covering less than 6 percent of the costs. Demographics and disease patterns also play a The low-income population in the highlands is role. Higher income groups tend to be older and to served by hospitals and clinics operated by mission suffer from diseases or accidents requiring hospi- agencies. Fees in these mission facilities cover 60 to talization, whereas the poorest households are 80 percent of the costs. Thus those who live in the 23 highlands, where incomes are low, pay a much back or eliminated. However, a certain number of higher proportion of the costs of their health care hospitals is an essential part of any health system, than those who live in the more prosperous low- even one whose main emphasis is on primary lands and cities. Most of the government health health care. In a sense, they are a fixed cost of the subsidy is captured by the rich.3 health infrastructure. That fixed cost can consume These subsidy patterns often lead to the broad a high proportion of health budgets even when prescription that hospitals should be severely cut hospitals are deemphasized, as in Tanzania. The real equity issue is how the needed hospitals are nues, who pays the taxes is aurptrovided through tax reve- paid for. The problem is not only-or even pri- ceives the benefits. Tax burdens in developing countries manrly-that developing countries' health systems are generally thought to be proportionately distributed at are hospital-based. It is that public spending for best-that is, people at all income levels pay the same health is hospital-oriented and thus benefits the percentage of their income in taxes, so that the poor pay as rich disproportionately. large a percentage as do the rich. 24 Policy Reforms Four policies to help address the problems of na- countries rectify the big investment mistakes-in- tional health systems are discussed in this chapter. vesting too much in urban hospitals or in the The policies share two characteristics: they shift wrong training facility. Nor are all aspects of these some of the burden of financing health care from policies easy to implement: user charges must be the 'public sector to the beneficiaries (households), designed to protect the poor; insurance programs and they shift some decisionmaking from central are difficult to run in rural areas; decentralization planning agencies to those in closer touch with of the health system may be resisted by other parts local conditions and client needs. The policies are of government. described in broad terms-their specific applica- Policy changes of the types proposed are, how- tion will be different in different country situa- ever, already under way in many countries in at tions. Because they are closely related and mutu- least partial response to the sector's problems. ally reinforcing, the policies constitute a package. Many of the details of such poliicies must be But a country may wish to adopt only some of designed specifically for each country, and their them or to move more quickly in some areas than effects can be fully evaluated and specific designs in others. In the long run, however, all four merit altered only in accordance with the experience of consideration. each country. As argued below, any substantial The four policies are: improvement in the effectiveness and fairness of national health systems is difficult to envision * Charging users of publicly provided health ser- without change in policies along the lines vices, especially for the types of curative care proposed. that benefit solely individuals and their families X Encouraging risk-coverage programs Charging Users of Government Health * Strengthening nongovernment provision of Facilities health services for which households are willing to pay Government health facilities in developing coun- * Decentralizing the public health system. tries tend to charge no fees or very low ones for services, drugs, and other supplies. An outpatient These policies alone will not rectify all health sec- visit for an adult in Botswana, Burundi, Lesotho, tor problems. They will not immediately help Pakistan, the Philippines, or Rwanda costs less 25 than one-third of the average daily agricultural Third, even modest charges to users are likely to wage. In Indonesia the cost is about half the daily make delivery of government health services more wage. In Burkina Faso, Malawi, Mali, and efficient. Consumers will be more sensible in their Zimbabwe the visit is free. How would increases demand for services. A system of fees to reflect the in charges to users-even rnodest increases-help relative costs of the services will charge more for solve typical health sector problems? hospital than for clinic visits and will therefore First, higher charges at government health facili- encourage the proper use of referral systems. A ties would generate more revenue. In the long run, small charge for a visit may help discourage pa- more revenue would allow currently underfunded tients from seeking the type of service they do not but cost-effective basic health services to expand really need-say, hospital care by a doctor for a and thus help governments redress the allocation minor ailment that could be handled at a clinic by problem. In the short run, revenues from charges a paramedic or at home (although time and travel can be used to cover a substantial portion of the costs will probably do more than any small fee to operating costs of current programs, especially discourage the frivolous use of services). Different programs of simple curative care. In Colombia and charges for different types of service can also signal Indonesia fees cover more than 15 percent of the to consumers the importance of certain kinds of operating costs of the system as a whole. Health care; for example, the same health center could projects in India, Indonesia, Mexico, Sierra Leone, charge little or nothing for prenatal care and a and Zaire cover 20 percent or more of recurrent higher fee for regular outpatient services. Fees also costs with fees; a project in Cameroon covers 95 encourage efficiency on the supply side. Wasteful percent of its costs with fees. Mission facilities in overprescription and multiple prescriptions are se- Africa cover as much as 70 percent of their costs rious problems in developing countries. In public with fees. These examples suggest the likelihood facilities health providers will be less inclined to that in many settings, even relatively poor ones, overprescribe if they know patients must pay for governments could recover 15 to 20 percent of drugs. Pilferage and spoilage of drugs and other operating costs. On the one hand, this is not much. supplies are also likely to decline if the providers of On the other, it is a substantial part of nonsalary these goods charge for them and are accountable costs-which tend to be underfunded. for the payments collected. Providers are likely to Second, higher charges could improve access of be more responsive to the concerns and needs of the poor to health services. It appears that free clients. The use of fees to fund some costs of health care would make ii. easier for the poor to health services will link revenue to performance "afford" services. But appearances are deceptive. and give staff an incentive to provide good care. If As discussed in chapter 1, because 60 to 80 percent clients are not attracted to a facility, a problem will of public funds are absorbed by urban, hospital- be obvious. In contrast, when few patients use free based care, it is often the middle class and the rich, services or services are used only because they are not the poor, who benefit most from free services. free, there is no signal of a problem to higher Although the pattern of subsidizing urban hospital management. But, when the institution of fees at services may help the urban poor, it can leave the public facilities in part of N geria led to a sudden rural poor underserved. Even if the free services drop in utilization, the aubh ies were able to were available in every area, so that the rich and recognize the serious problems in the quality of poor appeared to have equal access, this would not service. be the case. Because a consequence of greater wealth is a greater ability to afford the costs of Should All Services Have Fees High travel and time to obtain care, the rich inevitably Enough to Cover Costs? enjoy more of the subsidized free health care than do the poor. The imposition of fees makes it possi- Full cost recovery is not appropriate for all health ble for governments to generate revenue to extend services. The textbook rule is that, given certain appropriate services to the underserved. The necessary conditions, the price charged for a good charging of appropriate fees to the rich also or service should equal the additional (or marginal) removes much of the unfair subsidy inherent in cost of providing it-that is, the cost of supplying free care. the last unit. This pricing rule in most cases ensures 26 that prices will cover costs and that there will be an Fourth, lack of information does not necessarily efficient allocation of resources throughout the justify zero prices even for services about which economy. But the necessary conditions are not ful- consumers are uninformed. A modest charge that filled for every kind of health service. Where they is lower than the marginal cost may in fact be a are not, exceptions to the price rule are appropri- proper way to create incentives for efficient con- ate. (In some cases it even makes sense to charge sumption and delivery of services. For example, users nothing or to offer them incentives or subsi- charging for drugs may be the best way to make dies for using the service.) What are the conditions, the distribution network responsive to consumer and when are exceptions justified? demands in rural areas, in terms of supplying both the quantity and type of medicine needed. A lack EXTERNALITIES. When the benefits to society of of information does not justify wholesale aban- an individual's use of a service exceed the benefits donment of marginal cost pricing policies. In fact, to the individual, individuals will not purchase it suggests that information or health education enough of the service, from society's point of view, programs should be subsidized, and perhaps ac- if they must pay the full cost. Immunization against companied by subsidized health services, as part of contagious disease has such a positive externality. a marketing strategy. But most curative hospital care does not; all the benefits of a mended broken bone are captured by THE FREE-RIDER PROBLEM. The benefits of cer- the patient. tain health care services-such as disease control and monitoring programs-cannot be provided INCOMPLETE INFORMATION. If people do not only to the individuals willing to pay and withheld know enough about their own or their family's from others in the same area. TD kill flies, snails, health needs or about what health care can do for and mosquitos which carry parasitic diseases or to them, they are likely to purchase more or less than monitor epidemics, entire regio ns must be blan- they would if they had complete information. If keted. It is simply impractical to charge since no mothers do not know that infants with diarrhea provider-client transaction takes place. For most need liquids, they will not purchase oral rehydra- clinic services, however, there is no free-rider tion solution. Prenatal health care, well-baby care, problem. and family planning are other examples of services that have benefits which may not be fully known FAILURE IN INSURANCE AND ODTHER MARKETS. to all consumers. Without an insurance market individuals are un- A low or zero price is one way to encourage use able to use some kinds of health services, even of a new and valuable but not fully understood when they perceive the benefits of doing so and service. But four points must be made about this would be willing to pay the costs through insur- argument for low fees. First, the argument seldom ance premiums. Formal risk-sharing schemes to justifies subsidies that are not fully complemented cover curative health care are rare in rural areas by education and information programs. Second, of developing countries. In Africa and South Asia the argument may justify subsidies for a time, but insurance is not common even in urban areas, not indefinitely. At some point, as consumers be- except for employees of governments and large come aware of the private benefits of such ser- enterprises. vices, they will be willing to pay an amount that Lack of an insurance market does make it diffi- permits full cost recovery. (Much that consumers cult to charge the full costs of expensive hospital will eventually learn relates to preventive care, care. But it does not rule out charging small which is relatively cheap to provide, however, and amounts that at least deter frivolous use and raise the costs of collecting small fees could even ex- some revenue. ceed the amounts collected.) Third, as with the extemalities argument, the information argument THE EQUITY ARGUMENT AND ME`RIT GOODS. The does not justify subsidies for all types of health exceptions discussed above all argue against full care. The problem of incomplete information ap- marginal cost pricing on the grounds that it would plies much less to curative services because most not lead to efficiency-to the best allocation of people who are ill know they need health care. resources. There is a separate argument that it 27 would not lead to equity either. Some basic ser- only a portion-say, one-third-of the costs of vices, if priced at marginal cost, might not be pur- such services, they could recover as much as one- chased even by well-informed consumers if they fifth of the health system's total cost. do not have sufficient income. 'Governments may Until insurance is widely available, however, want to guarantee some minimal consumption of anything more than nominal daily charges for hos- goods and services that meet basic needs (what pital and clinic stays may be impractical and un- economists refer to as merit goods), or they may duly burden the unlucky sick. What kinds of fees redistribute income in a politically acceptable are practical in the near future and already in use in manner, by taxing the rich to provide basic services some countries? to the poor. This equity consideration argues particularly for * Hospital charges for private patients. Publicly subsidies to services such as rural health posts that run hospitals are often accessible to private phy- primarily serve the poor. In general, these have not sicians and private patients. In Botswana, the absorbed large proportions of public health funds. Gambia, and Zimbabwe private patients are charged for private rooms; in Botswana the gov- There are, in short, good reasons for charging enmient is considering raising private fees above less than full costs in the provision of public costs in order to subsidize public patients. In health. Three points, however, should be borne in public hospitals in Indonesia fees collected from mind: the more affluent who elect semiprivate care are used to subsidize general ward patients; the * Because a low or zero price is justified for some cross-subsidization is large enough to underwrite health services, it is not justified for all. free accommodation for indigents. Private physi- * Even when some subsidy is justified, a large sub- cians can also be charged for their use of public sidy (large enough to keep the user price at zero) hospital facilities, and patients using private phy- may not be. sicians can be assigned, without choice, to a pri- * Even when some subsidy is justified for some vate ward and charged more than other patients. period of time, it may not be justified * Hospital charges payable directly by insurance indefinitely. providers for insured patients. If participation in some sort of insurance scheme is compulsory for certain groups (such as employees in the civil What System of Charges Is Practical? service and formal sector) the full costs of those Experience in a few countries provides a practical patients can be covered. To ease the administra- guide to determining which services should carry tive burden on hospitals, insurance providers fees and to introducing fees in a sequence that is could be billed full costs; they in turn could bill politically acceptable and administratively possi- their clients any applicable deductible or copay- ble. Whatever system is selected, it should be flexi- ment costs. ble enough to allow increases and decreases in fees * Drug charges. Instituting charges for drugs to adjust to changes in utilization patterns and the should be high on the list of possible cost-recov- effects of inflation. Failure to raise fees with infla- ery steps. There is already widespread accep- tion has reduced revenues in many countries in the tance of the idea of purchasing drugs; a private past decade. market exists in virtually every country, even The theory outlined above indicates that fees those in which drugs are obtained free through for curative care should be implemented first and the public health system. Where the procure- be highest. Most curative care is for inpatients in ment and distribution of drugs in the public sec- hospitals and clinics, although some is for hospital tor is inefficient, the ability to charge for drugs outpatients. Except when the poor are exempt provides a useful management incentive. In a re- from payment for equity reasons, most outpatient volving fund where charges are an important and inpatient curative care in public facilities source of revenue to replenish drug supplies, ac- should be provided only for a fee. Such curative countability of managers and distributors can be services often account for 60 percent of total pub- built into the system and collection costs should lic sector spending on health. Even if fees covered be low (see box 5). 28 Box 5. Financing Village Health Workers and a Revolving Fund for Drugs in the G-ambia Many primary health care programs have success- traditional. These payments constitute the commu- fully incorporated elements of self-finance, usually nity contribution to the health program. from community support and the sale of drugs. In Drugs are financed by a revolving l und. Initially a the Gambia, village-level services are provided by a three-month supply of drugs is donated to the vil- village health worker, who is trained to administer lage by the central government. A smnall flat charge simple curative services and preventive care, and by of 0.06 dalasis (less than 5 U.S. cents) per tablet or a traditional birth attendant, who is trained in ma- teaspoon is charged by the health worker. Reve- ternity care. Both workers are chosen by a village nues are turned over to the development council, development committee. Following a short training which pays to replenish the stock of drugs. Orders period, they work in their villages under the super- for pharmaceuticals are written by the community vision of a community health nurse who once a nurse and picked up by the village health workers at week visits the four or five villages for which he or the Ministry of Health's regional store. The central she is responsible. government subsidizes these purchases only to the The village development committee pays the extent of absorbing transport and handling costs to health workers a salary or the villagers may pay the regional store. Village pharmaceutical stocks them in kind by contributing their labor in the and accounts are physically separatedl from the rest health workers' fields. The birth attendant is com- of the health system to help insulate village health pensated for services directly by the patients, as is workers from shortages. Bypass fees. In countries that have a referral sys- and pediatric care) could give patients more tem higher fees should be charged for simple incentive to keep their card and bring it on all types of care obtained from referral facilities. visits. Under such a system, if a person bypasses a lower level of service where basic care is available and goes directly to a higher level he will have to pay How High Should Charges Be? more for that care. The higher fee reflects the higher cost of providing low-level services at For most types of curative service for which some high-level facilities and provides an incentive for charge is appropriate, the amount, or price, patients to enter the referral system at the appro- charged should generally equal thle cost of provid- priate level. Eventually (as soon as practicable) ing that service. A typical fee schedule has lower higher-level facilities should cease to provide charges at the primary level of service-say, at low-level sefcices local dispensaries, where personnel and other costs are generally low-and successively higher fees at * Modest inpatient charges. There are many pos- higher levels. (Such a schedule also allows for the sibilities for instituting fees for inpatient care: a use of bypass fees.) The true cost of many health fixed fee at entrance, regardless of length of stay; services is difficult to calculate, however. For ex- a charge for linen, meals, and other replenish- ample, because most services are provided jointly ables, with the total cost to the patient rising with other services, the time devoted to a particu- with the length of stay; specific charges for iden- lar service by doctors, nurses, and other personnel tifiable goods, including drugs and laboratory is not usually clear. services; and a comprehensive schedule of fees For hospital, clinic, and othercurative services, for different services. A simple structure with governments will usually want to implement a low administrative costs may yield higher net pricing scheme by starting with low fees that are revenue than a complex schedule that is difficult clearly affordable to the bulk of the population- to enforce. for example, fees could be set so as not to exceed 1 * Outpatient fees. A few countries charge a fee for percent of income for most families for an average an initial visit. A small charge for a registration of two clinic visits per person a year. (Table S card or other record of visits (such as for prenatal provides some actual examples.) When low fees 29 Table 5. Typical Charges at Public Health Facilities, Selected Countries Maternal Outpatient and child Country consulting Drugs Inpatient fees Immunizations health Delivery Botswana, 1983 $0.45 Free $0.45 $0.55 Burkina Faso, 1982 Free Free Minor $0.12 per registration Burundi, 1983 $0.22 Free $2.20 per week Free Cameroon, 1983 Free Free $2.00 registration fee China, 1982 Registration fee 15-30 percent Charge for Service fee Free above room, food, wholesale treatment Ecuador, 1985 Free Charge Free Ethiopia, 1984 $0.25-0.50 Cost price of $1.09-14.53 drugs Ghana, 1980 Charge Charge Indonesia, 1983 $0.36 Free Charge for room and treatment Jamaica, 1985 $0.90 $0.90 $5.60 Free $9.30 Lesotho, 1980 $1.20 Free $0.60 per day and treatment Malawi, 1981 Free Free Free Free Free $1-3 Mali, 1982 Free Free Morocco, 1985 Free Free Free Free Free Free Pakistan, 1982 Free (two Charge (two provirlces) provinces) $0.08 (two provinces) Philippines, 1982 Free Free Charge Rwanda, 1977 Charge Charge Togo, 1979 $0.50-0.70 per $1-2 day and treatment Uganda, 1985 Free Free Free Free Free Free Zimbabwe, 1983 Free Free Free Free Free Note: When drugs are included in the outpatient consultation fee, they are recorded as free. Although not noted, most countries have a special fee schedule for private inpatients who desire superior accommodations. All charges are in U.S. dollars of the year indicated (fiscal year for Pakistan). Sources: Ainsworth (1983b), and World Bank data. are already in place, a similar rule can govern in- cator for setting fees is the fee charged for the creases in fees. Experience is then likely to indicate same service at private facilities, including those whether prices are too low or too high. They are run by missions. In most developing countries, pri- probably too high if use drops by more than, say, vate providers of health care charge higher (often 20 percent (and stays low for more than a few much higher) fees than does the public sector. In months) or certain groups cut back on their use. Kenya the average charge for a day of inpatient For such services as hospital surgery and intensive care at six missionary hospitals is more than twice care, sudden fee increases to cover full costs would that at govemment hospitals. In Thailand the fee overburden many households. Only as opportuni- private practitioners charge for an outpatient con- ties to participate in insurance schemes expand sultation is typically S0 percent higher than at pub- should these fees be raised substantially. But ex- lic clinics, and in the Philippines it can be twenty- tension of insurance to cover the bulk of the popu- eight times as high. In Peru the price of medicine at lation will take time-in some cases, ten years or retailers is sometimes more than three times the more. official price at government facilities (but unoffi- When a direct comparison between public and cial side payments are common in public sector nongovernment facilities is possible, a useful indi- dispensaries and medicines are often out of stock). 