When Both Markets and Governments Fail Health

Abstract

This paper presents the rationale and motivation for countries and the global development community to tackle a critical set of functions in the health sector that appear to be under-prioritized and underfunded. The recent eruptions of Ebola outbreaks in Africa and other communicable diseases like Zika and SARS elsewhere led scientific and medical commissions to call for global action. The calls for action motivated the World Health Organization (WHO) to respond by defining a new construct within the health sector: Common Good for Health (CGH). While the starting point for developing the CGH construct was the re-emergence of communicable diseases, it extends to additional outcomes resulting from failures to act and finance within and outside the health sector. This paper summarizes global evidence on failures to address CGHs effectively, identifies potential reasons for the public and private sectors' failures to respond, and lays out the first phase of the WHO program as represented by the papers in this special issue of Health Systems & Reform. OBJECTIVE AND MOTIVATION FOR THIS SPECIAL ISSUEThe last 20 years have seen amazing improvements in health indicators globally. Global attention directed to health has been impressive and resources have been expanding at unprecedented rates. External spending on health grew fivefold since 2000, reaching about $20 billion USD in 2015 1 and health sector resources go beyond external funds. We have known for years that OECD countries, especially the wealthiest, have spending rates that grow faster than economic growth. 2 A recent publication from the World Health Organization (WHO) using global data on health expenditures shows that this expansion is not unique to high-income countries. Between 2000 and 2016, global spending on health has increased at 4% per annum, while the global economy grew at 2.8%. Health spending growth has in fact been even more rapid in low-and middle-income countries -at 6% per year, it amounted to $1.6 trillion USD in 2016. 1

Financing Global Common Goods for Health: When the World is a Country

“…These losses are described elsewhere in this series such as in Yazbeck and Soucat's article. 18 Two examples are the expected annual losses from pandemic risk (projected to be approximately 500 billion USD, or 0.6% of global income per year 19 ) and the estimated annual GDP loss in 40 years that will accrue if current rates of AMR persist, approximately 454 billion USD per year. 20 2.…”

Financing Common Goods for Health: A Country Agenda

“…fragile or conflict-affected areas, or low-income countries) external assistance will be needed to ensure the provision of CGH. 3,4 This financing consideration directly complements policy efforts to move towards Universal Health Coverage (UHC) that focus on ensuring effective access for the entire population to quality, affordable health services. 7,8 In practice, UHC-related health financing reforms have often focused on personal services delivered to individuals, with less attention paid to population-based functions.…”

“…3 CGH can be classified into five categories: (i) policy and coordination; (ii) taxes and subsidies; (iii) regulations and legislations; (iv) information, collection, analysis & communication; and (v) population services. 3,4 This paper focuses on specific issues related to government financing mechanisms that influence how efficiently CGH are organized and delivered. Building from country experiences and budget documentation, it addresses how financing mechanisms for CGH interact with other aspects of health system financing and public finance more generally.…”

Common Goods for Health: Economic Rationale and Tools for Prioritization

“…The previous article in the special issue (by Yazbeck and Soucat) defined CGH as a cluster of feasible interventions exhibiting two fundamental characteristics: (i) market failures due to their public good nature or the large health externalities they generate; and (ii) strong potential impact on human life. 1 It explained the need to adequately recognize and finance such services, which are historically underfunded within the health sector, exposing human life to large avoidable losses.…”