Health care financing challenges in the Pacific: priority setting and resource allocation

Abstract

As explained in the Introduction, Pacific Islands Countries (PICs) have some of the highest rates of Non-Communicable Diseases (NCDs) in the world, and also face severe fiscal constraints. The original research contained in this thesis by compilation aims to address knowledge gaps, and help PIC governments respond to the emerging NCD crisis.

Chapter 2 investigates the health financing options available to governments in five PICs. The share of government expenditure going to health in these countries is already some of the highest in the world. Most options available to middle-income countries globally to increase the fiscal space for health are unavailable, or inappropriate, to PICs. Improving allocative and technical efficiency in existing government health expenditure is the most feasible option left for PICs.

Chapters 3 and 4 use two case studies to better understand the budgetary pressures that, given the above fiscal constraints, NCDs will increasingly impose in the Pacific and to raise fundamental questions about the cost-effectiveness and sustainability of health financing in the Pacific. Chapter 3, as well as re-considering the fiscal options of Chapter 2 in the context of Samoa, finds that dialysis treatment per patient in Samoa is twelve times the GDP per capita, user fees cover just 1.6% of the program, and two-thirds of patients die within two years. Chapter 4 investigates the cost to government of purchasing drugs to prevent and treat diabetes and hypertension in Vanuatu. Government pharmaceutical costs rise in large, step-wise, patterns as diabetes or hypertension progressively becomes more severe. About 20% of the population in Vanuatu has three or more risk factors for acquiring diabetes, but only 1.3% of the total population could be treated with insulin before the total Government drug budget for the country was fully spent. Chapter 5 finds that, contrary to general perceptions, the population of the PICs is “ageing” (i.e. the share of the population aged 60 years + is increasing). Current health systems are poorly designed to respond to their health needs. Ageing, combined with the high birth rates in many PICs, is likely to worsen the “dependency ratio” in countries, putting further strain on government budgets. This is exacerbated for those PICs with high levels of out-migration.

With limited financing options (Chapter 2), prohibitively expensive treatment protocols (Chapters 3 and 4), and an ageing population (Chapter 5), a strong case for any budgetary interventions is needed. Chapter 6 identifies, based on a literature survey and stakeholder views, how Ministries of Health can improve their capacity to negotiate better health financing from Ministries of Finance, and development partners. It identifies ten attributes of effective budget requests.

The academic contribution of the thesis is to help fill the research gap relating to the effectiveness and sustainability of NCD and other health care costs in the Pacific. The policy contribution is to provide the analysis underpinning the Pacific’s response to the NCD crisis. The “NCD Road Map”, which I drafted and which Pacific governments have now approved, is summarized in the Conclusion.