Discuss About The Healthcare Resources Expenditure Financial.
Health is considered to be the most fundamental driver for the overall quality of life. Healthcare funded publicly is a vital legacy of the enlightenment age. Legislations related to the healthcare insurance dates back to the 19th century and it has been found that the expenditure with respect to the healthcare has increased only after the expansion of the healthcare coverage. Global expenditure in the healthcare has been found to share a wide burden of the world income and this has been increasing at a steady pace. The high-income countries have been spending a larger part of the of their income into the healthcare, while the middle and the low-income countries the public spending is much lower (Lagomarsino et al., 2012). The healthcare financing in the developing counties with respect to the 21st century and this is actually shaped by the resources that are received in the form of the developmental assistance. The external health assistance of financing has been found to increase to a large extent after the introduction of the millennium development goals. It is important to note that the due to the millennium development goals the high-income countries have spent around 0.7 percent of the resources on the healthcare (Our World in Data 2018). This small percentage of the healthcare assistance is much less compared to the national spending of the developed countries. However, for the low-income countries, they are at the receiving end. The resources that the low-income receive are at a substantial level. It has been found that the developed nations finance the more the 25 percent on healthcare expenditure. Thus, it can be inferred that if the developmental assistance is managed and targeted properly, then it has the potential to reduce inequality that arises in the spending of healthcare (Healthdata.org, 2018). This study is based on providing a picture on the evidence where the donor aid has proved to be positive for a given country, and where the donor aid has been a burden over a country. The study will also focus on the approaches and the policies that address the distortionary effects of the health aid. The evidence that the policies have improved the outcomes to healthcare with respect to the foreign aid.
Donor funding- In the low-income countries, the development assistance for the health accounts to about 20 percent of the total spending by the receiving countries. This is found to play a major role in Sub-Saharan Africa and in the 12 countries, the external funding is found to be exceeding the 30 percent of the total health expenditure for the year 2000 in Africa. only a small portion of aid is provided to the low-income countries for the aid support. The remaining part of the financing is provided by the technical assistance which is not explicitly mentioned and registered in the balance of payment of the recipient country, intervention-specific programs, off-budget assistance or support for the disease, earmarked project support, budget support. However, it is important to note that the despite the shortcoming in the foreign assistance, the donor funding seems to be the best alternative for the for scaling up the expenditures in the health sector in several low-income countries. Especially for countries like Africa, the increase in the effectiveness of the additional efforts, and funding are necessary. This is vital for increasing the and improving the harmonization, decrease the volatility and maturity of the resources (worldbank.org 2018a).
The total amount of demand in the healthcare sector also forms a very important impact on the finances and expenditure in this sector. The main determinants of demand in this sector are the total number of inhabitants and the age demographics of the people. The other factors that determine the number of patients and hence the demand is the level of education the inhabitants or the citizens have received (Keyvanara et al. 2014).
For example, in most countries in UK it has been found that the age of the inhabitants who have high demand for the healthcare services and products range in the middle and old age groups.
The opportunity cost with regards to the finances of the healthcare sector is generally associated with the use of a technology in the sense that reports claim that often the opportunity cost of many health programs are replaced with that of the use of a new technology for providing enhanced healthcare services (Drummond et al. 2015). If the benefit accrued by the use of the new technology is greater than that accrued by using the programs, the technology installation is considered optimal.
Example: For example, the National Health Service (NHS) measures the opportunity costs of the programs and technology in the process mentioned above to stick to a particular budget depending upon the opportunity and installation cost of the two options.
The concept of vertical equity is another economic concept that is well applicable in the context of financing the healthcare industry. This is so because different people belonging to different income classes are generally not able to use the resources up to the extent that they need to because of the lack of money (Allanson and Petrie 2014). Both progressive and regressive systems exist in this area that is, usually the money paid by the rich is more than the amount paid by the poor (progressive systems) but the portion of income spent by the rich on healthcare is less as compared to that spent by the poor (regressive systems).
Example: For example, in America, the average amount annually spent by a rich household on healthcare is $7048 and that spent by a poor household on healthcare is $1930.
Another very important concept that forms a central pillar to the economic concepts encompassing the financing of the healthcare sector is the use of sustainable financial concepts. This concept involves using the budget including the expenditure and investments of this sector in such a way that there exists fiscal sustainability of health systems. This is the concept that increases the value for money for both the patients and the other stakeholders of this industry. In case of less developed countries this concept involves sourcing the funding by using taxation and other contributions on behalf of the labour. Globalisation is making the scenario of financial sustainability in the less developed countries but is also causing the responsibilities of effective management of such funds to be higher (Pammolli, Riccaboni and Magazzini 2012).
Example: In the OECD countries for example, the growth in healthcare expenditure has been around 2.6% in 2009, -0.4% in 2010, 0.3% in 2011 and 1% in 2012. Most of this expenditure is from labour expenditure and taxes.
Another very important economic concept affecting the finances and working of the healthcare sector is the multiplier effect of health expenditure that is carried forward to the younger generations and the very factor that helps in increasing the productivity of the people that receive the benefits of the healthcare industry. The multiplier essentially helps in reducing the long run costs of healthcare expenditure and costs pertaining to this aspect (Nuti, Vainieri, and Frey, 2012).
Example: In America for example before polio as a disease was eradicated, the country had invested an amount of almost $220 million in the short run and saved up an approximated amount of $320 million in the long run.
