Public Expenditures in Health

Main Principles Establish Market Failures Identify beneficiaries of expenditures Balance potential benefits with ability to deliver services

Health - Market Failures Public goods (pest control, sanitation, health education) Externalities (infectious disease control) Information advantage of doctors Insurance

Health - equity concerns Inequities in health status Inequities in benefits of services

The poor are sicker than other people: Mortality by “wealth”- Brazil, 1996

Incidence of disease by “wealth” India

Female 45Q15 by cause of death by income group, China 1987

Health - Problems of Implementation Management challenge –Personnel placement –Quality of services Conscientious providers Maintenance of facilities Political Influence

Health: Complementarity/ conflict between goals Public goods - strong complementarity Primary health care - modest efficiency effects (varies), potentially high equity effects, difficult management Hospitals - high efficiency, high potential but low actual equity effects, easier management(?)

In Brazil: the poor have worse sanitation facilities... % with no sanitation facilities

…they have less access to safe water...

…and this costs the lives of their children Mortality rate

Health: Complementarity/ conflict between goals Public goods - strong complementarity Primary health care - modest efficiency effects (varies), potentially high equity effects, difficult management Hospitals - high efficiency, high potential but low actual equity effects, easier management(?)

Determinants of infant mortality

Philippines: Effect of public medical care Poor areaNot-so-poor area

Substitution between public and private providers

Distribution of health care subsidies, Indonesia

Health: Complementarity/ conflict between goals Public goods - strong complementarity Primary health care - modest efficiency effects (varies), potentially high equity effects, difficult management Hospitals - high efficiency, high potential but low actual equity effects, easier management(?)

Value of insurance as a % of expected cost

Priorities in health policy