Universal health coverage: The rhetoric and the substance

Universal health coverage (UHC) is now being held out as the solution to the pressing problem of providing healthcare to the millions in developing countries. But what does UHC really imply? Amit Sengupta unpacks the concept.

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PROPONENTS of universal health coverage (UHC) have termed it the 'third great transition' in health that is changing how healthcare is financed and how health systems are organised.1 Given the very wide consensus which appears to have emerged in the health and development sector, that the attainment of UHC is the solution to the very acute and pressing problem of compromised access to healthcare in low- and middle-income countries (LMICs), it is important to unpack the concept of UHC.

One of the early occasions when UHC was mentioned as an overarching concept in an international platform was its inclusion in a resolution adopted at the 58th World Health Assembly in 2005. Titled 'Sustainable health financing, universal coverage and social health insurance', the resolution, inter alia, called upon member states to 'ensure that health-financing systems include a method for prepayment of financial contributions for healthcare, with a view to sharing risk among the population and avoiding catastrophic healthcare expenditure and impoverishment of individuals as a result of seeking care'.

UHC arose as a method of ensuring sustainable financing for health and not with a view to addressing the precise mechanism by which healthcare would be provided. Rather, the key concern that was sought to be addressed was avoidance of catastrophic healthcare expenditure.  This raises the rather obvious question: why were populations in many parts of the world faced with a situation where they were forced to incur 'catastrophic'2 expenditures on healthcare? The answer lies in the manner in which global policies impacted upon health services in LMICs.

Undermining of healthcare services

Healthcare systems need to be adequately financed and resourced with trained human-power. They also require the availability of basic infrastructure. The inability of low-income countries to pledge even a fraction of the resources required to sustain their healthcare systems has its origins in the economic crisis that engulfed these countries since the 1970s.

The crisis in the 1970s

The crisis had started by affecting the industrialised countries through the impact of the sudden rise in oil prices in 1973 and the resulting stagnation of industrial activity in these countries. But the impact of this crisis was transferred by the industrialised countries to the developing countries. This arose as a result of the 1979 decision by the US Federal Reserve to combat inflation by a steep and unprecedented rise in interest rates. The effect of this monetarist policy on many developing countries was visible very soon - the collapse of many of their economies. For developing countries which had taken out huge loans at extremely favourable terms to offset the shock of the oil price hike, the result was a catastrophic debt crisis, i.e., a state of bankruptcy of many developing countries which could not even pay back the interest on their loans. In desperation, many of these countries turned to the International Monetary Fund (IMF) and the World Bank for new loans.

This crisis came within a few years of the Alma Ata Declaration - the landmark document on public health adopted by the International Conference on Primary Health Care in Alma Ata, Kazakhstan, in 1978 - and prevented its bold and visionary aspirations from ever being put into practice. Instead, the crisis translated into savage cuts in government spending on social sectors such as health and education. Government health facilities suffered greatly, leading to their virtual dismantling and severe loss of morale among public health workers.

Structural adjustment conditionalities and health sector reforms

Many of these cuts were part of 'structural adjustment programmes' forced upon countries by the IMF and World Bank as conditions attached to their loans. Not only that, the IMF and World Bank sought to promote their brand of 'health sector reforms'. The World Bank released in 1987 a paper that was to influence health reforms across the globe. With this publication, titled 'Financing Health Services in Developing Countries: An Agenda for Reform', the World Bank announced its intent to play a prominent role in global health reform. In 1993, the World Bank's World Development Report, Investing in Health, outlined its agenda for health reform that advocated the following:3

         Foster an enabling environment for households to improve health: In effect this meant that disadvantaged families were required to cover their own health costs. In other words, fee for service and cost recovery through user fees.

         Improve government spending in health: This called for trimming of government spending by reducing services from comprehensive coverage to a narrowly selective, 'cost-effective' approach or a new brand of selective primary healthcare.

         Promote diversity and competition in health services: This dealt with the turning over to private doctors and businesses of most of those government services that used to provide free or subsidised care to the poor. It implied privatisation of most medical and health services, thus pricing many medical interventions beyond the reach of those in greatest need.

The ideological legitimation for these reforms was provided by the rise of neoliberal economic policies across the globe. Neoliberal policies are based on a model of development that promotes the predominance of the market and a consequent reduction of the role of governments.

