Global health in crisis

The creeping disaster

The news reaching us from Greece is shattering: “Growing numbers of suicides due to the greatest economic crisis since 1929”, “Chronically ill lacking access to medicine”, “Doubling in the number of HIV infections”. They remind us of the link between socioeconomic factors and people’s health. Austerity policies in times of crisis have been proven to cost human lives. Disasters such as wars, famine or floods are going to have a far more tragic impact among a world population shaken by financial crisis – if the right to good public healthcare for all is not given priority.

“The global economic downturn has profound importance for the health and well-being of populations and is likely to worsen health inequity. The people who are already most exposed to vulnerability and disadvantage feel the effects of the global economic downturn more strongly, similar to the effects of natural disasters.”, health scientist Sir Michael Marmot noted in his interim report for the World Health Organization (WHO) in 2011 (Marmot 2011).With the end of the financial crisis in late 2007, the world economic crisis set in, and given its extent, it is easily comparable to the Great Depression of the 1930s. Already in its first years, a hundred million people were plunged into poverty by rising energy and food costs (WHO 2009).

Evaluating experience from previous economic crises, the WHO called on the Member States to seek to ensure that „the economic crisis is not turning into a social and health crisis” (ibid.). Its warning went unheeded.

Poor preconditions for health

While the economic crisis started in the industrialized countries, it is going to have its most dramatic impacts in developing countries (Ortiz and Cummins 2013). The decline in overseas direct investment and return remittances from relatives abroad or the drop in development aid adds to the consequences of crisis within previously already fragile health and social welfare systems. Thus the partner organization of medico international “Centro Ecuménico Antonio Valdivieso” (CEAV) in Nicaragua reports that a major proportion of the money that it used to receive from Spanish organizations is no longer available. In many countries, development aid money for health accounts for a considerable proportion of health expenditure – often up to 50 percent. In times of crisis, this dependence can quickly lead to disaster.

Spending on health worldwide reflects extreme inequality which cannot be explained by a lack of resources, since enough is available for everyone – only that it is extremely unequally distributed. Eighty-four percent of the world’s population lives in the developing and emerging countries of the South. However, they account for just 29 percent of the global Gross Domestic Product (GDP). They bear 92 percent of the world’s health burden but have just 16 percent of global expenditure on health at their disposal (Moon and Omole 2013). The per capita health expenditure ratio is revealing, too. In Germany, it is 3,573 US dollars a year, and in Uganda just 10 US dollars, i.e. 350 times less (WHO 2013). One consequence of this imbalance is that in Germany, people live up to an age of 81 years on average, while life expectancy in Uganda is at 56 years.

No saving on health

Economic crises, such as the Great Depression, the debt crisis of the developing countries or the Asian crisis towards the end of the 20th century, but also sudden transformation processes, such as the one that Russia saw after the disintegration of the Soviet Union, are proven to have cost many people’s lives. Suicide statistics, child mortality and the incidence of chronic diseases shot upwards – although they did not do so to the same degree everywhere. In their survey published in May 2013, the two health scientists Stuckler and Basu demonstrate that the extent of harm to health owing to “economic disaster” is a consequence of the political measures taken by governments. The core issue is whether they opt for an austerity and budget consolidation policy or whether they promote social and health programs. From the Great Depression up to the euro crisis, it can be scientifically proven again and again that “the true threat to public health is not the recession as such but the austerity programs” (Stuckler and Basu 2013).

Thus the impressive developments that had taken place in some African countries in the 1950s and 1960s, such as the halving of child mortality or the extension of public health and education systems, were ruined all at once in 1980, when the debt crisis set in. A massive increase in the price of oil, rising interest rates and the decline in exports owing to protectionism among the industrialized countries coincided with cuts in public budgets. Similar developments could be observed in Latin America in the 1980s and 1990s. The major financial actors, the International Monetary Fund (IMF) and the World Bank, developed structural adjustment programs, which were the precondition for debt relief or external investment in the crisis-shaken countries. In addition to trade liberalization and the elimination of subsidies, this also included cuts in the health budget.

