Health and Health Care Financing in South Asia:Continuing Inequity?

International Journal of Current Medical Science and Dental Research (IJCMSDR) Volume 1 Issue 1 ǁ May-June 2019 ǁ PP 11-17 ISSN: 2581-866X || www.ijcmsdr.com

Health and Health Care Financing in South Asia:Continuing Inequity?

Dr. Anwar Islam Visiting Professor, Dept. of Public Health,North South University, Dhaka, Bangladesh

ABSTRACT: Along with the Indian sub-continent (India, Pakistan and Bangladesh), South Asia also includes a few other smaller countries such as Afghanistan, Bhutan, Maldives, Nepal and Sri Lanka. These eight South Asian countries, with 5.1 million square kilometres of landmass, compriseonly 3.4%of the world’s surface.

However, with a combined population of 1.75 billion, South Asia houses more than 23% of the global population. Except Bangladesh, the basic health indicators in the South Asian countries are not impressive. It should be noted that Bangladesh has made impressive gains in recent decades in this regard. The paper examines the pattern of health expenditure as a percentage of the Gross Domestic Product (GDP) as well as health expenditure per capita to better understand and explain the poor overall health indicators. In South Asian countries, the government expenditure as a percentage of the total health expenditure is also substantially lower than in many other developing countries. This may help explain, partially at least, the continuing inequity in health in these countries.

KEY WORDS:Health Care Financing; Gross Domestic Product; Resource Allocation; Inequity I.

INTRODUCTION

With a combined population of over 1.75 billion, the South Asian countries – India, Pakistan, Bangladesh, Afghanistan, Sri Lanka, Nepal, Bhutan and Maldives – make up more than 23% of the world’s population[1] (Table-1). In other words, they represent almost one-quarter of the humanity. Undoubtedly, with a population of 1.3 billion, India dominates South Asia in terms of population and other factors.

Table-1

Source:

United

Nations

Population

Division,

2015

The basic health indicators in most of these countries are also poor in comparison to many other developing countries. Sri Lanka and Maldives are exceptions in this regard with impressive basic health indicators. In recent years, Bangladesh also made impressive gains in improving its basic health indicators. Table-2 presents the basic health indicators of these South Asian countries[2].

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Health and Health Care Financing in South Asia

Table-2 South Asa: Basic Health Indicators (recent years)

Source: World Bank (various years) Comparative figures from numerous other developing countries clearly demonstrate that most South Asian countries are still lagging in basic health indicators. For example, in 2015, Malaysia, Iran, Iraq and Egypt had a maternal mortality ration of 40, 25, 50 and 33 respectively. Except Sri Lanka and Maldives, the MMR in all the other South Asian countries were significantly higher. The MMR in Afghanistan was 396 per 100,000 live birth and the corresponding figures for India, Pakistan and Bangladesh 174, 178 and 176 respectively[3]. However, in many sub-Saharan African countries, on the other hand, the MMR was much higher. Table-3 presents the most recent key health indicator figures (MMR, IMR, Under-5 Mortality Rate and Life Expectancy at birth) for eight countries – four from sub-Saharan Africa. Compared to the so-called rapidly developing low-income countries like Iran, Iraq, Malaysia and Egypt, all the countries in Sub-Saharan Africa have much worse health indicators.

For example, while life expectancy at birth was 75 and 76 years in Malaysia and Iran respectively in 2014, it was more than 10 years lower in all the Sub-Saharan African countries[4]. Clearly, sub-Saharan Africa countries are seriously lagging in terms of major health indicators. Expenditure on health, therefore, is carefully reviewed to explain this discrepancy in key health indicators across countries.

Table-3 Basic Health Indicators (recent years): Selected Developing Countries

Source: World Bank (various years)

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Health and Health Care Financing in South Asia South Asian Countries: Economic Strength and Commitment to Health : It is likely that key health indicators of the South Asian countries relate to the relative economic strength of these countries and their commitment to health reflected by the per capita expenditure on health and/or health expenditure as a percentage of the GDP[5, 6]. Table-4 presents data on the GDP per capita along with health expenditure per capita of the South Asian countries. Data on health expenditure as a percentage of the GDP are also included.

