Ref. :  000030991
Date :  2009-01-06
Language :  English
Home Page / The whole website
fr / es / de / po / en

Health amid a financial crisis: a complex diagnosis

Author :  OMS / WHO

The global financial crisis could have profound implications for the health spending plans of national governments. Unless countries have safety nets in place, the poor and vulnerable will be the first to suffer. Jane Parry and Gary Humphreys report.

Dr Suwit Wibulpolprasert, senior adviser on disease control at Thailand’s Ministry of Public Health, remembers the last time the wheels came off the global economy. “There was less travel and purchase of cars and motorcycles. Sales of alcohol – as well as tobacco – were reduced. These factors resulted in fewer deaths and injuries in road accidents,” he says.

Wibulpolprasert’s rather upbeat remarks underscore the complexity of the situation faced by public health officials, health-care professionals and patients around the world, as falling asset values, volatile exchange rates and shrinking industrial output complicate the business of getting health care to the people who need it.

This complexity is familiar to health economists. “There are so many offsetting factors that do not necessarily lead to one-sided effects on health,” says David Evans, director of the department of Health Systems Financing at the World Health Organization (WHO). Examples of this abound. In an economic crisis, governments may use their health budgets more effectively by switching to more generic drugs. Governments – as in the case of Mexico, Thailand and the Republic of Korea among others – may also take new social protection measures.

“In a recession it is important for governments to protect the poor and vulnerable, but most countries have not yet done this,” Evans says, adding that WHO has long been helping countries develop universal health protection mechanisms that are a vital safety net in times of economic turmoil.

The current financial crisis that started with the collapse of the sub-prime mortgage market in North America and parts of Europe in 2007 has since extended to low- and middle-income countries. Hungary has received emergency financial support from the International Monetary Fund (IMF) and other countries are in talks to secure similar IMF packages. But such support could limit governments’ ability to spend on health. And while developing countries are not yet in recession – defined as two consecutive quarters of negative economic growth – economists are concerned about the global downturn. Some fear it could be as bad or even worse than the great depression of the 1930s.

The World Bank currently forecasts growth for the global economy of 1% in 2009, including a contraction of about 0.1% for developed countries. The only silver lining in the gathering clouds for net importers of commodities is that oil, food and commodity prices have fallen. As bleak as the situation appears to be, it is hard to gauge the implications of all of this for people’s health around the world.

That’s why health economists are looking at past recessions and their effect on health care to shine some light on the current crisis. The IMF identifies three periods of global recession in the past 20 years: 1990–93; 1997–98; 2001–02. The last two were driven by financial crises and are, in some ways, similar to the current crisis.

One of the clearest trends economists have identified is that in all three recessions total commitments of official development assistance (ODA) declined. While, ODA for health increased during the 1990–93 recession, it fell more than overall ODA commitments in the two subsequent recessions. Economists, however, qualify this by saying that disbursement data before 2002 are not accurate.

WHO’s Director-General Dr Margaret Chan has urged affluent countries not to reduce ODA or to cut spending on health, education and social protection. “Both of these responses have occurred in the past. And both could be as … devastating for health, development, security and prosperity as they were in the past.”

Beyond the decline in ODA, another striking fact economists point out is that total health expenditure has tended to fall in countries affected by recession. But not always, and here, the key factor is government policy. Some countries have protected government health spending and others have not.

Meanwhile, out-of-pocket expenditure on health care tends to fall during recessions because people are less affluent and avoid spending money, or they leave private sector heath care and turn to public services. This is what happened during the 1997–98 economic crisis in the Republic of Korea when, according to Professor Bong-min Yang of the School of Public Health, Seoul National University, there was “a clear shift” of patients from private hospitals and clinics to public health centres.

Similar outcomes are to be expected in the current recession. For example, in the United Kingdom employees with private insurance who lose their jobs may fall back on public health services. In countries where public sector health programmes are already under strain, an increase in demand for those services could cause additional problems.

But such shifts are not always negative, as noted by Dr Viroj Tangcharoensathien, the director of the International Health Policy Program, Thailand. “After the crisis of 1997, the private sector collapsed due to significant demand reductions, and a number of private-sector doctors applied to return to the government sector,” Tangcharoensathien says.

Indeed recessions are full of seemingly contradictory trends. Mortality rates, for example, increase in some countries, but not in others.