Erosion and collapse of public systems

A prominent effect of health sector reform was the promotion of greater privatisation of healthcare. This meant that people have to spend more money themselves to access healthcare. Curiously, this effect has been used as an argument to introduce systems of payment (in the form of 'user fees') in the public healthcare system as well. The logic of this argument goes: if people are already paying in the private sector, they can also pay to access the public sector! In the context of a push to decrease government spending, the attempt has also been to use such payments as a way to offset government expenditure in running the public system.

Hand in hand with the levying of user fees came the trend of segmenting healthcare into public healthcare for the poor and private healthcare for the rich. On the face of it, this seemed an attractive proposition, one that the World Bank actively propagated. Along with this, the Bank advocated that governments in lower-income countries should not attempt to provide comprehensive care but concentrate instead on providing a 'minimum' package of services targeted at the poor.4 Segmentation was also actively promoted in middle- and high-income countries, where tax breaks on private insurance were used to entice higher-income groups away from publicly funded health services.

The argument in favour of this segmentation is obvious: government resources can be directed at those who cannot pay, while those who can are serviced by the private sector. Unfortunately this argument is based on an extremely shallow and simplistic view of how health systems work. Such a system results in the rich opting out of the public system and at the same time also drawing away resources, political clout and accountability from the public system. An expansion of the private sector also drains resources away from the public system in different ways. It draws on a limited pool of health professionals and on limited foreign exchange for the import of drugs and equipment in developing countries. Ultimately it sucks resources away to the extent that the public system is even more hard-pressed to cope with its workload. What is left is 'a poor service for poor people'.

UHC to the rescue!

By the turn of the millennium, the debate had come full circle. The impact of the Fund-Bank-driven policies was being felt in most LMICs and out-of-pocket expenses were a major component of health financing in many countries.

A possible recourse to remedy the situation could have been the promotion of efforts to rebuild public systems. This course, however, was generally not promoted as the principal way to fix the broken system. Instead the debate shifted from how services were to be provided to how services were to be financed, under the broad rubric of universal health coverage. With the gaze firmly directed at catastrophic 'expenses', the remedy proposed was one involving the securing of finances and not securing of quality health services. The logic appeared to be that if the money can be secured, provisioning of health services would take care of itself.

UHC: The proposal

It is useful to first understand clearly what was proposed as UHC. The World Health Organisation's 2010 World Health Report (WHR 2010), titled Health Systems Financing: The Path to Universal Coverage, elaborated this in full measure. UHC has been conceived as a health financing system that would progressively move towards coverage of the entire population, include an increasing range of services, and seek to increase the share of pooled funds as the major source of funding (in relation to co-payments by those accessing healthcare). The centrality of public healthcare services is not a part of this narrative. The role of the state is that of managing this system. The system envisaged is thus one where we see a clear 'provider-purchaser' split - the issues of financing (and management) are entirely divorced from provisioning.

It is worth noting here that such a split has been the hallmark of reforms of other public services as well. The import of this split is that theoretically, under this model, health services can be entirely provided by private enterprises while the state mediates to secure the funding of these services and regulates (to the extent possible) the quality and range of services provided by such enterprises. A provider-purchaser split puts a price on services - that is, it commodifies them, which is the precondition for their transaction in the marketplace.5

New public management and UHC

In fact the strategy of reform in public services since 1987 - sometimes referred to as the new public management - has been to introduce private sector management, organisation and labour market practices into the public sector in the expectation that the sector can thus be made to deliver the sorts of service and efficiency that the private sector (and its competitive environment) has supposedly already realised. More specifically, and most clearly in the areas of health and education, there has been an aspiration to introduce 'internal markets' within the domain of public provision.

In these reforms, public funding has been retained but steps have been taken to divide the purchasers from the providers of services. The intention is that individual units (schools, colleges or healthcare trusts) should compete for consumers of their services. The purchaser of these services (parents, patients or their surrogates) should be able to move their custom between providers with relative ease. This so-called new public management is crucial to subsequent privatisation of public services, as otherwise public services in their classical form are not designed to be purchasable commodities and are therefore useless as marketable commodities.6

The role of public services is defined in WHR 2010 in the following manner: 'Governments have a responsibility to ensure that all providers, public and private, operate appropriately and attend to patients' needs cost effectively and efficiently.' In other words, UHC does not discriminate between public and private services, its only concerns are cost-effectiveness and efficiency. In practice, this impartial role of the state can translate into different interpretations and is also subject to the current state of public health services. With public health systems in a state of disarray brought upon by the exercise of Fund-Bank-directed policies as we have noted earlier, states can choose not to rebuild public systems but to rely increasingly on private providers. This is happening to varying degrees in most LMICs. The logic applied is: something needs to be done to rein in the catastrophic impact of out-of-pocket expenditures immediately, and as the public system is too weak to respond, it is strategic to turn to the private sector. In short, the UHC model provides the opportunity for exercising such a choice by the way it is constructed, and in situations where the state itself is committed to pursuing neoliberal policies, the choice veers away from options that are based on public systems.