30 In parts of Java a visit to a traditional practitioner derived from their near monopoly over available may cost a person ten times as much as a visit to a drugs. public clinic. Existing private spending suggests that consum- ers would be able to pay for publicly provided health services. But would they be willing to pay, Can Most Households Afford Higher Charges? or would they simply stop using public services? The evidence from household surveys of health Households spend 2 to 5 percent of their annual care utilization is clear on this point: fees them- income on health care in many developing coun- selves are not critical in determining utilization. tries. Rural households often spend much more in Studies in Malaysia and the Philippines show that years of poor health; surveys show drug purchases proximity and quality are more important than alone take up 5 percent of income in parts of rural fees in individuals' decisions about whether to Mali, and in Indonesia and Malawi fees of tradi- seek health care and what type to use. If public tional practitioners may take up 10 percent of an- services are not very good or are too far away, even nual income. On the one hand, this is already a free services will not attract clients. In the Philip- substantial amount, and additional fees and pines the frequency of visits to private facilities and charges at public facilities might be difficult to traditional practitioners was not affected by rela- bear. On the other hand, that level of spending tive fees, despite the fact that the nongovernment indicates an ability and willingness to pay for tradi- clinics and hospitals had average charges twenty- tional curative care and perhaps for some ineffec- eight times higher than those at government clinics tual drugs; the public sector could tap this source and hospitals. Even demand for preventive care for to finance modem curIttive care and effective mothers and infants was found to be not particu- drugs and free public funds for preventive larly sensitive to the amount of the fee. programs. Studies to date, however, have not examined in Most households could probably afford modest detail the differences between the nonpoor and fees at public facilities. At a fee of 25 cents for an the poor in their responses to prices. Even though outpatient visit, for example, a four-person house- there appears to be very little, if any, reduction in hold with an income of only $200 annually would overall health care as a result of moderate price spend just 1 percent of household income to reach increases in many developing countries, it is plausi- the norm established by the World Health Organi- ble to assume that use by the very poor is reduced zation of two visits per person per year. A house- more than average. For that reason fee systems hold with only half as much income ($100) would must be designed to protect the poor. require 2 percent.1 Charges to cover the cost of drugs in public facilities might actually reduce What about the Poor? overall household spending on drugs: if the money collected were spent to make drugs more available How can the poor be safeguarded from unafford- in public facilities, clients would be spared the able costs? higher costs and sometimes wasteful overprescrib- Ironically, in some cases the poor may be better ing of private pharmacists. The availability of protected in the private sector. A sliding scale of drugs in public facilities would provide effective fees, with a low charge or even none for the poor, competition for the private pharmacies and even- is common on an informal basis at missions and at tually drive down the high profits that are often the village level, where any household's ability to pay is widely known. Traditional practitioners also 1. The question of affordability arises in many countries charge different amounts depending on the pa- when user charges are simultaneously being introduced for other public services such as education, water supply, and tient's income. But in a formal public system a irrigation. This is not an issue which can be treated ade- sliding scale would be costly to administer, and quately here. However, it should be noted that user experience with this approach is lacking. charges for health would be small compared with new Employer and community insurance schemes, charges for water, electricity, or even education; and user . b charges at public facilities might not raise total household discussed below, can help, but the very poor are spending but would simply divert spending away from less those least likely to be included in such schemes. effective traditional care and nontherapeutic drugs. Some form of differential pricing is thus necessary 31 in public systems so that disadvantaged groups, * Inequity. Like an indirect tax, routine charges households, or individuals can be charged smaller for basic services place a higher relative burden fees. on the poor. One practical approach is to base fees on the user's place of residence. For instance, people in * Low revenues. The proportion of total costs that predominantly poor rural areas would pay little or can be recovered is not likely to be high. nothing while those in urban districts would pay . A s more. (Although some urban residents may travel *Inefficiency. A structure consisting only of low to free rural health posts, travel and time costs and fees does nothing to discourage excess demand perceptions of better care in urban areas are likely for high-cost hospital care; some of the potential to obviate this problem.) Combined with higher efficiency gains of fees are forfeited. charges for hospital care, this approach would not Fees that would cover the full costs of major only protect the poor, but would also improve the hospital and other inpatient treatment do not pre- targeting of existing government health spending. sent these problems. But inpatient care is expen- Higher charges in urban areas may even be justi- sive. Thus full-cost fees cannot be introduced until fied aside from concern for the poor-since urban large parts of the population participate in some services are usually better staffed and equipped. form of risk-sharing. Under health insurance the Another option is to issue vouchers to the poor, insurer reimburses the patients for their medical based on certification of poor households by local commnityleaders, a practice that appears to expenses; inprepayment systems, includinghealth community leaders, a practice that appears to maintenance organizations (HMOs), all participants work well in Ethiopia. The poor can also be pro- regularly pay a fixed amount and in turn receive tected by allowing staff discretion in collecting fll a charges (although this is difficult in the govern- u care. ment sector) or by using a means test, which often already exists for other programs in middle-in- The Situation Today come countries. A few countries, including Ja- maica, Indonesia, and Thailand, are experimenting Such programs, however, currently cover only a with more or less formal income tests that rely small proportion of low-income households in either on the patients' own word or on documen- most developing countries, and especially in Africa tation from the patient's village headman or other and South Asia. Outside of China, no more than 15 community leader. In Thailand a means test estab- percent of the people in developing countries take lishes eligibility for free membership in a rural risk- part in any form of risk-coverage scheme. Adding sharing scheme that charges those who can afford China boosts the figure to between 15 and 25 to join (see box 7 below). Some of the previous percent because of China's large population and suggestions-such as higher fees for private and the fact that its urban risk-coverage programs semiprivate accommodation in public hospitals cover the majority of urban residents and some in and free or low-cost care at higher-level facilities rural areas (although rural coverage has declined for patients referred from a lower level-also im- with the recent privatization of production). In a plicitly protect the poor. sense, of course, risk-coverage plans have existed ever since the extended family has existed; in many developing countries the family is still the most Providing Insurance or Other Risk Coverage important mechanism for sharing risk. Perhaps the most important form of health in- If cost recovery measures are initially confined to surance is government-sponsored social insurance small bypass and outpatient fees for regularly used programs, most common in the middle-income services and to payments for frequently used countries of Latin America. In Brazil and Chile pharmaceuticals (such as aspirin and chloroquine), social insurance plans provide health coverage for the issue of insurance can safely be ignored. In the more than 85 percent of the population. Govern- short run this may be a reasonable strategy, espe- ment-sponsored social insurance is often compul- cially for low-income countries. But in the long sory for public employees. In India such a system run there will be problems: serves about 5 percent of the total population and 32 covers its own costs. Thus at least part of the plans (such as a village fund for purchasing population pays directly for its health care. In In- medicines or a broader self-supporting network of donesia there is some evidence that the insured in a local clinics), and programs sponsored by coopera- compulsory public employee insurance program tives such as a dairy farmers' asscciation in India or provide a slight subsidy to the public health a coffee growers' group in Colombia. Prepayment system. plans include health maintenance organizations Employer plans are a second form of coverage. and so-called preferred provider plans (box 6). But They either provide care directly through em- prepayment and community plans remain both ployer-owned, on-site health facilities or rely on few in number and small in scope-they probably contracts with outside providers or health mainte- reach less than half a percent of those not covered nance organizations. Indian employers that spon- by social insurance or an employer plan. sor group policies can turn to the private market Fourth, there is private insurance to cover fees. or, under certain conditions, join the public em- In countries where most health c:are is provided by ployees' government-run scheme. In Chile individ- the public sector at low or zero cost to users, the uals or employers can form health insurance plans market for private insurance is limited to those to which employees make payments that would who wish to use private practitioners. In otherwise go into the public insurance system. Ag- Zimbabwe the majority of holders of private insur- ricultural estates, such as banana plantations in ance are high-income Europeans; large tax rebates Honduras, rubber forests in Liberia and Zaire, and on their insurance premiums mean the public sys- tea estates in India, typically offer direct care, tem is actually subsidizing them. In Jamaica private maintaining their own medical staffs and health insurance has become increasingly popular for facilities in the rural locations where their employ- those who desire better service than the public ees live and work. sector provides, and in Brazil private insurance is A third category of risk-sharing is prepayment increasingly available. plans: individuals form or join a group to which Many countries are already taking steps to ex- they make payments in return for the receipt of tend risk coverage. Indonesia has plans to broaden needed health care. Within this category fall per- the government program to cover all employees of sonal prepayment plans, community-sponsored private firms. In Thailand an innovative health Box 6. Prepaid Health Care Organizations There is a variety of ways to organize private groups choice of providers, competition arnong providers for the provision of prepaid health care. In each of prevents the poor quality of care, which would them all members pay a participation fee or prepay- drive away clients. ment. This spreads the risk of health care costs over Prepayment plans may hire their own staff to the entire group. Some schemes also charge small provide services or use private doctors who partici- additional fees for care (copayments) to discourage pate as "preferred providers." The so-called health overuse, but the general pattern is that one payment maintenance organizations (HMOs) provide care di- entitles the participant to all health services and rectly with salaried employees in facilities owned care needed over a given period. The premiums by the HMOs. The preferred provider organizations collected provide the funds for paying staff and (PPOs) provide care indirectly by allowing partici- buying all supplies and equipment. pants to choose among participating professionals. The organizations have incentives to provide These professionals may be paid either a fee for care in a cost-effective manner because adding ser- service or a fixed amount per participant per year vices or providing more expensive care does not (capitation). produce added revenues. There are also incentives Community and cooperative prepayment pro- to provide cost-effective preventive care to the par- grams are generally organized on the basis of either ticipants so as to reduce illness and thus lower the direct provision (HMO) or indirect provision (PPo). costs of curative care. So long as participants have a 33 card system is providing risk coverage for some costs of organizing risk-sharing programs, moni- rural people (box 7). In Latin America the percent- toring service, making payments, and so on may be age of the population covered by social insurance very large in countries where communications are rose from 21 percent in 1960 to 40 percent in poor and literacy is low. 1980. Risk-coverage programs that did not exist Under this second circumstance, what can gov- twenty-five years ago now serve millions in China, ernments do to encourage viable, low-cost risk Egypt, and the Philippines. Most employer plans, sharing? Two approaches will help: making cover- other than those of the older agricultural estates, age compulsory and keeping it simple. have either come into being or been rapidly en- larged in recent years, as have all but a handful of the community and cooperative schemes now MAKING COVERAGE COMPULSORY. An effective operating. approach is for governments to make health insur- But change is slow. In most countries govern- ance compulsory, at least for employees in the ments that are introducing cost recovery in the formal salaried sector.2 (As explained below, the health sector face the question of what to do to government itself need not be the provider of in- encourage or provide systems of risk sharing that surance, although it may be.) Making coverage will cover much larger proportions of the popula- compulsory has several attractive features. First, tion than at present and will do so at a reasonable the more participants there are, the more revenue administrative cost. is collected. A higher proportion of the costs of health services not covered by fees will be recov- How Can Governments Encourage ered via the insurance system. Second, a larger Risk Sharing? number of enrollees spreads risks more widely and makes the system more viable and more fair (see In any risk-sharing scheme, small amounts of reve- box 8). Other people need not be burdened with nue are collected from each participant (or from caring for those who, if given the choice, would taxpayers) when the risk-sharing is accomplished not protect themselves against the risk of illness. through a national-service-type system so that the Third, compulsory insurance creates a large mar- large cost of unexpected events can be shared. The ket that will encourage private suppliers to enter only economic cost of a risk-coverage scheme is and introduce a range of alternative risk-coverage the administrative cost. For society at large, risk plans to attract customers. Under such a system the sharing makes sense under certain conditions: government could collect compulsory premiums when the event insured against is largely unpredict- but allow consumers to subscribe to any one of a able and its likelihood cannot be significantly re- number of public or private risk-sharing systems. duced by the behavior of the individual; when the Fourth, but not least in importance, with compul- cost of the event's occurrence is large; and when sory coverage the problem of adverse selection- there is a consensus that it is necessary to alleviate the tendency of the healthy to avoid joining or the harm caused. In health, such is the case. The paying a premium-is effectively avoided. When probability of the need for medical care of the adverse selection is operating, those who remain in unpredictable and nonvoluntary type is generally the plans are usually the less wealthy, who also low for any one person, but the cost to those suffer more illness and who will face larger and stricken may be very large. larger premiums as the average health of the mem- Thus there ought to be a viable market for bers declines. Some people would suggest, how- health coverage. Why is such privately provided ever, that since some health problems are due at coverage so limited in developing countries? There least in part to smoking, drinking, lack of exercise, are at least two reasons. First, as long as services in or poor dietary choices, the careful, diligent, and the government sector are free (or almost free), only those willing to pay extra to use private health 2. Financing health insurance through a labor tax can care will be interested in risk coverage. Of course, introduce a distortion in the labor market. If the wage if charges for government services are increased, costs are passed on to consumers, this method of financing could be simply a new form of regressive sales tax. This is this problem will disappear. Second, and more an important reason for keeping compulsory coverage sim- problematic in the long run, the administrative ple and limited, as argued below. 