In Thailand adult mortality increased in 1996–99. In Peru child mortality increased in 1989. In Mexico, mortality among children and the elderly was 5–7% higher in the crisis years of 1995–96 than in non-crisis years, according to Felicia Marie Knaul, an economist at the Mexican Health Foundation, citing an article she published with David Cutler and other colleagues in the Journal of Public Economics in 2002. They also found that more people faced financial ruin or were impoverished by paying for health services.

But increased mortality is by no means always the case, and it varies depending on the economic status of the country. In the United States of America (USA) and western Europe, for example, there is evidence that mortality actually falls during recessions, with the decreased use of alcohol and tobacco. There may also be reduced pollution, due to lower industrial output, and fewer road collisions because of less traffic.

The Republic of Korea is an interesting example of how difficult it is to generalize about economic recession and its effect on health. “The economic crisis has had a negative impact on consumer purchasing power, so it is expected to have a negative impact on health-care expenditure too,” says Professor Soonman Kwon from the department of Health Policy and Management at Seoul National University. But he then points out that the Kim Dae-jung government, which came to power in 1998, right after the IMF rescue loan, actually expanded health-care programmes as part of a broader policy to extend the safety net for disadvantaged groups. “[this] government … introduced new programmes, such as expanding the benefit coverage and integrating a number of health insurance providers into a single payer, so I cannot foresee a sudden decrease in health-care spending [now],” Kwon says.

And just as the impact of recession on health varies from country to country, so too do the recessions any given country may experience. In 1997, the Thai baht lost 50% of its value against the US dollar, pushing drug procurement costs for the government through the roof. This time the crisis has so far expressed itself in the form of a drop in consumer demand from the USA and Europe, which is hitting Thailand’s exports, but leaving the agricultural sector unscathed. “The sense of urgency, or acute crisis is less than it was in 1997,” says Tangcharoensathien. His colleague, Wibulpolprasert, is similarly sanguine: “Going into this economic crisis, we already have a social safety net in place – a universal health-care system instituted in 2002.”

In contrast to many traditional economists, Tangcharoensathien believes that one of the best ways to protect this system is to reduce infrastructure development, such as transport and railways, and to maintain support of the country’s health services. In other words, government policy will make the difference – a constant that can be relied upon whether a country is in a recession or not.

Mexico also learned its lessons from the 1995–96 crisis. Many people in need of health care struggled to pay their health bills or became impoverished in doing so. A rise in poverty and the devastating health effect of this led to the establishment in 1997 of an anti-poverty programme, Progresa now called Opportunidades, which gives poor families cash incentives to go for regular health checks and get their children vaccinated.

The crisis in Mexico also led to a 2003 health reform that established the Seguro Popular universal health insurance scheme. About 45% of the 103 million population has access to health insurance through social security. “By 2010, everyone will be eligible for public health insurance under the Seguro Popular scheme,” Knaul says, adding: “Economic crisis should motivate the expansion of coverage. The danger is that budget cuts will stall the process and leave families unprotected when they most need it.”

Bulletin of the World Health Organization > Past issues > Volume 87, Number 1, January 2009, 1-80

Rate this content
Average of 90 ratings 
Rating 1.82 / 4 MoyenMoyenMoyenMoyen
Same author:
 flecheWHO expert panel paves way for strong international governance on human genome editing
 flecheSunbeds pose a risk for all people
 flecheProtecting the children from the environment
 fleche9 out of 10 people worldwide breathe polluted air, but more countries are taking action
 flecheThe cost of a polluted environment:
1.7 million child deaths a year

 flecheRespire la vie - une campagne sur les dangers de la pollution de l'air - infographies
 fleche2016 year in review: key health issues
 flecheWHO Global Urban Ambient Air Pollution Database (update 2016)
 flecheLife expectancy increased by 5 years since 2000, but health inequalities persist
 flecheGlobal report on diabetes
 flecheAn estimated 12.6 million deaths each year are attributable to unhealthy environments
 flecheCommission presents its final report, calling for high-level action to address major health challenge
 flecheTrends in maternal mortality: 1990 to 2015
Estimates by WHO, UNICEF, UNFPA, World Bank Group and the United Nations Population Division

