Priority setting for universal health care: The macroeconomic context. Prince Mahidol Awards Conference, 2016 People s Health Movement

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Albert Norman
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1 Priority setting for universal health care: The macroeconomic context Prince Mahidol Awards Conference, 2016 People s Health Movement

2 Interpretations of UHC PHM recognises the importance of universal health coverage (UHC) although our endorsement is qualified because of the diversity of interpretations of UHC circulating Financing WHO single payer (pooling, transfers, risk management) WB competitive health insurance markets; public safety nets; irreversible privatisation PHM tax financed, publicly managed Delivery WHO people centred, integrated health services WB mixed service delivery (strong corporate sector); publicly subsidised safety net (defined benefit package) PHM comprehensive primary health care

markets; public safety nets; irreversible privatisation PHM tax financed, publicly managed Delivery WHO people centred, integrated health

3 Market failure Market failure in health care widely acknowledged Private sector delivery adds further barriers to equitable and efficient distribution of health care resources and the regulation of quality and adherence to clinical standards. Regulation for efficiency, equity and quality both complex and expensive and faces significant political barriers

and the regulation of quality and adherence to clinical standards.

4 Equity and efficiency in resource allocation PHM endorses the need for equity and efficiency in the allocation of resources for health care and population health programmes including in the implementation of UHC. Health system design (funding and delivery configuration) is the major determinant of equity and efficiency in resource allocation and health care delivery. More specific approaches, discussed below, include: first, the use of defined benefit packages in insurance dominated systems; and second, the methods and mechanisms through which equitable and efficient resource allocation can be promoted in tax-funded, public delivery systems.

Health system design (funding and delivery configuration) is the major determinant of equity and efficiency in resource allocation and health care delivery.

5 Health system design Multipayer systems sustains inequity and allocative inefficiency Strong private sector a barrier to effective clinical governance Single payer systems provide for control over resource allocation (eg primary health care capitation, volume-capped inpatient care) Asset and resource planning as a determinant of recurrent resource allocation

provide for control over resource allocation (eg primary health care capitation,

6 Interventions and benefit packages While it is easy to define benefit packages in terms of a list of interventions, it is a huge and costly administrative task to ensure that benefit payments are restricted to interventions that are used in accordance with clinical guidelines (assuming that clinically authoritative guidelines for that environment exist) even more difficult for diagnostic interventions The opportunity costs of implementing the defined benefits package strategy with integrity are particularly high in the context of private insurance and private practice Market model (commodified interventions) ignores the infrastructure requirements to deliver efficiently safe and high quality services (district health systems)

difficult for diagnostic interventions The opportunity costs of implementing the defined benefits package strategy with integrity are particularly high in the context of private

7 Resource allocation in tax-funded public delivery systems Resource allocation in tax-funded public delivery systems can be efficient and effective; critical elements include: adequate funding, planning and budgeting at the district health system level, the role of senior clinicians in budget management and guidelines implementation at the clinical level, and community accountability with respect to both funding and administration. Program budgeting with marginal analysis: a tool for promoting efficiency and equity in resource allocation within budget funded health systems

clinicians in budget management and guidelines implementation at the clinical level, and community accountability with respect to both funding

8 The marketisation of UHC undermines the implementation of comprehensive primary health care. Reducing PHC to arbitrarily defined interventions limits and distorts the analysis of needs and priorities; precludes effective community accountability; ignores public and community action around the social determination of health; and prevents best use of limited resources.

and priorities; precludes effective community accountability; ignores public and community

9 Global economy: imbalances and instabilities Global crisis (global warming, war, hunger, displacement) reflects and drives macroeconomic imbalances and instabilities over production under consumption over accumulation Corporate response to stagnant demand replacing labour with technology replacing high wage with low wage labour externalising the cost of production to the environment increasing market share through mergers and acquisitions avoiding tax; and searching for new markets

to stagnant demand replacing labour with technology replacing high wage with low wage labour externalising the cost of

10 Over accumulation (surpus cash) and the need to open new markets Reduced opportunities for greenfield investment Diversion of profit to: speculation, debt-funded consumption and financial churning Neoliberalism is a program of global economic reform directed to securing the interests of the transnational corporations in the face of these global imbalances: free trade (in manufactured goods but not agricultural commodities!); opening up trade in services; low quality patenting but high levels of protection; and investor protection provisions resistance to any effective multilateral tax agreement; resistance to any binding agreement on the human rights obligations of TNCs, and resistance to effective action on climate change.

free trade (in manufactured goods but not agricultural commodities!

11 Linking macroeconomic crisis to health policy Widening social and economic inequalities associated with neoliberal economic policies contribute to the fraying of social solidarity and consequently weaken political support for single pool single payer systems. Transnational corporations, as the principal conduits of foreign direct investment, are driving a race to the bottom with respect to tax policies (through tax competition) with increased restrictions on public funding of health care as a consequence. Neoliberal pressures to open new markets for corporate investors through health system privatisation (supported by trade in services provisions and investor protection provisions in contemporary trade agreements) contribute to the privileging of market models in health policy debate.

Transnational corporations, as the principal conduits of foreign direct investment, are driving a race to the bottom with respect to tax policies (through tax competition) with increased

12 Global regulation to prevent equity and efficiency in health care resource allocation Trade in service provisions plus ISDS to promote irreversible privatisation Transparency provisions in new trade agreements designed to prevent cost-effectiveness considerations from influencing pricing decisions in pharmaceutical subsidy schemes illustrate the wider economic forces opposing efficiency in resource allocation Unethical pharmaceutical marketing practices are a major cause of inefficient resource allocation but big pharma (supported by host governments) resists appropriate regulation of marketing

in pharmaceutical subsidy schemes illustrate the wider economic forces opposing efficiency in resource allocation Unethical pharmaceutical marketing

13 Neoliberal policies: driving inequity and inefficiency in health care delivery Not only are the policies of neoliberalism exacerbating the global economic crisis but they are driving inequity and inefficiency in health care delivery through marketisation and privatisation. Health policy makers should be fully aware of the perverse influence of the neoliberal program in debates around UHC, including around priority setting.

health care delivery through marketisation and privatisation.

14 UHC: single payer financing and publicly managed health care delivery PHM calls upon policy makers to approach UHC with full consideration of the benefits of single payer financing and publicly managed health care delivery, including equitable resource allocation for efficient, safe and high quality care.

benefits of single payer financing and publicly managed health care

AFTINET Bulletin No. 6 10 July 200

AFTINET Bulletin No. 6 10 July 200 Australian Fair Trade and Investment Network, ABN 83 659 681 462 Convenor: Dr Patricia Ranald, Principal Policy Officer, Public Interest Advocacy Centre, pranald@piac.asn.au