34 Box 7. Rural Risk Coverage: Thailand's Health Card System Risk coverage is difficult to provide in rural areas facility. With the referral slip a cardholder is enti- because poor communication, scattered popula- tled to prompt attention at the referral hospital via tion, and low money incomes restrict the market a "green channel" or "expressway," 'which reduces for private insurance and prepaid plans. Collecting waiting time and thus increases the incentive to premiums and making reimbursements are difficult purchase a health card. whether the risk-sharing plan is privately or pub- In principle the health cards should encourage licly run. Record-keeping for catastrophic coverage the use of preventive health care (which is free to a (the amount spent by an individual or household cardholder), increase the use of local health centers per illness or per time period) or for billing when (which had in the past often been bypassed), reduce deductibles or copayments are used is simply im- waiting time and congestion for those referred to practical in many rural facilities. hospitals, raise capital to finance better and more In 1983 the Ministry of Public Health in Thai- health services, and allow households to protect land initiated a health card system in rural areas. themselves against catastrophic health costs. Households are sold a card entitling the bearer to An evaluative survey carried out several months treatment for a specified number of times (usually after the program started found "uniform enthusi- eight) during the period of the card's validity. The asm" for the system among cardholders. In the five cards are sold at a modest price so that most house- villages covered by the system from 55 to 100 per- holds can afford them. They entitle the purchaser cent of the villagers purchased cards. The cards, not only to treatment of illness, but also to unlim- which are priced at less than the average household ited visits for preventive services such as maternal health expenditure for mostly private care, have and child health care and immunizations. The sys- captured new revenues for the public sector. Al- tem is set up so that cardholders must enter the though the program is still too new to be declared a health system at a health center or drug dispensary. success, there is room for optimism that card sys- Entry to a district or provincial hospital for higher- tems can help improve rural health care in Thailand level care requires a referral from the lower-level and other developing countries. strong-willed are paying for the health costs of the chased, or if it wishes to subsidize them for the lazy, careless, and self-indulgent. In practical poor, then it is reasonable to provide them at a low terms, perhaps little can be done about this unfair- fee or even free of charge. But it is inefficient to ness, other than to make sure that the plan covers a collect from all members of the coverage plan to group large and diverse enough to spread the risks pay for such health care. related to poor habits and that deductibles and Only under prepayment plans does it make sense copayments reduce the attractiveness of the use of to cover low-cost services. In prepayment systems, health care services. health personnel have incentives to use supplies, equipment, and time wisely, and customers cannot successfully ask for more expensive services than KEEPING COVERAGE SIMPLE. Compulsory insur- are needed. At the same time, competition among ance plans (run or subsidized by the government) plans gives providers an incentive to be sure par- should, where politically possible, avoid covering ticipants receive adequate care. small predictable costs, which tend to be covered, for example, under the social insurance schemes in Latin America. It makes little sense to collect from Avoiding Cost Escalation everyone the amount needed to pay for routine checkups and other predictably needed services In some developed countries and in developing and then to return the same amounts to each par- countries with large social insurance schemes, run- ticipant as the services are provided. If society con- away costs in the health sector as a whole have siders checkups necessary but unlikely to be pur- become a problem. These are less the result of 35 Box 8. Social Security Financing of Health Care in Latin America Social insurance has been used to finance health tries develop, however, and more workers are care in Latin America for more than sixty years. brought into the modem wage sector, more are Sixteen Latin American countries have social insur- covered, and as incomes rise countries can afford ance systems that provide health care to some por- broader coverage. In fact, throughout Latin tion of the population. America, coverage has been increasing and is far Social insurance systems are thought to contrib- more widespread in the higher-middle-income than ute to the development of dual health systems-a lower-middle-income countries (see figure). ministry of health system for indigents and a social The Brazilian system has expanded rapidly since security system for comparatively wealthy workers the 1960s, extending coverage from 23 percent of in the modem sector. They are said to create an the economically active population in 1963 to over environment in which expensive, high-technology 85 percent by 1984. Coverage of rural areas and curative services are overemphasized to the neglect indigents has been paid for by federal subsidies, of less sophisticated types of care and preventive acreage taxes, taxes on agricultural sales, and taxes services. They are widely believed to contribute to on rural employers. Any Brazilian needing emer- the concentration of facilities and personnel in ur- gency care will be treated in social security facili- ban areas and to compete with public systems for ties. In Mexico the social security system covered scarce personnel and equipment. about 35 percent of the population in 1978. Be- The evidence on these points, however, is not tween 1978 and 1980 federal subsidies were used to clear-cut. The dual nature of health systems in build 2,100 rural health clinics that are run by the Latin America is declining as social insurance cov- social security system. This program has brought erage expands. Generally, social insurance covers about a third of rural residents into the social secur- f only workers (and sometimes dependents) in the ity system (although they have access only to these Z wage sector, a restriction which excludes the clinics, not to hospital care). Ecuador has extended poorest occupational groups, such as farmers, agri- medical care under social insurance to about 10 g cultural workers, and domestic servants. As coun- percent of rural residents. Coverage and Share of Government Expenditure of Social Insurance Medical Plans, Latin America, 1977 Coverage (percent) Share of government expenditure Lower-middle Higher-middle income income 71 Lower-middle Higher-middle income income 7.99 8.32 7.02 Social Public Social Public insurance health insurance health Note: Percentages are averages, weighted by population, for the countries listed in the table. Lower-middle income refers to average per capita income of $410-$840 (range of the nine countries included). Higher-middle income refers to average per capita income of $1120-$2660 (range of the seven countries included). 36 Box 8 (continued) In most social security systems benefits are rela- inequitable insofar as the poor receive little tively equitably distributed. Because workers usu- coverage. ally pay a fixed percentage of wages to the system, The effect of social insurance on health care is contributions are proportional to wage income (at undoubtedly to expand the hospital-based system. least within a certain range of earnings). Medical However, people who are covered by social secur- benefits are generally not closely related to income, ity systems generally also have a better record of so all members are eligible for the same health immunizations, attended deliveries, and prenatal services despite their unequal contributions. In sys- care than do people covered only by publicly pro- tems with broad coverage, this arrangement can vided health systems. create desirable redistributions of resources from Whether social insurance systems contribute to the more affluent to the poor. In Brazil in 1981, for the centralization of health resources is equally example, the social security system collected 42 questionable. Care has been extended to rural areas percent of its revenues in the state of Sao Paulo (the through social insurance in Brazil, Ecuador, and richest state) but made only 24 percent of its health Mexico. Most hospital services paid for by social expenditures there. security in Brazil are provided under contract by the Social security systems do spend a large amount private sector. Public and philanthropic institutions per beneficiary on health care, probably more than provide services to social security beneficiaries who do the corresponding public health systems, espe- live long distances from social security facilities. cially in the lower-middle-income countries. The In summary, inequities created by social insur- social security systems of the seven higher-middle- ance systems in Latin America appeaLr to be mainly income Latin American countries spent an average a matter of incomplete coverage. Within a given of $44 per beneficiary in 1977, while the lower- fund (except in Chile) health care benefits are the middle-income countries spent an average of $53 same for rich or poor participants. Moreover, in per capita. these countries social insurance has proven its abil- But the systems are usually self-financing, funded ity to generate revenue for health. primarily by payroll taxes. There were no state sub- Several Latin American countries have had prob- sidies in Argentina, Bolivia, the Dominican Repub- lems with overconsumption of hea]lth services (as lic, or El Salvador in 1977. In Costa Rica and Pan- have developed countries). As a result, there is wide ama state subsidies were less than 4 percent of experimentation with different health delivery sys- revenues, in Uruguay 12 percent, and in Venezuela tems, coverage plans, and prepayment and copay- 15 percent. In Colombia the state subsidy is rather ment policies. Brazil, for example, has introduced a high-26 percent of total revenues, but this 26 per- diagnostically related group (DRG) system with rea- cent includes the government's contribution for sonable success at cost containment. The need for govemment employees. Thus the systems are fair in reforms to reduce cost inflation should not, how- the sense that the benefits are paid for by those who ever, be allowed to overshadow the positive aspects receive them. The results can of course be judged of the systems. Box Table 8. Overview of Medical Care under Social Insurance in Sixteen Latin American Countries, 1977 Per capita Health care Per capita share of total cost Of Health care government medical care shrofGPepnius Percentage of under social share of GDP expenditures population insurance Social Public Social Public Country covered (U.S. dollars) insurance health insurance health Higher-middle-income a Mexico 56 n.a. n.a. n.a. n.a. n.a. Panama 47 74 3.1 4.3 10.3 14.5 Costa Rica 82 51 3.8 0.6 19.4 3.2 Brazil 83 23 1.4 0.7 7.4 8.1 Uruguay S0 14 0.5 0.9 2.2 2.0 Argentina 80 n.a. n.a. n.a. n.a. n.a. Venezuela 30 59 0.7 2.2 2.3 7.3 Average 71 44.2 8.3 7.0 (Box continues on following page.) - 37 Box Table 8 (continued) Per capita Healtb care cost of share of total medical care Health care government Percentage of under social share of GDP expenditures population insurance Social Public Social Public Country covered (U.S. dollars) insurance bealth insurance health Lower-middle-income b Honduras 7 48 0.8 1.6 3.8 8.5 El Salvador 5 52 0.6 1.4 3.9 9.8 Bolivia 13 52 1.3 1.0 10.4 8.0 Colombia 10 49 0.9 0.8 8.0 8.6 Paraguay 13 n.a. n.a. n.a. n.a. n.a. Ecuador 5 89 0.7 1.3 5.0 9.9 Guatemala 14 25 0.5 0.8 5.0 7.6 Dominican Republic 4 73 0.4 1.2 2.6 6.5 Peru 12 36 0.8 1.4 4.3 5.9 Average 11 53 5.3 8.0 n.a. Not available. Note: Countries are listed in order of 1977 per capita income. a. Higher-middle-income: S1,120-92,660. b. Lower-middle-income: $410-$840. Source: Zschock (1986). insurance as such than of poorly designed insur- whatever is used will be paid for without argu- ance. It is possible to design an insurance plan so ment?) Accordingly, it generally makes sense even that costs will not escalate in the long run. in prepaid plans to charge at least a small fee for each visit. DEDUCTIBLES AND COPAYMENTS. Services should not be seen by users and providers as free. COMPETITION AMONG RISK-SHARING SCHEMES. If those covered by compulsory insurance receive Only effective competition will guarantee that ad- services at no cost at all they will make too much ministrative costs will be minimized and a variety use of costly services. In fee-for-jervice systems, a of options offered. Whenever possible, govern- deductible (an amount users must pay before their ments should thus avoid crowding out private in- insurance coverage begins) and a copayment (a per- surers. It may even be a good idea for governments centage of total costs above the deductible paid by to subsidize private insurers for a limited period, as the user) help prevent overuse of scarce personnel, in the Philippines. Governments can also set up a equipment, and supplies. Even small deductibles system to reinsure private insurers against large (such as 1 percent of yearly household income) and losses that occur before they have been in opera- small copayments (10 percent or so of the cost of tion long enough to build up a reserve. services received) can significantly reduce the un- If a private market is unlikely to develop, gov- necessary use of medical care by patients. In richer ernments should offer a range of options for cov- countries such as the United States, insurance firms erage. Some customers will opt for small premi- have experienced such high costs with plans that ums with large copayments (that is, payment only do not have deductibles and copayments that they for large medical expenses). By so doing they put have almost ceased to offer such coverage. Copay- themselves in a pool of customers who have incen- ments also give suppliers an incentive to avoid tives to keep expenditures (and therefore future waste. Once patients begin to view services as premiums) low, while effectively protecting them- something they must pay for, the incentives for selves against catastrophic costs. Others will find suppliers to charge reasonable prices increase. that HMO prepayment plans offer more for their (Why should a supplier husband resources if money. 38 Protecting the Poor longer forced to compete with Free services, and under risk-sharing plans that pay for treatment in What about the poor, who cannot afford even low the nongovemment sector (such as that introduced premiums and cannot afford deductibles and in Chile), private professionals and organizations copayments? The cost of premiums can be subsi- can provide some of the services covered by gov- dized through vouchers to the poor, perhaps emient or private insurance. through a health card system. In fee-based systems, The main issues for public policy are how to when catastrophic illness strikes and even small encourage the nongovernment sector and regulate charges add up to a large financial burden, pay- the health market, especially the private for-profit ments above a specified level can be forgiven. De- sector. As discussed earlier, nongovernment provi- ductibles and copayments can be reduced for the sion is likely to make sense for rnost curative ser- poor. The main practical problem with all these is vices, the full benefits of which accrue to the pa- identifying the poor-an administrative difficulty tient and for which users all over the world have everywhere since means tests are difficult to apply. demonstrated a willingness to pay. In a few coun- tries, it may even be practical to make use of the nongovernment sector for preventive care of the Using Nongovernment Resources Effectively type that benefits others than the recipient. The public health authorities might contract with pri- In chapter 1 the widespread provision of health vate providers for certain public goods, such as care in the nongovernment sector of health care in vector control and immunizations. This use of the the developing world was documented. Religious private sector (both nonprofit and for-profit) missions and other nonprofit groups, independent would require supervision and inspection by gov- physicians and pharmacists, and traditional healers emment authorities as well as public information and midwives are all active, and direct payments to campaigns to inform the people of the obligations these providers account for up to half of all health and services of the private institutions. spending in many countries. There is no "correct" size for this nongovemn- ment sector in comparison with government ser- Encouraging Nongovernment Health vices; the relative roles of the two sectors are Care Services bound to vary among countries. However, govern- ments reduce their own options for expanding ac- The barriers that restrict commurity organizations cess to health when they actively discourage and priv ate gro sfrommumti atior nongovernment suppliers or fail to seek efficient and pnvate groups from initiating, expanding, or ways to encourage them. Even the Chinese health improving health care services are varied and for- system relies heavily on private practitioners and midable. In Benin, Cameroon, CZhad, and Togo private payments (see box 9). Expansion of care other than that of the state-administered nongovemnent services, including private for- health system is discouraged. In Malawi restric- profit and nonprofit services, can reduce the ad- tions on private practice have led :o the emigration ministrative and fiscal burden on the government of indigenous doctors. Private voluntary organiza- sector and broaden consumers' options. For some tions (including churches) are often treated more types of health care, especially simple curative as a nuisance than as a partner by government care, private providers may well be more efficient authorities. Approvals for expansion are delayed, than the govemment and offer comparable or bet- access to government sources for purchasing ter services at lower unit cost.3 Competition from 3. Hard evidence is not readily available, in part because the nongovermment sector can also encourage gov- it is difficult to establish comparability, taking quality into emnment services to improve their efficiency. account. For example, a recent study comparing govem- The charging of fees and the encouragement of ment and nongovemment hospitals in Chile concluded risk-coverage systems will in themselves provide that the nongovemment hospitals were more efficient be- incentives for the further development of cause fewer days per patient were spent in these hospitals. However, whether number of days spent in the hospital nongovemnment health care. When fees are insti- per patient is a satisfactory measure of efficiency is subject tuted at public facilities, private providers are no to debate. 39 Box 9. The Chinese System of Financing Health The Chinese health system provides an important lion state enterprise employees and their depen- example of success in the effective delivery of low- dents. The two programs, introduced in 1952, cost services. Along with China's high level of liter- cover approximately 14 percent of the population, acy and food policies which help ensure adequate mostly in urban areas. Most rural residents were nutrition, China's health system has been important covered by a rural cooperative insurance system in raising life expectancy to almost seventy years, until recent economic reforms led to its collapse. well above the average for countries of comparable The great majority of rural people now have no income. insurance coverage, a situation causing large risk How is the Chinese health system financed? Con- because of the high user charges. sider how China has used each of the four ap- proaches proposed in this paper. Effective use of the private sector. 'Barefoot doc- User chargs. ThChiesedchareusrsofpub- tors," now officially called rural or village doctors, User charges. The Chinese do charge users of pub- are all effectively nongovernment, for-profit practi- lic facilities. The central government pays 100 per- tioners. They cover their own costs through cent of the salaries of the health workers in state- charges to patients for curative services and owned hospitals and health centers and 60 percent through drug sales (at a markup of 15 percent for of the salaries of workers in collectively owned Western drugss (an 5 percent fort health~~~~~~~~~~~~ cetr.Tegvmetas .rvdsvr Western drugs and 25 percent for traditonal drugs). health centers. The government also provides very They are typically well trained (one to three years) small subsidies to village doctors working in some and well trainedboveeaverageeencomes) remote areas. User charges, however, cover all and well paid (above average incomes). other costs. All drugs are sold at a 15 to 25 percent profit, and fees for services are set at a level to cover Decentralization. China has a long-standing policy all nonsalary costs not covered by the drug reve- that fees collected are used by the collecting facility nues. Hospitals typically cover 75 percent of their as it sees fit. As would be the case elsewhere, decen- operating costs through drug fees and user charges. tralization may itself bring problems. For example, a recent decision to permit hospitals to distribute Risk coverage. The Chinese system provides health profits in the form of bonuses to employees may insurance for a significant part of the population. A have contributed to an increase in drug sales (partic- state-sponsored compulsory Govemment Insur- ularly to insured patients). If additional drugs were ance Scheme covers about 20 million people, and a not actually needed, this would amount to supplier- Labor Insurance Scheme covers another 120 mil- induced demand. medicines and supplies is denied, and long-range toward unnecessary restrictions, hostility, and ne- planning is limited. Nongovernment community glect. Additional positive steps include: groups-for instance, a village or neighborhood that wants to have its own health post-still get * Helping community-based nongovernment little assistance from higher-level public agencies schemes get started by increasing public funding in many countries during the difficult start-up for training and backup support, including tech- phase. In some societies traditional practitioners- nical supervision and assistance in procurement instead of being given the training and support that would enable them to collaborate better with the provitechnial organdinatncia tasistanc to modern sector and promote primary health care- priate vuntary o ansgfor ani (e are dismissed as incompetent. Employees and vol- coordination of activities unteers of nonprofit and voluntary organizations are often treated in a similar fashion. * Making credit accessible (especially where credit To encourage community-run and private markets are restricted) to communities and pri- sources of health services, the first step that many vate ventures that want to expand or upgrade countries need to take is to reverse past tendencies services and facilities 40 Box 10. Public-Private Cooperation Cooperation between the public and nongovern- vices in public hospitals, but patients are free to use ment sectors in providing health care has some- the cash value of that coverage as a partial payment times been deliberately fostered by governments. It for services from more expensive private providers. is particularly common in countries where In some rural areas where there are people covered nongovemment entities have historically provided by the insurance system but few providers, the gov- an important share of health care services and emient has supported the construcltion of at least where the government sector has been unable to twenty-nine new private hospitals. expand rapidly enough to satisfy demand. This co- operation can take several different forms. Incentives. In Chile, following legislative changes in 1979-80, all employees make mandatory contribu- Subsidizing nongovernment organizations. In tions of 6 percent of their income for health care Rwanda, where missions provide 40 percent of the either to the public social security health system health care services, the govemment reimburses (FONASA) or a private social security fund (ISAPRE). them for 86 percent of the salaries of Rwandese Those who choose the public social security staff. These public subsidies account for 4 to 5 scheme can opt to receive private health services percent of recurrent public health spending. through a voucher system. Most of the private so- In Zimbabwe the government provided missions cial security funds are financial intermediaries that with Z$4.6 million (about US$6.6 million) in receive fees and reimburse the provider of the pa- 1980-81 to reimburse them for providing health tient's choosing. Some provide services directly; the care to indigents. This subsidy represented 4 per- largest operates a complete range of outpatient and cent of central government health care spending, inpatient health care facilities. Overall the result has but an estimated 85 percent of mission health ser- been an expansion of private services. A decrease in vice revenues. In addition, the government pur- government spending has been more than offset by chased Z$0.9 million in services from hospitals an increase in nongovemment spending during owned by industrial or mining companies. 