The dubious assumption that these conditionalities would result in economic growth failed to materialize. Rather, the measures forced the countries to carry out a neoliberal reform of their economic and social systems and secured access for the industrialized countries to natural resources. There were times when countries such as Zimbabwe or Nicaragua were spending between a quarter and half of their revenue on debt repayment – often several times the amount of their health and education budgets.

In the current crisis in Europe, the IMF, together with the European Commission and the European Central Bank, is formulating the conditions for debt relief. They are very similar to the structural adjustment programs of the 1980s and 1990s. The Structural Adjustment Participatory Review Initiative (SAPRI) launched by the World Bank in 1997, which documented the disastrous developments at the time and led to a reorientation less than twenty years ago, appears to have been forgotten since. However, the impacts of the Greek health budget being cut by almost half were predictable – ranging from a lack of medicines and dressing material through an exodus of health specialists and a rising number of HIV infections to increased influenza mortality (Bonovas and Nikolopoulos 2012). The question must be permitted whether this was consciously accepted as a possible consequence of the measures.

In many developing countries, too, the IMF continues to be active in providing support for governments. Presently, the following IMF structural adjustment programs are on the agenda (Ortiz and Cummins 2013):

• eliminating or reduction of subsidies, including fuel, agriculture and food products (in 100 countries)
• wage bill cuts/caps, including the salaries of education, health and other public sector workers (in 98 countries)
• rationalization and further targeting of safety (in 80 countries)
• pension reform (in 86 countries)
• healthcare reform (in 37 countries)
• labor flexibilization (in 32 countries).

Structural adjustment through privatization

The reforms called for in the health sector include, in particular, cuts in government services and medical personnel and usually go hand in hand with increases in out of pocket payments for healthcare facilities or the purchase of medicines. In the field of the social security system, the IMF often recommends restricting the public security nets and welfare to the poorest sections of the population – as is the case in 25 industrialized countries and in 55 developing countries, such as Nicaragua, Sudan, Zambia, Mali or Haiti (Ortiz und Cummins 2013). Usually, this is difficult to implement both administratively and politically, and given the large number of vulnerable groups in the population, also above the poverty line, it is not recommendable. Rather, comprehensive public healthcare is urgently needed that is pre-financed on a mutual basis: the rich for the poor, and the healthy for the sick. As the WHO notes, this is also the most efficient way of financing (WHO 2010).

One of the biggest problems that the countries of the South are facing is that the overwhelming majority of the population is not financially safeguarded in the event of illness (Moon und Omole 2013). As a rule, anyone seeking health services has to make out-of-pocket payments. Such individualized health financing does not make sense from a health policy angle and, what is even more important, is highly unfair. It excludes those from appropriate healthcare who need it most given their situation. To poor people and those without means, who are usually sick more often, out of pocket payments often represent insurmountable obstacles. Since they simply cannot afford it, sick people avoid seeing a physician or going to hospital. Each year, the WHO estimates, 100 million people are driven into poverty because they have to finance “disastrous health expenditure” privately (WHO 2010).

The user fees that the World Bank advocated for a long time are highly controversial, too. Originally, they were supposed to serve as a barrier to prevent an “overuse” of medical facilities. But they pass on responsibility for health to the poor, or, as WHO Secretary General Margret Chan puts it, “user fees have punished the poor” (WHO 2010).

The individualization of health costs via private payments is accompanied by the privatization of public hospitals, a measure that tight public budgets serve as a reason for. Whereas pressure on the public health system is mounting, the development of the private health sector continues, just like the World Bank has demanded for many decades. The debate on the pros and cons of the private health sector is shaped considerably by ideological convictions, an analysis of more than 2,300 scientific articles recently revealed (Braithwaite et al. 2010). Especially in the case of the developing countries, there is a lack of data on the impacts of privatization on access to healthcare. Many countries in Africa, Latin America and Asia have only weakly developed public healthcare systems. Underfinanced, ailing public hospitals for the lion’s proportion of the population contrast with well-equipped private hospitals for the elites. However, it has not been possible to prove scientifically that the private sector is more efficient, can cope with more pressure and is more effective medically. Rather, an increasing amount of unnecessary examinations and surgeries are being performed some of which even violate medical standards (Basu et al. 2012).

