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Journal of the Academy of Hospital Administration

Notes, News and Journal Scan

Author(s): Rajiv Kumar Jain*, Sidhartha Satpathy**

Vol. 14, No. 1 (2002-01 - 2002-06)

Economic Analysis of Programmes can Improve Productivity and Quality of Care

Economic analysis of programmes can provide managers with information that can improve both the productivity of programmes and the quality of care, says John Bratt, Family Health International (FHI) and Senior Associate for Health Economics. Among other things, economic analysis can help programme managers identify any high revenue producing services that can subsidize a programme's low revenue-producing services, *evaluate clients ability to pay for services, *ascertain if certain services or products offered by a programme are draining resources and threatening programme sustainability, *determine if clinics in different regions should charge different prices and *evaluate staff productivity (Network; vol.21: No 3, 2002)

Recommendations of the Commission on Macroeconomics and Health

The Commission on Macroeconomics and Health (CMH) was instituted by the World Health Organization in January 2000 and published its work in December 2001. Its preliminary findings were summarized by Commissioner Richard Feachem, at the Forum 5 meeting of the Global Forum for Health Research held in Geneva in October, 2001. Its main message is: Although health is widely understood to be both a central goal and an important outcome of development, the importance of investing in health to promote economic development and poverty reduction has been much less appreciated.

Key findings action plan and donor finances required are as follows:

Key Findings of the Commission on Macroeconomics and Health, December 2001

1. Importance of investing in health has been greatly underestimated by analysts, governments in developing countries and the international donor community; increased investments in health would translate into hundreds of billions of dollars per year of increased income in the low-income countries.

2. A few health conditions are responsible for a high proportion of the health deficit: HIV/AIDS, malaria, TB, childhood infectious diseases, maternal and perinatal conditions, tobacco-related illnesses, and micronutrient deficiencies.

3. The HIV/AIDS pandemic: it is an unparalleled catastrophe and requires special consideration.

4. Reproductive health: investments in reproductive health, including family planning, are crucial accompaniments of investments in disease control.

5. Health spending in low-income countries: it is insufficient to address the health challenges they face (minimum financing needed is estimated at US$30-40 per person/year to cover essential interventions).

6. Financing by low-income countries: poor countries can increase the domestic resources that they mobilize for the health sector and use those resources more efficiently.

7. Donor finance: donor finance will be needed to close the financing gap, in conjunction with best efforts by the recipient countries.

8. Health coverage for the poor: this would require greater financial investments in specific health-sector interventions, as well as a properly structured health delivery system that can reach the poor.

9. Global Public Goods and Poverty: an assault on diseases of the poor will also require substantial investments in global public goods.

10. Coordinated Actions: by the pharmaceutical industry, governments of low-income countries, donors and international agencies are needed to ensure that the world's low-income countries have reliable access to essential medicines.

Action Plan proposed by the Commission on Macroeconomics and Health December 2001.

1. Establishment of National Commissions on Macroeconomics and Health (NCMH): each low and middle-income country should establish a NCMH, to formulate a long-term programme for scaling up essential health interventions as part of their Poverty Reduction Strategy.

2. Country financing: the financing strategy should envisage an increase in domestic budgetary resources for health of 1% of GNP by 2007 and 2% of GNP by 2015.

3. Donor financing: the international donor community should commit adequate grant resources for low-income countries to ensure universal coverage of essential interventions, scaled-up R&D for disease of the poor, and other global public goods. Where funds are not used appropriately, credibility requires that funding be cut back and used to support capacity building

4. New funding mechanisms: the international community should establish new funding mechanisms:

  • the Global Fund for AIDS, TB and Malaria (US$8 billion by 2007)
  • the Global Health Research Fund (US$1.5 billion by 2007)
  • additional outlays (US$1.5 billion for TDR, IVR, HRP, Global Forum for Health Research, various public-priate partnerships aiming at new drug and vaccine development)
  • country programmes should direct at least 5% of outlays to operational research.

5. Other global public goods: financing should be bolstered through additional financing of relevant international agencies such as WHO and the Word Bank (US$1.5 billion by 2007 and US$2 billion/year by 2015).

6. Orphan drug legislation: to support private-sector incentives, existing orphan drug legislation in the high-income countries should be modified to cover diseases of the poor.

7. Pharmaceutical industry: in cooperation with low-income countries and WHO, the international pharmaceutical industry should ensure access of the low-income countries to essential medicines through commitments to provide essential medicines at the lowest viable commercial price in the low-income countries, and to licence the production of essential medicines to generics producers as warranted by cost and/or supply conditions.

8. WTO member governments: should ensure sufficient safeguards for the developing countries, and in particular the right of countries that do not produce the relevant pharmaceutical products to invoke compulsory licensing for imports from third-country generics suppliers.

9. IMF and World Bank: should work with recipient countries to incorporate the scaling up of health and other poverty-reduction programmes into a viable macroeconomic framework.

Box 1.3 Donor financing required for universal coverage of essential interventions, R&D for diseases of the poor and provision of other global public goods as proposed by the CMH (in billions of US$/year)

Components By 2007 By 2015
Country-level programmes 22.0 31.0
R&D for diseases of the poor 3.0 4.0
Provision of other global public goods 2.0 3.0
Total 27.0 38.0

(The 10/90 Report on Health Research 2001-2002; P.14-17 April 2002, Global Forum for Health Research, Geneva).

