Making an even stronger case for investing in health
As we usher in the new year of 2014 and the post-2015 development agenda begins to crystalize, an important transition is occurring in the global health policy field.
Investment in global health has quintupled over the past two decades but also faces considerable challenges ahead, as discussed in a recent working paper by R4D for the Lancet Commission on Investing in Health (CIH).
World Bank President Jim Yong Kim is calling this a time for even greater ambition.
Helen Saxenian, a long-time advisor and valuable source of technical guidance for Results for Development (R4D)’s global health focus area, is one of the authors of the new Lancet CIH report titled, Global Health 2035: A World Converging within a Generation, that introduces a new ‘full income’ approach to valuing investments in health and could play a major role in shaping the priorities of the post-2015 agenda.
The CIH was initiated by The Lancet in late 2012 to revisit the findings and conclusions of the 1993 World Development Report on “Investing in Health” (1993 WDR) and make recommendations for the next 20 years. The 1993 WDR was authored in part by Helen along with R4D Managing Director Robert Hecht under the direction of Dean Jamison (1993 WDR Staff Director) with oversight from Larry Summers (World Bank Chief Economist at the time), and Nancy Birdsall (Acting Chief Economist after Larry Summers left the Bank to join the U.S. Treasury).
On the 20th anniversary of its publication, the 1993 WDR is credited with influencing a wide range of actors and contributing to a major scaling up of investment in health over the past two decades. Bill Gates has cited it as direct inspiration for the Gates Foundation’s focus on health, saying, “I remember reading the 1993 World Development Report. Every page screamed out that human life was not being as valued in the world at large as it should be.”
In this interview, Helen and Robert reflect on the past 20 years in the global health field since helping author the 1993 WDR, and offer insight into the full income approach and other key messages and recommendations in the CIH’s new Global Health 2035 report.
Looking back on the past 20 years, what are the most important legacies and lasting impacts of the 1993 WDR?
Helen Saxenian: Most importantly, the 1993 WDR made a compelling argument that evidence-based health expenditures are an investment not just in health and well being, but an investment in economic prosperity. By introducing important methodological advances in measuring and tracking the cost-effectiveness and economic impacts of health interventions, the report influenced a range of actors in international development, from the World Health Organization (WHO), to national governments and private philanthropies.
The most important methodological advancement was the introduction of Disability-Adjusted Life-Years (DALY), a metric that quantifies disease burden, including both loss of life and loss of healthy life years. The global DALY exercise forced the disease experts to come together and collaborate on re-visiting methods for accurately counting and deriving the number of deaths that occur in the world and why.
The 1993 WDR also highlighted the cost-effectiveness of select health interventions, such as for tuberculosis, immunization, and malaria that generate enormous value for money.
Drawing on the cost-effectiveness analysis, another major legacy of the 1993 WDR was the recommendation that countries develop and invest in an essential benefit package of public health and clinical interventions. This idea took off on a much greater scale than we expected as authors of the report. Twenty years later, many countries still work with the idea of essential benefit packages and it continues to be an important concept for pro-poor approaches to expanding health coverage.
Finally, the 1993 WDR generated the first complete set of country-level estimates of public and private spending on health estimates. Following the WDR publication, methodologies to estimate national health accounts were improved. WHO now has institutionalized the function of compiling and disseminating country-level estimates of health spending on an annual basis.
Robert Hecht: The WDR strongly argued for the idea that you can apply economic tools to examine how to get the most value for money and set the right priorities for investment in the health area. WDR 93 showed clearly for the first time how governments and donors could generate enormous health benefits for the poor, saving millions of lives, and doing so at a remarkably low cost.
The 1993 WDR was also very important in sending a guiding message about the role of governments in the health sector. Broadly speaking, we argued on the basis of widespread evidence that while the delivery of essential health services could be done effectively by a mix of public and private actors, the government needed to step up to take on the financing side, because private out-of-pocket spending by families could bankrupt them and drive them into poverty, and because private voluntary insurance inevitably led to incomplete and inequitable coverage, and often to escalating health prices. Public insurance approaches made the most sense for efficient and sustainable health services for the entire population of a country. I think that is still largely the right policy prescription today.
What are the major messages of the new CIH report on Global Health 2035? Does it contain any major revisions or departures from the 1993 WDR?
Helen: There are four messages in the new 2035 report that really build on the 1993 WDR in terms of underscoring the importance of continuing to prioritize investment in health:
- Using a ‘full-income’ approach to account for the intrinsic value of an additional life year (VLY), it is even more apparent that there is an enormous payoff from investing in health.
- A “grand convergence” in health outcomes between low- and middle-income countries is achievable within a single generation.
- Fiscal policies are a powerful underused lever for curbing the burden of non-communicable diseases (NCD) and injury.
- There are two pro-poor pathways for progressive universalism as efficient means toward achieving universal health coverage (UHC): 1) publicly funded health insurance and 2) expanded core benefits packages.
Can you elaborate a bit more on the new ‘full income’ approach? What is a VLY and how could this impact decision-making from a policy standpoint?
Helen: I think it’s best to think about ‘full income’ in the simplest possible way. The idea is that people place a high value on living a healthier and longer life. Traditional national health accounts fail to capture this intrinsic value and the new report introduces a distinct new metric called the value of an additional life-year (VLY) to measure this. Take, for example two identical countries with identical GDP but in one country, people live to 40, while in the other they live to 65. If you look only at GDP, it doesn’t capture that difference and the benefits of longer life.
In the 1993 WDR, we only looked at the returns from health that come from improved productivity from living longer, healthier lives (DALYs). Looking at this measure only, mortality reductions accounted for about 11 percent of recent economic growth in low- and middle-income countries, but this is only part of the picture. The CIH 2035 report tries to portray a more complete picture of the gains from investing in health, capturing both the gains from productivity, as well as the collective gains from this intrinsic value of life.
Only time will tell how this impacts how people think. DALYs were somewhat controversial when first introduced in 1993, but have come to be a well-established concept in how we measure the benefits of health investments. I think VLYs and taking the full income approach may similarly appear at first to be a daunting concept, but really is quite simple in what it tries to capture, and has the potential demonstrate the tremendous benefits from investing an a grand convergence in global health by 2035.