 flecheViolence against women
 flecheHealth and human rights
 flecheTuberculosis mortality nearly halved since 1990
 flecheNew report identifies four ways to reduce health risks from climate pollutants
 flecheClimate change and health
 flecheVaccine hesitancy: A growing challenge for immunization programmes
 flecheWHO calls for increase in voluntary blood donors to save millions of lives
 flecheEbola diaries: Detecting disease on an unprecedented scale
 flecheGlobal vaccination targets ‘off-track’ warns WHO
 flecheWorld Health Day 2015: From farm to plate, make food safe
 flecheTobacco use declining but major intensification needed in reduction and control efforts
 flecheWHO calls on countries to reduce sugars intake among adults and children
 fleche1.1 billion people at risk of hearing loss
 flecheNew study highlights need to scale up violence prevention efforts globally
 flecheUN reveals major gaps in water and sanitation – especially in rural areas
 flecheWorld health statistics 2014
 flecheImproved data reveals higher global burden of tuberculosis
 flechePreventing suicide: A global imperative
 flecheWHO and partners respond to the outbreak of Ebola virus disease in Guinea
 flecheCommunicating the economics of social determinants of health and health inequalities
 flecheWorld Hepatitis Day: Think again
 flecheWHO targets elimination of TB in over 30 countries
 flecheAccelerating WHO emergency response to Ebola outbreak: Contact tracing
 flecheWHO/UNICEF highlight need to further reduce gaps in access to improved drinking water and sanitation
 flecheWHO’s first global report on antibiotic resistance reveals serious, worldwide threat to public health
 flecheWHO issues new guidance on how to provide contraceptive information and service
 flechePush for palliative care stokes debate
 flecheHINARI: Providing access to health literature
 flecheBuilding Back Better Sustainable mental health care after emergencies
 flechePrevention and control of NCDs: Guidelines for primary health care in low-resource settings
 flecheMental health action plan 2013 - 2020
 flecheWHO issues new guidance for treating children with severe acute malnutrition
 flecheWorld AIDS Day
 flecheTen chemicals of major public health concern
 flecheGains in tuberculosis control at risk due to 3 million missed patients and drug resistance
 flecheWHO calls for the phase out of mercury fever thermometers and blood pressure measuring devices by 2020
 flecheEarly childhood development and disability
 flecheWHO welcomes the updating of the European Union (EU) Tobacco Products Directive
 flecheFamily planning
 flecheMDG 1: eradicate extreme poverty and hunger
 flecheHealth research is essential for progress towards universal health coverage
 flecheHepatitis: “It’s closer than you think”
 flecheDementia cases set to triple by 2050 but still largely ignored
 flecheWHO report on the global tobacco epidemic, 2011: warning about the dangers of tobacco
 flecheWHO maps noncommunicable disease trends in all countries
 flecheNew WHO report: deaths from noncommunicable diseases on the rise, with developing world hit hardest
 flecheWorld Health Day 2011: Urgent action necessary to safeguard drug treatments
 flecheDiabetes: the sweet irony of modern technology
 flecheTurn off the tap of unsafe medicines
 flecheAction needed to reduce health impact of harmful alcohol use
 fleche2010 in review: key health issues - Photo feature
 flecheMalaria report shows rapid progress towards international targets
 flecheWHO urges all countries to strengthen health financing so more people can use services
 flecheHidden cities: new report shows how poverty and ill-health are linked in urban areas
 flecheWHO: control of neglected tropical diseases is feasible - Renewed engagement to scale-up integrated interventions announced
 flecheMore developing countries show universal access to HIV/AIDS services is possible
 flecheH1N1 in post-pandemic period
 flecheWHO launches global network of age-friendly cities
 flecheSixty-third World Health Assembly closes after passing multiple resolutions
 flecheGrowing threat from counterfeit medicines
 flecheWorld Health Day 2010 - Urbanization and health
 flecheAccess to safe drinking water improving; sanitation needs greater efforts
 flecheGlobal forum addresses solutions to prevent premature deaths
 fleche2009 in review: key health issues
 fleche10 facts on climate change and health
 flecheNew HIV infections reduced by 17% over the past eight years
 flecheToday women live longer, but not healthier lives
 flecheChildhood vaccines at all-time high, but access not yet equitable
 flecheMore than four million HIV-positive people now receiving life-saving treatment
 flecheLargest ever HIV vaccine trial results very encouraging
 flecheRoad accidents, suicide and maternal conditions are leading causes of death in young people
 flecheWorld now at the start of 2009 influenza pandemic

 flecheWorld Health Assembly opens amid concerns about flu pandemic
 flecheSwine influenza frequently asked questions - WHO
 flecheImpact of financial crisis on health: a truly global solution is needed
 flecheHIV-related TB deaths higher than past estimates
 flecheHealth impact of climate change needs attention
 flecheThe Financial Crisis and Global Health
 fleche2008 in review: key public health issues - Photo essay
 flecheMessage from Dr Margaret Chan, WHO Director-General, for World AIDS Day