What is overlooked is that the poor and impoverished can only assert their right to health where a public-supported healthcare system exists. Health is an important public good that is linked to social responsibility and commitments. In contrast, in the case of a private hospital operator or philanthropic associations, those in need can, at best, apply for support, but they cannot take legal action to enforce it. Furthermore, a well-established public health service is essential for good prophylaxis and surveillance – especially in times of crisis. But profit-oriented private providers of health services are only interested in preventing diseases to a certain degree – unless pharmaceutical, medical engineering or nutritional supplement products are employed that earn them revenue.

The benefit of private healthcare also depends on whether it is capable of providing for the population in times of disaster and crisis. People who have suddenly lost their possessions or secure income can no longer afford private supplementary insurances and contributions and turn to public institutions, which is what the WHO also predicted in its 2009 Report (WHO 2009). In Greece, for example, the intake of patients by public hospitals increased by 20 percent between 2009 and 2011 (Kentikelenis und Papanicolas 2012).

Rethinking is vital

Public-financed, high-quality healthcare and prevention are essential to reduce a population’s vulnerability. The WHO, as well as many renowned scientists, is therefore calling for anti-cyclic health financing: more money in times of crisis – especially since there can be no doubt that demand has increased significantly (WHO 2009). Quite generally, the issue of sustainable health financing urgently needs settling. The inequalities described above are untenable from a human rights perspective, and they are causing unnecessary suffering. One way out would be to replace development aid steered by vested interests with obligatory compensatory financing systems. Such a demand, which was already raised by medico international in the late 1990s, was presented by Anand Grover, UN Special Rapporteur for the Right to Health in his report to the UN General Assembly in 2012.: “Realization of the right to health in the developing world is thus also dependent upon the availability of sustainable international funding for health, which should ultimately be realized through an obligatory, treaty-based regime founded upon the principle of global solidarity.” (Grover 2012)

Most countries throughout the world continue to lack systems of compensatory public, mutual health financing, whether it be via taxation or health insurances. It is not without reason that the WHO also put the goal of Universal Health Coverage (UHC) right at the top of the agenda in the planned revision of the Millennium Development Goals, which are to be newly agreed in 2015. In stark contrast to this, social security systems are presently being eliminated in Europe and many other countries. In Greece, more than 30 percent of the population is no longer medically insured.

The human right to health is enshrined in Article 12 of the International Covenant on Economic, Social and Cultural Rights. Only if society – and hence also its governments and its institutions – recognize healthcare as a collective task, as a public good that must not be left up to the market, can it become and stay a reality. In times of crisis, this simple insight is all the more true.

List of references:

Basu, S. et al., 2012. Comparative Performance of Private and Public Healthcare Systems in Low- and Middle-Income Countries: A Systematic Review R. Jenkins, ed. PLoS medicine, 9(6), p.e1001244.

Bonovas, S. & Nikolopoulos, G., 2012. High-burden epidemics in Greece in the era of economic crisis. Early signs of a public health tragedy. Journal of preventive medicine and hygiene, 53(3), pp.169–171.

Braithwaite, J., Travaglia, J.F. & Corbett, A., 2010. Can Questions of the Privatization and Corporatization, and the Autonomy and Accountability of Public Hospitals, Ever be Resolved? Health Care Analysis, 19(2), pp.133–153.

Grover, A., 2012. Right of everyone to the enjoyment of the highest attainable standard of physical and mental health, United Nations General Assembly.

Kentikelenis, A. & Papanicolas, I., 2012. Economic crisis, austerity and the Greek public health system. European journal of public health, 22(1), pp.4–5.

Marmot, M., 2011. Interim second report on social determinants of health and the health divide in the WHO European Region, World Health Organization. Moon, S. & Omole, O., 2013. Development Assistance for Health: Critiques and Proposals for Change, Chatham House.

Ortiz, I. & Cummins, M., 2013. The Age of Austerity: A Review of Public Expenditures and Adjustment Measures in 181 Countries, South Centre.

Stuckler, D. & Basu, S., 2013. The Body Economic - Why Austerity Kills, Basic Books.

WHO, 2009. The financial crisis and global health, WHO.

WHO, 2010. World Health Report 2010 - Health System Financing, Worlld Health Organization.

WHO, 2013. World Health Statistics 2013, WHO.


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