The Unassuming Economist

In a latest blog for the Conversable Economist, author Timothy Taylor studies data from the OECD publication, Health at a Glance (2021) to understand why meaningful healthcare reform in the USA may be harder to achieve.

It glances over evidence that demonstrates USA’s not-so-commendable performance on health and wellbeing indicators (like mortality, growth in life expectancy, etc.) despite a large share of expenditure on healthcare. Subsequently, parameters of Americans’ satisfaction from their healthcare industry are discussed, which are found to be upbeat and high-ranking in contrast.

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In a column for VoxDev ( December 2021), economists Eeshani Kandpal and Elina Pradhan of the World Bank Development Research Group, Madhulika Khanna from Yale University, and Benjamin Loevinsohn of The Global Fund explain results from an experiment in Nigeria. “Providing operating funds to public health facilities can be as effective as alternative pay-for-performance models, at half the cost”, they write.

The authors discuss some factors besides poor effort put in by healthcare workers, such as lack of control on operational budget by PHCs which causes delays and other inefficiencies to build a case in favor of decentralized financing. The study compares outcomes from two interventions- pay for performance and decentralized facility financing. It presents conclusions about the performance of both interventions in areas like quality of service delivered, immunization of children, use of contraceptives, antenatal care-seeking. The article also discusses several policy insights.

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The latest report by World Health Organization, Global expenditure on health: Public spending on the rise? (2021), highlights interesting statistics about expenditure in high income, low income, and low middle-income countries on primary healthcare, the correlation between government spending and out-of-pocket expenditure, trends in public investment patterns, etc. It analyzes data over a 20 year period, from 2000 until 2019, and provides crucial policy insights alongside recent developments.

“Overall, global spending on health has doubled in real terms over the past two decades, reaching US$ 8.5 trillion in 2019 and 9.8% of GDP (up from 8.5% in 2000). Spending on health remained highly unequal—and more unequal than the distribution of global GDP. High income countries accounted for nearly 80% of global spending on health (with the United States of America alone accounting for more than 40%), and their average spending per capita was more than four times the average GDP per capita of low income countries. In countries for which data were available, about half of health spending went towards primary health care (PHC), representing about 3% of GDP on average. Nearly half of PHC spending was funded by private sources, the same as for non-PHC services. Among the low income countries for which data were available, about one-third of PHC spending came from external aid and one-fifth came from government sources, whereas the composition was reversed for non-PHC spending. Further analysis from a set of low and middle income countries indicates that the share of PHC spending that went to infectious diseases was significantly higher than the share that went to noncommunicable diseases and injuries.”

Click here to access the full report.