1980-82. In Zambia the government provided missions In Uruguay the social security system does not with 6.6 million kwacha in 1980-81 (about US$9.4 have its own facilities, but encourages the use of million), which was over half of the missions' ex- nongovemment health maintenance organizations. penditures on health care. Mining companies re- HMOs are now the primary source of care for bene- ceived 80,000 kwacha to reimburse them for health ficiaries of the system and provide services to 45 care services to indigents, representing approxi- percent of the population. Monthly fees, copay- mately 2.5 percent of total health expenditures by ments, and required services in Uruguay's twenty- the mines. three HMOs are closely regulated by the Ministry of Health. Contracting to nongovernment providers. In Indo- In Brazil services financed by the social security nesia the government employees' health insurance fund may also be purchased from the private for- scheme pays nearly 20 percent of its total health profit sector. Since the early 1960s fitms have been expenditures to private health providers. allowed to contract with prepaid health organiza- In Colombia the Social Security Institute con- tions and to retain their social security contribution tracts for beds in private hospitals. for that purpose. This has fostered an enormous In the Philippines the government compensates expansion of health maintenance organizations. Be- private hospitals to maintain charity beds in areas tween 1961 and 1979 more than 200 HMOs were not covered by the public system, and it pays pri- organized. In 1981 this provision was frozen, ex- vate hospitals for services that are unavailable cept for firms already contracting with HMOs, be- through public hospitals. The Philippine social in- cause of financial problems within the social secur- surance system pays the full cost of inpatient ser- ity system. 4 4 1 * Transferring the operation of government health good private for-profit facilities when free govern- facilities to nongovernment providers (through ment clinics are available. (One aspect of quality to sale, lease, or contract). Such a step is appropri- which consumers are likely to be sensitive is wait- ate for curative care facilities where the benefits ing time. "Free" government clinics may cost more of care accrue directly to those served (box 10). if many hours are lost waiting in line.) But some government monitoring of quality is likely to be critical to prevent untrained people Regulating Nongovernment Health Care from providing incorrect or harmful treatments There are certain criticalfunctionand to prevent unscrupulous health providers from There are certai crtIcal functlons the public sec- charging for services which are not needed or for tor must perform. In virtually everv countra e charging exorbitant prices for necessary services government plays an important role in training- oe hc hyhv oooy and must do so, for example, to ensure that health Certification of private facilities together with professionals are trained in public health and pre- perioicreiew by governmen toring te periodic reviews by government monitoring teams ventive care. (Those trained should pay most or is one option, although in poor countries it may be even all of the costs, however, through fees or too costly. Examination and licensing of individu- service after training.) In addition, governments in als at the time they enter the health profession is developing countries need to protect their popula- common and practical. Governments can also en- tions by supporting research and development to courage and monitor self-policing by providers. improve control of local diseases. Private for-profit providers frequently develop Most important, and most difficult, the govern- their own means of maintaining quality through ment sector must take steps to make the private professional associations and accreditation re- for-profit market for individual health services as quirements (as in the case of various types of competitive as possible. This requires heavy em- healers in India even before the government phasis on consumer infor-mation programs. The intervened). government can aid individuals to become better Where health resources are extremely scarce (as purchasers of health care by providing such infor- they are in most of Africa and the poorer rural mation as the prices charged by health providers parts of many other countries), the benefits of for specific types of care, the effective methods quality control must be balanced against the costs. and appropriate equipment for treating various ail- Where shortages are severe, the most constructive ments, and the importance of insurance coverage, approach to quality control may be to help sup- Even when information is available, however, the port private practitioners through advisory visits to effort to increase competitive incentives will also build up skills, periodic free training at various require regulation. A nongovernment health sector levels, and professional workshops. Where the will need to be regulated because not all consum- nongovernment sector is already active but offer- ers will always be sufficiently informed about their ing services of lower quality than the government own needs (indeed, this is why they seek help) and sector, it may be less costly to upgrade them the options available to them. through training than to restrict or regulate these activities. This is obviously n -t true where gov- QUALITY CONTROL. Fostering the expansion of emnment health services are not widely accessible. the nongovernment sector will not necessarily Many countries now train traditional midwives in threaten quality. In fact, World Bank health ana- modern techniques of prenatal, birthing, and post- lysts report that nongovernment providers in many natal care. Traditional practitioners have been li- countries (Ecuador, Thailand, and Zambia) offer censed to provide psychiatric care in parts of West better care than government facilities. In Nigeria Africa. Several countries have schemes under and Uganda mission hospitals and clinics have which the public sector subsidizes the commercial medicines and other supplies when public facilities distribution of contraceptives. do not. In Malawi consumers walk miles past nearly free government health centers to get to COST CONTROL. An effective way to regulate mission clinics that charge many times as much. In costs is to require that payments to providers be the Philippines, low-income people pay to use very through prepayment plans or capitation (a set fee 42 per patient served during the period). Under such There are several ways countries can deal with systems physicians and hospitals cannot increase this problem. In a number of countries, including their revenues by choosing more expensive treat- the Philippines, a period of public service is re- ments for their patients. If the patient has a choice quired of doctors before they can open a private among doctors or prepaid plans there will be more practice. In many places in Asia, allowing private incentive to provide high-quality care. Govern- practice in off-duty hours has helped attract doc- ments or insurance authorities retain the power to tors to the public sector. Where shortages are se- regulate both the quality of service and the medi- vere, countries may need to rely for a time on cal conditions that must be met by providers. foreign staff in public programs-a sensible in- Govemments need to maintain some control terim solution for countries that can afford it or over cost in fee-for-service insurance systems- have access to extemal funds. Foreign funding especially where competition has not developed might also be used to raise the salaries of highly among insurance providers. As discussed above, trained personnel in the public sector or to provide deductibles and copayments are vital to the con- intemational professional contacts and in-service trol of health costs. Another method is the use of training of a caliber that would attract the best diagnostically related groups (DRGs) which elimi- local graduates to public careers. nates some of the administrative costs of dealing In the long run, the training of high-level health with voluminous price lists and creates incentives professionals, especially doctors, should not be so for cost-conscious behavior by providers. Related highly subsidized from public funds. Few coun- medical procedures are aggregated into a DRG, and tries today in Africa, South Asia, or even East Asia payments for each group of procedures are based charge the full costs of training physicians and on previous average costs in various institutions. other health personnel, and the cost of training a Providers who can reduce their costs below the physician is often in the range of $10,000-20,000 a average keep the difference, and this incentive year. Because the training is subsidized, leakage of tends to reduce current costs on which future re- personnel to the private for-profit sector repre- imbursements will be based. sents a considerable loss to the public system. (Ironically, the result of free training in countries Competition for Scarce Resources such as India is an apparent oversupply of doctors; students have little to lose by going to a medical Price regulation is always difficult. In the long run, school that is free even though they face future competition among service and insurance provid- underemployment.) Training could be financed by ers to attract customers by providing good service govemment-backed loans to students. If students for a specified cost will be a better solution to the must borrow for their training, publicly sponsored problem of cost escalation. But would encourag- loans can stipulate that part of the loan will be ing the expansion of private for-profit providers forgiven for persons who serve in rural areas or create competition between public and private accept lower salaries in the public sector. This is providers? And would this in turn cause shortages one example of how increased cost recovery in or sharp price increases for scarce health one sector (education) can reduce problems in an- resources? other (health). The principal concern is that shortages of skilled A more fundamental problern is that a large, personnel in the govemment sector, especially rich, and privileged private medical sector can af- doctors and nurses, will be exacerbated if the pri- fect public perceptions of what constitutes "good" vate sector expands. Shortages of trained health health care-it may confuse the difference be- professionals are severe in many countries and to tween good care and costly care. The solution to train more-the solution-takes a long time. In- this problem is not, however, for governments to creasing the supply of physicians, for example, re- restrict the nongovemment sector. Restrictions are quires at least three to five years-even more if likely to drain talent away from the health sector medical schools must be expanded or upgraded altogether and to place the fuill administrative before additional students can be admitted. burden of curative care on already overburdened Worse, where the training itself is highly subsi- public sectors. The solution is for governments to dized, training more people raises public costs. play an aggressive role in developing truly public, 43 usually preventive, programs and in educating con- There should be two general objectives of finan- sumers about these programs and their critical role cial devolution to facilities where fees are charged. in improving health. The first is to give managers planning and budget- ing autonomy, including the freedom to econo- mize on inputs and adjust their service mix to de- Decentralizing Government Health Services mand. The second is to give managers incentives to generate fee revenue. These incentives are contro- Even when the nongovernment sector provides a versial; they include crediting fees to the manage- considerable proportion of health services, the ment accounts rather than to the central govern- role of the government will remain large. The gov- ment and maintaining central government emnment will continue to be responsible for public budgetary support, not automatically reducing it in programs such as the control of communicable proportion to fees collected. diseases and other preventive care for which there is no real market. In low-income rural areas and even in many urban areas it will provide modem Control of Fees at What Level? curative care for the foreseeable future because of In practical terms, there are two questions con- the difficulty of attracting private health practi- cerning the control of revenues from cost recov- tioners. In most developing countries government ery First, should revenues be controlled by the service networks sensibly combine curative and ministry of finance or by the ministry of health? preventive care at the local level. Second, if controlled within a particular ministry, Thus the issue of improving the efficiency of how centralized should that control be? For opti- public services cannot be neglected. In countries mal allocation of given resources, one view is that where managerial resources are scarce, communi- a r se caio is difcl,tasotto.sso,admn all revenues should go to a central government caton ls difficult, transportation Is slow, and many fund, where they can be allocated across all sectors people are isolated, decentralization of the govern- and activities to ensure their best possible use. In ment health system should be considered as one extreme cases, revenues collected in health clinics possible way to improve efficiency. might best be used to improve agricultural re- Decentralization of government health services search, to retire part of the national debt, or to means granting greater financial and management reduce highly distortionary levels of taxation. autonomy to local units of the system. Decentrali- Within any one sector, an analogous argument ap- zation is appropriate primarily where scattered fa- plies: central control of health revenues within the cilities provide services directly to their clients and health ministry could allow fees collected for hos- have instituted charges for drugs and curative care. pital meals to finance immunizations, if that were It is less likely to make sense for tax-supported viewed as optimal for the sector as a whole. public goods, such as immunizations and control Several other considerations, however, argue for of vector-borne diseases. These programs are more control of revenues as close as possible to the logically administered centrally, even though they point of collection. These have to do with possibly can be, and are in some countries, contracted out high costs of administering a system to collect fees by the central government to local governments. and with the need to guard against the misuse of Decentralization gives local units greater re- collected revenues. sponsibility for planning and budgeting, for col- lecting user charges, and for determining how col- * Improving incentives for fee payment and col- lected funds and transfers from the central lection. When fees are not retained at the point government will be spent. It does not imply any of service delivery, local users are less likely to loss of control by the central government over see any value from their payments, and local broad policy development., Even with decentrali- health care providers will have less of an incen- zation, the central government should continue to tive to enforce payment by their clients. In some retain control over such areas as training policy, situations collusion could develop between local assignment of some personnel, and overall plan- providers and their clients. When providers do ning-such as deciding when and where to invest not collect fees from friends and acquaintances in new facilities. the benefit to those so favored is obvious, but 44 the benefit of collecting fees to add revenue to point of service delivery. This point of service de- central government funds is less readily per- livery is often a local health post. In China local ceived. In hospitals, for example, staff will have facilities have paid all nonsalary costs from locally * little incentive to collect fees if they do not know collected user charges and drug fees for many how the money is to be used; if they believe it years, and in Pakistan the government is consider- will be used to improve the hospital environ- ing allowing local facilities to keep fees. The deliv- ment, however, they will have good reason to ery point can also be a drug dispensary: in a revolv- insist on payment. ing fund for drugs local stocks are periodically * Accountability. When fees are retained at the replenished through fees. And it can be a public point of service delivery and used to replenish hospital, as in Jamaica. In Zambia a public hospital drug supplies, to maintain buildings, or to sup- operates as a parastatal with complete financial port valued programs, service users are aware of autonomy; Burkina Faso and C6te d'lvoire are the results. They can monitor the use of their considering a similar arrangement. Setting up a payments by the local service staff and consider- hospital as a parastatal can make it financially ably reduce the costs to the public sector of more self-sufficient and less of a clrain on public monitoring. health funds. Is there a point at which revenues collected in • Signaling the center. When revenues are col- public health facilities should be used to reduce lected and controlled at the service level, local the central budgetary allocation to the health sec- staff have more say in how the funds are spent. tor, thus relieving fiscal pressure on the central Their choice-for example, whether to replace government? The thrust of the argument through- the clinic well or purchase more drugs-is more out this study is that certain health programs with likely to reflect local need than a central deci- public benefits are now underfunded. As revenue sion. The center itself receives signals as to what collection in public facilities makes large curative resources are valued and needed by observing services with private benefits financially self-sus- the spending patterns of the service units. taining, the freed government funds should be ab- * Community development. The collection and al- sorbed in truly public health activities and in subsi- location of revenues in small communities can dizing curative care for the poor. The situation in provide an impetus for more generalized com- every country will be different, but this principle munity participation in development activities. implies that the overall central budgetary alloca- For example, local management of a village re- tion to health should be protected for a time when volving fund for drugs can spur related commu- user charges are introduced. Only if and when nity health work such as environmental sanita- there is adequate provision of health activities with tion. The involvement of local persons in public benefits and of critical curative care for the decisions of local importance develops the ca- poor should a reduction in public funding for pacity for decisionmaking and self-government health be considered. in the community. * Minimizing administrative costs. The immedi- Appropriate Transfers from Central Govern- ate cost of collection is the staff time needed to ment to Local Facilities enforce the payment of fees at the service deliv- ery point. Additional administrative costs are in- Decentralization and greater local control of fi- curred for the necessary accounting if revenues nances by no means imply the complete financial are then shifted to higher levels, independence of each individual fa,zility. Govern- ment facilities that provide integrated curative and In general, the higher the transactions and infor- preventive services in rural areas and to the urban mation costs of collecting fees and administering poor will continue to require budgetary transfers revenues-that is, the smaller the amounts being from the center. In fact, in rural areas the appropri- collected, the more differentiated the charges (as ate unit for purposes of decentralizei planning and when there is a lengthy price list for drugs), and the budgeting is likely to be a regional or district of- more frequent the collection-the stronger are the fice, not a small health post. Government hospitals arguments for controlling revenues close to the in urban areas could, however, eventually transfer 45 some of their revenues to the center to supplement * The DRG approach is based on the number of general revenues that finance other government patients served in each diagnostically related health programs. group rather than on the number and character- Ideally, transfers from the center to local areas istics of all participants in a plan. The DRG ap- would be in the form of vouchers issued directly to proach is appropriate for inpatient facilities. The individuals, who could then spend the funds at the resources required to treat each group of patients facility of their choice, whether in the public or adequately are estimated according to the re- private sector. Thailand (see box 7 above) and ported diagnoses. Under this system, a service Chile are experimenting with this approach. In unit that sees many patients needing expensive most countries, however, central government care receives more transfer funds than one that transfers are made directly to local facilities on an deals with mostly minor cases. A DRG strategy is annual basis. The amount of the transfer is usually more equitable and easier to apply than capita- based on a dialogue between the central govern- tion because information is more readily availa- ment (usually the health ministry) and the local ble on actual patients than on entire populations facilities-an approach that relies heavily on the of communities. However, administrative and quality of the dialogue. Frequent and honest in- record-keeping costs are high (the U.S. system terchanges can allow units to defend and explain has more than 450 groups and a similar system in their requests-and to understand better the cen- Chile has more than 3,000), and frequent and tral government's constraints. But such in- careful reviews of categories and allowable pay- terchanges may not always operate well, especially ments are needed. Experience in the United for the areas and units farthest from the center. States and the Federal Republic of Germany also Full annual reviews require a large staff with spe- shows that the diagnoses tend to respond to the cial capabilities that many health ministries lack. system, with more patients appearing in the more An alternative is to rely on one of three formulas highly compensated categories once the system for the size of the annual grant: is in place. * In a matching grant the amount is set per unit of For developing countries, a sensible early step is output, and output is measured as some propor- small-scale experimentation with a capitation