Influential votaries of UHC are happy to emphasise the key role to be played by governments in strategically 'purchasing' care to improve 'efficiency', rather than any role by governments to provide services. For example, an issue of the Bulletin of the World Health Organisation argues: 'Countries cannot simply spend their way to universal health coverage. To sustain progress, efficiency and accountability must be ensured. The main health financing instrument for promoting efficiency in the use of funds is purchasing, and more specifically, strategic purchasing.'7

This discourse of UHC is in sharp contrast to the vision of primary healthcare envisaged in the Alma Ata Declaration of 1978, which called for the building of health systems that were integrated, provided comprehensive care, were organised to promote equity, and were driven by community needs.8 UHC instead envisages healthcare as pieces of a jigsaw puzzle, connected only by a common financing pool and by regulation of an array of private and public providers.

UHC a step forward?

UHC is a step forward to the extent that it is an explicit recognition of two important aspects of public health. By prescribing a central role to the state in securing funding for healthcare and in regulating the quality and range of services, UHC recognises that 'market failures' are a feature of healthcare and patients suffer when they have to buy healthcare in a free-market situation. It also thereby recognises that health is a 'public good' with externalities, and the state has responsibility to ensure access. Again here UHC provides the possibility of exercising a choice, and relatively more progressive governments would try to privilege public systems and would be more inclined to examine funding mechanisms that promote equity. Financial pooling through UHC makes it easier to develop comprehensive public systems, but whether that will happen is subject to a political choice shaped by various factors.

It needs to be noted that 'coverage' and not 'care' is what is formally sought to be universalised under the rubric of UHC. UHC can move towards universal 'care' but it would not if 'care' is defined in narrow terms as access to a basic package of services.

Levels of ambiguities in UHC

We can perceive two levels of ambiguities embedded in the present concept of UHC. While it proposes that funding for health should be pooled, it does not propose the same for provision of services, that is, it does not propose a unified system of public provision. Further, it does not define the 'depth' of coverage and hence allows an interpretation that coverage can mean a basic package, quite akin to the World Bank's prescriptions two decades back.

These ambiguities were clearly captured by a literature survey of peer-reviewed publications on UHC. Just 21 of the 100 papers analysed provided an explicit definition of UHC. Among these, there was little consensus and the meanings were often unclear. The majority referred to UHC as universal coverage, but differed in regard to whether they meant a comprehensive set of healthcare services, whereas others referred to a single intervention.9

Why an integrated public system for healthcare?

There are structural reasons why market-driven healthcare and promotion of market competition does not promote efficiency or quality.10 In other words, market competition is not inherently superior to pure or predominant public sector provision of health services.

Market competition does not make for better care as most patients do not have enough knowledge to make informed choices about the relative quality or merits of different healthcare providers, nor are they willing, able or assertive enough to negotiate on price and quality, especially when care is urgent, when sickness results in vulnerability or when illiteracy and poverty are prevalent (called information asymmetry in the healthcare 'market'). Most people do not want 'choice' in healthcare, but an assurance that their local and accessible healthcare provider will provide good, if not the best, quality care. Instead, commercialised healthcare eats away at provider-patient trust, adding to the stress of being sick or injured. A trusting, caring and compassionate relationship between patient and health worker is in itself a therapeutic intervention that is corrupted by the market-based relationship between consumer and provider.11

Commercialised healthcare systems often have very high transaction costs that are necessary to manage or regulate the market. Similar cost issues accompany the management of public contracts with private providers, especially those providers motivated to maximise income, who may strive to take shortcuts or manipulate data to achieve their contract specifi- cations at the lowest cost, even at the expense of patients and the public good. To counteract this, purchasers end up spending large amounts of money on systems designed to catch out contractees in a 'cat and mouse' game of detection and deception, or end up being drawn into costly contract disputes.12

