Publications

	Table of Contents
p. 21 of 27 BACK | NEXT Executive summary Introduction Regional health context The Bank’s involvementin the health sector Issues and options The health of the poor, women, and indigenous peoples Setting clear priorities Mobilizing resources for the public health sector Building managerial capacity Testing innovative approaches Introducing effective, new, and affordable technologies Focusing on functions which constitute public goods Increasing collaboration between public and private sectors The Bank’s health policy

Policy for the Health Sector : Issues and options

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Focusing on functions which constitute public goods

The DMC governments have not given much emphasis in the past to functions that are uniquely their responsibility and which constitute public goods, such as: (i) research and information collection; (ii) modifying behaviors related to health and hygiene; and (iii) regulating private sector activities that impinge on health. Without government, involvement many of these critical activities will simply not take place and the effects on the health of the population could be dramatic.

Investing in research

Over the last half century there has been inspiring progress in a variety of health technologies. This newly found ability to prevent or treat illnesses came about primarily as a result of the investments governments and the private sector have made in research. Sadly, little investment has been made in research focused on health conditions that affect the poor in developing countries. For example, pneumonia, diarrhea, and TB constituted 18 percent of the global burden of disease in 1990, yet attracted only 0.2 percent of the $56 billion spent on health research worldwide. Not only are the funds available for research on diseases of the poor limited, they appear to be declining. Between 1988 and 1993, bilateral ODA for health research and development declined 37 percent.¹⁷ This small and declining investment in research and development is tragic because research and development has yielded spectacular returns. All the research on the effectiveness of vitamin A in reducing child mortality cost less than $10 million, yet it has the potential to save more than 650,000 lives per year in Bangladesh, India, Indonesia, and Philippines alone.¹⁸

Since 1978 the Bank has invested less than $5 million in health research (less than 0.5 percent of total health sector lending) and much of this has occurred in the last few years. WHO has done a careful analysis of research priorities in developing countries and is helping to coordinate international efforts to increase the funds available for research and development.¹⁹ Useful criteria for the Bank and its DMCs in prioritizing their investments in research and development include: (i) the studies should directly relate to practical interventions that are applicable in DMC settings, i.e., downstream research such as field trials of new interventions; (ii) the topics should be ones that the private sector is unlikely to invest in because of the noncommercial nature of the intervention; (iii) the research should relate to diseases or conditions that disproportionately affect poor people; and (iv) the topics are not currently being investigated. In addition to helping finance the research the Bank and the DMCs should ensure that the results are widely disseminated.

Modifying health-related behaviors

Successful efforts to reduce the burden of disease are often dependent on affecting people’s behavioral choices. Effective programs to decrease smoking, limit the spread of HIV/AIDS, improve personal hygiene, reduce the use of illegal drugs, or promote good nutrition are heavily dependent on influencing behaviors through health education, social marketing, and community mobilization. These programs are almost pure public goods and deserve to be publicly financed. The private sector will simply not invest in efforts to promote healthy behaviors that do not involve the sale of a particular product. Indeed the private sector sometimes promotes products, such as cigarettes, breast-milk substitutes, and alcohol that can be injurious to health. Despite the public goods nature of modifying health-related behaviors, DMC governments are currently spending only a small proportion of their budgets on it. Few reliable estimates exist of public expenditures on health education but it is rarely more than 1 percent of the public health budget, even in the era of HIV/ AIDS. Part of the reason for the lack of investment may be that changing people’s behavior is difficult. In North America, it took more than 30 years and billions of dollars to change people’s attitudes to smoking. In developing countries, this difficulty is compounded by the shortage of rigorous studies that explore cost-effective means of affecting behavior. Nonetheless, modifying unhealthy behav-iors is so pressing that the Bank and its DMCs need to invest in discovering effective and efficient means of accomplishing it in the Asian context.

Regulating the private sector

One of the most difficult challenges DMC governments face is effectively, efficiently, and transparently regulating private sector activities that relate to health. Governments are uniquely placed to regulate such activities, and, while they should work with other stakeholders, they must ultimately take responsibility. The regulatory function is critical, because without it the health of the population can be put at grave risk. For example, a Bank-financed study in the Lao PDR demonstrated that 47 percent of medicines purchased in private pharmacies were substandard and nearly a third were bogus. Until now, DMC governments have not devoted many resources to regulation, and even where laws and regulations exist, they have been rarely and inconsistently enforced. Besides the large and burgeoning pharmaceutical market, governments will need to ensure proper regulation of the food supply, education and licensing of health workers, provision of curative care, and environmental health hazards.

The obligation to regulate these activities is not just a burden on governments; it also provides an opportunity to significantly improve the health of the population. For example, enforcing regulations that remove lead from the environment can be an extremely cost-effective means to foster the intellectual development of children. Similarly, ensuring that salt is iodized, wheat flour fortified with iron and vitamin A, and breast-milk substitutes properly marketed can provide dramatic benefits for child health. The single most important area for government regulatory efforts will be in tobacco control. Based on a careful analysis of the global experience with efforts to reduce tobacco consumption, WHO²⁰ has recommended that governments raise taxes on tobacco such that prices increase significantly faster than inflation and growth in GDP (the price elasticities in developing countries are about –0.6, indicating that increased taxes on tobacco boosts government revenues and decreases consumption, particularly by the poor). WHO has also recommended that developing country governments (i) impose a total ban on all advertising and promotion of tobacco products; (ii) mandate very large warnings in the local language on the front of each cigarette package; (iii) ban smoking in public places and in the workplace (as the Bank itself does); and (iv) publicize the legislation on tobacco control. Ensuring that salt is iodized, wheat flour fortified with iron and vitamin A, and

While regulation of private sector health-related activities is an appropriate role for governments and affords opportunities to improve the health of the population, it can also create serious problems. Chief among the potential dangers are the generation of bureaucratic red tape that stifles enterprise and corruption that increases costs throughout the system. Although there is limited experience with successful regulation in the DMCs, there are a number of possible approaches that should be tried more broadly. These are described briefly in Box 6. marketed can provide dramatic benefits for child health.

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