sys- tion of fee revenue. The proportion of fee reve- tem for regional facilities and a simple DRG system nue that is subsidized can be adjusted to reflect for hospitals. the social value of different services. For exam- In making annual budgetary transfers to local ple, children's medical fees might have a match- facilities the central government should neither ing grant of 200 percent while general geriatric take away any surplus that a local facility has care would have no matching grant. The propor- achieved by its efficient operation nor should the tion can also be adjusted for different regions govemment make good any deficit by adjusting according to need and the ability to pay. This the next year's amount. In Java's Cirebon district approach is likely to work best for hospitals in the government hospital receives a central govern- middle-income countries where insurance sys- ment grant for about 40 percent of its revenue. tems are sufficiently developed to allow fees This amount is paid regardless of how well or close to costs. It will not work in primary health poorly the facility provides services to the sur- care facilities at district levels, where many ser- rounding population. Hospital managers therefore vices carry no fee at all. have no incentive to save on costs. * The capitation approach distributes resources Decentralization of government health services according to the number of participants in a pre- is not an easy task and it has been tackled probably paid plan. Some such plans also take account of less than the other policy recommendations. If socioeconomic characteristics such as age and other parts of a government are highly centralized, income distribution, since these affect needs. any attempt to decentralize will meet considerable The capitation approach is sensible for annual obstacles. But it will reap considerable benefits transfers to regional or district systems from a as well since health activities are more widely central health ministry. dispersed geographically than perhaps any other 46 government service except agricultural extension. disparities. Deregulation of the nongovernment In health services with weak overall administrative sector and decentralization coulld increase geo- systems, poorly trained staff in remote areas, and graphical inequality and decrease the quality of personnel shortages because of difficulties in at- services. tracting staff away from the cities, decentralization Avoiding the pitfalls requires not only political will require careful planning and a gradual intro- and social boldness in innovating policy but also duction. In some countries, inexperienced staff of systematic and sustained attention to monitoring regional agencies, local hospitals, and clinics will programs. Each country needs to monitor their need to be trained to manage revenues and ex- specific approaches to implementation as they are penditures, and they will need time to practice tried and to maintain flexibility in such decisions as their newly acquired skills before decentralization the size of user charges and the approach to is implemented. decentralization. For these reasons, implementation must be ex- Problems and Pitfalls of Reforms pected to take time. Indeed, the pace of implemen- tation is bound to differ with the circumstances in Of course, these reforms will not solve all the each nation. For example, in many countries, problems of the health sector. User charges will changes in policy will require changes in adminis- not generate foreign exchange to pay for imported trative support systems (for example cash-handling pharmaceuticals. Insurance programs alone will rules) and legislation. In countries where overall not be enough to ensure better quality. Nor will administration is weak, change will need to be decentralization eliminate the need for difficult introduced gradually. political decisions regarding new investments, But in every country, some initial steps are possi- training subsidies, and wage scales for public ble (see box 11). The most important first step is to workers. And a private sector-no matter how begin to charge some amount to most users of good-will not fill critical needs such as environ- publicly provided curative health services. In some mental disease control and may not adequately countries the ability to differentiate the poor from serve the poor in remote rural areas. Reforms in the not so poor will allow charges for these ser- financing health care will have little impact with- vices with private benefits to be raised toward mar- out a political commitment by the government to ginal cost quickly; in others overall fees will have making the sector more effective. As noted above, to remain modest until methods to identify the user charges and other reforms will free govern- poor are tested. ment resources but cannot ensure that they will be The pace at which risk coverage is introduced used wisely. Decisions made largely in the political will be determined by the speed with which fees arena will determine whether freed funds are used can be instituted and increased toward full service for the poor and for public services-rather than cost for the nonpoor. As fees become higher the for urban hospitals and expensive nonessential necessity for risk-coverage plans will increase. equipment-and whether services are accessible Timing of the reforms for more effective use of enough and of a caliber to induce clients to pay the nongovernment sector will vary greatly by so- fees and buy insurance. Only government action ciety. In some nations the nongovernment sector is can bring the necessary changes in management strong and prevalent, in both a technical and a and training programs-for example, revising political sense, and the important issues are ones of medical education to make the training of doctors appropriate regulation and cost control. In other more appropriate to the country's needs and to nations political reality and the weakness of the strengthen paramedical personnel. nongovernment sector mean that more effective The entire finance policy package is difficult to use of nongovernment activities will be a longer- implement; each of the four parts has possible term goal. drawbacks unless introduced with care. User How quickly government health systems can be charges could deter those with the greatest need decentralized will also vary by nation. In some from seeking care, and there would be little reve- cases management ability, record-keeping, and lo- nue to recycle into health services. Risk-sharing cal resources will be available in many localities schemes could raise costs and augment existing and decentralization of certain facilities will be 47 relatively easy. In others the movement toward tion, the development of costing and accounting local decisionmaking and control of resources will procedures, and the design of complementary reg- be feasible only after training and experimenta- ulatory and supervisory programs. Box 11. Reforms of Health Financing Already Under Way Several nations have already begun to institute the public hospitals. A national health insurance reforms discussed here. scheme is being initiated as part of the social secur- ity system. Jamaica. After discussions with the World Bank, the government made several changes in the health The Gambia. A plan has been implemented under finance system. A procedure was adopted for ex- which fees are charged for drugs and the revenues empting the poor from fees, based on eligibility for collected are used by the village development coun- an already operating food aid program. The Minis- cil to purchase replacement drug supplies-a so- try of Health obtained central government ap- called revolving drug fund (see box 5). proval for a decentralization plan under which 50 percent of fees are kept by the collecting health facility and the remaining 50 percent go to the Min- Peru. Plans are being made to increase user fees and istry of Health. A study of risk-sharing alternatives allow them to be retained by the Ministry of has been commissioned, and plans are being made Health (rather than be sent to the Finance Ministry) for a pilot test of a prepaid health system for rural and to have the private for-profit sector largely take areas. over the supply of pharmaceuticals. Thailand. A card system which effectively provides China. A risk-coverage plan is being tested in se- risk coverage and subsidizes the use of medical care lected rural areas. Plans are being made for a pro- by the poor has been put into operation in several vincial revolving fund (with capitalization financed rural areas (see box 7). by a World Bank loan) to make loans to provincial hospitals, which in turn would generate funds to repay the loans by raising fees for hospital services. Somalia. The private practice of medicine, which had been forbidden, has recently been legalized. World Bank staff are recommending increased Brazil. The recession beginning in 1981 prompted levels of cost recovery for selected health services. Brazilian authorities to contain health costs. The social security medical system closed several un- derused hospitals for tuberculosis and psychiatric Zambia. Because the constitution prohibits charg- care. Contracts with private hospitals were rewrit- ing citizens for health services, plans are being made ten so that payments are now made on the basis of to turn the university hospital at Lusaka into a para- diagnostically related groups. The system expanded statal that charges expatriate clients for services and its payments to state and local governments that drugs. Public funds replaced by the fee revenues at provide basic health care on the basis of capitation the hospital will be transferred to finance the oper- rather than services delivered. Costs had been ating costs of new maternal, child health, and fam- growing by 22 percent a year in the 1970s but fell in ily planning services. the early 1980s and are projected to grow by no more than 6 percent a year through 1989. Cost containment has been achieved with no evidence of Zimbabwe. The government has introduced a fee declining quality; more effective incentives have for patients who bypass lower levels of the health prompted providers to eliminate waste and unnec- system and raised room fees for private patients in essary services. 48 What the World Bank Can Do The World Bank began direct lending for health in although charging prices for electricity is accepta- 1980. By 1983 the Bank had become one of the ble everywhere, the argument for charging fees for largest funders of health projects, lending more government-provided health services is not widely than $100 million annually. Lending operations in appreciated. more than twenty countries have focused on the Policy dialogue is supported by staff analysis of development of basic health care programs, in- health finance issues in the form of sector studies, cluding expansion of primary health care, provi- in the context of work on project design, and in sion of drugs, and support for training and techni- economic studies of overall public investments. cal assistance. Lending operations have generally Opportunities are being sought for discussions been preceded by systematic studies of the health with the highest levels of government (inside and sector as a whole. These studies have enabled the outside the health ministries). The issues addressed Bank to carry on a policy dialogue regarding sys- are being expanded and altered. To the main temwide issues with government officials (see box agenda-expenditure and revenue trends, public 12). sector fees, and financial management problems- are being added risk coverage, stimulation of the nongovemment sector, and decentralization of the Stimulating Consideration of Finance public sector. Operational studies of these are be- Policy Reforms ing suggested and supported. The evidence and experience accumulated from The Bank is now broadening that dialogue, both staff analyses should increase the Bank's ability to with borrowers and with other lending agencies, to make sound suggestions on specific programs. encourage consideration of new financing ap- New operational studies should help the Bank to proaches and to rethink prevailing strategies and acquire practical information about the progress the concepts on which they are based. Many coun- of reforms in health financing and thus to improve tries, before they can carry out policy reforms, future discussions and advice. must clarify for themselves what their alternatives Discussions and exchanges of ideas and research are and why change may be desirable. The financ- findings are also going on with multilateral and ing climate in the health sector differs markedly bilateral aid organizations and are meant to forge from that in, say, public utilities. For example, greater agreement on approaches to health finance 49 Box 12. World Bank Health Lending and Sector Work A March 1975 Health Policy Paper limited World World Bank lending operations are generally pre- Bank health operations to support for project com- ceded by health sector work-staff studies ponents in other sectors; direct lending for health designed to improve knowledge of specific country was not approved until late 1979. Since then situations. Sector work by the Bank has often had a nineteen projects have been approved by the Board positive effect on governments' approaches to fi- of Executive Directors. More than $600 million nancing health. In Zambia the National Committee was committed during the five fiscal years from for Development Planning appointed a committee 1981 through 1985. The 1980 Health Sector Policy that produced a comprehensive response to the Paper identified activities for possible inclusion in Bank's sector report. The president of Zambia held health projects: a press conference at which he discussed the need for greater efficiency in the health sector and the * Development of basic health infrastructure need for cost recovery. The Jordan Health Sector * Training of community health workers and Review probably contributed to the government's paraprofessional staff decision to scale back planned hospital construc- * Strengthening the logistics and the supply of es- tion. In Burkina Faso, China, Comoros, and the sential drugs Philippines, Bank sector reports have contributed * Promotion of proper nutrition to new thinking about finance issues. Bank reports * Provision of maternal and child health care, in- also serve as a means of communication with other cluding family planning lending agencies on financing and other issues in * Prevention and control of endemic and epidemic the health sector. diseases * Development of management, supervision, and evaluation systems. in developing countries. The Bank is one of the to assist countries with the reform of health fi- few institutions able to press strongly for greater nancing. Finance-related activities are being incor- attention to health financing. It is doing so aggres- porated into projects focused mainly on other sively through routine meetings, through special health care issues. For example, a project might conferences on the subject, and through interac- include support for training health managers in the tion with other lending agencies with respect to fundamentals of new approaches to financing. Or specific countries. The coordination of strategies assistance for a new drug program might be ac- and approaches should benefit the developing companied by the introduction of new charges for countries, which must respond to what have been drugs that would over time ensure that the pro- at times contradictory suggestions on health gram could be sustained. Lending can cover the financing. start-up costs of new finance policies, such as the The Bank is also increasing its support for train- design and testing of pilot insurance schemes or ing courses for country officials in health finance new programs of user charges, and the develop- and health economics. The Bank's Economic De- ment of accounting systems for health facilities. velopment Institute offers courses on health care Lending can also be used to implement decentrali- that include a financing module; special courses on zation and to improve the quality of public services financing issues for government staff of health, so that they will attract fee-paying customers. finance, and planning ministries are planned. Sup- port for training is also provided by including Conducting Research funds for fellowships in project loans. Progress in spreading new ideas and challenging Expanding Lending old ones has been slow because evidence on some topics is scarce. Sector studies can help, but more Bank lending operations can be and are being used extensive collection and analysis of data are also 50 required and can be undertaken in conjunction health practitioners in rural areas? What income with operational work. The knowledge of health groups does the nongovernment sector serve? financing has reached a stage at which the poten- What are alternative means, and their relative tial payoff to well-chosen research projects is high. costs, for improving information to consumers The central issues are clear, the hypotheses exist, about the quality and prices of pirivate health ser- the audience to be persuaded is large and impor- vices? How can both public and private health tant, and the techniques needed to obtain the providers be regulated and supervised so that their needed information are available. clients are protected from ill-acdvised and over- Some of the possibilities for Bank-supported re- priced services? search are: 6. How can the management of government 1. How accessible are services now and how health facilities be organized and overseen so that good are they? What are nongovemment expendi- resources are used efficiently and workers perform tures on health care? How much do people now well? What steps can be taken to ensure sustained pay? How much can they afford? How would utili- political and popular support for the reform of zation of services be affected if prices were raised? health financing? Would demand fall for important health services? Would utilization by the poor decline? 2. What fees should be charged and how much Fostering improvements in heal[th sector finance revenue can be raised from them? What are collec- is among the most valuable contributions the tion costs likely to be? What is a reasonable sched- World Bank can make to better health care in low- ule of charges at different levels of the system? income countries. Through its sector work, 3. What health insurance programs now exist? through innovative lending strategies, through dia- Who is covered at what cost? Are there informal logue with other lending agencies, and through insurance systems within extended families? research and operational evaluation, the Bank can 4. How equitable is the existing health system? help direct the attention of govermments and inter- What groups now benefit from what services, at national agencies to the neglected matter of health what Fost to the government purse? What are prac- sector finance. The Bank consistently has advo- tical means of identifying and protecting those un- cated that overall economic policy be grounded in able to pay for health care? sound principles of finance and project selection; 5. How active is the nongovernment health sec- the agenda proposed here for the reform of health tor? Is the for-profit sector competitive? Are there financing is consistent with and would reinforce private physicians, pharmacists, and other trained those principles in the health sector. 51 Appendix Tables Note: See the technical notes following the appen- dix tables for explanations of the tables' content, form, symbols, and sources. 53 Table A-1. Basic Indicators GNP per capita Life Area Average annual expectancy Population (thousands growth rate at birth (millions) of square Dollars (percent) (years) mid-1984 kilometers) 1984 1965-84 1984 Low-income economies 2,389.5 t 31,795 t 260 w 2.8 w 60 w China and India 1,778.3 t 12,849 t 290 w 3.3 w 63 w Other low-income 611.2 t 18,946 t 190 w 0.9 w 52 w Sub-Saharan Africa 257.7 t 15,646 t 210 w -0.1 w 48 w Ethiopia 42.2 1,222 110 0.4 44 Bangladesh 98.1 144 130 0.6 50 Mali 7.3 1,240 140 1.1 46 Zaire 29.7 2,345 140 -1.6 51 Burkina Faso 6.6 274 160 1.2 45 Nepal 16.1 141 160 0.2 47 Burma 36.1 677 180 2.3 58 Malawi 6.8 118 180 1.7 45 Niger 6.2 1,267 190 -1.3 43 Tanzania 21.5 945 210 0.6 52 Burundi 4.6 28 220 1.9 48 Uganda 15.0 236 230 2.9 51 Togo 2.9 57 250 0.5 51 Central African Rep. 2.5 623 260 -0.1 49 India 749.2 3,288 260 1.6 56 Madagascar 9.9 587 260 -1.6 52 Somalia 5.2 638 260 .. 46 Benin 3.9 113 270 1.0 49 Rwanda 5.8 26 280 2.3 47 China 1,029.2 9,561 310 4.5 69 Kenya 19.6 583 310 2.1 54 Sierra Leone 3.7 72 310 0.6 38 Haiti 5.4 28 320 1.0 55 Guinea 5.9 246 330 1.1 38 Ghana 12.3 239 350 -1.9 53 Sri Lanka 15.9 66 360 2.9 70 Sudan 21.3 2,506 360 1.2 48 Pakistan 92.4 804 380 2.5 51 Senegal 6.4 196 380 -0.5 46 Afghanistan .. 648 Bhutan 1.2 47 .. .. 44 Chad 4.9 1,284 .. .. 44 Kampuchea, Dem. .. 181 Lao PDR 3.5 237 .. .. 45 Mozambique 13.4 802 .. .. 46 Viet Nam 60.1 330 .. .. 65 Middle-income economies 1,187.6 t 40,927 t 1,250 w 3.1 w 61 w Oil exporters 556.1 t 15,510 t 1,000 w 3.3 w 58 w Oil importers 631.5 t 25,417 t 1,460 w 3.1 w 64 w Sub-Saharan Africa 148.4 t 6,228 t 680 w 2.4 w 50 w Lower middle-income 691.1 t 19,132 740 w 3.0 w 58 w Mauritania 1.7 1,031 450 0.3 46 Liberia 2.1 111 470 0.5 50 Zambia 6.4 753 470 -1.3 52 Lesotho 1.5 30 530 5.9 54 Bolivia 6.2 1,099 540 0.2 53 54 Table A-1 (continued) GNP per capita Life Area Average annual expectancy Population (thousands growth rate at birth (millions) of square Dollars (percent) (years) mid-1984 kilometers) 1984 1965-84 1984 Indonesia 158.9 1,919 540 4.9 55 Yemen Arab Rep. 7.8 195 550 5.9 45 Yemen, PDR 2.0 333 550 .. 47 Cote d'lvoire 9.9 322 610 0.2 52 Philippines 53.4 300 660 2.6 63 Morocco 21.4 447 670 2.8 59 Honduras 4.2 112 700 0.5 61 El Salvador 5.4 21 710 -0.6 65 Papua New Guinea 3.4 462 710 0.6 52 Egypt, Arab Rep. 4S.9 1,001 720 4.3 60 Nigeria 96.5 924 730 2.8 50 Zimbabwe 8.1 391 760 1.5 57 Cameroon 9.9 475 800 2.9 54 Nicaragua 3.2 130 860 -1.5 60 Thailand 50.0 514 860 4.2 64 Botswana 1.0 600 960 8.4 58 Dominican Rep. 6.1 49 970 3.2 64 Peru 18.2 1,285 1,000 -0.1 59 Mauritius 1.0 2 1,090 2.7 66 Congo, People's Rep. 1.8 342 1,140 3.7 57 Ecuador 9.1 284 1,150 3.8 65 Jamaica 2.2 11 1,150 -0.4 73 Guatemala 7.7 109 1,160 2.0 60 Turkey 48.4 781 1,160 2.9 64 Costa Rica 2.5 51 1,190 1.6 73 Paraguay 3.3 407 1,240 4.4 66 Tunisia 7.0 164 1,270 4.4 62 Colombia 28.4 1,139 1,390 3.0 65 Jordan 3.4 98 1,570 4.8 64 Syrian Arab Rep. 10.1 185 1,620 4.5 63 Angola 9.9 1,247 .. .. 43 Cuba 9.9 115 .. .. 75 Korea, Dem. Rep. 19.9 121 .. .. 68 Lebanon .. 10 Mongolia 1.9 1,565 .. .. 