The South Asian countries differ substantially in terms of their economic strength as indicated by the per capita Gross Domestic Product. The per capita GDP varies from a low of US$ 592 in Afghanistan to a high of US$ 7,666 in Maldives. It is interesting to note that the three most populous South Asia countries – India, Pakistan and Bangladesh – do not differ much in terms of their GDP per capita. While India has a GDP per capita of USD 1,582, the corresponding figures for Pakistan and Bangladesh are USD 1,429 and USD 1,212 respectively.

It is difficult to measure how much a society or country values its health[7]. At the individual and/or family level, a high premium is put on health as individuals and families are usually prepared to make significant financial sacrifice to preserve or promote health. However, it is difficult measure the collective commitment of a society to health and health care. Nevertheless, perhaps two measures may be used to gauge the value placed on health by a society at large: the per capita expenditure and expenditure on health as a percentage of the Gross Domestic Product (GDP). Table-4 presents these data.

It is clear that most of the South Asian countries spend less than 5% of heir Gross Domestic Product (GDP) on health. For example, India spends only 4.7% of its GDP on healthcare, while Bangladesh spends only 2.8% of its GDP on health. Pakistan, on the other hand, seems to beat all others by spending a meagre 2.6% of its GDP on health (Table-4). In this respect, by spending 8.2% of its GDP on health, the war-torn Afghanistan seems to create an example for others to follow. Maldives also spends a respectable percentage of its GDP (6.9%) on healthcare.

However, when the per capita health expenditure figures are considered, it becomes clear that South Asian countries spend a meagre amount of their resources on healthcare. For example, the three biggest countries in South Asia - India, Pakistan and Bangladesh – spend only $75, $36 and $31 respectively on health. Sri Lanka, on the other hand, spends $127 per capita on health. Maldives seems to be an exception in this regard. It spends $1,165 per capita on health.

Table-4 Per Capita Gross Domestic Product and Health Expenditure per Capita and as a Percentage of GDP: South Asian Countries, 2014/2015 (USD)

Source: World Bank It is interesting to note that compared to many other developing countries in Asia and Africa with similar GDP per capita (between $700 and $1,500), most of the South Asian countries spend substantially less resources on health. For example, Mali had a per capita expenditure of USD 744 in 2014on health and Tanzania spent USD 840 per capita on health in 2014. In other words, both Mali and Tanzania spent more on health per capita than any of the South Asian countries except Maldives. Table-5 presents GDP per capita (2015) of selected countries from Asia and Africa along with their expenditure per capita on health and as a percentage of their GDP (2014).

The table makes it clear that with similar GDP per capita, all these countries spent much more of health care

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Health and Health Care Financing in South Asia than the South Asian countries. More important is to note the significant difference between the South Asia and these selected countries in terms of their commitment to health as reflected in the percentage of their GDP dedicated to health.

Table-5 Per Capita Gross Domestic Product and Health Expenditure per Capita and as a Percentage of GDP: Selected Countries, 2014/2015 (USD)

Source: World Bank Health Expenditure in South Asia: Source of Inequity :It is clear that South Asian countries, especially the big three – India, Pakistan and Bangladesh – spent a considerably lower percentage of their GDP on health.

Understandably, their per capita expenditure on health is also significantly lower than many other comparable developing countries. However, in order to identify the extent of inequity within the health care system, it is imperative to look at the distribution of the total health expenditure. How much of the total health expenditure is borne by individuals and families through out-of-pocket expenses reflects, to a great extent, the inherent inequity within the system. On the other hand, how much of the total health expenditure is made up of public funding could also gauge the level of equity within the system.

Among the eight South Asian countries, in only three – Maldives, Bhutan, and Sri Lanka – public spending makes up the bulk of the total health expenditure (THE). In Maldives, public spending makes up 78.3% of the THE. In Bhutan and Sri Lanka, on the other hand, 73.2% and 56.1% of the total expenditure on health respectively consist of public funding. The corresponding figures for Bangladesh, India and Pakistan are 27.9%, 30.0% and 35.2% respectively (Table-6). Clearly Maldives with public expenditure on health as a percentage of the health expenditure (78.3% in 2014) stands out as an example for others to follow.

