To achieve universal health coverage, people need public healthcare systems providing fair access to decent health care. This should be an entitlement for all, regardless of means, requiring adequate, appropriate and sustainable financing over the long term.

Jomo Kwame Sundaram

Private health insurance
Voluntary private health insurance (PHI) is not an acceptable option for both equity and efficiency reasons. Those with lower health risks are less likely to buy insurance. Paying the same rate will be seen as benefiting those deemed greater risks, especially the less healthy, often also those less well off.

Hence, PHI premiums are often ‘risk-rated’. This means those considered greater risks – e.g., the elderly or those with pre-existing conditions – face higher premiums. As these are often un-affordable, many cannot afford coverage.

This is clearly neither cost-effective nor equitable, but also socially risky, especially with communicable diseases. This typically means poorer health outcomes compared to spending. Also, various insurance premium rate arrangements have different distributional consequences.

‘Fee-for-service’ reimbursement encourages unnecessary investigations and over-treatment. This escalates costs, raising premiums, without correspondingly improving health. But limiting such ‘abuse’ requires monitoring, always costly.

Nazihah Noor

With PHI, much public expenditure is needed to cover the poor and others who cannot afford the premiums, often also deemed to be at greater risk. Hence, achieving ‘health-for-all’ in such circumstances would require costly public subsidization of PHI.

Social health insurance
Unlike typically ‘voluntary’ PHI, social health insurance (SHI) is usually mandatory for entire national populations. Although often espoused with the best of intentions, SHI is invariably costlier due to its limitations and problems.

SHI incurs additional costs of health insurance administration to enrol, collect premiums, ascertain eligibility and benefits, make payments and minimize abuses. Revenue financed universal coverage need not incur such costs.

Compared to PHI, SHI seems like a step forward for countries with weak or non-existent public healthcare arrangements. But like PHI, SHI encourages over-treatment and cost escalation, as well as costly bureaucratic insurance administration.

Instead of such abuses inherent to insurance systems, a revenue financed health systems would incentivize prioritizing the health and wellbeing of those it is responsible for, thus emphasizing preventive health.

Such a health system contrasts with insurance systems’ emphasis on minimizing costs for the often unnecessary medical services it incentivizes, instead of improving the population’s health and wellbeing.

Government subsidies for health insurance, private or social, would inevitably go to the transnational giants which dominate health insurance internationally.

Financing SHI complications
Hence, SHI involves much more per capita health spending, raising it by 3-4%! But despite being much more costly than revenue-financed systems, there is no evidence health outcomes are improved by switching to SHI from government funding.

Germany’s SHI has been more cost-effective than the US with its PHI. But it is less cost effective than most other economies with revenue-financed healthcare. Nevertheless, healthcare financing consultants, continue to recommend versions of SHI, although it is clearly not cost-effective, appropriate, efficient or equitable.

SHI schemes remain in some rich countries for specific historical reasons, e.g., Germany’s evolved from its long history of union-provided health insurance. But more recently, even these economies rely increasingly on supplementary revenue financing. But again, such hybrid financing does not improve cost-effectiveness.

As SHI typically involves imposing a flat payroll tax, it discourages employers from providing proper employment contracts to staff. SHI is estimated to have reduced formal employment by 8-10% worldwide, and total employment in rich countries by 5-6%!

It is also difficult and costly to collect SHI premiums from the self-employed, or from casual, temporary and informal workers not on regular payrolls. Also, most working people in developing countries are not in formal employment, with far fewer unionized.

SHI schemes are always difficult to introduce as they would reduce take-home incomes. In most developing countries, most families cannot afford such pay-cuts. Hence, government revenue would still be needed to cover the uncovered to achieve health for all.

Many SHI proposals also recommend earmarking revenue from new ‘health’ taxes collected. Such earmarking creates likely conflicts of interest reminiscent of justifications for ‘sin taxes’ on addictive narcotics, smoking, alcohol consumption and gambling.

Will governments perpetuate unhealthy practices and behaviours to secure more tax revenue? Is there an optimum level of smoking or sugar consumption to be allowed, even encouraged, to get such earmarked funding?

Revenue financing
International evidence shows progressive revenue-funded public health financing to be much more equitable, cost-effective and beneficial than SHI. Hence, moving from revenue-financing to SHI would be a step backwards in terms of both equity and efficiency, or cost-effectiveness.

The late World Bank economist Adam Wagstaff and others have long advocated tax- or revenue-financed health provisioning due to the significant additional costs of managing health insurance systems, both private and social.

Revenue-financed public healthcare financing avoids the many insurance administration expenses incurred by both PHI and SHI. There will be no more need for such costly payments for unnecessary medical tests, procedures and treatments, and bureaucratic processes to manage insurance procedures and curb abuses, e.g., those associated with ‘moral hazard’.

Better financing and reorganization of preventive health efforts are needed. Public health programmes requiring mass participation, e.g., breast or cervical cancer screening, generally have much better outcomes with revenue-financing compared to SHI.

Better results can be achieved by improving tax-funded healthcare. More resources need to be deployed to improve preventive and primary healthcare. Strengthening public health services must include improving staff service conditions, morale and retention rates.