63 Upper middle-income 496.6 t 21,795 t 1,950 w 3.3 w 65 w Chile 11.8 757 1,700 -0.1 70 Brazil 132.6 8,512 1,720 4.6 64 Portugal 10.2 92 1,970 3.5 74 Malaysia 15.3 330 1,980 4.5 69 Panama 2.1 77 1,980 2.6 71 Uruguay 3.0 176 1,980 1.8 73 Mexico 76.8 1,973 2,040 2.9 66 Korea, Rep. of 40.1 98 2,110 6.6 68 Yugoslavia 23.0 256 2,120 4.3 69 Argentina 30.1 2,767 2,230 0.3 70 South Africa 31.6 1,221 2,340 1.4 54 Algeria 21.2 2,382 2,410 3.6 60 Venezuela 16.8 912 3,410 0.9 69 Greece 9.9 132 3,770 3.8 75 Israel 4.2 21 5,060 2.7 75 (Table continues on the following page.) 55 Table A-1 (continued) GNP per capita Life Area Average annual expectancy Population (thousands growth rate at birth (millions) of square Dollars (percent) (years) mid-1984 kilometers) 1984 1965-84 1984 Hong Kong 5.4 1 6,330 6.2 76 Trinidad and Tobago 1.2 5 7,150 2.6 69 Singapore 2.5 1 7,260 7.8 72 Iran, Islamic Rep. 43.8 1,648 .. .. 61 Iraq 15.1 435 .. .. 60 High-income oil exporters 18.6 t 4,311 t 11,250 w 3.2 w 62 w Oman 1.1 300 6,490 6.1 53 Libya 3.5 1,760 8,520 -1.1 59 Saudi Arabia 11.1 2,150 10,530 5.9 62 Kuwait 1.7 18 16,720 -0.1 72 United Arab Emirates 1.3 84 21,920 .. 72 Industrial market economies 733.4 t 30,935 t 11,430 w 2.4 w 76 w Spain 38.7 505 4,440 2.7 77 Ireland 3.5 70 4,970 2.4 73 Italy 57.0 301 6,420 2.7 77 New Zealand 3.2 269 7,730 1.4 74 United Kingdom 56.4 245 8,570 1.6 74 Belgium 9.9 31 8,610 3.0 75 Austria 7.6 84 9,140 3.6 73 Netherlands 14.4 41 9,520 2.1 77 France 54.9 547 9,760 3.0 77 Japan 120.0 372 10,630 4.7 77 Finland 4.9 337 10,770 3.3 75 Germany, Fed. Rep. 61.2 249 11,130 2.7 75 Denmark 5.1 43 11,170 1.8 75 Australia 15.5 7,687 11,740 1.7 76 Sweden 8.3 450 11,860 1.8 77 Canada 25.1 9,976 13,280 2.4 76 Norway 4.1 324 13,940 3.3 77 United States 237.0 9,363 15,390 1.7 76 Switzerland 6.4 41 16,330 1.4 77 East European nonmarket economies 389.3 t 23,421 t .. .. 68 w Hungary 10.7 93 2,100 6.2 70 Poland 36.9 313 2,100 1.5 71 Albania 2.9 29 .. .. 70 Bulgaria 9.0 111 .. .. 71 Czechoslovakia 15.5 128 .. .. 70 German Dem. Rep. 16.7 108 .. .. 71 Romania 22.7 238 .. .. 71 USSR 275.0 22,402 .. .. 67 56 Table A-2. Central Government Expenditure Percentage of total expenditure Housinig; Total amenities; expenditure social security Economic (percentage of Defense Education Health and welfare services Otber GNP) 1972 1983 1972 1983 1972 1983 1972 1983 1972 1983 1972 1,983 1972 1983 Low-income economies 17.2 w 19.5 w 12.7 w 4.7 w 4.6 w 2.7 w 7.3 w 5.8 w 22.8 w 24.0 w 35.4 w 43.3 w 18.2 w 16.3 w China and Other low- income 17.2 w 18.5 w 12.7 w 9.9 w 4.6 w 3.3 w 7.3 w 8.1 w 22.8 w 23.8 w 35.4 w 36.4 w 18.2 w 19.9 w Sub-Saharan Africa 13.2 w 10.3 w 15.5 w 15.9 w 5.2 w 4.5 w 5.7 w 5.0 w 20.9 w 21.5 w 39.5 w 42.8 w 21.0 w 20.1 w Ethiopia 14.3 .. 14.4 .. 5.7 .. 4.4 .. 22.9 .. 38.3 .. 13.7 Bangladesh 5.1 .. 14.9 .. .0 .. 9.8 .. 39.3 .. 25.9 .. 9.3 Mali .. 7.9 .. I10.1 .. 2.5 .. 4.6 .. 7.1 .. 67.8 .. 68.9 Zaire 11.1 7.9 15.2 16.3 2.3 3.2 2.0 0.4 13.3 16.8 56.1 55.4 38.6 27.5 Burkina Faso 11.5 20.7 20.6 19.6 8.2 6.8 6.6 8.0 15.5 16.3 37.6 28.6 10.9 13.6 Nepal 7.2 5.4 7.2 9.9 4.7 4.5 0.7 4.3 57.2 S3.1 23.0 22.7 8.5 17.2 Burma 31.6 .. 15.0 .. 6.1 .. 7.5 .. 20.1 .. 19.7 .. 20.0 Malawi 3.1 6.2 15.8 13.4 5.5 6.8 5.8 1.3 33.1 35.2 36.7 37.1 22.1 32.0 Tanzania 11.9 .. 17.3 .. 7.2 .. 2.1 .. 39.0 .. 22.6 .. 19.7 Burundi 10.3 .. 23.4 .. 6.0 .. 2.7 .. 33.9 .. 23.8 .. 19.9 Uganda 23.1 17.0 15.3 12.9 5.3 4.6 7.3 2.6 12.4 9.5 36.6 53.A 21.8 4.5 Togo .. 6.8 .. 19.6 S. .7 .. 8.2 .. 18.2 .. 41.6 . 34.1 Central African India .. 20.0 .. 1.9 .. 2.4 .. 4.6 .. 24.1 .. 47.0 .. 14.9 Madagascar 3.6 .. 9.1 . 4.2 .. 9.9 . 40.5 .. 32.7 .. 20.8 Somalia 23.3 .. 5.5 . 7.2 .. 1.9 . 21.6 .. 40.5 .. 13.5 Rwanda 25.6 .. 22.2 .. 5.7 .. 2.6 .. 22.0 .. 21.9 .. 11.7 Kenya 6.0 13.8 21.9 20.6 7.9 7.0 3.9 0.7 30.1 24.6 30.2 33.3 21.0 26.6 Sierra Leone .. 4.2 .. 14.8 .. 6.2 .. 1.5 .. 32.1 .. 41.2 .. 21.2 Ghana 7-.9 6.2. 201.1 18.7. 6.3 5.8 4.1 6.8 15'.1 1 9'.2 4 6'.6 43.3 19'.5, 7.8 Sri Lanka 3.1 2.4 13.0 7.1 6.4 5.1 19.5 11.4 20.2 13.1 37.7 60.8 25.4 33.6 Sudan 24.1 9.5 9.3 6.1 5.4 1.3 1.4 2.3 15.8 23.5 44.1 57.3 19.2 16.9 Pakistan 39.9 34.8 1.2 3.1 1.1 1.0 3.2 9.3 21.4 28.0 33.2 23.8 16.5 17.8 Senegal .. 9.7 .. 17.6 .. 4.7 .. 8.6 .. 19.2 40.3, 17.4 26.8 Afghanistan . . . . . . . . .. . Cbad 24.6 .. 14.8 .. 4.4 .. 1.7 .. 21.8 .. 32.7 .. 18.1 Kampucbea, Mozambique .. . . . . . . . . . .. . CTabke continues on the following page.) 57 Table A-2 (continued) Percentage of total expenditure Housi'ng; Total amenities; expenditure social security Economic (percentage of Defense Education Health -and welfare services Other GNP) 1972 1983 1972 1983 1972 1983 1972 1983 1972 1983 1972 1983 17972 1983 Middle-income economies 15.1 w 11.4 w 12.8 w 12.1 w 6.3 w 4.5 w 20.0 w 17.0 w 24.3 w 21.9 w 21.5 w 33.1 w 20.0 w 26.2 w Oil exporters 22.5 w 15.4 w 14.5 w 12.8 w 3.9 w 3.7 w 4.3 w 9.3 w 26.5 w 25.7 w 28.3 w 33.1 w 16.7 w 26.7 w Oil importers 14.3 w 14.4 w 11.9 w 10.9 w 6.9 w 4.8 w 26.8 w 21.2 w 21.9 w 19.8 w 18.2 w 28.9 w 21.4 w 25.1 w Sub-Saharan Africa .. 13.2 w 9.1 w 17.2 w 4.9 w 6.3 w 4.3 w 8.4 w 21.6 w 24.0 w 47.0 w 30.9 w 13.1 w 32.4 w Lower middle- income 18.4 w 15.5 w 16.4 w 15.0 w 4.1 w 4.2 w 5.5 w 7.6 w 30.3 w 26.5 w 25.3 w 31.2 w 16.8 w 24.4 w Liberia .. 7.9 .. 15.8 .. 7.3 .. 2.7 .. 28.6 .. 37.7 .. 34.9 Zambia . .. 19.0 15.2 7.4 8.4 1.3 1.8 26.7 23.9 45.7 50.7 34.0 41.5 Lesotho . .. 19.5 17.4 8.0 7.2 6.5 1.3 24.5 29.4 41.5 44.7 16.6 27.6 Bolivia 16.2 10.8 30.6 26.9 8.6 3.1 2.9 18.0 12.4 12.9 29.3 28.3 9.2 11.3 Indonesia 18.5 11.7 7.5 9.4 1.3 2.2 0.9 1.4 30.4 37.8 41.4 37.4 16.2 24.0 Yemen Arab Rep. .. 36.7 .. 16.6 .. 4.9 .. . . 8.7 .. 33.1 .. 43.2 Yemen, PDR . . . . . . . . . . . Philippines 10.9 13.6 16.3 25.6 3.2 6.8 4.3 4.9 17.6 44.6 47.7 4.5 13.4 11.8 Morocco 12.3 14.6 19.2 18.6 4.8 2.9 8.4 7.1 25.6 28.8 29.7 27.9 22.4 33.2 Honduras 12.4 . . 22.3 . . 10.2 . . 8.7 . . 28.3 . . 18.1 . . 15.3 El Salvador 6.6 15.8 21.4 16.6 10.9 8.4 7.6 4.7 14.4 21.3 39.0 33.1 12.8 17.4 Papua New Guinea .. 4.2 .. 20.9 .. 9.3 .. 1.8 .. 19.6 .. 44.2 .. 36.2 Egypt, Arab Rep. .. 15.7 .. 10.7 .. 2.8 .. 14.9 .. 8.6 ..47.3 .. 39.0 Nigeria 40.2 .. 4.5 . 3.6 .. 0.8 . 19.6 .. 31.4 .. 10.2 Zimbabwe .. 18.3 ..21.5 .. 6.1 .. 7.8 .. 20.9 .. 25.4 .. 36.3 Cameroon .. 9.6 .. 13.2 .. 3.7 .. 8.5 .. 26.0 .. 39.0 .. 21.8 Nicaragua 12.3 . . 16.6 . . 4.0 . . 16.4 . . 27.1 . . 23.6 . . 15.5 49.2 Thailand 20.2 19.8 19.9 20.7 3.7 5.1 7.0 4.6 25.6 21.8 23.5 28.0 17.2 19.6 Botswana I.. 7.0 10.0 19.4 6.0 5.6 21.7 9.1 28.0 27.4 34.5 31.5 33.7 44.7 Dominican Rep. 8.5 8.7 14.2 15.3 11.7 10.5 11.8 14.7 35.4 29.7 18.4 21.0 18.5 15.6 Peru 14.8 27.6 22.7 18.5 6.2 6.2 2.9 0.8 30.3 . . 23.1 46.9 17.1 18.6 Mauritius 0.8 0.9 13.5 15.6 10.3 7.8 18.0 21.1 13.9 9.2 43.4 45.3 16.3 28.7 Congo, People's Ecuador 15.7 10.6 27.5 26.0 4.5 7.5 0.8 1.3 28.9 13.9 22.6 40.7 13.4 14.3 Guatemala 11.0 .. 19.4 .. 9.5 .. 10.4 .. 23.8 .. 25.8 .. 9.9 13.1 Turkey 15.4 13.2 18.2 12.5 3.3 1.8 3.3 2.0 41.9 31.8 17.9 38.7 21.8 24.3 Costa Rica 2.8 3.0 28.3 19.4 3.8 22.5 26.7 17.1 21.8 20.2 16.7 17.8 18.9 26.4 Paraguay 13.8 12.5 12.1 12.0 3.5 3.7 18.3 32.2 19.6 14.0 32.7 25.7 13.1 11.7 Tunisia 4.9 .. 30.5 .. 7.4 .. 8.8 .. 23.3 .. 25.1 .. 22.8 37.1 Jordan .. 25.6 .. 11.5 .. 3.6 .. 13.7 .. 33.2 .. 12.3 .. 46.3 Syrian Arab Rep. 37.2 .. 11.3 .. 1.4 .. 3.6 .. 39.9 .. 6.7 .. 28.1 58 Table A-2 (continued) Percentage of total expenditure Housing; Total amenities; expenditure social security Economic (percentage of Defense Education Health and welfare services Other GNP) 1972 1983 1972 193 1972 1983 1972 1983 1972 1983 1972 2983 1972 1983 Angola.. . . .... Cuba . .. Korea, Dem. Upper middle- income 14.0 w 9.8 w 11.5 w 11.0 w 7.0 w 4.7 w 24.9 w 20.6 w 22.3 w 20.2 w 20.3 w 33.7 w 21.3 w 26.9 w Chile 6.1 12.0 14.3 13.7 8.2 6.0 39.8 45.7 15.3 6.3 16.3 16.3 42.3 34.8 Brazil 8.3 4.1 6.8 3.7 6.4 7.3 36.0 35.1 24.6 23.8 17.9 25.9 17.8 21.4 Malaysia 18.5 .. 23.4 .. 6.8 .. 4.4 10.5 14.2 .. 32.7 .. 27.7 Panama . .. 20.7 11.0 15.1 13.1 10.8 12.2 24.2 13.5 29.1 50.2 27.6 40.4 Uruguay 5.6 12.7 9.5 6.5 1.6 3.4 52.3 52.1 9.8 8.7 21.2 16.5 25.0 25.9 Mexico 4.2 2.0 16.4 11.0 5.1 1.2 25.0 12.5 34.2 26.2 15.2 47.2 12.0 27.9 Korea, Rep. of 25.8 31.9 15.9 20.5 1.2 1.6 5.8 5.9 25.6 13.6 25.7 26.5 18.1 18.3 Yugoslavia 20.5 .. . . 24.8 .. 35.6 .. 12.0 . . 7.0 . . 21.1 Argentina 8.8 9.1 8.8 7.6 2.9 1.4 23.5 33.9 14.7 22.7 41.2 2S.2 16.5 22.3 South Africa . . . . . .. . . . .. . .. 21.8 28.0 Venezuela 10.3 5.2 18.6' 19'.1' 11'.7' 8.6 9.2 9.7 25.4 20.6 24.8 36.9 21.3 27.4 Greece 14.9 . . 9.0 .. 7.3 .. 30.2 .. 26.4 .. 12.3 . . 27.5 Israel 39.8 29.0 9.0 8.4 3.5 4.3 7.8 21.5 16.3 6.4 23.5 36.4 44.0 48.8 Hong Kong . . . . . . . . . . . Trinidad and Singapore 35.3 18.5 15.7 21.6 7.8 6.4 3.9 5.6 9.9 14.3 27.3 33.7 16.8 23.7 Iran, Islamic Rep. 24.1 8.7 10.4 13.9 3.6 5.7 6.1 13.3 30.6 23.0 25.2 35.4 30.8 28.1 High-income oil exporters 13.0 w 27.7 w 13.6 w 9.4 w 5.6 w 6.0 w 14.9 w 12.1 w 17.8 w 21.9 w 35.1 w 22.9 w 24.2 w 30.9 w Oman 39.3 51.3 3.7 7.4 5.9 3.5 3.0 1.9 24.4 21.6 23.6 14.3 62.1 54.3 Saudi Arabia . . . . . . . . . . . Kuwait 8.4 13.3 15.0 10.1 5.5 6.2 14.2 15.5 16.6 28.7 40.1 26.2 34.4 39.2 United Arab Emirates 24.5 43.2 16.2 9.8 4.5 7.7 6.4 5.2 18.2 7.0 30.2 27.2 4.3 16.5 Industrial market economies 20.8 w 14.3 w 5.4 w 4.7 w 10.0 w 11.2 w 37.2 w 41.1 w 12.0 w 9.2 w 14.6 w 19.5 w 22.9 w 30.0 w Spain 6.5 4.4 8.3 6.0 0.9 0.6 49.8 64.2 17.5 10.1 17.0 14.8 19.8 31.5 Ireland . .. . .. . . . .. . . . .. 33.0 58.1 Italy 6.3 3.5 16.1 8.6 13.5 11.5 44.8 34.3 18.4 6.1 0.9 36.,0 31.8 52.8 New Zealand 5.8 4.9 16.9 11.9 14.8 12.6 25.6 30.2 16.5 17.6 20.4 22.7 28.5 41.7 United Kingdom 16.7 .. 2.6 .. 12.2 .. 26.5 .. 11.1 .. 30.8 .. 32.7 41.4 (Table continues on the following page.) 59 Table A-2 (continued) Percentage of total expenditure Housing; Total amenities; expenditure social security Economic (percentage of Defense Education Health and welfare services Other GNP) 1972 1983 1972 1983 1972 1983 1972 1983 1972 1983 1972 1983 1972 1983 Belgium 6.7 5.2 15.5 13.9 1.5 1.7 41.0 42.8 18.9 16.3 16.4 20.1 39.2 56.7 Austria 3.2 3.2 10.2 9.6 10.1 11.5 53.7 48.6 11.2 13.2 11.5 13.9 29.7 39.9 Netherlands .. 5.3 .. 11.2 .. 11.3 .. 41.2 .. 10.0 .. 21.0 40.8 59.4 France .. 7.3 .. 8.2 .. 14.6 .. 47.6 .. 6.9 .. 15.4 32.5 44.8 Japan . .. . .. . .. . .. . .. . .. 12.7 18.6 Finland 6.1 5.5 15.3 13.8 10.6 10.6 28.4 32.0 27.9 25.1 11.6 13.0 24.8 31.6 Germany, Fed. Rep. 12.4 9.3 1.5 0.8 17.5 18.6 46.9 50.3 11.3 7.0 10.4 13.9 24.2 31.1 Denmark 7.2 .. 15.9 .. 10.0 .. 41.4 .. 11.9 .. 13.6 .. 32.8 46.6 Australia 14.1 9.7 4.4 7.9 8.2 7.1 21.0 30.0 13.1 8.4 39.2 37.0 19.8 26.7 Sweden 12.5 6.9 14.8 9.2 3.6 1.5 44.3 49.4 10.6 9.3 14.3 23.7 28.0 46.9 Canada .. 8.0 .. 3.6 .. 6.3 .. 37.6 .. 16.7 .. 27.8 .. 25.6 Norway 9.7 8.6 9.9 8.8 12.3 10.6 39.9 36.2 20.2 20.5 8.0 15.3 35.0 39.7 United States 32.2 23.7 3.2 1.9 8.6 10.7 35.3 36.3 10.6 8.8 10.1 18.6 19.4 25.3 Switzerland 15.1 10.4 4.2 3.1 10.0 13.4 39.5 49.7 18.4 12.6 12.8 10.8 13.3 19.4 Eastern European nonmarket economies .. . .. . .. . .. . .. . .. . .. . Hungary .. .. .. .. .. .. .. .. .. .. .. .. .. 55.2 Polandi Albania.. . .. . .. . .. . .. . .. . .. . Bulgaria.. . .. . .. . .. . .. . .. . .. . Czechoslovakia .. .. .. .. .. .. .. .. .. .. .. .. German Dem. Rep... . .. . .. . .. . .. . .. . .. . Romania .. 5.5 .. 2.5 .. 0.8 .. 24.9 .. 50.4 .. 15.8 .. 27.4 USSR 60 Table A-3. Health Expenditure as a Percentage of Total Central Government Spending Country 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 Argentina . . 4.S 2.8 2.2 1.7 1.7 1.4 1.1 1.4 Australia 7.9 13.0 11.0 10.4 10.2 10.0 10.1 7.1 7.1 7.8 Austria 12.3 12.6 13.2 12.8 12.9 13.0 12.9 12.2 11.5 Bangladesh 5.4 5.0 4.7 5.3 .. 6.4 . Belgium 1.6 1.5 1.8 1.8 1.9 1.6 1.7 1.7 Benin . .. 6.4 6.6 5.6 .. . Bolivia 8.4 8.0 8.0 8.3 8.6 12.1 7.2 .. 3.1 Botswana 6.3 6.4 6.8 6.0 4.7 5.4 5.9 4.9 5.6 Brazil 6.5 7.5 6.9 7.3 7.4 6.5 7.4 7.8 7.3 Burkina Faso 6.6 6.5 5.3 S.6 4.9 5.8 5.8 6.6 6.8 Burma 6.6 6.6 5.9 6.7 6.4 5.3 6.1 7.0 Burundi 7.2 5.9 4.7 .. . .. . Cameroon ..' 4.8 4.8 4.6 4.3 5.1 2.7 .. 3.7 4.4 Canada 7.7 8.3 6.9 7.6 7.6 6.7 6.2 5.2 6.3 Chad 3.7 4.2 . . . . . Chile 7.0 6.9 6.9 6.9 6.5 7.4 6.5 6.8 6.0 6.2 Colombia 6.1 6.4 6.0 6.8 6.1 6.8 . Costa Rica 4.5 5.0 3.3 25.4 25.0 . .. 32.8 22.5 Denmark 3.6 2.9 1.9 1.7 1.6 1.7 1.4 Dominican Rep. 6.8 8.9 9.0 9.4 9.1 9.3 9.7 10.7 10.5 Ecuador 7.3 7.2 6.8 8.2 8.4 7.8 7.8 7.7 7.5 Egypt 2.7 2.6 3.2 3.6 3.0 .. 2.2 2.4 2.8 2.7 El Salvador 8.2 9.2 9.8 8.9 8.7 9.0 8.4 7.1 8.4 8.1 Ethiopia 4.7 4.5 4.9 4.0 3.8 3.4 . Finland 10.7 10.8 11.5 11.1 10.5 10.5 11.2 10.9 10.6 France 15.0 14.8 11.6 14.8 15.0 15.0 14.7 14.6 Gambia, The 8.2 8.6 9.1 6.3 . . . Germany, Fed. Rep. 19.8 19.8 19.3 19.3 19.0 19.0 19.2, 19'.3' 18'.6' Ghana 8.3 8.0 7.4 7.3 6.0 7.0 6.4 5.8 .. 8.6 Greece 7.9 8.1 8.1 9.9 10.5 10.3 10.5 Guatemala 8.6 8.3 7.6 7.1 7.6 .. . Honduras 12.8 14.7 8.5 8.5 8.0 .. . India 2.4 2.5 2.0 2.1 1.7 1.6 2.0 2.3 2.4 Indonesia 2.1 1.9 2.5 2.1 2.4 2.5 2.5 2.5 2.2 Iran 3.2 2.9 3.0 3.5 4.4 6.4 5.4 5.5 .5.7 Israel 3.7 3.4 4.3 4.6 5.2 3.5 3.5 4.3 3.7 Italy 16.8 . .. 7.6 10.5 12.6 10.7 10.6 11.5 11.5 Jamaica 9.3 8.2 7.8 .. . . . Jordan 4.1 4.4 3.6 3.7 4.1 .. 3.7 3.8 3j.6 Kenya 8.0 7.9 8.2 7.4 7.2 7.8 7.8 7.3 7.0 Korea .. 1.1 1.7 1.6 1.1 1.2 1.3 1.4 1'.6 1.4 Kuwait . . 5.9 5.9 6.3 5.1 4.9 5.4 6.2 6.3 Lesotho 5.5 5.2 5.4 .. . . . . 7.2 Liberia 9.3 7.2 7.9 8.2 6.1 5.2 7.6 7.2 7.3 6.2 Malawi 5.8 6.4 5.4 S.3 1.7 5.5 5.2 5.2 6.8 Malaysia 6.9 5.7 7.4 6.4 6.5 5.1 4.4 . Mali .. 6.9 6.2 5.3 5.3 3.1 4.6 2.8 2.5 Mauritania .. . . 3.5 2.8 . . . Mexico 4.2 4.1 4.4 4.0 3.9 2.4 1.9 1.3 1.2 Morocco 3.6 3.3 3.0 3.6 3.1 3.4 3.0 2.9 2.9 Nepal 5.9 6.7 5.5 5.3 5.1 3.9 4.1 4.5 . Netherlands 11.7 11.6 11.8 11.9 11.7 11.7 11.6 11.6 11.3 11.0 (Table continues on the following page.) 61 Table A-3 (continued) Country 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 New Zealand 15.0 15.7 15.0 1 5.0 15.2 15.2 14.2 13.5 12.6 Nicaragua 8.4 11.8 9.6 10.0 10.3 14.6 . Niger . . 4.9 4.5 4.6 4.7 4.1 . Nigeria 2.2 2.7 2.2 2.5 . . . Norway 13.4 13.3 11.2 .. . . 10.3 10.6 10.6 Oman 3.2 3.2 2.7 3.2 3.2 2.9 3.0 3.1 3.5 4.1 Pakistan 1.5 1.8 1.6 1.6 1.3 1.5 1.6 1.1 1.0 Panama 14.5 13.2 14.5 15.1 12.1 12.7 13.2 13.1 Papua New Guinea 6.3 8.5 8.3 8.2 7.9 8.6 9.5 9.4 9.3 Paraguay 2.8 2.8 2.7 2.7 3.7 3.6 4.5 3.7 Peru 5.1 5.8 5.9 5.6 6.1 4.5 5.3 6.2 Philippines 3.9 4.5 4.6 4.3 4.7 3.9 4.1 4.1 5.8 Portugal 4.4 .. . .. . .. . Romania 0.3 0.4 0.4 0.4 0.3 0.6 0.7 0.8 0.8 Rwanda 6.5 5.0 4.8 6.2 4.8 4.5 . Senegal 5.9 . . . .. 4.7 4.6 3.9 4.7 Sierra Leone 4.6 5.0 5.2 4.3 4.1 .. . . 6.2 8.0 Singapore 8.5 7.7 7.4 8.5 7.0 6.9 7.2 6.4 6.4 Somalia 5.9 5.7 4.9 3.2 . . . Spain 0.9 0.8 0.7 0.7 0.8 0.7 0.6 0.6 0.6 Sri Lanka 6.1 6.2 6.0 4.2 5.2 4.9 3.5 3.3 5.1 Sudan 1.6 1.8 1.5 1.7 1.5 1.4 . . 1.3 Swaziland 6.4 6.8 6.5 4.9 6.3 7.2 5.4 7.1 7.4 Sweden 3.1 3.1 2.6 2.6 2.5 2.2 2.0 2.1 1.5 1.4 Switzerland 10.4 10.1 10.6 10.9 11.4 11.7 12.7 12.9 13.4 Syria 0.8 1.0 0.9 0.7 1.0 0.8 1.1 Tanzania 7.0 7.1 7.1 7.3 5.7 6.0 6.0 . Thailand 3.7 4.4 4.7 4.4 4.5 4.1 4.2 4.9 5.1 5.4 Togo . .. 4.7 4.6 5.6 . . 5.3 6.1 5.7 5.4 Trinidad and Tobago .. 7.0 7.8 6.9 6.4 5.8 5.9 . Tunisia 6.2 6.7 7.0 7.3 6.4 7.2 7.7 6.7 Turkey . . 2.5 2.5 2.2 2.9 3.6 2.1 . Uganda 4.0 5.6 8.1 8.2 5.2 5.8 5.9 5.2 4.6 2.6 United Arab Emirates 10.1 7.0 8.9 9.2 9.3 7.9 6.2 7.1 7.7 United Kingdom 12.9 12.9 12.6 12.5 12.4 . . . United States 9.3 9.7 10.0 10.2 10.5 10.4 10.8 10.8 10.7 11.0 Uruguay 3.9 3.9 3.8 5.0 4.7 4.9 3.8 3.3 3.4 Venezuela 9.1 9.1 8.0 7.8 8.5 8.8 7.6 7.6 8.6 7.6 Yemen, Arab Rep. 2.7 2.9 2.8 3.9 3.4 4.0 3.3 4.5 4.9 4.2 Zaire 1.5 3.0 4.0 3.9 3.2 2.5 2.6 3.2 . Zambia 5.8 7.0 7.3 7.7 6.9 6.1 6.0 8.4 . Zimbabwe .. 6.9 5.8 5.7 5.9 5.4 7.1 6.4 6.1 62 Table A-4. Index of Constant Per Capita Central Government Health Expenditure Country 197S 1976 1977 1978 1979 1980 1981 1982 1983 Argentina . . 189.7 100.0 79.7 65.0 69.7 59.6 43.5 60.0 Australia 63.2 118.5 100.0 97.9 95.5 93.5 96.5 68.5 72.5 Austria 84.6 92.1 100.0 105.1 109.6 114.0 117.4 112.3 108.9 Bangladesh 54.1 94.1 100.0 95.2 . . 114.5 Belgium 81.6 82.6 100.0 106.8 117.2 107.4 120.3 118.7 Benin . .. 100.0 85.8 79.1 . Bolivia 89.4 98.0 100.0 108.4 108.9 .. 87.3 35.3 Botswana 88.6 96.4 100.0 121.2 91.0 108.9 135.6 1.39.8 146.0 Brazil 82.1 100.6 100.0 110.7 106.1 108.1 119.8 1.34.0 114.0 Burkina Faso 105.4 121.8 100.0 112.7 110.3 117.1 119.0 151.6 118.2 Burma 94.8 99.3 100.0 128.4 122.8 115.7 144.2 1.77.1 Burundi 122.6 117.8 100.0 . . . Cameroon . . 110.6 100.0 100.6 93.2 110.7 82.2 .. 113.1 Canada 107.3 114.9 100.0 114.1 111.9 103.9 100.2 87.6 110.0 Chile 113.5 96.8 100.0 97.8 82.8 89.5 81.0 98.0 Colombia 113.1 102.8 100.0 125.0 127.9 159.5 Costa Rica 124.3 149.6 100.0 950.1 1,021.4 . Denmark 170.9 142.7 100.0 93.4 93.3 106.5 91.0 Dominican Rep. 85.1 106.5 100.0 113.2 124.7 127.1 129.4 118.7 Ecuador 89.7 97.6 100.0 106.1 104.3 134.2 151.7 142.8 110.8 Egypt 97.0 98.3 100.0 106.6 101.2 .. 74.3 El Salvador 77.5 96.4 100.0 97.8 92.9 98.8 89.6 72.0 Ethiopia 90.1 92.5 100.0 94.5 90.2 93.1 Finland 89.1 91.9 100.0 98.6 99.3 102.4 112.3 117.0 121.4 France 94.8 98.3 100.0 108.0 113.7 116.9 122.1 127.1 Germany, Fed. Rep. 94.3 99.2 100.0 102.7 103.2 110.4 114.1 115.8 111.7 Ghana 133.7 127.1 100.0 81.5 63.9 54.4 42.1 37.9 Greece 81.6 95.2 100.0 128.3 137.3 143.5 164.6 Honduras 126.9 157.5 100.0 118.6 113.8 . India 112.6 119.5 100.0 114.7 92.3 85.9 112.5 136.9 Indonesia 78.8 81.8 100.0 99.7 125.2 143.2 168.7 145.1 133.1 Iran 110.0 96.7 100.0 110.9 96.9 127.1 109.4 Israel 80.7 79.6 100.0 100.8 129.4 89.8 95.1 115.6 119.8 Jamaica 114.0 105.8 100.0 . . . Jordan 91.3 100.2 100.0 98.4 132.9 .. 115.5 120.3 111.3 Kenya 102.3 99.9 100.0 116.6 123.3 132.3 142.4 130.4 105.1 Korea .. 62.9 100.0 100.7 76.7 86.2 96.7 115.3 139.3 Kuwait . .. 100.0 119.8 84.7 69.8 81.8 Lesotho 73.9 81.4 100.0 ... . . Liberia 92.7 104.4 100.0 121.7 119.4 73.1 123.5 Malawi 123.9 111.8 100.0 125.3 49.1 166.3 146.8 115.5 154.2 Malaysia 77.4 68.9 100.0 81.2 79.4 85.1 102.9 Mexico 59.6 71.4 100.0 107.7 137.1 117.2 137.4 217.2 Morocco 94.1 106.0 100.0 103.0 91.9 103.2 102.3 97.2 83.4 Nepal 71.8 100.2 100.0 98.2 95.1 74.2 84.1 109.8 Netherlands 92.2 95.0 100.0 104.9 109.0 112.1 113.5 116.2 116.5 New Zealand 101.2 96.0 100.0 108.2 107.2 111.3 114.1 113.1 Nicaragua 71.7 95.5 100.0 82.9 71.6 151.7 .. . Niger . . 113.6 100.0 122.6 137.2 146.3 .. . Nigeria 87.8 99.4 100.0 63.4 . . .. . Norway 100.0 111.8 100.0 .. . . 102.7 108.0 111.1 (Table continues on the foldlowing page.) 63 Table A-4 (continued) Country 1975 1976 1977 1978 1979 1980 1981 1982 1983 Pakistan 99.3 118.0 100.0 117.4 103.8 113.1 138.5 92.1 99.3 Panama 102.4 93.9 100.0 106.8 111.4 112.7 124.7 140.9 Papua New Guinea 97.1 117.5 100.0 108.9 101.4 114.7 132.4 126.5 118.6 Paraguay 88.5 97.9 100.0 110.1 149.6 152.8 213.8 183.3 Peru 93.5 104.4 100.0 85.2 85.2 85.4 103.2 103.8 Philippines 82.6 98.6 100.0 96.5 101.7 88.3 99.0 97.3 121.9 Rwanda 108.0 96.0 100.0 131.1 118.4 105.5 Sierra Leone 110.1 100.3 100.0 93.7 90.7 .. .. .. 143.7 Singapore 88.8 94.9 100.0 119.2 106.5 119.5 155.1 133.2 152.2 Somalia 90.9 87.9 100.0 96.6 .. .. South Africa .. .. 100.0 97.6 92.5 93.6 96.5 131.6 Spain 107.4 93.4 100.0 103.8 127.7 106.3 103.6 101.9 110.8 Sri Lanka 107.6 118.2 100.0 126.1 153.8 168.0 101.6 102.0 155.6 Sudan 87.4 104.4 100.0 103.2 80.4 67.9 .. 60.3 Swaziland 83.6 99.9 100.0 108.1 93.9 104.8 90.2 113.9 101.3 Sweden 99.8 108.0 100.0 105.2 111.1 98.6 95.9 102.4 80.2 Switzerland 84.2 91.0 100.0 101.1 108.3 113.1 117.5 124.4 130.0 Syria 92.8 119.8 100.0 75.5 99.5 101.4 114.5 Tanzania 111.3 93.0 100.0 107.2 105.2 94.3 87.8 Thailand 63.7 89.4 100.0 105.4 114.0 112.1 120.8 155.1 162.3 Togo .. .. 100.0 105.1 97.7 .. 88.3 93.4 80.5 Trinidad and Tobago .. 87.6 100.0 120.7 119.5 98.2 99.1 Tunisia 74.1 84.9 100.0 109.6 100.8 109.7 126.9 132.9 Turkey .. 84.5 100.0 81.9 116.9 128.7 69.6 .. 65.9 United Kingdom 102.4 105.2 100.0 103.5 104.9 .. .. United States 85.1 93.6 100.0 103.5 107.4 113.8 121.4 127.4 131.9 Uruguay 96.8 103.5 100.0 137.1 121.6 142.9 .. Venezuela 89.4 98.5 100.0 96.4 80.1 81.4 91.4 87.5 Yemen 72.5 87.9 100.0 190.2 250.1 291.4 340.2 518.7 Zaire 47.7 101.3 100.0 77.0 60.2 49.0 60.8 70.9 Zambia 101.3 105.7 100.0 88.5 72.6 78.7 78.4 109.3 Zimbabwe .. 108.7 100.0 110.1 103.1 109.5 136.3 148.5 64 Table A-S. Health-Related Indicators Daily calorie supply Population per: per capita Physician Nursing person Total Afs pqercerntage 1965 1981 1965 1981 1983 1983 Low-income economies 8,357 w 5,375 w 5,037 w 3,920 w 2,336 w 102 w China and India 4,218 w 2,096 w 4,443 w 2,917 w 2,415 w 105 w Other low-income 26,631 w 17,234 w 7,951 w 7,546 w 2,275 w 102 w Sub-Saharan Africa 38,649 w 42,670 w 5,714 w 3,022 w 2,084 w 90 w Ethiopia 70,190 88,120 5,970 5,000 2,162 93 Bangladesh 9,010 .. 19,400 1,864 81 Mali 49,010 25,380 3,200 2,320 1,597 68 Zaire 39,050 .. .. .. 2,136 96 Burkina Faso 74,110 49,280 4,170 3,070 2,014 85 Nepal 46,180 30,060 .. 33,430 2,047 93 Burma 11,660 4,660 11,410 4,890 2,534 117 Malawi 46,900 52,960 49,240 2,980 2,200 95 Niger 71,440 .. 6,210 .. 2,271 97 Tanzania 21,840 .. 2,100 .. 2,271 98 Burundi 54,930 .. 7,310 .. 2,378 102 Uganda 11,080 22,180 3,130 2,000 2,351 101 Togo 24,980 18,550 4,990 1,640 2,156 94 Central African Rep. 44,490 23,090 3,000 2,120 2,048 91 India 4,860 2,610 6,500 4,670 2,115 96 Madagascar 9,900 9,940 3,620 1,090 2,543 112 Somalia 35,060 15,630 3,630 2,550 2,063 89 Benin 28,790 16,980 2,540 1,660 1,907 83 Rwanda 74,170 29,150 7,450 10,260 2,276 98 China 3,780 1,730 3,040 1,670 2,620 111 Kenya 13,450 7,540 1,860 990 1,919 83 Sierra Leone 17,690 17,670 4,700 2,110 2,082 91 Haiti 12,580 .. 12,870 .. 1,887 83 Guinea 54,610 .. 4,750 .. 1,939 84 Ghana 12,040 6,760 3,710 630 1,516 66 Sri Lanka 5,750 7,620 3,210 1,260 2,348 106 Sudan 23,500 9,070 3,360 1,440 2,122 90 Pakistan 3,160 3,320 9,900 5,870 2,205 95 Senegal 21,130 13,060 2,640 1,990 2,436 102 Afghanistan 15,770 .. 24,450 Bhutan .. 18,160 .. 7,960 Chad 73,040 .. 13,620 .. 1,620 68 Kampuchea, Dem. 22,500 .. 3,670 Lao PDR 26,510 .. 5,320 .. 1,992 90 Mozambique 21,560 33,340 5,370 5,610 1,668 71 Viet Nam .. 4,310 .. 1,040 2,017 93 Middle-income economies 11,192 w 4,764 w 3,526 w 1,474 w 2,611 w 110 w Oil exporters 20,085 w 6,587 w 5,454 w 1,684 w 2,512 w 109 w Oil importers 3,943 w 2,902 w 1,876 w 1,273 w 2,692 w 111 w Sub-Saharan Africa 35,741 w 8,445 w 4,876 w 2,208 w 2,066 w 89 w (Table continues on the following page.) 65 Table A-S (continued) Daily calorie supply Population per: per capita Physician Nursing person Total As percentage Ttl of requirement 1965 1981 1965 1981 1983 1983 Lower middle-income 18,215 w 8,235 w 4,783 w 1,783 w 2,448 w 106 w Mauritania 36,580 .. .. 2,252 97 Liberia 12,450 8,550 2,300 2,940 2,367 102 Zambia 11,390 7,110 5,820 1,660 1,929 84 Lesotho 22,930 .. 4,700 .. 2,376 104 Bolivia 3,310 1,950 3,990 .. 1,954 82 Indonesia 31,820 11,320 9,S00 .. 2,380 110 Yemen Arab Rep. 58,240 7,070 .. 3,440 2,226 92 Yemen, PDR 12,870 7,120 1,850 820 2,254 94 Cote d'lvoire 20,690 .. 1,850 2,576 112 Philippines 1,310 2,150 1,130 2,590 2,357 104 Morocco 12,120 17,230 2,290 900 2,544 105 Honduras 5,450 .. 1,540 2,135 94 El Salvador 4,630 3,220 1,300 .. 2,060 90 Papua New Guinea 12,520 16,070 620 960 2,109 79 Egypt, Arab Rep. 2,260 800 2,030 790 3,163 126 Nigeria 44,990 10,540 5,780 2,420 2,022 86 Zimbabwe 5,190 6,650 990 1,000 1,956 82 Cameroon 29,720 .. 1,970 .. 2,031 88 Nicaragua 2,490 2,290 1,390 S90 2,268 101 Thailand 7,230 6,770 5,020 2,140 2,330 105 Botswana 22,090 9,250 16,210 700 2,152 93 Dominican Rep. 1,720 1,390 1,640 1,240 2,368 105 Peru 1,620 .. 