Free and Public

Working for the Many – what role for public services in fighting inequality?

The extreme gap between the rich and the poor has become headline news in countries around the world, with consensus from actors as diverse as the Pope, Christine Lagarde and President Obama that we need solutions to reverse the growing divide between the haves and the have nots.

In February 2014, backing a new IMF discussion paper, Christine Lagarde Director of the IMF underlined that ‘making taxation more progressive’ and ‘improving access to health and education’ have a key role to play in tacking inequality.  Oxfam has worked for decades to promote universal access to quality health services, and in our new report ‘Working for the Many’ we consider evidence of how public services – especially health and education – impact on economic inequality.

The evidence bears out Christine Lagarde’s claim – the case to invest more in free public healthcare as one of the weapons to tackle extreme inequality is compelling.

First we consider a 2012 OECD study which quantifies the value of public services – the vast majority of which is health and education – to each quintile of the population, by converting that value into ‘virtual income’.  The data shows that in OECD countries public services are worth the equivalent of a huge 76 per cent of the post-tax income of the poorest group, and just 14 per cent of the richest. So whilst public services benefit rich and poor equally in absolute terms, so that everyone is a winner, these services are strongly redistributive and help to mitigate the impact of today’s skewed income distribution by benefiting the poorest far more.

In fact, across OECD countries the virtual income gained from public services reduces income inequality by an average of 20 per cent.  Similar calculations across six Latin American countries show the same impact – virtual income from health and education reduce income inequality by between 10 and 20 per cent.

Evidence from studies done across Asia, and more than 70 developing and transition countries shows the same underlying patterns in the world’s poorest countries.  A 2007 study of healthcare systems in eight Asian countries and three Chinese provinces and regions shows that in all but one, healthcare had the same equalizing effect through progressive distribution of benefit. The more these governments spent on healthcare, the more progressive the distribution of income was and the more the healthcare system addressed economic inequality. This mirrors findings in the OECD study, that countries that increased public spending on services throughout the 2000s had an increasing rate of success in reducing income inequality. But those countries that cut spending during that time showed a marked decline in the rate of inequality reduction.

Whilst public services provide everyone with ‘virtual income’ and fight inequality by putting more in the pockets of the poorest; user fees and private services have the opposite effect.

User fees take money out of the pockets of the poorest and undermine the inequality-reducing potential of services.  Health user fees cause 150 million people around the world to suffer financial catastrophe each year.  That is approximately two per cent of the global population.  And since Malaysia privatized portions of its health services and introduced user fees in the 1980s, out-of-pocket spending has risen, representing one-third of total healthcare spending in the country in 2009. A recent study in the USA showed that the poorest 20 per cent spend 15 per cent of their income on healthcare, compared to the richest 20 per cent for whom healthcare amounts to just 3 per cent of income. But despite this significant cost to the poorest, they still don’t get all the cover they need.

Private provision of healthcare further skews the benefit towards the richest.  In three of the best performing Asian countries that have met or are close to meeting Universal Health Coverage – Sri Lanka, Malaysia and Hong Kong – the private sector is of negligible value to the poorest quintile of the population, and the benefits of private healthcare services are strongly regressive. They serve the richest far more than the poorest. Fortunately in these cases the public sector has compensated and allowed universal and equitable access to be achieved.

More recent and detailed evidence from a 2013 study of the Indian healthcare system finds that amongst the poorest 60 per cent of Indian women, the majority turn to public sector facilities to give birth, whilst the majority of those in the top two quintiles give birth in a private facility.  Finally, comparable data from across 15 countries in sub-Saharan Africa reveals that just three per cent of people from families living in the poorest quintile sought care from a private doctor when sick.

Fees take more away from the actual income of the poorest people, and private services benefit the richest first and foremost.  If governments are serious about closing the gap between rich and poor, and achieving Universal Health Coverage, the evidence points them towards free public services.

Read the full paper, ‘Working for the Few: Public Services Fight Inequality’

Emma Seery is Head of Inequality Policy and Campaigns for Oxfam GB


Oxfam warns malaria subsidy is too risky to continue

A girl receiving treatment from a community health worker in Port-au-PrinceLast week in our new report ‘Salt Sugar and Malaria Pills’, Oxfam is calling for an end to a global malaria scheme; the Affordable Medicines Facility – malaria (AMFm).