Public systems are more efficient also because they ensure economies of scale in the purchasing, supply and distribution of drugs and equipment.13 In the Indian state of Tamil Nadu, for example, pooled purchasing of medicines undertaken by a public sector entity has driven down medicine costs significantly, and other Indian states are engaged in duplicating the model.14 Public health systems embed other levels of efficiency as well. National or district-level systems for administration, staffing and training are able to reduce management costs of multiple private providers. Further provision at scale also enables specialisation: a full range of products and services can be offered at lower cost than if provided by individual operators.15

Public systems perform tasks that are not directly linked to providing care. These include maintaining disease surveillance systems, providing immunisation to the entire population, as well as several other public health tasks. A public system that integrates these functions with healthcare delivery is best placed to secure better health outcomes. Public health is based on systematic applications of best-practice technologies applied at population scale and systematic monitoring and data collection. Vaccine coverage should be applied comprehensively in order to achieve herd immunity in the community. Disease eradication, such as for smallpox and perhaps imminently for polio, depends on universal protection applied systematically and rigorously. Even the control of communicable diseases not currently close to eradication, such as malaria, will often be characterised by mass action benefits if coverage levels are very high.16

If health systems are to provide care to a whole population, there are significant marginal costs involved in the delivery of care to the most inaccessible or the most disadvantaged sections of the population. The costs of delivering care to geographically remote or sparsely distributed populations can be much higher than the concentrated delivery of care in urban settings. Delivery of care to those with pre-existing, chronic conditions is also often more expensive, as is the treatment of rare diseases compared with common ones.17 In an aging population a very high proportion of healthcare needs are concentrated in the last few months or years of life. Public systems can absorb these marginal costs and spread them across an entire population. Private systems, on the other hand, would find such costs to be unacceptable and would attempt to avoid care provision to people who live in underserved areas, who are disadvantaged, or those who suffer from conditions that require expensive care or long-term care. Public systems thus promote equity while even the best-designed private systems undermine equity.

Finally, competition harms collaboration between different providers, often an important ingredient of good-quality care, especially in relation to referrals between different kinds of specialists or between different levels of the healthcare system.

The argument that health systems in LMICs should leverage on the already dominant private sector is clearly misplaced. If the public sector is nearly moribund because it is deeply underfunded, the private sector will fill up the space ceded. The large out-of-pocket expenditures and private provision in low-income countries are mainly a reflection of the paucity of public services, especially for the poor, forcing the middle and upper classes to go directly to private providers, while the poor are left without reliable basic services. This reality is unfortunate, and not a case for private provision, but rather a call to action to bolster the deeply under-financed public sector.18

Conclusions

In our analysis, while tracing the genesis of UHC, we have discussed how UHC builds on the notion of health systems promoted by the World Bank and other global institutions - segmentation of health systems into parallel private and public systems, in which the poor are provided only 'basic services' by an underfunded public system and the rich migrate to a burgeoning private system. The logic for UHC is driven by the need to secure pooled funds for health systems that are organised on the principles of the market. The role of the state is being increasingly identified as that of a 'steward' and not a provider of healthcare services. New management techniques are being introduced in order to accomplish this, based on the notion of a 'purchaser-provider' split. The state, in such a system, harnesses public funds and then as a purchaser of services makes these funds available to private capital to extract profits. At a global level capital is seeking a new domain for profit-making, in an area earlier designated as a public good and hence not available as a marketable commodity.

We are now seeing a convergence of systems in the developed and the developing countries. Both are reforming existing systems and are moving away from the solidarity-based notion of healthcare to a market-based system for healthcare provision.

The present dominant model of UHC that is being promoted worldwide - based on 'universal' insurance - offers no advantages and many disadvantages over the option of a single public health system with universal and free access and financed with tax funds. This latter is the most humane option, because it values the lives of all equally; it is the most fair, because those in need receive proportionally more; it is the most equitable, because all have equal access to the available services when faced with the same need; and it is the most affordable, because it does not have to generate a profit and its administrative expenses are lower.19

Reforms are necessary in public systems that free them from control by a self-seeking bureaucracy that is tied to neoliberal governments. People's movements and organisations have a stake and a definite role in reclaiming public systems and in transforming them as well. The fight for a just and equitable health system has to be part of the broader struggle for comprehensive rights and entitlements. In this struggle, if UHC appears an attractive slogan, so be it, but it needs to be understood first for what it stands for in the hearts and minds of those primarily responsible for promoting the concept of UHC.   