Table-6 South Asian Countries: Public Expenditure on Health as a % of THE, 1995 and 2014

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Health and Health Care Financing in South Asia Source: World Bank In other words, in most South Asian countries out-of-pocket (OOP) expenses make up the bulk of the total expenditure on health[8]. In Bangladesh, for example, OOP made up 67% of the total Health expenditure in 2014[9]. In India and Pakistan, the corresponding figures for 2014 were 62.4% and 56.3% respectively. In Maldives (18.3%), Bhutan (25.3%) and Sri Lanka (42.1%), the out-of-pocket expenses as a percentage of the total expenditure on health were significantly lower than in other South Asian countries (Table-7).

Table-7 South Asian Countries: Out-of-pocket Expenses on Health as a % of THE, 1995 and 2014

Source: World Bank In other words, Bangladesh (67%) and India (62.4%) are the two countries where out-of-pocket expenses dominate health expenditure. Pakistan is not far behind with OOP making up 56.3% of the total expenditure on health. In Bangladesh, it should be noted, the percentage of OOP has increased substantially between 1995 (60.2%) and 2014 (67.0%). Surprisingly, in Maldives also the OOP as a percentage of the Total Health Expenditure increased between 1995 (14.1%) and 2014 (18.3%). It may be reasonably argued that higher the OOP, lower is the ability of the poor to access health care services. Inequity in health care, thus, is a serious consequence of the dominance of out-of-pocket expenses.

II.

DISCUSSION

Recognizing the intrinsic value of health, accessibility to health care services must be regarded as an essential ingredient in ensuring equity[10]. Accessibility has three different dimensions: physical accessibility, social accessibility, and financial accessibility[11]. The distance between one’s household and the nearest primary health care centre or clinic provides a good measure of the physical accessibility to essential health care services. On the other hand, the extent of any “social” barrier in accessing health care services denotes the social accessibility[12]. For example, the caste system in India often makes it extremely difficult for the lower caste people (Sudras and the “untouchables”) to access public services, including health care. In a feudal society, on the other hand, the peasants and the landless are like to face social barriers in accessing health care services[13].

The rural Bangladesh, by and large, is a feudal setup dominated by the land-owing class. However, feudalism in Bangladesh is too weak to substantially affect the accessibility of the poor to public services.

Bangladesh has an elaborate primary health care system divided into three tiers: the community clinics at the village level (usually serving a population of 5,000 to 6,000 people), the thana (the lowest administrative unit) Health and Family Welfare Centres (usually serving a population of 20,000 to 25,000 people composed of numerous villages), and the Upazila (sub-district) Health Care Centres (usually serving a population of more than 150,000 people)[14]. The primary health care system is, by and large, publicly funded. In other words, clients are not officially required to pay for services at these clinics or centres. However, in recent years, user fees have been introduced to discourage use of these services even when they are not medically needed.

Moreover, drugs were never either subsidized or publicly funded. The cost of drugs, arguably the most expensive part of the health care system, must be fully borne of the clients. It should be noted that even when someone is an in-patient in a public hospital, the required drugs must be paid for by the client. Moreover, there are many “hidden” costs associated with accessing the health care system. These include bribing agents to get admitted in a public hospital, or to secure a bed rather than being on the floor. In many cases, doctors demand “additional” fees to see a client or to write a prescription with low-cost medicines. Out-of-pocket expenses noted

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Health and Health Care Financing in South Asia here do not include these unofficial or hidden costs associated with utilization of publicly funded health care services. In short, the health system is expensive, especially for the poor.

In Bangladesh, as in many other developing countries, “tips” (or “bakshish” in local vernacular) to be paid to service providers – at all levels – is an universal phenomenon. Needless to say, the size of the “tips” to be paid vary widely according to the official status of the person at the receiving end of the tips. For example, it would be much higher for a physician than that for a nurse, the nursing assistant or the cleaner in a hospital. However, all will demand it and their demands must be satisfied. Sadly, these “out-of-pocket” expenses also remain outside the purview of the formal OOP expenses.