Despite great successes in fighting malaria, many poor people continue to die of this treatable disease.  The majority of those dying in Africa are children. In fact in 2010, 86 per cent of malaria deaths were children under five.  So why are we not supportive of a scheme that aims to reduce the price of life saving medicines?

As you may expect – and hope – we have some very good reasons based on the evidence.

It is true that the AMFm has succeeded in reducing the price of ACT – the ‘good’ malaria drug – and increasing the number of medicines available in the countries where the subsidy operated. You don’t need a PHD in economics to understand that a subsidy will achieve these things. But that doesn’t mean the subsidy is helping the poorest families to get the treatment they need, and doesn’t take into account the public health risk of treating malaria in this way.

Firstly, there is no evidence that the poorest and most vulnerable have benefited. The AMFm’s own evaluation of the pilot phase, which has seen the subsidy rolled out in 7 territories, failed to measure this.  They don’t know who bought the medicines.  What we do know is that when medicines have even a low price, the poorest families cannot afford them.  Ordinary people have spent over 105 million USD buying these subsidised medicines in the pilot countries. This level of out of pocket payment is not what will allow the poorest people, living below the poverty line, to get the medicines they need.

But there is a far more fundamental flaw in the AMFm.  The scheme has mainly incentivised increased sales through small-scale private providers.  Which doesn’t sound like a problem, until you realise this doesn’t mean chemists or private doctors. It means shops.  The AMFm has put the majority of medicines in the hands of shopkeepers who don’t have any medical training, and can’t give medical advice to families or properly diagnose malaria.  Given that an estimated 60% of fevers are not malaria, distributing medicines in this way runs a real risk of wrong treatment for the majority.

We are not idealists either. We know that public health infrastructure in many countries cannot always provide a well trained doctor on the doorstep of the poorest people.  This is why our report also proposes a pragmatic solution that will have a far better chance of success than the AMFm.  Community health workers are based in communities, and can be trained to diagnose and treat malaria and non-malarial fevers.  When Ethiopia invested in 30,000 community health workers, they saw malarial deaths fall by half in just 3 years.  And the amount that has been spent so far on the AMFm could have trained and paid the first year’s salaries of 390,000 community health workers in sub-saharan Africa.  This is the opportunity cost of the AMFm that the Global Fund Board must bear in mind.

So ask yourself this. If there is a 2 in 3 chance your daughter who woke up this morning with a fever, doesn’t have malaria, but another life threatening disease, would you really take her to a shopkeeper without any medical training but with a financial incentive to sell you malaria pills? Or would you prefer to have a trained health worker in your community, who can diagnose and treat pneumonia and other diseases?

A child in Tanzania has the right to safe treatment, just like our own children do. The AMFm puts lives at risk in the poorest countries, and poses a dangerous distraction away from more effective interventions that can save the lives of the poorest and most vulnerable.

This is why we are urging the Global Fund who will meet in early November, to base their decisions on the evidence. To put an end to the AMFm, and free up the resources to invest in what we know works.

Emma Seery is Oxfam’s Head of Public Services and Development Finance team


Une subvention pour lutter contre le paludisme qui, selon Oxfam, comporte trop de risques

Une subvention pour lutter contre le paludisme qui, selon Oxfam, comporte trop de risques

La semaine passée, dans notre dernier rapport “Des anti-paludéens à l’épicerie”, Oxfam suggérait que l’on mette fin à un projet mondial contre le paludisme Fonds pour des médicaments antipaludéens à des prix abordables (AMFm).

Malgré une avancée notable dans la lutte contre le paludisme, un nombre important de personnes indigentes meurent encore de cette maladie pourtant curable. La majorité des victimes en Afrique sont des enfants. De fait, en 2010, 86 pour cent  des personnes décédées des suites du paludisme avaient moins de cinq ans. Alors pourquoi ne sommes-nous pas en faveur d’un projet qui vise à réduire le prix de médicaments qui sauvent des vies?

Oxfam a de très  bonnes raisons d’exiger l’arrêt de ce mécanisme à la lumières de plusieurs  faits.