There is nothing inherently wrong with revenue-financed healthcare. Underfunding is largely due to political choices and fiscal constraints. These are typically due to externally imposed political limits.

Instead of dogmatically insisting on SHI, as is typical of health financing consultants, revenue financing of public healthcare should be reformed, strengthened and improved by:
* increasing and improving budget allocations.
* eliminating waste and corruption with competitive bidding, etc.
* increasing government revenue with fairer taxation, including wealth, ‘windfall’ and deterrent ‘sin’ taxes, e.g., of tobacco and sugar consumption.

IPS UN Bureau

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In 2015, almost all heads of government in the world committed to the United Nations’ Sustainable Development Goals (SDGs), including universal health coverage (UHC). This was consistent with the World Health Organization’s commitment to Health for All.

The COVID-19 pandemic exposed most countries’ under-investment in public healthcare provisioning and other weaknesses. Clearly, health system reforms and appropriate financing are needed to improve populations’ wellbeing.

Jomo Kwame Sundaram

Health inequalities growing
Recent decades have seen healthcare in many developing countries trending towards a perceived two-tier system – a higher quality private sector, and lower quality public services. Many doctors, especially specialists, have been leaving public service for much more lucrative private practice.

This ‘brain drain’ has worsened already deteriorating public service quality, increasing waiting times. Hence, more of those with means have been turning to private facilities. As private medical charges are high in developing countries, many who can afford private health insurance, buy it.

If unchecked, the gap – in charges and quality – between private and public health services will grow, increasing disparities between haves and have-nots. Social solidarity implies cross-subsidization in health financing – with the healthy financing the ill, and the rich subsidizing the poor. Social solidarity also enables universal coverage and equitable access.

Better healthcare for all
Most governments need to strengthen public provisioning of comprehensive health protection with adequate financing. Meanwhile, healthcare costs have gone up due to more ill health, the rising costs of new medical technologies, privatization and less public procurement.

Everyone – nations as well as families – faces more unexpected health threats, worsened by rising catastrophic and other medical expenses, more economic vulnerability, greater income insecurity, declining public provisioning, and costlier coping strategies.

Nazihah Noor

Spending and outcomes
Most countries, including in the developing world, have seen rising healthcare spending. But there is no direct relationship between health expenditure and wellbeing. Hence, more spending does not ensure better outcomes, whereas appropriate public healthcare provisioning does.

Although health spending has been rising in many developing countries, it has generally remained low in relation to income. Government health services were already facing fiscal constraints before the pandemic. To cope with COVID-19, public health expenditure in many middle-income countries spiked.

Chronic underinvestment in public services has undermined healthcare overall. Many underfunded systems have nonetheless improved health conditions, reducing morbidity and mortality. Decent health outcomes, despite relatively low health spending, imply greater public expenditure ‘cost-effectiveness’ or efficiency.

Nonetheless, much more could be achieved with better policies, increased spending and more appropriate priorities. Thus, reducing child and maternal mortality, besides improving sanitation and water supplies, have significantly raised life expectancy in developing countries.

Improving policy
To enhance wellbeing, health systems must better protect people from current and future threats and challenges. Better public healthcare financing – with absolutely and relatively more, but also more appropriate funding – seems most important.

Developing country governments are often fed oft-repeated, but doubtful claims that current government healthcare spending is too high, and health insurance is necessary to fill the funding gap. Instead, official revenue should mainly fund health budgets to ensure efficiency and equity.

Health promotion should involve more preventive efforts. By mainly focusing on curative interventions, most government spending and policy priorities neglect determinants of wellbeing, including inequities. Some WHO recommended policies deemed most cost-effective target tobacco products, harmful alcohol use and unhealthy diets.

Policy coherence
To better address overall wellbeing, a more comprehensive and integrated approach should integrate health with related public policies. Affordable healthier food options, physical exercise and healthier lifestyles deserve far greater emphases.

For example, a cheap, but nutritious, safe and healthy daily school feeding programme in Japan – introduced a century ago, when it was still quite poor – has ensured life expectancy in the archipelagic nation has been the world’s highest for decades.

An ‘all-of-government’ approach should ensure meals planned by dieticians, mindful not only of good nutrition, but also of local food cultures, costs, safety and micronutrient deficiencies. With a ‘whole-of-society’ approach, involved parents can ensure schoolchildren are fed safe food from farmers not using toxic pesticides.

This can be ensured with the food or agriculture ministry’s participation. Farmer organizations can be contracted to supply needed foodstuff with initial support from government agricultural extension services, not corporate salesmen. This, in turn, improves the safety of all farm produce, ensuring healthy food for all.

Health reform recommendations should prioritize governments’ major commitments – to the people and the international community – of ‘universal health coverage’ to ensure ‘health for all’.

Nazihah Noor is a public health policy researcher. She led two reports on health system issues in Malaysia, Social Inequalities and Health in Malaysia and Health and Social Protection: Continuing Universal Health Coverage. She is currently pursuing a PhD in public health in Switzerland.