Dr Amit Sengupta trained in medicine and works on issues related to public health, pharmaceuticals policy and other science and technology (S&T) policy issues like intellectual property rights. He is Co-Convenor of People's Health Movement - India and Associate Coordinator of People's Health Movement (Global). He is also associated with the Delhi Science Forum - a public interest organisation working on S&T policy issues - as well as with the All India People's Science Network.

        The basic research for the analysis in this article was done for a paper titled 'Universal Coverage: Beyond Rhetoric', published by the Municipal Services Project (available at www.municipalservicesproject.org/publication/universal-health-coverage-beyond-rhetoric). A more detailed analysis of the issue is also available in the Global Health Watch 4 report, in a chapter titled 'The current discourse on Universal Health Coverage'. For more details about Global Health Watch, visit www.ghwatch.org.

Endnotes

1.    Judith Rodin and David de Ferranti (2012). Universal health coverage: the third global health transition? The Lancet, Vol. 380, 8 September.

2.    Catastrophic expenditure on healthcare is defined as expenditure of a household on healthcare that exceeds 10% of its total expenditure.

3.    Martin Khor (1994). Worrying shift in global health strategy. The Star, 5 December.

4.    In the World Development Report of 1993, the World Bank published a ranking of common healthcare interventions according to their cost-effectiveness and used it to propose a minimum package of services for use in low- and middle-income countries. At best, the minimum package would avert no more than one-third of the estimated burden of disease in low-income countries and less than a fifth in middle-income countries. Examples of care that would be excluded from public funding in poorer countries include: emer-gency treatment of moderately severe injuries; treatment of childhood meningitis; and treatment of chronic conditions including diabetes, cataract, hypertension, mental illness and cervical cancer. See for example: M. Segall (2003). District health systems in a neoliberal world: a review of five key policy areas. International Journal of Health Planning and Management, 18:S5-S26.

5.    Asa Cristina Laurell (2007). Health System Reform in Mexico: A Critical Review. International Journal of Health Services, Vol. 37, No. 3, pp. 515-535.

6.    Paul Pierson (2001). The New Politics of the Welfare State.Oxford University Press. p. 157.

7.    Joseph Kutzin (2012). Anything goes on the path to universal health coverage? No. Bulletin of the World Health Organization, published online: 10 October 2012.

8.    Healthcare Systems and Approaches to Health. Global Health Watch 1. Zed Books, London, 2005. p. 56.

9.    David Stuckler, Andrea B. Feigl, Sanjay Basu and Martin McKee (2010). The political economy of universal health coverage. Background paper for the Global Symposium on Health Systems Research, 16-19 November, Montreux, Switzerland.

10. T. Rice (1997). Can markets give us the health system we want? Journal of Health Politics, Policy and Law, 22:383-426.

11. Healthcare Systems and Approaches to Health. Global Health Watch 1. Zed Books, London, 2005. pp. 67-68.

12. Healthcare Systems and Approaches to Health. Global Health Watch 1. Zed Books, London, 2005. pp. 67-68.

13. M. Robinson and G. White (2001). The Role of Civic Organizations in the Provision of Social Services: Towards Synergy. In: G. Mwabu, C. Ugaz and G. White (eds.), Social Provision in Low-Income Countries - New Patterns and Emerging Trends. Oxford University Press.

14. P.V. Singh, A. Tatambhotla, R. Kalvakuntla and M. Chokshi (2013). Understanding public drug procurement in India: A comparative qualitative study of five Indian states. BMJ Open, 3(2):1-11.

15   Oxfam (2009). Blind optimism: Challenging the myths about private healthcare in poor countries. Oxfam Briefing Paper.

16. Jeffrey D. Sachs (2012). Achieving universal health coverage in low-income settings. The Lancet, Vol. 380, 8 September, p. 945.

17. Allotey et al. (2012). Universal coverage in an era of privatisation: can we guarantee health for all? BMC Public Health, 2012 12 (Suppl 1):S1.

18. Jeffrey D. Sachs (2012). Achieving universal health coverage in low-income settings. The Lancet, Vol. 380, 8 September, p. 945.

19. Asa Cristina Laurell (2010). Can Insurance Guarantee Universal Access to Health Services? Social Medicine, Vol. 137, No. 3.

*Third World Resurgence No. 296/297, April/May 2015, pp 7-12