This week, both the Indian and South African governments announced proposed reforms to how health is paid for in their countries.
If implimented, the reforms would mean significant progress towards their citizens gaining access to free, universal, essential health care.
Health is a human right, and every country around the world has signed up to at least one treaty that asserts this right. Equitable health financing policy is a prerequisite to realising that right.
The 2010 World Health Report, and the resolution that followed at this May’s World Health Assembly, demonstrate a global consensus that direct payments for health care at the point of use are regressive.
Large scale risk and resource pooling are needed so that the wealthy and healthy effectively subsidise the costs of health care for the poor and sick.
According to the latest estimates, over 50% of total expenditures on health in India are paid for by patients out of their own pockets when they seek treatment or medicine.
This means that the financial burden of ill health falls on the patient. With over 40% of the population living on less than a dollar a day, the majority of people in India simply cannot afford basic health care.
If the condition is serious or any complications arise, health care can become exorbitantly expensive for poor households and such payments can plunge them further into poverty.
The poorest children in India are three times more likely to die before their fifth birthday than those born into wealthy families. Amongst the poor, only 19% of births have skilled attendance, whereas 89% of births in rich households are attended by a skilled health care provider (World Health Statistics 2011).
In South Africa, more than 80% of the population rely on the public sector as they cannot afford the premiums for private health insurance. The government’s facilities are desperately under-resourced and overstretched, meaning that the majority of the population receive low standards of care, for a fee, which the Health Minister accepts is “often totally unacceptable”.
Both India and South Africa must take action to reduce this inequity gap. For this to happen, the financial burden must be shifted from the individual to the population, so that ill health no longer perpetuates poverty for the poorest and most in need. Direct payments for a package of essential health services at primary, secondary and tertiary levels must be removed.
Time for optimism
An expert commission in India has been looking into how to improve the health system so it can better meet the needs of its people. What the commission proposes are progressive reforms, relieving the individual from the financial burden of health care.
Of course, the cost of health care will not simply evaporate, but it should be borne by the government where resources can be raised, pooled and used equitably.
To facilitate this, the recommendations include increasing the government’s budgetary allocation to health: currently at 1.4% of GDP, the commission proposes increasing this to 2.5% by 2017 and 3% by 2020. With GDP estimated at over $1.5 trillion in 2010, this is a substantial increase in resources.
The commission also recommends introducing a surcharge on taxable income, which is earmarked for health. This is perhaps the fairest way to finance health care, whereby people contribute according to their ability to pay.
Similar to the Indian commission’s proposals, the reforms in South Africa will introduce a dedicated health contribution for people above a certain salary level, so that additional resources are raised according to ability to pay and are pooled by the government. These will then be used to improve the quality of essential primary services in the public sector.
Pressing for change
The ground is set for progressive change and for the right to health to become a reality in both India and South Africa.
It is now the responsibility of civil society to ensure that these proposed reforms become national policy and are implemented effectively.