 flecheNew study presents state of the world's health
 flecheWorld Health Report calls for return to primary health care approach
 flecheProgress made in malaria control, yet burden is enormous
 flecheExecutive summary "Closing the gap in a generation: Health equity through action on the social determinants of health"
 flecheInequities are killing people on a "grand scale" reports WHO's Commission
 flecheWHO launches new HIV/AIDS guide to help countries reach universal access
 flecheNew rapid tests for drug-resistant TB for developing countries
 fleche3 million now receiving life-saving HIV drugs
 flecheWorld Health Assembly sets bold new action for WHO
 flecheNoncommunicable diseases now biggest killers
 fleche10 facts on immunization
 flecheClimate change will erode foundations of health
 flecheInterview: espoirs et craintes dans la lutte contre le paludisme
 flecheGlobal costs of attaining the Millennium Development Goal for water supply and sanitation
 flecheMaternal mortality ratio falling too slowly to meet goal
 flecheJournée Internationale des Personnes Agées - 1er Octobre
 flecheWHO stresses need to ensure the safety of children's medicines
 flecheHealth workforce challenges place increasing demands on European health systems
 flecheNew guidelines to improve psychological and social assistance in emergencies
 flecheWHO urges more investments, services for mental health
 flecheThe world health report 2007
 flecheInternational spread of disease threatens public health security
 flecheChina and India join WHO clinical trial registry platform
 flecheCountries urged to be more vigilant about food safety
 flecheChan, Margaret
 flecheGovernments make progress in interpersonal violence prevention. National efforts leading to significant progress, reports WHO
 flecheWHO proposes global agenda on transplantation
 flecheSpeech by Dr Margaret Chan, Director-General of the World Health Organization at the High-level debate on international health security
 flecheWHO reports some promising results on avian influenza vaccines
 flecheWHO Executive Board to tackle key global health issues
 fleche2006: A year of challenges and achievements
 flecheNew vaccines against cervical cancer major opportunity for developing world
 flecheProgress made, but AIDS remains pressing public health challenge
 flecheMargaret Chan to be WHO's next Director-General
 flecheFuture of sexual and reproductive health at tipping point according to global study
 flecheUN Secretary-General’s study reveals full range and scale of violence against children
 flecheWHO challenges world to improve air quality
 flecheHealth consequences of excessive solar UV radiation
 flecheNew global alliance seeks to address worldwide shortage of doctors, nurses and other health workers
 flecheThe World Health Organization announces new standards for registration of all human medical research
 flecheThe world health report 2006 - Working together for health
 flecheWorld Health Organization report explains the health impacts of the world's worst-ever civil nuclear accident
 flecheWorld Health Report outlines need for more investment in health workforce to improve working conditions, revitalize training institutions and anticipate future challenges
 flecheReport: Public health, innovation and intellectual property rights
 flecheIntellectual property rights and innovation: high-level commission calls for action to ensure developing country access to existing and new medicines and vaccines
 flecheProgress on Global Access to HIV Antiretroviral Therapy
 flecheGlobal access to HIV therapy tripled in past two years, but significant challenges remain
 flecheCounterfeit medicines: the silent epidemic
 flecheAvian influenza confirmed in birds in Nigeria
 flecheInternational Pledging Conference on Avian and Human Pandemic Influenza
 flecheWas 2005 the year of natural disasters?
 flecheResults of survey: how healthy is your world?
 flecheIncreased HIV prevention and treatment efforts needed to slow and reverse AIDS epidemic, according to new UNAIDS/WHO report
 flecheMeeting on Avian Influenza and Human Pandemic Influenza. Closing remarks
 flecheGlobal meeting to develop common approach on avian influenza and human pandemic influenza
 flecheHealth workers, clean water, blankets and shelter still in short supply in Pakistan for earthquake survivors
 fleche1 October: International Day of Older Persons
 flecheImmunization maintains strong performance made in last quarter century
 flecheWHO expert to work with the UN system on avian and human influenza
 flecheThe World Health Organization warns of the rising threat of heart disease and stroke as overweight and obesity rapidly increase
 flecheWorld Health Organization urges responsible use of antimalarial medicines
 flecheChernobyl: the true scale of the accident
 flecheDonation of three million treatments of oseltamivir to WHO will help early response to an emerging influenza pandemic
 flecheHealth and the Millennium Development Goals
 flecheBuilding stronger health systems key to reaching the health Millennium Development Goals
 flecheNew Bangkok charter for health promotion adopted to address rapidly changing global health issues
 flecheWHO: "learning by doing" is key to achieving universal access to HIV/AIDS prevention and treatment
 flecheCountries with moderate to high risk of hepatitis B infection (2002)
 flecheGlobal prevalence of hepatitis C infection (2002)
 flecheAccess to HIV treatment continues to accelerate in developing countries, but bottlenecks persist, says WHO/UNAIDS report
 flecheAlmost 2 billion more people need access to basic sanitation by 2015 to meet millenium target
 flecheWHO and FAO to consult consumer associations from 25 countries on how to promote their involvement in food safety
 flecheWorld Health Assembly adopts new International Health Regulations
 flecheFifty-eighth World Health Assembly: 16–25 May 2005, Geneva, Switzerland
 flecheTB cases and deaths linked to HIV at alarming levels in Africa
 flecheAfrica is worst hit by dual epidemic
 flecheGlobal tobacco treaty enters into force with 57 countries already committed
 flecheWHO warns up to five million people without access to basic services in Southeast Asia
 flecheLee, Jong-wook
 flecheNumber of women living with HIV increases in each region of the world