The concept of Donor Aid becomes very important in this regard as it most definitely helps in increasing the financial stability of the health care sector in most countries but has its own set of strengths and weaknesses which are described in detail below:
Benefits of donor aid for a given country – a cross-national study was carried out for the purpose of the effectiveness of the foreign health aid. A Malawi case study revealed that how the foreign aid impacted the Malawi population. The results of the study revealed that a large number of the individuals in the urban areas are having more health facilities and a large number of the ethnic groups are more likely to receive the foreign aid. It has been found that the parasitic disease control aid has led to the reduction of the prevalence of malaria. Also, it has been found that there is less number of the individuals that are reporting the disease. The other results from the finding suggest that the aid projects were aimed towards the improvement of the basic infrastructure of health and it specifically targeted towards the control of the infectious and the parasitic diseases. The health aid was allocated towards the urban areas and the areas that had the existing health facilities. The medical aid specifically directed towards the specialised medical equipment and services. 7-million-dollar European Union blood transfusion program was launched as a service program. Financial aid by the German Development Bank about 3 million dollars are aimed towards the bolstering the health services in the Chitipa district and it also included the rehabilitation of the health centres (Marty et al. 2017).
Donor aid as a burden to a country- the donor country plays a major role of assistance and help for the receiving country. The burden on the receiving country is due to the fact that the donor country is always a developed nation which along with the different international organization provide development assistance for health to the poor countries. The developing nations or the poor income countries are always at the receiving end of the financial aid that works to augment the healthcare sector of the recipient nation. It has been seen that the several poor income countries face the liability of reflecting the development in their healthcare sector due to the added budget allocation through the external financial assistance (Lyon et al. 2014). The financial aid is not just received in terms of the medical services but also the developed bring their medical assistance in terms of the manpower. The medical team are sent into the countries that face the disease burden and are unable to neither handle nor able to cope up with the disease burden due to the lack of medical development in the recipient country. Recently the outbreak of Ebola in New Guinea and other African states has resulted in health assistance by several international organizations along with the active participation of the United States, US not only provided the financial assistance but also has sent a medical team for providing effective training to the local and the regional health player for the purpose of effective containment of the Ebola virus (Gostin and Friedman 2015).
Weaknesses of the Economic Factors Influencing the Healthcare Sector- Like all other sectors, the implications of the economic factors discussed above have some weaknesses in the context of the functioning of the healthcare sector. The financing and funding challenges existing in the context of technological innovations that are highly expensive and have to be installed only with a replacement of the health programs in place include developing cost systems to increase the margins of the health care industry.
Policies and the approaches that can address the issues in health aid- The policies and the approaches are basically framed for addressing the issues that disturb the normal flow of aid or act as hindrances in healthcare. The two major policies and recommendations in this aspect are:
Assistance – Providing assistance for the global public foods includes the examples of support for the countries like the research and development of the new types of the health tools; harmonization and development of the internal health regulations; knowledge sharing and generation; sharing of the health-related intellectual property; and shaping of the market for the reduction of the prices.
Monitoring – Dealing with the cross border externalities and it includes the supporting the response and the preparedness though the regulations, sharing of information and surveillance; the other processes will also include the responding to the anti-microbial resistance, counterfeiting the drugs, prevention of the marketing of the unhealthy products like the sugar, alcohol, tobacco for the purpose of controlling the cross border disease movement; providing the global stewardship and leadership and it includes the support for the support of priority setting and health advocacy, along with the promotion of the aid accountability and effectiveness (Yamey et al. 2015).
Evidence of the policies that have been effective in improving the country’s health system- The countries that are under the WHO European Region undertook efforts for consolidation the health system accountability. In terms of the health performance systems, around 18 countries took the health system accountability. Among the 18 countries, the Turkey, Finland, Republic of Moldova. Turkey is one of the examples of a country where the systems of health have traditionally been characterized as the centralization of the decision making. Efforts are also put into place for the purpose of greater efficiency in decision making at the local and the regional level. Finland also represents the perfect a perfect case where the systems of health are seen to be decentralized. These 2 countries are found to be important and indicative of the health system stewards and are able to confront the developing strategies for the purpose of improving the performance. This also refers to the attainment of an optimal level of balance for the purpose of creating a centralized environment. This will allow the adaptability to the local and the regional variations for the adequate amount of response to the local needs. The Republic of Moldova itself highlights the countries that have experienced or have undergone a political and socio-economic transition. The systematic change is due to the change occurring in the priority areas like the strategies and the policy instruments (who.int 2018).
Conclusion
The term global public goods are in need of the protection of and the protection of the public health. The institutions have the responsibility of providing the public goods and are well developed at the national level and it is clearly identified as a responsibility of the sovereign states. The world health organization was mandated so that it provides the global public goods. As the globalization deepens, the degree of dependence between the low-income countries also advances (Moon, Røttingen and Frenk 2017). The cross-border externalities include the pandemic preparedness and prevention of the spread of the disease. like the recent outbreak of the Ebola in the New Guinea and this led to the global turmoil and unrest. The international health organizations and the along with WHO and United States proved to be effective in the containment and also were also successful in the spread of the disease into the other countries. A large number of the financial assistance and the medical assistance led to the effective control of the disease spread (WHO Ebola Response Team 2014). Thus from the above study, it can be concluded that the financial aid for augmenting ting the healthcare sector of a country is best suited for the low-income nations. The increasing burden of disease in the underdeveloped and the poor nations has led to the increase in the disease burden. The financial aid boosts the budget of the health sector of a poor country. The rising number of the disease and a large number of the discrepancies related to the proper delivery of the health packages has led to the effective management of the health provisions.
Reference
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