Il est vrai que le AMFm a réussi à faire baisser le prix des ACT – les meilleurs traitements antipaludéens à l’heure actuelle– et à augmenter la quantité de médicaments disponibles dans des pays où la subvention a été attribuée. Nul besoin d’un doctorat en économie pour comprendre qu’une subvention permette d’atteindre ces objectifs. Mais cela ne signifie pas pour autant que cette aide rend l’accès aux médicaments plus aisé pour les familles les plus démunies ni qu’elle prend en compte les risques de santé publique en traitant le paludisme de cette façon.

Tout d’abord, il n’existe aucune preuve que les plus pauvres et les plus vulnérables aient bénéficié de cette aide. La propre évaluation de l’AMFm lors de la phase pilote, durant laquelle la subvention a été déployée sur 7 territoires, n’a pu le mesurer et ils ne savent pas qui a acheté les médicaments. Mais ce que nous savons, c’est que même lorsque les prix sont bas, les familles les plus pauvres ne peuvent se permettre une telle dépense. Les gens ordinaires ont déboursé plus de 105 million USD pour ces médicaments subventionnés dans les pays pilotes. Pour autant, ce système de contribution personnelle ne permet pas aux plus nécessiteux, vivant en dessous du seuil de pauvreté, d’obtenir les médicaments dont ils ont besoin.

Ensuite, il existe un autre défaut encore plus fondamental dans l’AMFm. Le programme a essentiellement renforcé la hausse des ventes de petits prestataires privés. Ce qui ne semble pas poser problème, jusqu’à ce qu’on réalise que cela ne correspond pas forcément à des pharmaciens ou des médecins privés. Non, cela concerne plutôt des magasins. L’AMFm a mis la grande majorité des médicaments entre les mains de petits commerçants qui n’ont aucune formation médicale et ne peuvent donner aucun conseil à des familles, ni diagnostiquer correctement le paludisme. Dans la mesure où l’on estime que 60% des fièvres ne sont pas liées au paludisme, distribuer des médicaments de cette manière comporte un risque réel de distribuer des traitements inappropriés dans la majorité des cas.

Nous ne sommes pas idéalistes pour autant. Nous savons que les infrastructures de santé publiques dans de nombreux pays ne peuvent pas toujours fournir des médecins bien formés au plus près des plus démunis. C’est pourquoi notre rapport propose également une solution pragmatique qui aura bien plus de chance de réussir que l’AMFm. Les travailleurs de santé locaux basés dans les communautés qui peuvent être formés pour diagnostiquer et soigner le paludisme et des fièvres autres que paludéennes. Lorsque l’Éthiopie avait investi dans 30,000 travailleurs de santé locaux, les décès dus au paludisme avaient diminué de moitié en 3 ans. Or, le montant jusqu’à présent dépensé pour l’AMFm aurait pu servir à la formation et au salaire de travailleurs de santé locaux en Afrique sub-saharienne. Ceci est le coût d’opportunité engendré par l’AMFm que le Conseil du Fonds Global doit avoir à l’esprit.

Il faut se poser les questions suivantes : s’il y a deux chances sur trois que votre fille qui s’est levée ce matin avec de la fièvre, n’ait pas le paludisme mais une autre maladie qui mettrait sa vie en danger, l’amèneriez-vous vraiment chez un commerçant sans formation médicale mais financièrement incité à vous vendre des comprimés anti-paludéens? Ou préfèreriez-vous avoir un travailleur de santé formé dans votre communauté, qui pourrait diagnostiquer et traiter une pneumonie ou d’autres maladies ?

Un enfant en Tanzanie a le droit à un traitement sûr, au même titre que  le votre. L’AMFm met des vies en danger dans les pays les plus pauvres et risque de détourner l’intérêt général au détriment d’interventions efficaces qui peuvent sauver la vie des plus pauvres et des plus vulnérables.

C’est pourquoi nous invitons le Fonds mondial qui se réunit début novembre à prendre leurs décisions à la lumière de ces faits. Mettre fin à l’AMFm et libérer les ressources pour les investir dans ce qui, nous le savons, fonctionne.

Emma Seery, responsable de l’équipe Fonds de développement et Services publics à Oxfam


Global Health Check was created by Anna Marriott and is currently edited by Mohga Kamal-Yanni