In short, in most of the South Asian countries, public spending on health care is far lower than in many other comparable (in terms of GDP per capita) developing countries. Maldives stands out as an exception in this regard. India, Pakistan and Bangladesh – by far the biggest countries in South Asia –on average spend about 3.7% of their GDP on health[15]. Bangladesh has the worst record in this regard, spending only 2.8% of its GDP on health. In most cases, there is little connection between the GDP per capita of a country and its commitment to health. For example, Afghanistan and Nepal spend 8.2% and 5.8% of their GDP on health respectively although Bangladesh, India and Pakistan spend less on health (as a percentage of their GDP) despite having greater GDP per capita. Data clearly suggests that there is a strong relationship between a country’s commitment to health (reflected in the health expenditure per capita or the percentage of GDP spent on health) and its basic health indicators such as Maternal Mortality Ratio, Infant Mortality Rate or Life Expectancy at birth. Higher the per capita health expenditure, better are the key health indicators. For instance, among the South Asian countries, Maldives (USD 1,165) and Sri Lanka (USD 127) have the highest spending on health per capita. Key health indicators are also far better in Maldives and Sri Lanka compared to the other South Asian countries. For example, both Sri Lanka (75 years) and Maldives (77 years) have the highest life expectancy in South Asia.

Not surprisingly, countries with higher public expenditure on health as a percentage of the Total Health Expenditure (THE) also demonstrate better basic health indicators. In South Asia, Maldives (78.3%), Sri Lanka (56.1%) and Bhutan (73.2%) stand out in this regard. Basic health indicators in these countries, as noted earlier, are far better than the other South Asian countries. Needless to say, out-of-pocket expenditure on health is far lower in these countries compared to the other South Asian countries. Bangladesh is far worse in this regard with OOP accounting for 67% of the Total Health Expenditure. For Bangladesh, the real OOP figure would be much higher if, as discussed, the informal costs borne by the consumers are considered. These informal costs, it must be reiterated, are primarily affecting the poor severely curtailing their ability to access health care services.

III.

CONCLUSION AND RECOMMENDATIONS

The research makes it clear that (a) health care financing in South Asia, by and large, is lagging behind other developing countries with comparable Gross Domestic Product per capita. It is particularly true in case of the three largest South Asian countries in terms of population – India, Pakistan and Bangladesh; (b) in most South Asian countries, health expenditure as a percentage of the GDP is below 5%; and (c) in most of these countries, out-of-pocket expenses make up the bulk of the Total Health Expenditure. Again, this is particularly true for the three biggest South Asian countries – India, Pakistan and Bangladesh. In other words, public spending on health in these countries is disappointingly lower than in many other comparable developing countries. Maldives is an exception in this regard. Afghanistan also spends more on health as a percentage of its GDP (8.2%); however, its per capita health expenditure is far lower (USD 57) than in most other South Asian countries except Bangladesh ((USD 31) and Pakistan (USD 36).

The predominance of out-of-pocket expenses in health make the system burdensome for the poor. The poor and the disadvantaged find it particularly inhibitive to access health care services. In the three largest South Asian countries – India, Bangladesh and Pakistan - the OOP expenses make up 62.4%, 67% and 56.3% of the Total Health Expenditure respectively. It is argued that greater the OOP expenses as a percentage of the THE, less accessible the system is for the poor and the disadvantaged. In short, the health system becomes more inequitable as OOP as a percentage of the THE increases. In Bangladesh as well as in many other developing countries, additional informal payments make the system much more inequitable.

Greater public spending on health with corresponding reduction in the OOP expenses is the most effective way to make the health system more equitable. Most South Asian countries, particularly the big three – India, Pakistan and Bangladesh –must increase their public spending on health with a view to make it more accessible to the poor and the disadvantaged. Removing or significantly reducing the financial barrier in accessing health care services must be recognized as preconditions in making the system more equitable. Planners and policy

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Health and Health Care Financing in South Asia makes in South Asian countries, particularly in India, Pakistan and Bangladesh, must promote greater equity in health through bolstering public spending on health care. Pro-poor policies and programs must be introduced to significantly reduce out-of-pocket expenses for health care services.

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