880 .. 1,997 85 Mauritius 3,850 1,730 1,990 570 2,675 118 Congo, People's Rep. 14,210 .. 950 .. 2,425 109 Ecuador 3,020 2,320 .. 2,043 89 Jamaica 1,930 .. 340 .. 2,493 111 Guatemala 3,830 .. 8,250 1,360 2,071 95 Turkey 2,860 1,500 2,290 1,240 3,100 123 Costa Rica 2,040 .. 630 .. 2,556 114 Paraguay 1,840 1,310 1,550 650 2,811 122 Tunisia 8,040 3,620 I,lS0 950 2,889 121 Colombia 2,530 .. 890 .. 2,546 110 Jordan 4,670 1,170 1,810 1,170 2,882 117 Syrian Arab Rep. 4,050 2,160 11,760 1,370 3,156 127 Angola 12,000 .. 3,820 .. 2,041 87 Cuba 1,150 600 820 .. 2,914 126 Korea, Dem. Rep. .. .. .. .. 2,968 127 Lebanon 1,240 .. 2,500 .. Mongolia 710 440 310 240 2,841 117 Upper middle-income 2,473 w 1,374 w 1,914 w 975 w 2,830 w 116 w Chile 2,080 950 600 .. 2,574 105 Brazil 2,180 1,200 1,550 1,140 2,533 106 Portugal 1,170 450 1,160 .. 3,046 124 Malaysia 6,220 3,920 1,320 1,390 2,477 111 Panama 2,170 1,010 680 .. 2,275 98 66 Table A-5 (continued) Daily calorie supply Population per: per capita Physician Nursing person Total As percentage PycoTotal of requirement 1965 1981 1965 1981 1983 1983 Uruguay 870 510 590 .. 2,647 99 Mexico 2,060 1,140 950 .. 2,934 126 Korea, Rep. of 2,740 1,440 2,990 350 2,765 118 Yugoslavia 1,190 670 850 300 3,575 141 Argentina 640 .. 610 .. 3,159 119 South Africa 2,050 .. 500 .. 2,897 118 Algeria 8,400 .. 11,770 .. 2,750 115 Venezuela 1,270 930 560 .. 2,451 99 Greece 710 390 600 370 3,601 144 Israel 410 400 300 130 3,110 121 Hong Kong 2,400 1,260 1,220 800 2,787 122 Trinidad and Tobago 3,820 1,390 560 390 3,120 129 Singapore 1,910 1,100 600 340 2,636 115 Iran, Islamic Rep. 3,770 2,630 4,170 1,160 2,85S 118 Iraq 4,970 1,790 2,910 2,250 2,840 118 High-income oil exporters 8,836 w 1,408 w 4,626 w 573 w 3,345 w Oman 23,790 1,680 6,380 440 Libya 3,970 660 850 360 3,651 155 Saudi Arabia 9,400 1,800 6,060 730 3,244 134 Kuwait 830 600 270 180 3,369 United Arab Emirates .7. 72 .. 390 3,407 Industrial market economies 867 w 554 w 425 w 177 w 3,352 w 130 w Spain 810 360 1,220 280 3,237 132 Ireland 960 780 170 120 3,579 143 Italy 1,850 750 790 250 3,521 140 New Zealand 820 590 980 110 3,493 132 United Kingdom 860 680 200 120 3,226 128 Belgium 700 380 590 130 3,705 140 Austria 720 580 350 170 3,479 132 Netherlands 860 480 270 .. 3,477 129 France 890 460 .. 110 3,514 139 Japan 970 740 410 210 2,653 113 Finland 1,290 460 180 100 3,077 114 Germany, Fed. Rep. 680 420 500 170 3,475 130 Denmark 740 420 190 140 3,525 131 Australia 720 500 110 100 3,068 115 Sweden 910 410 310 100 3,115 116 Canada 770 510 190 120 3,459 130 Norway 800 460 340 70 3,088 115 United States 640 500 310 180 3,623 137 Switzerland 750 390 270 130 3,472 129 (Table continues on the following page.) 67 Table A-S (continued) Daily calorie supply Population per: per capita Physician Nursing person Total As percentage Ttl of requirement 1965 1981 1965 1981 1983 1983 East European nonmarket economics 564 w 329 w 300 w 199 w 3,409 w 132 w Hungary 630 320 240 140 3,563 135 Poland 800 550 410 .. 3,336 127 Albania 2,100 550 .. 2,907 121 Bulgaria 600 400 410 190 3,675 147 Czechoslovakia 540 350 200 130 3,555 144 German Dem. Rep. 870 490 .. 3,718 142 Romania 740 650 400 280 3,341 126 USSR 480 260 280 .. 3,381 132 68 Table A-6. Population per Hospital Bed Population per bed Population per bed Country or area 1950 1960 1970 1980 1981 Country or area 1950 1960 1970 1980 1981 Africa Bahamas 156 182 195 256 ... Algeria 448 320 342 ... ..Barbados 176 170 98 119 .. Angola . 488 362 ... ..Belize 205 214 185 ... .. Benin . 770 861 704 904 Bermuda 155 144 98 ... .. Botswana 1,041 500 .. 383 ... Bolivia ... 619 491 . Burkina Faso ... 1,851 1,671 .. ... Brazil 320 309 262 . Burundi ... 899 787 .. ... British Virgin Cameroon 581 453 480 . ... Islands 389 229 256 382 ... Cape Verde ... 403 638 513 ... Canada 97 90 102 .. . Central Chile 216 275 247 292 .. African Colombia ... 355 446 609 ... Republic ... 650 464 616 . Costa Rica 198 224 254 297 .. Chad ... 1,394 776 ... ... Cuba ... 224 213 .. .. Comoros ... 473 429 ... ... Dominica 295 219 230 Congo ... 205 177 ... ... Dominican C5te d'lvoire ... 606 676 ... ... Republic 400 404 349 Djibouti 158 123 106 ... 286 Ecuador ... 509 434 .. .. Egypt ... 466 462 518 500 El Salvador 465 436 516 . Equatorial Falkland Is. 118 63 74 118 118 Guinea ... 194 ... .. ... French Ethiopia ... 3,090 3,035 2,787 ... Guiana 64 71 86 ... .. Gabon ... 162 98 ... ... Greenland ... ... 75 .. .. Gambia 957 731 ... ... ... Grenada 161 163 139 188 ... Ghana 2,196 1,283 758 ... ... Guadeloupe 132 149 93 ... .. Guinea ... 1,325 585 ... ... Guatemala 438 365 456 ... .. Guinea-Bissau ... 576 613 398 529 Guyana 109 184 213 ... .. Kenya 789 779 774 ... ... Haiti 1,616 1,723 1,374 1,264 Lesotho 1,040 740 487 ... ..Honduras 619 593 568 781 . Liberia 2,094 728 527 ... ..Jamaica 230 241 244 ... .. Libya ... 363 256 ... 201 Martinique 112 101 99 ... .. Madagascar 388 426 353 ... ... Mexico 1,114 612 812 ... .. Malawi 1,366 884 639 ... ... Netherlands Mali ... 1,406 1,386 . .. ... Antilles ... 110 109 ... .. Mauritania ... 4,680 2,786 ... ... Nicaragua 411 424 409 ... .. Mauritius 229 213 248 318 ... Panama 245 250 319 ... .. Morocco 1,037 626 688 ... 848 Paraguay ... 398 624 ... .. Mozambique ... 1,090 771 795 ... Peru 502 419 474 ... .. Niger ... 2,356 1,903 ... ... Puerto Rico 214 194 220 246 ... - ~~~Nigeria 3,795 2,516 1,849 1,251 ... St. Christopher 283 284 187 177 ... Reunion 228 151 119 ... ... Saint Lucia 252 232 225 ... .. Rwanda ... ... 768 640 648 St. Pierre and St. Helena 147 66 88 ... ..Miouelon 83 54 ... .. .. Sao Tome and Saint V~incent Principe ... 25 33 ... ..and Senegal ... 743 728 ... ... Grenadines 224 212 205 . Seychelles 225 145 144 ... ... Suriname 138 151 192 123 Sierra Leone 1,718 1,286 1,037 884 .. . Trinidad and Somalia 866 583 571 ... ... Tobago 234 191 217 ... Sudan 1,135 1,034 1,044 1,086 1,091 United States 104 109 127 171 .. Swaziland 1,136 498 290 .. ... Uruguay 162 187 176 .. .. Tanzania 771 659 ... ... ... Venezuela 276 282 316 .. .. Togo 911 749 655 .. .. Tunisia 655 373 410 469 ... Asia UZanda 901 1687 6419 ... 689 Afghanistan 9,958 8,075 6,894 ... 3,700 Zamire 221 163 319 ... 289 Bahrain ... 214 241 329 ... Zambabw 664 366 25 315 ...28 Bangladesh ... ... 6,790 ... 4,545 Zimbabwe 273 266 295 344 ... ~~~~Brunei 153 209 263 326 390 North America, South America, and Caribbean Burma 2,220 1,561 1,197 1,222 1,226 Antigua 131 131 140 ... ... China ... ... ... 493 491 Argentina 153 159 179 ... ... Cyprus 292 221 190 182 180 (Table continues on the following page.) 69 Table A-6 (continued) Population per bed Population per bed Country or area 1950 19601 1970 1980 1981 Country or area 1950 1960 1970 1980 1981 Kampuchea, German Dem. Democratic 1,513 1,233 929 ... ... Rep. 98 84 90 ... .. East Timor ... 2,248 377 ... ... Germany, Hong Kong 498 380 240 250 245 Fed. Rep. 94 95 90 87 . India 3,074 2,149 1,629 1,254 1,265 Gibraltar 82 87 126 ... Indonesia 1,564 1,343 1,466 ... ... Greece 285 173 161 160 162 Iran, I.R. 2,148 1,079 759 646 640 Hungary 178 144 123 110 109 Iraq 993 542 517 517 532 Iceland 104 94 68 61 .. Israel 177 148 171 196 . .. Ireland 70 66 79 103 ... Japan 258 ill 79 89 86 Italy ... 110 94 . Jordan 766 557 961 1,163 1,230 Luxembourg 123 92 86 86 84 Kuwait ... 147 211 238 . Malta 101 108 99 . Lao People's Monaco 77 ... 74 . Democratic Netherlands 131 128 94 80 ... Rep. 4,775 2,273 1,176 ... ... Norway 114 103 91 67 67 Lebanon 212 240 260 ... ... Poland ... 143 131 . Macau . 103 239 ... ... Portugal 249 183 164 ... .. Malaysia: Romania 236 137 120 107 114 Peninsular 206 254 273 ... 370 Spain 284 250 194 . Sabah 598 341 378 ... ... Sweden 81 72 67 68 .. Sarawak 496 409 394 . ... Switzerland 69 79 89 . Mongolia 191 114 108 90 90 UK: England Nepal ... 8,060 6,752 5,477 ... and Wales 92 95 109 ... Oman ... 3,021 ... 499 492 Northemn Pakistan ... 4,022 1,657 1,739 1,746 Ireland 91 83 86 90 90 Philippines ... 1,208 854 518 ... Scotland 84 81 83 88 ... Qatar ... ... 130 ... 338 Yugoslavia 321 200 179 167 ... Korea, Rep. ... 2,482 1,922 587 607 Saudi Arabia .. . 1,894 1,140 ... 645 Oceania Singapore 247 226 270 250 247 American Sri Lanka 366 319 331 340 340 Samoa 78 88 169 ... Syrian Arab Australia 89 84 83 ... .. Republic 1,492 929 1,005 934 904 Cook Islands 188 124 ... ... 126 Thailand ... 1,393 846 658 ... Fiji 248 247 344 354 364 Turkey 1,106 601 489 445 47 French United Arab Polynesia 218 136 114 158 .. Emirates ... ... . 268 234 Guam 203 209 ... .. Viet Nam ... ... . 278 272 Kiribati 133 178 100 196 208 Yemen Arab Nauru 24 20 34 ... .. Rep. ... 2,901 1,552 ... 1,838 New Yemen, Caledonia 107 73 86 101 93 P.D.R. 1,002 1,154 978 679 ... New Zealand 77 93 98 ... .. Niue 250 139 200 71 .. Pacific Islands 147 186 198 292 223 Europe Papua New Albania 277 196 147 ... ... Guinea 162 ... 152 243 .. Austria 110 93 92 89 89 Samoa . 200 215 224 231 Belgium 141 125 120 ... 107 Solomon Bulgaria 235 161 129 90 90 Islands 228 145 135 ... 175 Channel Tokelau ... ... ... 51 51 Islands: Tonga 625 394 404 299 296 Guernsey .. 81 95 104 104 Tuvalu ... . .. ... 97 97 Jersey ... 100 86 89 89 Vanuatu 135 121 90 153 ... Czechoslovakia ... 101 98 80 80 Wallis and Denmark 104 108 103 ... ... Futuna Faeroe Islands 138 142 167 123 123 Islands ... 90 69 77 108 Finland 135 100 78 64 ... France 118 119 139 ... ... USSR 178 123 91 ... .. 70 Table A-7. Life Expectancy and Related Indicators Life expectancy at Infant birth (years) mortality rate Child death rate Male Female (aged under 1) (aged 1-4) 1965 1984 1965 1984 1965 1984 1965 1984 Low-income economies 49 w 60 w 51 w 61 w 125 w 72 w 19 w 9 w China and India 51 w 63 w 53 w 64 w 115 w 59 w 16 w 6 w Other low-income 44 w 50 w 45 w 52 w 147 w 114 w 27 w 18 w Sub-Saharan Africa 41 w 47 w 43 w 50 w 155 w 129 w 36 w 26 w Ethiopia 42 43 43 46 166 172 37 39 Bangladesh 45 S0 44 51 153 124 24 18 Mali 37 44 39 48 207 176 47 44 Zaire 42 49 45 53 142 103 30 20 Burkina Faso 40 44 42 46 195 146 52 30 Nepal 40 47 39 46 184 135 30 20 Burma 46 57 49 60 125 67 21 7 Malavvi 38 44 40 46 201 158 55 36 Niger 35 42 38 45 181 142 46 29 Tanzania 41 50 44 53 138 111 29 22 Burundi 42 46 45 49 143 120 38 24 Ugandia 43 49 47 53 122 110 26 21 Togo 40 50 43 53 156 98 36 12 Central African Rep. 40 47 41 50 169 138 47 27 India 46 56 44 55 151 90 23 11 Madagascar 41 51 44 54 .. 110 .. 22 Somalia 36 44 40 47 166 153 37 33 Benin 41 47 43 51 168 116 52 19 Rwanda 47 46 51 49 141 128 35 26 China 55 68 59 70 90 36 11 2 Kenya 43 52 46 56 113 92 25 16 Sierra Leone 32 38 33 39 221 176 69 44 Haiti 46 53 47 57 138 124 37 22 Guinea 34 38 36 39 197 176 53 44 Ghana 45 51 49 55 123 95 25 11 SriLanka 63 68 64 72 63 37 6 2 Sudan 39 46 41 50 161 113 37 18 Pakistan 46 52 44 50 150 116 23 16 Senegal 40 45 42 48 172 138 42 27 Afghanistan 34 .. 35 .. 223 .. 39 Bhutan 34 44 32 43 184 135 30 20 Chad 39 43 41 45 184 139 47 27 Kampuchea, Dem. 43 .. 45 .. 135 .. 19 Lao PDR 39 43 42 46 196 153 34 24 Mozambique 36 45 39 48 172 125 31 22 Viet Nam 47 63 50 67 89 50 8 4 Middle-income economics 51 w 59 w 54w 63w 115 w 72w 18 w 8 w Oil exporters 47 w 56 w 50 w 60 w 138 w 89 w 22 w 12 w Oil importers 55 w 62 w 58 w 67 w 97 w 57 w 15 w 5 w Sub-Saharan Africa 41 w 49 w 44 w 52 w 168 w 107 w 33 w 19 w (Table continues on the following page.) 71 Table A-7 (continued) Life expectancy at Infant birth (years) mortality rate Child death rate Male Female (aged under 1) (aged 1-4) 1965 1984 1965 1984 1965 1984 1965 1984 Lower middle-income 47 w 56 w 50 w 60 w 133 w 83 w 22 w 11 w Mauritania 39 45 42 48 171 133 41 25 Liberia 40 48 44 52 172 128 32 23 Zambia 42 50 46 53 123 85 29 15 Lesotho 47 52 50 56 143 107 20 14 Bolivia 42 51 46 54 161 118 37 20 Indonesia 43 53 45 56 138 97 20 12 Yemen Arab Rep. 37 44 38 46 200 155 55 35 Yemen, PDR 37 46 39 48 194 146 52 31 Cote d'lvoire 43 51 45 54 176 106 37 15 Philippines 54 61 57 65 73 49 11 4 Morocco 48 57 51 61 147 91 32 10 Honduras 48 59 51 63 131 77 24 7 El Salvador 52 63 56 68 120 66 20 5 Papua New Guinea 44 51 44 54 143 69 23 7 Egypt, Arab Rep. 47 59 50 62 173 94 21 11 Nigeria 40 48 43 51 179 110 33 21 Zimbabwe 46 55 49 59 104 77 15 7 Cameroon 44 53 47 56 145 92 34 10 Nicaragua 49 58 51 62 123 70 24 6 Thailand 53, 62 58 66 90 44 11 3 Botswana 46 55 49 61 108 72 21 11 Dominican Rep. 52 62 56 66 111 71 14 6 Peru 49 58 52 61 131 95 24 11 Mauritius 59 62 63 69 64 26 9 1 Congo, People's Rep. 48 55 51 59 121 78 19 7 Ecuador 54 63 57 67 113 67 22 5 Jamaica 63 71 67 76 51 20 4 1 Guatemala 413 58 50 62 114 66 16 5 Turkey 52 61 55 66 157 86 35 9 Costa Rica 63 71 66 76 72 19 8 (-) Paraguay 56 64 60 68 74 44 7 2 Tunisia 50 60 51 64 147 79 30 8 Colombia 53 63 59 67 99 48 8 3 Jordan 49 62 51 66 117 50 19 3 Syrian Arab Rep. 51 62 54 65 116 55 19 4 Angola 34 42 37 44 193 144 52 30 Cuba 65 73 69 77 38 16 4 (.) Korea, Dem. Rep. 55 65 58 72 64 28 6 2 Lebanon 60 .. 64 .. 57 .. 4 Mongolia 55 61 58 65 89 50 11 4 Upper middle-income 56 w 63 w 60 w 68 w 91 w 56 w 13 w 5 w Chile 56 67 62 73 110 22 14 1 Brazil S5 62 59 67 104 68 14 6 Portugal 61 71 68 77 69 19 6 1 Malaysia 56 66 59 71 57 28 5 2 Panama 62 70 64 73 59 25 4 1 72 Table A-7 (continued) Life expectancy at Infant birth (years) mortality rate Child death rate Male Female (aged under 1) (aged 1-4) 1965 1984 1965 1984 196S 1984 1965 1984 Uruguay 65 71 72 75 47 29 3 1 Mexico 58 64 61 69 84 51 9 3 Korea, Rep. of 55 65 58 72 64 28 6 2 Yugoslavia 64 66 68 73 72 28 7 2 Argentina 63 67 69 74 59 34 4 1 South Africa 45 52 48 56 124 79 22 7 Algeria 49 59 51 62 1SS 82 34 8 Venezuela 60 66 64 73 67 38 6 2 Greece 69 72 72 78 37 16 2 1 Israel 70 73 73 77 29 14 2 (.) Hong Kong 64 73 71 79 28 10 2 (.) Trinidad and Tobago 63 67 67 72 43 22 3 1 Singapore 63 70 68 75 28 10 1 (.) Iran, Islamic Rep. 52 61 52 61 150 112 32 17 Iraq 50 58 53 62 121 74 21 7 High-income oil exporters 47 w 61 w 50 w 64 w 141 w 65 w 34 w 6 w Oman 40 52 42 55 175 110 43 17 Libya 48 57 51 61 140 91 29 10 Saudi Arabia 47 60 49 64 148 61 38 4 Kuwait 61 69 64 74 43 22 5 1 United Arab Emirates 57 70 61 74 104 36 14 1 Industrial market economies 68 w 73 w 74 w 79 w 24 w 9 w 1 w () w Spain 68 74 73 80 38 10 3 (.) Ireland 69 71 73 76 27 10 1 (.) Italy 68 74 73 79 38 12 3 (.) New Zealand 68 71 74 77 20 12 1 (.) United Kingdom 68 72 74 78 20 10 1 0.) Belgium 68 72 74 78 24 11 1 (.) Austria 66 70 73 77 30 11 2 (.) Netherlands 71 73 76 80 14 8 1 (.) France 68 74 75 80 22 9 1 (.) Japan 68 75 73 80 21 6 1 (.) Finland 66 72 73 79 17 6 1 (.) Germany, Fed. Rep. 67 72 73 78 26 10 1 (.) Denmark 71 72 75 78 19 8 1 (.) Australia 68 73 74 79 19 9 1 (.) Sweden 72 74 76 80 13 7 1 (.) Canada 69 72 75 80 24 9 1 (.) Norway 71 74 76 80 17 8 1 (.) United States 67 72 74 80 25 11 1 (.) Switzerland 69 73 75 80 18 8 1 (.) (Tabk continues on the following page.) 73 Table A-7 (continued) Life expectancy at Infant birth (years) mortality rate Child death rate Male Female (aged under 1) (aged 1-4) 1965 1984 1965 1984 1965 1984 1965 1984 East European nonmarket economies 66 w 66 w 73 w 71 w 31 w 19 w 2 w (.)w Hungary 67 67 72 74 42 19 3 1 Poland 66 67 72 76 46 19 3 1 Albania 64 67 67 73 87 43 10 3 Bulgaria 66 68 72 74 35 17 2 1 Czechoslovakia 64 66 73 74 23 15 1 1 German Dem. Rep. 67 68 73 75 27 11 1 (.) Romania 66 69 70 74 53 25 1 1 USSR 65 65 74 74 30 .. 2 74 Table A-8. Urbanization Urban population Urban population As percentage Average annual As percentage Average annual of total growth rate of total growth rate population (percent) population (percent) 1965 1984 1965-73 1973-84 1965 1984 196S-73 1973-84 Low-income Indonesia 16 25 4.1 4.5 economies 17 w 23 w 4.5 w 4.6 w Yemen Arab Rep. 5 19 9.7 8.8 China and India 18 w 23 w .. .. Yemen, PDR 30 37 3.4 3.5 Other low-income 13 w 22 w 5.2 w 5.1 w Cote d'lvoire 23 46 8.2 8.3 Sub-Saharan Africa 11 w 21 w 6.2 w 6.1 w Philippines 32 39 4.0 3.7 Ethiopia 8 15 7.4 6.1 Morocco 32 43 4.0 4.2 Bangladesh 6 18 6.6 7.7 Honduras 26 39 5.4 5.7 Mali 13 19 5.4 4.5 El Salvador 39 43 3.6 3.6 Zaire 19 39 5.9 7.1 Papua New Guinea 5 14 14.3 6.1 Burkina Faso 6 11 6.5 4.8 Egypt, Arab Rep. 40 23 3.0 3.0 Nepal 4 7 4.3 8.4 Nigeria 15 30 4.7 5.2 Burma 21 29 4.0 4.0 Zimbabwe 14 27 6.8 6.1 Malawi 5 12 8.2 7.3 Cameroon 16 41 7.3 8.2 Niger 7 14 7.0 7.1 Nicaragua 43 56 4.4 5.2 Tanzania 6 14 8.1 8.6 Thailand 13 18 4.8 3.1 Burundi 2 2 1.4 3.3 Botswana 4 20 19.0 11.3 Uganda 6 7 8.3 -0.1 Dominican Rep. 35 55 5.6 4.7 Togo 11 23 6.4 6.5 Peru 52 68 4.7 3.6 Central African Rep. 27 45 4.4 4.6 Mauritius 37 56 4.6 3.4 India 19 25 4.0 4.2 Congo, People's Rep. 35 56 4.4 5.4 Madagascar 12 21 5.3 5.5 Ecuador 37 47 3.9 3.9 Somalia 20 33 6.4 5.4 Jamaica 38 53 4.3 2.7 Benin 11 15 4.5 5.0 Guatemala 34 41 3.8 4.1 Rwanda 3 5 6.0 6.6 Turkey 32 46 4.9 4.0 China 18 22 3.0 2.9 Costa Rica 38 45 3.8 3.3 Kenya 9 18 7.3 7.9 Paraguay 36 41 3.2 3.4 Sierra Leone 15 24 5.0 3.5 Tunisia 40 54 4.1 3.8 Haiti 18 27 3.8 4.2 Colombia 54 67 4.3 2.9 Guinea 12 27 5.0 6.2 Jordan 47 72 4.7 4.7 Ghana 26 39 4.5 5.3 Syrian Arab Rep. 40 49 4.8 4.3 Sri Lanka 20 21 3.4 3.5 Angola 13 24 5.9 6.0 Sudan 13 21 6.3 5.5 Cuba 58 71 2.8 1.6 Pakistan 24 29 4.3 4.4 Korea, Dem. Rep. 45 63 4.9 4.1 Senegal 27 35 4.2 3.8 Lebanon 49 .. 6.2 Afghanistan 9 .. 5.6 .. Mongolia 42 55 4.6 4.1 Bhutan 3 4 -2.1 4.6 Upper middle-income 49 w 65 w 3.9 w 4.1 w Chad 9 21 6.9 6.5 Chile 72 83 2.8 2.4 Kampuchea, Dem. 11 .. 3.4 .. Brazil 51 72 4.5 4.0 Lao PDR 8 15 4.6 5.7 Portugal 24 31 1.2 2.5 Mozambique 5 16 8.2 10.2 Malaysia 26 31 3.3 3.6 Viet Nam 16 20 5.5 2.3 Panama 44 50 4.1 3.1 Middle-income 36 w 49 w 4.5 w 4.1 w Uruguay 81 85 0.8 0.8 Oil exporters 29 w 42 w 4.4 w 4.4 w Mexico 55 69 4.8 4.0 Oil importers 40 w 55 w 4.5 w 3.6 w Korea, Rep. of 32 64 6.5 4.6 Sub-Saharan Africa 16 w 28 w 6.4 w 5.9 w Yugoslavia 31 46 3.1 2.7 Lower middle-income 26 w 37 w 5.1 w 4.2 w Argentina 76 84 2.1 2.1 Mauritania 7 26 16.0 5.1 South Africa 47 56 2.6 3.7 Liberia 22 39 5.3 6.0 Algeria 32 47 2.5 5.4 Zambia 24 48 7.6 6.4 Venezuela 72 85 4.8 4.3 Lesotho 2 13 7.8 20.1 Greece 48 65 2.5 2.5 Bolivia 40 43 8.9 3.6 Israel 81 90 3.8 2.7 (Table continues on the following page.) 75 Table A-8 (continued) Urban population Urban population As percentage Average annual As percentage Average annual of total growth rate of total growth rate population (percent) population (percent) 1965 1984 1965-73 1973-84 1965 1984 1965-73 1973-84 Hong Kong 89 93 2.1 2.6 France 67 81 2.0 1.2 Trinadad and Tobago 22 22 0.6 1.2 Japan 67 76 2.4 1.4 Singapore 100 100 1.8 1.3 Finland 44 60 2.8 1.9 Iran, Islamic Rep. 37 54 5.4 5.0 Germany, Fed. Rep. 79 86 1.2 0.3 Iraq 51 70 5.7 5.5 Denmark 77 86 1.3 0.6 High-income oil Australia 83 86 2.6 1.5 exporters 36 w 70 w 9.2 w 7.7 w Sweden 77 86 1.6 0.7 Oman 4 27 10.8 17.6 Canada 73 75 1.9 1.2 Lyan 9 63 10.9 17.9 Norway 37 77 3.4 2.7 Libya 29 63 8.9 7.9 United States 72 74 1.6 1.3 Saudi Arabia 39 72 8.4 7.3 Swteln53 61. 08 Kuwait 75 93 9.3 7.7 Switzerland 53 60 1.9 0.8 United Arab Emirates 56 79 16.7 10.4 East European Industrial market nonmarket economies 72 w 77 w 1.8 w 1.2 w economies 52 w 64 w 2.6 w 1.8 w Spain 61 77 2.5 2.0 Hungary 43 55 2.2 1.4 Ireland 49 57 2.0 2.2 Poland 50 60 1.5 1.8 Italy 62 71 1.4 1.0 Albania 32 39 3.5 3.2 New Zealand 79 83 1.9 0.9 Bulgaria 46 68 3.2 2.1 United Kingdom 87 92 0.7 0.2 Czechoslovakia 51 66 1.8 1.7 Belgium 86 89 0.9 1.2 German Dem. Rep. 73 76 0.2 0.2 Austria 51 56 0.8 0.6 Romania 34 52 4.2 3.0 Netherlands 79 76 0.8 -1.0 USSR 52 66 5.9 -3.0 76 Technical Notes In tables A-1, A-2, A-5, A-7, and A-8, economies squares growth rate, r, is estimated by fitting a are listed in their group in ascending order of gross least-squares linear trend line to the logarithmic national product (GNP) per capita except for those annual values of the variable in the relevant period. for which no GNP per capita can be calculated. More specifically, the regression equation takes These are listed in alphabetical order, in italics, at the form of log X, = a + b, + e, where this is the end of their group. equivalent to the logarithmic transformation of The letter w after a summary measure indicates the compound growth rate equation, X, = XO (1 + that it is a weighted average; the letter m, that it is a r),. In these equations, X, is the variable, t is time, median value; the letter t, that it is a total. Data and a = log Xoand b = log (1 + r) are the parame- that are not available are indicated by ". ."; ";(.) ters to be estimated; e, is the error term. If b* is the indicates less than half the unit designated. All least-squares estimate of b, then the annual average growth rates are in real terms. Figures in italics are growth rate, r, is obtained as [antilog (b*)]-1. for years or periods other than those specified. The statistics and measures presented in the ap- pendix tables have been chosen to give a picture of Table A-i. Basic Indicators the health sector in developing countries. Data for This table is adapted from World Bank (1986). The developed countries have been added for compar- estimates of population for mid-1984 are based on ative purposes. Considerable effort has been made data from the U.N. Population Division or World to standardize the data; nevertheless, statistical Bank sources. In many cases the data take into methods, coverage, practices, and definitions dif- account the results of recent population censuses. fer widely. In addition, the statistical systems in Note that refugees not permanently settled in the many developing economies are still weak, and country of asylum are generally considered to be this affects the availability and reliability of the part of the population of their country of origin. data. Readers are urged to take these limitations The data on area are from the 1984 FAO Produc- into account in interpreting the indicators, particu- tion Yearbook. larly when making comparisons across countries. GNP measures the total domestic and foreign All growth rates shown are in constant prices output claimed by residents and is calculated and, unless otherwise noted, have been computed without making deductions for depreciation. It by using the least-squares method. The least- comprises gross domestic product (see the note for 77 table A-2) adjusted by net factor income from The estimates of 1984 GNP and 1984 per capita abroad. That income comprises the income res- GNP are calculated on the basis of the 1982-84 idents receive from abroad for factor services (la- base period. With this method, the first step is to bor, investment, and interest) less similar payments calculate the conversion factor. This is done by made to nonresidents who contributed to the do- taking the simple arithmetic average of the actual mestic economy. exchange rate for 1984 and of adjusted exchange The GNP per capita figures are calculated ac- rates for 1982 and 1983. To obtain the deflated cording to the World Bank Atlas method. The exchange rate for 1982, the actual exchange rate Bank recognizes that perfect cross-country compa- for 1982 is multiplied by the relative rate of infla- rability of GNP per capita estimates cannot be tion for the country and for the United States be- achieved. Beyond the classic, strictly intractable tween 1982 and 1984. For 1983, the actual ex- "index number problem," two obstacles stand in change rate for 1983 is multiplied by the relative the way of adequate comparability. One concerns rate of inflation for the country and the United GNP numbers themselves. There are differences in States between 1983 and 1984. the national accounting systems and in the cover- This average of the actual and the deflated ex- age and reliability of underlying statistical informa- change rate is intended to smooth the impact of tion between various countries. The other relates fluctuations in prices and exchange rates. The sec- to the conversion of GNP data, expressed in differ- ond step is to convert the GNP at current purchaser ent national currencies, to a common numeraire- values and in national currencies of the year 1984 conventionally the U.S. dollar-to compare them by means of the conversion factor as derived across countries. The Bank's procedure for con- above. Then the resulting GNP in U.S. dollars is verting GNP to U.S. dollars generally uses a three- divided by the midyear population to derive the year average of the official exchange rate. For a 1984 per capita GNP. The preliminary estimates of few countries, however, the prevailing official ex- GNP per capita for 1984 are shown in this table. change rate does not reflect the rate effectively The following formulas describe the procedures applied to actual foreign exchange transactions, for computing the conversion factor for year t: and in these cases an alternative conversion factor I l P + p/ P ] is used. (et-22[e2 ( ) t- t- Recognizing that these shortcomings affect the and for calculating per capita GNP in U.S. dollars comparability of the GNP per capita estimates, the for year t: World Bank has introduced several improvements in the estimation procedures. Through its regular (YMd = YtI Nt . e, 2.t review of member countries' national accounts, where the World Bank systematically evaluates the GNP estimates, focusing on the coverage and concepts employed and, where appropriate, making adjust- P = GNP (lor for year t ments to improve comparability. The Bank also = GNP deflator for year t e = annua vrg xhnert lclcr undertakes a systematic review to assess the appro- ual average exchange rate (local cur- ,, , . , ~~~~~~~~~rency/U.S. dollars) for year t priateness of the exchange rates as conversion fac- Ny Somid tors. An alternate conversion factor is used when '= USyear population for year t the official exchange rate is judged to diverge by an .. GNP deflator for year t exceptionally large margin from the rate effec- Because of problems associated with the availa- tively applied to foreign transactions. This applies bility of data and the determination of exchange to only a small number of countries. rates, information on GNP per capita is not shown In an effort to achieve greater comparability, the for most East European nonmarket economies. U.N. International Comparison Project (IcP) has Life expectancy at birth indicates the number of developed measures of gross domestic product years a newborn infant would live if patterns of (GDP) using purchasing-power parities rather than mortality prevailing for all people at the time of its exchange rates. So far the project covers sixty birth were to stay the same throughout its life. countries for the year 1980, but some inherent Data are from the U.N. Population Division, sup- methodological issues remain unresolved. plemented by World Bank estimates. 