Healthcare Spending - EIU Perspectives - The Economist

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The provision of healthcare to women—like the supply of so much else in life—is and will remain a tale of haves and
An article by The Economist Intelligence Unit

Healthcare spending: To have and have not

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mall increases in healthcare spending in middle-income countries are likely to boost the health and well-being of their poorest female citizens. In wealthy countries, meanwhile, the outlook for improvement is not as bright. The provision of healthcare to women—like the supply of so much else in life—is and will remain a tale of haves and have-nots. In wealthy countries, healthcare spending is huge and is expected to keep climbing for the rest of this decade. In middle-income countries, healthcare spending is rising as well, but from a much lower base. In absolute terms, the gap in healthcare provision between rich and middle income countries will remain large for the rest of this decade. This gap has direct health implications for women in middle income and poor countries, where maternal and infant mortality rates are considerably higher than in wealthy nations. And health, in turn, has a direct impact on well-being. The recently published study Women’s health and well-being: Evolving definitions and practices, which was written by the Economist Intelligence Unit (EIU) and sponsored by Merck Consumer Health, established that, by a wide margin, women consider physical health and fitness to be the main hallmark of well-being. Yet paradoxically, the gap in well-being between women in wealthy and in middle income countries is not necessarily widening along with the healthcare spending gap. Indeed, in some ways women in several middle income countries are becoming better-off, while women in some wealthy countries are facing unexpected challenges to their sense of well-being. The narrowing gap between female well-being in wealthy and middle income countries has several reasons. First, some middle income countries, such as India, are making a determined effort to improve healthcare, including doubling healthcare spending over the current decade (See Table 1). In the country’s poorest areas, even small increases in spending can make a big difference in terms of access to basic medical services. In this way, even budget increases that result in spending that is modest in comparison to wealthy countries can contribute directly to female well-being. Sponsored by

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Healthcare spending: To have and have not

Table 1: On the rise Healthcare spending (US$ billion) 2011

2015 (a)

2020 (b)

India

71

87

150

Mexico

71

72

107

Brazil

240

179

215

Germany

423

370

487

France

330

284

359

(a) EIU estimate  (b) EIU forecast Source: EIU

While healthcare spending as a percentage of GDP is growing only modestly in Mexico and India, two of the middle-income countries examined in the EIU study, the modest rise in percentage terms is mainly due to GDP growth that outpaces the healthcare spending increases. (See Table 2)

Table 2: Chasing GDP growth Healthcare spending as percent of GDP 2011

2015 (a)

2020 (b)

India

3.8

4.1

4.2

Mexico

6.0

6.2

6.4

Brazil

9.2

10.3

10.5

Germany

11.2

11.1

11.6

France

11.5

11.8

11.9

(a) EIU estimate  (b) EIU forecast Source: EIU

Second, in the two wealthy countries examined in the study—Germany and France—large absolute increases in healthcare spending are not necessarily contributing to improved health and wellbeing. The increased spending masks healthcare systems that are badly stretched due to ageing populations and the use of costly medical technologies in a relatively small number of cases. In Germany, too, healthcare spending is likely to be stretched across a population enlarged by migration. The health budget increases might not compensate for the greater demands being placed on the systems. The prognosis shared by many healthcare experts is that in general terms, healthcare provision in these countries can be expected to worsen in the coming years. Third, while the developed world spends lavishly on healthcare, austerity measures in some wealthy countries—encompassing a wide range of budget areas beyond healthcare—threaten to impact the well-being of women disproportionately. Austerity measures may reduce state services that hit women particularly hard, such as childcare and child benefits. And since women are more likely to work in the state sector, they are more likely to be affected by cuts in the number of state jobs. “Women’s 2

© The Economist Intelligence Unit Limited 2016

Healthcare spending: To have and have not

well-being has taken a step back,” says Vittoria Luda di Cortemiglia, programme co-ordinator at the United Nations Interregional Crime and Justice Research Institute. She refers to the effect of government austerity measures in Europe, which she says have hit social spending essential to women and dented their financial independence.

Making a difference While there may be cause for optimism about the well-being of the world’s poorest women in the years ahead, the healthcare spending increases in middle income countries are no panacea. In the three middle income countries examined in the EIU study—Brazil, Mexico and India—there remains vast room for improvement. Spending is still well below the levels needed, and reform efforts have often failed in the implementation. In rural India, and in the country’s urban slums, healthcare access for women remains a problem. In Brazil and Mexico, patients face long waiting periods for essential treatment, and most observers call previous government attempts to introduce universal coverage ineffective. “The policies are good,” says Sanghita Bhatacharya, a senior public health specialist at the Public Health Foundation of India, “although there are questions over implementation.” Asha George of Johns Hopkins University’s School of Public Health agrees, warning that the focus of India’s efforts should be more at the local rather than national level. “Hospitals tend to be built in urban areas and can be remote from rural communities,” she says. This shift toward community-based care will not happen quickly, nor is it likely to happen without a fundamental improvement in local government. Ms Bhatacharya adds that national government initiatives in everything from education provision to women’s welfare must be better coordinated if women’s well-being is to improve. As in India, policies in Brazil and Mexico—where most citizens lack private health insurance and have limited access to state medical care—try to improve basic health provision for poorer women. These countries, too, are facing difficulties in implementing these policies. Nonetheless, the effort to bring healthcare to the people who need it most wins high approval rates among female consumers in India surveyed for the Women’s health and well-being study. Perhaps with an eye on their government’s efforts to introduce universal health coverage, respondents in India are far more likely than respondents in the other four countries surveyed to say their government has been successful in supporting their health and well-being. (See Chart 1) The female respondents’ views are mirrored to some extent in a separate survey of public officials conducted for the study. Public officials in the same five countries, who are responsible for programmes aimed at improving women’s well-being, were asked how women’s well-being in their countries has changed over the past three years. Alone in India and Brazil, at least some of the officials see significant improvement. (See Chart 2)

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Healthcare spending: To have and have not

Chart 1: Approval ratings How would you rate the success of your government (either national, regional or local) in supporting your health and well-being? (% of women answering “very successful” or “moderately successful”, by country *)

76%

India

43%

Germany

41%

France

30%

Brazil

29%

Mexico

*Note: Proportion of total sample giving this response: 44% Source: EIU- Women’s Survey.

Chart 2: Room to improve In your view, how has women’s overall well-being changed in your country in the past three years? (% answering “improved significantly”, by country *)

19%

India Germany

0%

France

0% 10%

Brazil Mexico

0%

*Note: Proportion of total sample giving this response: 6%. Source: EIU- Public officials’ survey.

The “zero” result amongst public officials in Mexico on this question mirrors the views of female consumers in that country on the success of government programmes aimed at improving female well-being; the consumers’ approval rate in Mexico was the lowest among the five countries. The “zero” result amongst public officials in France in Germany, on the other hand, may be because women in these countries already have a high standard of living and high levels of well-being, leaving less room for officials to see significant improvement over the past three years. Yet slow economic growth, government austerity measures, and the lingering memory of the global financial crisis of 2008-09 continue to dent confidence and well-being even in wealthy countries. Expected cutbacks in coverage and/or higher costs for medical services may also influence the outlook for well-being in developed countries. While the “haves” in Europe are still far better off than the “have nots” in poorer countries, the gap in well-being between them is starting—ever so slowly—to close. 4

© The Economist Intelligence Unit Limited 2016