IPS UN Bureau

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Failure to vaccinate most in poor countries sustains the COVID-19 pandemic. Rich country greed and patent monopolies block developing countries from affordably making the means to protect themselves.

Mutant menace
The SARS-CoV-2 virus has been mutating as it replicates. Numerous replications in hundreds of millions of hosts have generated many variants. Some mutations are more resilient than others, and better able to overcome human defences.

Jomo Kwame Sundaram

South Africans first scientifically identified the new variant, alerting global health authorities immediately. Instead of appreciating its prompt actions, southern African nations are being punished with travel restrictions.

In fact, Dutch health authorities acknowledge the new Omicron variant was already in western Europe before the first South African cases. Punitive responses – e.g., travel bans – may deter other governments from rapid action and notification, so essential for effective international cooperation.

Promises, promises
With huge inequalities in vaccinations – especially between high-income countries (HICs) and low-income countries (LICs) – the virus has been enabled to continue replicating, mutating, infecting and killing, especially those least protected.

Richer countries have taken more than half the first 7.5 billion vaccine doses. Rich countries have bought many – up to five – times their populations’ needs. Ten HICs will have more than 870 million excess doses by year’s end.

While some HICs have been shamed into pledging vaccine doses to LICs and lower middle-income countries (MICs), delivery has fallen well short of their modest promises. By late October, only about a tenth of the over 1.3 billion vaccine doses pledged had been delivered.

Nazihah Noor

US President Biden’s September summit set an end-2021 target of 40% vaccination of the world’s 92 poorest countries, but at least 82 are unlikely to meet this target.

As Brown observed, although the US accounts for half the vaccines donated, it has only delivered a quarter of its pledge. Most other rich countries have delivered less than a fifth. Only China and New Zealand have given over half of what they promised.

Apartheid victims
With vaccines being hoarded by HICs, less than 3% of LIC populations are fully vaccinated. By late November, only 5.8% in LICs had at least one vaccine dose, compared to 54% of the world.

Most LICs do not even book via COVAX – the global programme to distribute vaccines – as they cannot afford to pay for them. Also, the programme has never secured enough vaccine doses since its inception.

COVAX was supposed to provide two billion doses by end-2021, but under 576 million were actually delivered by November. Also, the WHO appeal to G20 countries to give COVAX priority has gone largely unheeded.

With LICs unable to vaccinate their populations, the pandemic will go on for years. WHO now expects around 200 million more infections in the year from 21 October, with total deaths expected to double from the five million to date! Unsurprisingly, vaccine apartheid’s worst victims are in the LICs.

Profits block progress
The World Trade Organization (WTO) ministerial meetings – scheduled to start on 30 November – were expected to decide on the waiver proposal. With no resolution likely, the meeting has been postponed indefinitely, ostensibly due to Omicron.

First proposed in October 2020, it is now supported by well over a hundred of WTO’s 164 member states. The elaborated waiver proposal, co-sponsored by 63 countries, would allow others to more affordably make the means to fight the pandemic, without fear of intellectual property (IP) litigation.

But over 14 months later, the proposal remains blocked. Most European countries continue to oppose the waiver request to temporarily suspend IP rights protecting corporate monopolies on COVID-19 medical technologies and products for the pandemic’s duration.

As the pandemic increasingly infects and kills in poor countries, the public is being misled about the waiver proposal. It is dishonestly claimed that new vaccines cannot be developed without patent protection. Worse, all developing countries are falsely said to lack technical expertise to make vaccines.

Profits against people
LICs have received than one percent of all Pfizer-BioNTech vaccines and 0.2 percent of Moderna’s. Instead, the three have prioritized their most profitable contracts with rich governments, while paying lip service to poor countries.

Pfizer expects to sell three billion doses by year’s end, and four billion more in 2022. With COVID-19 now endemic, Pfizer CEO Alberto Bourla expects to sell boosters for years to come, while Moderna recently announced an Omicron-specific booster.

Using the firms’ own earnings reports, the People’s Vaccine Alliance (PVA) estimates mRNA vaccine manufacturers – Pfizer, BioNTech and Moderna – will make pre-tax profits of US$34 billion this year.

Maximizing profits by blocking the waiver is effectively prolonging the pandemic. Instead of vaccinating those who have not yet had their first shot, they make much more by selling booster vaccinations to HICs.

Despite getting over US$8 billion in public funding, the three have refused to transfer vaccine technology to developing countries. Instead, Pfizer’s Bourla has dismissed technology transfer to developing countries as “dangerous nonsense”.

Profitable catastrophe
The main barrier to vaccinating the world is profits. Clearly, the Omicron danger is due to the world’s failure to vaccinate billions of vulnerable people in developing countries. This catastrophe has been worsened by ongoing European opposition to their effort to suspend IP monopolies.

The 12 billion vaccines made in 2021 could have vaccinated the entire world, but clearly did not. Omicron is plainly due to corporations’ ability to profiteer from the pandemic, refuse to share knowledge and know-how, and bully governments into unfair contracts.

Nazihah Noor is a public health policy researcher. She holds a Master of Public Health and a BSc in Biomedical Science from Imperial College London, specializing in global health.

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