78 The summary measures for GNP per capita and of military forces; including the purchase of mili- life expectancy in this table are weighted by popu- tary supplies and equipment, construction, recruit- lation. Those for average annual rates of inflation ing, and training. Also in this category is expendi- are weighted by the share of country GDP valued in ture on strengthening public services to meet current U.S. dollars for the entire period in the wartime emergencies, on training civil defense per- particular income group. sonnel, on supporting research and development, and on funding administration of military aid. Education comprises expenditure on the provi- Tables A-2, A-3, and A-4. Central sion, management, inspection, and support of Government Expenditure preprimary, primary, and secondary schools; of universities and colleges; and of vocational, techni- Table A-2 is adapted from World Bank (1986). The cal, and other training institutions by central gov- data on central government finance in tables A-2, ernments: Also included is expenditure on the gen- A-3, and A-4 are from the IMF Government Fi- eral administration and regulation of the nance Statistics Yearbook for 1986, IMF data files, education system; on research into its objectives, and World Bank country documentation. The ac- organization, administration, and methods; and on counts of each country are reported using the sys- such subsidiary services as transport, school meals, tem of common definitions and classifications and medical and dental services in schools. found in the IMF Manual on Government Finance Health covers public expenditures on hospitals, Statistics. Due to differences in coverage of availa- medical and dental centers, and clinics with a ma- ble data, the individual components of central gov- jor medical component; on national health and emment expenditure and current revenue shown medical insurance schemes; and on family plan- in these tables may not be strictly comparable ning and preventive care. Also included is expendi- across all economies. The shares of total expendi- ture on the general administration and regulation ture and revenue by category are calculated from of relevant government departments, hospitals and national currencies. clinics, health and sanitation, and national health The inadequate statistical coverage of state, pro- and medical insurance schemes; and on research vincial, and local governments has dictated the use and development. of central government data only. This may seri- Housing and community amenities and social ously understate or distort the statistical portrayal security and welfare cover (1) public expenditure of the allocation of resources for various purposes, on housing, such as income-related schemes, on especially in large countries where lower levels of provision and support of housing and slum clear- government have considerable autonomy and are ance activities, on community development, and responsible for many social services. on sanitary services; and (2) public expenditure on It must be emphasized that the data presented, compensation to the sick and temporarily disabled especially those for education and health, are not for loss of income; on payments to the elderly, the comparable for a number of reasons. In many permanently disabled, and the unemployed; and economies private health and education services on family, maternity, and child allowances. The are substantial; in others public services represent second category also includes the cost of welfare the major component of total expenditure but services such as care of the aged, the disabled, and may be financed by lower levels of govemment. children, as well as the cost of general administra- Great caution should therefore be exercised in us- tion, regulation, and research associated with so- ing the data for cross-country comparisons. cial security and welfare services. Central government expenditure comprises the Economic services comprise public expenditure expenditure by all govemment offices, depart- associated with the regulation, support, and more ments, establishments, and other bodies that are efficient operation of business, economic develop- agencies or instruments of the central authority of ment, redress of regional imbalances, and the crea- a country. It includes both current and capital (de- tion of employment opportunities. Research, trade velopment) expenditures. promotion, geological surveys, and inspection and Defense comprises all expenditures, whether by regulation of particular industry groups are among defense or other departments, on the maintenance the activities included. The five major categories 79 of economic services are fuel and energy, agricul- Table A-6. Population per Hospital Bed ture, industry, transportation and communication, and other economic affairs and services. A review of the number of persons per hospital Other covers expenditure on the general admin- bed is given in this table. For the period 1950-70, istration of government not included elsewhere; data for the closest available year have been used for a few economies it also includes amounts that whenever information was not available for the could not be allocated to other components. exact year. The summary measures for the components of A hospital bed is defined by WHO as a bed regu- central government expenditure are computed larly maintained and staffed for the accommoda- from group totals for expenditure components tion and full-time care of a succession of inpatients and central government expenditure in current and is situated in a ward or a part of a hospital dollars. Those for total expenditure as a percent- where continuous medical care for inpatients is age of GNP are computed from group totals for the provided. Cribs and bassinets used for healthy above total expenditure in current dollars, and newborn infants who do not require special care GNP in current dollars, respectively. are not included. The source for the data is WHO (1983). Table A-5. Health-Related Indicators Table A-7. Life Expectancy and Related This table is adapted from World Bank (1986). The Indicators estimates of population per physician and nursing This table is adapted from World Bank (1986). person are derived from World Health Organiza- Life expectancy at birth is defined in the note tion (WHO) data. They also take into account re- for table A-1. vised estimates of population. Nursing persons in- The infant mortality rate is the number of in- clude graduate, practical, assistant, and auxiliary fants who die before reaching one year of age, per nurses; the inclusion of auxiliary nurses allows for thousand live births in a given year. The data are a better estimation of the availability of nursing from a variety of U.N. sources-"Infant Mortal- care. Because definitions of nursing personnel vary ity: World Estimates and Projections, 1950-2025" -and because the data shown are for a variety of (United Nations 1982) and recent issues of the years, generally not more than two years distant United Nations Demographic Yearbook and Pop- from those specified-the data for these two in- ulation and Vital Statistics Report-and from the dicators are not strictly comparable across the World Bank. countries. The child death rate is the number of deaths of The daily calorie supply per capita is calculated children aged 1-4 per thousand children in the by dividing the calorie equivalent of the food sup- same age group in a given year. Estimates are based plies in an economy by the population. Food sup- on the data on infant mortality and on the relation- plies comprise domestic production, imports less ship between the infant mortality rate and the exports, and changes in stocks; they exclude child death rate implicit in the appropriate Coale- animal feeds, seeds for use in agriculture, and food Demeny Model life tables; see Coale and Demeny lost in processing and distribution. The daily calo- (1966). rie requirement per capita refers to the calories The summary measures in this table are country needed to sustain a person at normal levels of figures weighted by each country's share in the activity and health, taking into account age and sex aggregate population. distributions, average body weights, and environ- mental temperatures. Because no later figures are available, 1977 calorie requirement data are used Table A-8. Urbanization for these calculations. Both sets of estimates are from the Food and Agriculture Organization (FAO). This table is adapted from World Bank (1986). The The summary measures in this table are country data on urban population as a percentage of total figures weighted by each country's share in the population are from United Nations (1985) supple- aggregate population. mented by data from various issues of the United 80 Nations Demographic Yearbook and from the The summary measures for urban population as World Bank. a percentage of total population are calculated The growth rates of urban population are calcu- from country percentages weighted by each coun- lated from the World Bank's population estimates; try's share in the aggregate population; the other the estimates of urban population share are calcu- summary measures in this table are weighted in the lated from the sources cited above. Data on urban same fashion, using urban population. agglomeration are from United Nations (1980)., For reasons explained in the notes to the previ- Because the estimates in this table are based on ous tables, the data presented are not comparable different national definitions of what is "urban," across the countries. cross-country comparisons should be interpreted with caution. 81 Bibliographical Notes This report uses information from a wide variety Company's health care system in Liberia. The de- of internal World Bank documents, Bank publica- scriptions of existing health care systems are based tions, and outside sources. World Bank sector re- on Bose and Desai (1983), Valenzuela (1981), and views and project reports, ongoing economic anal- Jonsson (1986). yses and research, as well as project reports for The discussion of the problem of insufficient specific countries provided valuable facts; they spending for cost-effective programs used Patel have not been published for external dissemina- (1986), WHO (1981b), de Ferranti (1985), and USAID tion, however, and are not listed in the references. (1985) for expenditure information and estimates World Development Reports for 1982, 1984, and of the cost of primary health care interventions. 1986 were sources of information. Discussions of Examples for the section on inefficiency came the major sources for each section of the report from Bose and Desai (1983), Bloom (1983), and follow. Sources for tables and figures are shown at Gesler (1979), Gershenberg and Haskell (1972), the end of each. and Lasker (1981) on rationing by queue. The dis- cussion of supply problems is based on Ainsworth (1983a), Danzon (1985), Gray (1986), USAID (1985), Chapter 1. The Health Sector WHO (1984), Jonsson (1986), and Gwatkin, and Its Problems Berman, and Burger (1986a-c). The discussion of the equity problem is based on sector and appraisal World Bank sector and appraisal reports provided reports, and on Jonsson (1986) from which much much of the factual information; especially useful Tanzanian information came; Jimenez (1987) for were reports on Colombia, Ethiopia, the Gambia, information on China, Colombia, Indonesia, and Lesotho, Niger, Nigeria, Somalia, Swaziland, Malaysia; Melrose (1982) on high technology Zambia, and Zimbabwe. For the section, "Health medicine in Bangladesh; and Mesa-Lago (1983) on and the Health Sector in Developing Countries," Latin American social security systems. other major sources were Birdsall (1986) on mor- bidity; Akin et al. (1985), Bird&all, Orivel, Ains- Chapter 2. Policy Reforms worth, and Chuhan (1983), and International Sta- tistical Institute (1979) on service usage patterns, Especially useful for chapter 2 were World Bank and Clower and Armstrong (1966) on the Firestone sector and other reports on Argentina, Bangladesh, 83 Botswana, Brazil, Cameroon, China, Colombia, on the responsiveness of health service purchases Ecuador, India, Indonesia, Ivory Coast, Kenya, to prices. Sources for the section on risk coverage Lesotho, Malawi, the Philippines, Rwanda, Thai- include Prescott and Jamison (1984), Abel-Smith land, Zambia, and Zimbabwe. The section on (1985), and Newhouse (1981b). The discussion of charging the fees relies for the general argument on the private sector benefited from Fisk (1978) and de Ferranti (1985), Birdsall (1986), Akin et al. Savas (1982) on the pros and cons of contracting (1985), and Jimenez (1987). public services out to private providers; Olson The World Development Report 1983 and Saun- (1981) and Dobson (1978) on the problems with ders and Warford (1976) were sources on marginal the periodic review method of regulation for both cost pricing mlethodology; Roemer and Shain facilities and individual practitioners; and Stinson (1959), Pauly and Satterthwaite (1981), and Feld- (1982) on community-based health finance sys- stein (1972) on supplier induced demand; and Hel- tems. The discussion of decentralization benefited ler (1976), Birdsall et al. (1983), Akin and Schwartz from the World Development Report 1982 and (1985), Ainsworth (1983a), and de Ferranti (1983b) Birdsall (1986). 84 References Abel-Smith, Brian. 1976. Value for Money in Health Note 86-10. Washington, D.C.: Population, Services: A Comparative Study. London: Health, and Nutrition Department, World Bank, Heinemann. February. -. 1978. "Poverty, Development, and Health Akin, John, C. C. Griffin, D. K. Guilkey, and B. M. Policy." Public Health Papers 69. Geneva: World Popkin. 1985. The Demand for Primary Health Health Organization. Care in the Third World. Totowa, N.J.: Rowman . 1985. "Global Perspectives on Health Ser- and Allanheld. vice Financing." Social Science and Medicine 21, . Forthcoming. "The Demand for Primary no. 9: 957-63. Health Care in the Bicol Region of the Philip- Acharya, M. 1982. "Issues in Recurrent Costs in So- pines." Economic Development and Cultural cial Sectors." Washington, D.C.: Development Re- Change. search Department, World Bank. Processed. Akin, John, and J. Brad Schwartz. 1985. "The Effect Acharya, S. N. 1972. "Public Enterprise Pricing and of Economic Factors on Contraceptive Choice in Social Benefit Cost Analysis." Oxford, England: Jamaica and Thailand." Chapel Hill: University of Oxford University Economic Paper. North Carolina. Processed. Anderson, D., and R. Turvey. 1974. 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"Fees for Health Services and the Indonesia." Ph.D. thesis, School of Public Hygiene Concern for Equity for the Poor." PHN Technical and Public Health, Johns Hopkins University. 85 Attah, E. B. 1976. "Applications of a Health Planning Technical Note 86-24. Washington, D.C.: Popula- Model in Morocco." International Journal of tion, Health, and Nutrition Department, World Health Services 6, no. 1: 103-21. Bank, July. . 1986. "Underutilization of Public Sector Birdsall, Nancy, Franqois Orivel, Martha Ainsworth, Health Facilities in Imo State, Nigeria." PHN Tech- and Punam Chuhan. 1983. "Three Studies on Cost nical Note 86-1. Washington, D.C.: Population, Recovery in Social Projects: (1) Willingness to Pay Health, and Nutrition Department, World Bank, for Health and Water in Rural Mali: Do WTP Ques- February. tions Work?; (2) Cost Recovery for Health and Barlow, Robin. 1976. "Application of a Health Plan- Water Projects in Rural Mali: Household Ability ning Model in Morocco." 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Health for All Series 3. Geneva. Department, World Bank. Processed. -. 1981b. "Review of Health Expenditures, Fi- nancial Needs of the Strategy for Health for All by Zschock, Dieter K. 1979. "Health Care Financing in the Year 2000, and the International Flow of Re- Developing Countries." International Health Pro- sources for Strategy." Report of the Director- grams Monograph Series 1. Washington, D.C.: General, EB69/7, November 18. Geneva. American Public Health Association. -. 1982. "Guidelines for Preparation of the . 1980. "Health Care Financing in Central Country Health Resource Utilization Review Doc- America and the Andean Region-A Workshop ument." Health Resources Group for Primary Report. Latin American Research Review 15, no. Health Care, coR/HRG/82.1. Geneva. 3: 149-68. -. 1983. World Healti? Statistics Annual-An- nuuaire de Statistiques Sanitaires Mondiales, 1983. 1981. "General Review of Problems of Geneva. Medical Care Delivery under Social Security in De- -_-. 1984. "Health Costs and Financing" World veloping Countries." Paper prepared for ISSA ,, 198. "Healthcs and Finacn." Round Table Meeting at Brasilia, November, Health Statistics 37, no. 4: 336-469. 24-27. World Bank. 1980. Health. Sector Policy Paper. Washington, D.C. . 1982. "General Review of Problems of -. 1982. World Development Report 1982. Medical Care Delivery under Social Security in De- New York: Oxford University Press. veloping Countries." International Social Security -. 1983. World Development Report 1983. Review 35, no. 1: 3-16. New York: Oxford University Press. .1986. "Medical Care under Social Insurance -. 1984. World Development Report 1984. in Latin America." Latin American Research Re- New York: Oxford University Press. view 21, no. 1: 99-122. The most recent World Bank publications are described in the catalog New Publications, a new edition of which is issued in the spring and fall of each year. The complete backlist of publications is shown in the annual Index of Publications, which contains an alphabetical title list and indexes of subjects, authors, and countries and regions; it is of value principally to libraries and institutional purchasers. The contin- uing research program is described in The World Bank Research Program: Abstracts of Current Studies, which is issued annually. The latest edition of each of these is available free of charge from Publica- tions Sales Unit, Department B, The World Bank, 1818 H Street, N.W., Washington, D.C. 20433, U.S.A., or from Publications, The World Bank, 66, avenue d'Iena, 75116 Paris, France. 93 The World Bank Headquarters European Office Tokyo Office 1818 H Street, N.W 66, avenue d'lena Kokusai Building Washington, D.C. 20433, U.SA. 75116 Parts, France 1-1 Marunouchi 3-chome Telephone: (202) 477-1234, Telephone: (1) 47.23.54.21 Chiyoda-ku, Tokyo 100, Japan Telex: WUI 64145 WORLDBANK Telex: 842-620628 Telephone: (03) 214-5001 RCA 248423 WORLDBK Telex: 781-26838 Cable Address: INTBAFRAD WASHINGTONDC Related titles from the World Bank of interest to readers of Financing Health Services in Developing Countries Child and Maternal Health Services in Rural India. Two volumes. Arnfried A. Kielmann, Carl E. Taylor, and others. The Johns Hopkins University Press. China: The Health Sector. Dean 'T. Jamison and others. The Environment, Public Health, and Human Ecology: Considerations forEconomic Development James A. Lee. The Johns Hopkins University Press. Paying for Health Services in Developing Countries: An Overview. David de Ferranti. WTorld Bank Staff Working Paper 721. Population Growth and Policies in Sub-Saharan Africa. A World Bank Policy Study. Poverty and Hunger: Issues and Options forFood Security in Developing Countries. A World Bank Policy Study. Pricing Policy in the Social Sectors: CostRecovery for Education and Health in Developing Countries. Emmanuel Jimenez. The Johns Hopkins University Press. The Private Provision of Public Services in Developing Countries. Gabriel Roth. Oxford University Press. ?120 ISBN 0-8213-0900-5 $'-