The economics of universal health coverage

The economics of universal health coverage

Lawrence Summers, president emeritus of Harvard University, talks to John Kirton, director of the G20 Research Group, about the economic growth and extended tax frameworks that could fund UHC


The Lancet Commission on Investing in Health, which you co-chaired in 2014, came to four conclusions: an enormous payoff comes from investing in health; a grand convergence on health is achievable in our lifetime; fiscal policies can curb non-communicable diseases and injuries; progressive universalism as a pathway to universal health coverage is an efficient way to achieve health and financial protection. Would you revise these conclusions now?

The conclusions all look pretty good, in particular the idea that there’s an enormous payoff to further investments in global health. We may not be quite on track to hit the goals for a grand convergence, because sufficient efforts haven’t been made in both domestic and international resource mobilisation. But the broad objective is there, and is attainable for this generation. The case for public goods has been strengthened by what we’ve seen in terms of the consequences of global climate change and the smaller things we’ve seen on epidemics, which emphasise the importance of preparation for the low likelihood but high consequential risks of an influenza pandemic. The idea of moving towards progressive universalism remains an important beacon, although we are generations away from having achieved that in a meaningful sense.

How important is universal health coverage in the case you make now for investing in health?

I know universal health coverage is a shibboleth of the global health community, but realistically when you’ve got many countries that have $5 a year, if that, to spend on individuals’ health care, you’re not going to provide those individuals with anything like universal health coverage as it is understood in the industrial world. The more appropriate focus is towards the gradual expansion of the quality and quantity of services for more and more people designed in ways that will maximise saving life and reducing pain and suffering. That’s the way healthcare resource policy allocations should be made. I don’t find the rhetoric of high-quality care available for all at no cost to them to be consonant with reality on the ground.

Lawrence Summers, president emeritus of Harvard University

Your report suggested two pathways to achieve universal health coverage by 2030: rapid movement towards publicly financed coverage of the entire population for a defined set of interventions, and a larger set of interventions that may require patients to pay premiums or co-payments, with exemptions for the poor.

I think that’s the right way but I think it’s going to take a long time to get there. The trick is one has to respect budgets in defining what’s going to be in the package that’s going to be provided universally at no cost. If one is realistic about the size of budgets, then one will have to be very severe in the set of benefits that are provided at zero cost, focusing on vaccinations and the like. There is a strong tendency to assert everything’s available for free, which just leads to more arbitrary choices as to who is going to get access to the things that are ‘made available’ but not made available in sufficient quantity for everybody.

Where will the money come from for universal health coverage?

Financing universal health coverage in low-income countries runs up against the stark reality of poverty. Health care must be publicly financed in order to achieve universal health coverage and decent health care for the poor. Universal health coverage is a matter of practicality to control epidemic diseases, a matter of priority investment for economic development and a matter of basic human rights. Yet governments in the low-income countries cannot afford universal health coverage on their own. The rich countries and the richest people around the world need to be taxed sufficiently to enable the low-income countries to be able to finance universal health coverage.

The lion’s share of basic universal health coverage in the vast majority of countries – not the very poorest, but certainly in middle- and lower-income countries – is going to have to come from their own resources. And it can. Because of economic growth, their tax bases are going to expand by trillions of dollars in the aggregate over the next two decades. It would take only a quite limited fraction of the increases in their tax revenues to finance universal health coverage.

What would the impact of that money be on human health and on the economy as a whole?

Years of life expectancy, meaningful increments to economic growth, the further emancipation of women, greater ability of children to learn, and more modern and happy and well-functioning societies.

How can we make the needed monies flow?

It’s heavily a matter of the choices that countries make. Those of us with backgrounds in economics and health have an obligation to pound the drum and make the case for how high the return on these investments can often be.