National Health Policy - 2002

The main objective of the National Health Policy-2002 announced recently by the Government of India is "to achieve an acceptable standard of good health amongst the general population of the country. The approach would be to increase access to the decentralized public health system by establishing new infrastructure in deficient areas, and by upgrading the infrastructure in the existing institutions. Overriding importance would be given to ensuring a more equitable access to health services across the social and geographical expanse of the country. Emphasis will be given to increasing the aggregate public health investment through a substantially increased contribution by the Central Government. It is expected that this initiative will strengthen the capacity of the public health administration at the State level to render effective service delivery. The contribution of the private sector in providing health services would be much enhanced, particularly for the population group, which can afford to pay for services. Primacy will be given to preventive and first-line curative initiatives at the primary health level through increased sectoral share of allocation. Emphasis will be laid on rational use of drugs within the allopathic system. Increased access to tried and tested systems of traditional medicine will be ensured." The Policy rightly expects improved standard of governance, increased financial and material inputs, and more empathetic and committed attitude in the service providers as prerequisites for its success. It states "Any expectation of a significant improvement in the quality of health services, and the consequential improved health status of the citizenry, would depend not only on increased financial and material inputs, but also on a more empathetic and committed attitude in the service providers, whether in the private or public sectors. In some measure, this optimistic policy document is based on the understanding that the citizenry is increasingly demanding more by way of quality in health services, and the health delivery system, particularly in the public sector, is being pressed to respond. In this backdrop, it needs to be recognized that any policy in the social sector is critically dependent on the service providers treating their responsibility not as a commercial activity, but as a service, albeit a paid one. In the area of public health, an improved standard of governance is a prerequisite for the success of any health policy." Let's wait, watch and act.

WHO sets out priorities at Annual World Health Assembly:

WHO plans to step up its campaigns against poverty related diseases, whilst also intensifying programmes aimed at tackling cardio-vascular diseases, obesity and other ailments of richer nations, The Director General told the Annual Health Assembly on May 13, 2002.

She said she wanted to "reinvigorate WHO's work on diet, food safety and human nutrition, linking basic research with efforts to tackle specific nutrient deficiencies in populations and the promotion of good health through optimal diets."

Brundtland said WHO should be proud of putting health firmly on the political agendas and for pioneering global initiatives such as Roll Back Malaria, Stop TB and immunisation partnerships. However, far more was needed, she stressed.

"We must further increase the funding for tackling the illnesses of poverty. We must increase the number of people who can access treatments like anti-retrovirals at the same time as we scale up prevention programmes. We must do all we can to increase access to essential medicine and health technologies," she continued.

But, as Brundtland set out WHO's priorities visit from Peoples Health Assembly and Medecins san frontiers (MSF) criticised the agency for doing too little to further its once vaunted goal of health- and hence medicines, for all.

MSF activists camping outside also had a word of praise for WHO as it hailed WHO's recognition of generic producers like Cipla, and the recent introduction of anti-retroviral's in its list of essential medicines. But it urged WHO to show more courage in taking on the pharmaceutical giants to further lower the price of drugs in poor countries, and to take a higher profile in the organising debate on free trade and patient protection.

Lancet, Vol. 359, May 18,2002

WHO launches first global strategy on traditional medicines.

On May 16th, WHO released its first global strategy on traditional medicines and announced that it will be greatly extending its activities in non-allopathic therapies. At the launch of the WHO Traditional Medicines strategy 2002-2005, the Executive Director of Health Technology and Pharmaceuticals, Yashuhiro Suzuki said "Traditional or complementary medicine is the victim of both uncritical enthusiasts and uninformed skeptics. This strategy is intended to tap into its real potential for peoples health and well being, while minimising the risks of unproven or misused remedies".

The strategy document reviews the current world-wide use and status of traditional and complementary/alternative medicine (TM/CAM) and " provides a frame work for action for WHO and its partners, aimed at enabling TM/CAM to play a far greater role in reducing excess mortality and morbidity, especially amongst impoverished population". WHO's plan for the next three years will tackle issues of policy, safety, access, and rational use of TM/CAM. In the area of policy, WHO will try to implement programme ensuring integration of TM/CAM into national health care systems as being appropriate; and will also promote the safety, efficacy and quality of TM/CAM by expanding the knowledge base.

The strategy also aims to increase the availability and affordability of TM/CAM, as appropriate, with an emphasis on access for poor population, accompanied by promotion of therapeutically sound use of TM/CAM by both providers and consumers. It will also compile an evidence base for TM/CAM with emphasis on priority health problems such as malaria and HIV/AIDS. WHO will support countries to establish effective regulatory systems for herbal medicines and development of technical guidelines.

Lancet, Vol. 359, May 18, 2002

* Deputy Chief Medical Director,
Indian Railways Medical Service, New Delhi, India.
(For correspondence: 480, Sector 37, Faridabad 121003, Haryana, India.) 

E-mail: [email protected] and [email protected].

** Associate Professor,
Deptt. of Hospital Administration, AIIMS, New Delhi - 110 029.

E-mail: [email protected]

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