 flecheLandmark report could influence the future of medicines in Europe and the world
 flecheNew WHO report calls for a new and innovative approach to health systems research
 flecheFood safety : Five simple measures could significantly reduce the global incidence of foodborne disease
 flecheSuicide huge but preventable public health problem, says WHO
 flecheA globally effective HIV vaccine requires greater participation of women and adolescents in clinical trials
 flecheWHO publishes new guidelines on preventing mother to child transmission of HIV
 flecheStrong foundations built to increase access to AIDS treatment
 flecheCodex urged to speed up work and increase participation by developing countries
 flechePolio experts warn of largest epidemic in recent years, as polio hits Darfur
 flecheThe environment: where's the risk, and where are children safe?
 flecheStudy on environmental burden of disease in children: Key findings
 flecheUnprecedented opportunity to fight HIV/AIDS and change the course of history
 flecheMore than 600 million people urgently need effective malaria treatment to prevent unacceptably high death rates
 flecheWorld Health Day 2004 offers an historic opportunity to increase investment in road safety
 flecheWorld Health Day: Road safety is no accident!
 flecheWHO Framework Convention on Tobacco Control now signed by 100 countries
 flecheWorld Health Organization to host influenza pandemic preparedness meeting
 flecheWorld Health Organization and scientific journal editors vow to help galvanize mental health research in developing countries
 flecheAIDS threat growing throughout Europe
 flecheUnprecedented spread of avian influenza requires broad collaboration
 flecheMany countries not on target to reach health-related Millennium Development Goals
 flecheUrgent work needed to rebuild health care systems
 flecheNew book demonstrates how climate change impacts on health
 flecheWHO and UNAIDS unveil plan to get 3 million AIDS patients on treatment by 2005
 flecheMass immunization campaign launched to protect 15 million children from polio, as outbreak in Nigeria spreads across West Africa
 flecheWorld Health Organization says failure to deliver AIDS medicines is a global health emergency
 flecheHealth crisis in Liberia - the long road to recovery
Coronavirus never before seen in humans is the cause of SARS

 flecheWHO/FAO release independent Expert Report on diet and chronic disease
 flecheAgreement reached on global Framework Convention on Tobacco Control
 flechel’OMS et la FIA unissent leurs efforts pour améliorer la sécurité routière
 flecheWHO launches annual Move for Health day as global initiative to promote benefits of physical activity
 flecheCountries meet to finalize landmark agreement on International Tobacco Control
 flecheOutbreaks in Africa underscore the urgency for increased global influenza surveillance and pandemic planning
 flecheEight questions consumers should ask on the threat of mad cow disease
 flecheForty new countries given low cost access to health journals
 flecheSymposium aims to expand 5 a day initiative to boost fruit and vegetable consumption
 flecheWater for health enshrined as a human right
 flecheImpact of AIDS worsens African famine
 flecheIntensification de l'action dans les pays: Rencontre des hauts responsables de la santé et des finances avec les partenaires pour améliorer la santé des pauvres
 flecheIntensification de l'action dans les pays: Rencontre des hauts responsables de la santé et des finances avec les partenaires pour améliorer la santé des pauvres
Keywords   go
Translate this page Traduire par Google Translate

Share on Facebook
Partager sur Twitter
Share on Google+Google + Share on LinkedInLinkedIn
Partager sur MessengerMessenger Partager sur BloggerBlogger
Other items
where is published this article: