Will current health reforms in south and east Asia improve equity?

Universal health coverage may not reduce disparities in health care access and outcomes in poorer nations

Nations in south and east Asia have made considerable progress on reducing poverty and improving the health of their populations. Many have already achieved the Millennium Development Goal (MDG) target on poverty reduction, and should achieve the health MDG targets on maternal and child mortality by the deadline in 2015.1 Indeed, the MDGs have provided excellent advocacy for progress on social indicators all over the world, and the approaching deadline is stimulating new efforts on all MDG targets. However, while there has been progress, serious disparities in health outcomes and access to health services persist in these regions,2,3 particularly among lower- and middle-income countries (LMICs), as is being seen globally.4

Economic development in south and east Asia has yielded higher living standards and expectations of better health. It has also generated significant demographic changes (particularly urbanisation and ageing populations), and a hastening of the epidemiological transition in which communicable disease mortality is replaced by cardiovascular, metabolic and other non-communicable causes of death. However, regional government investment has generally not met either the increased demand for health services or been appropriate to the evolving disease profile; indeed, much of the response has arisen from the private sector. Health services in south and east Asian LMICs are increasingly marketised, with the private sector providing most outpatient and a significant proportion of inpatient health care. This has increased total health expenditure (THE), particularly out-of-pocket expenditure, including by those who can least afford the often costly care recommended.2,3 Out-of-pocket expenditure forms a higher proportion of THE in Asia than in any other global region,5 suggesting that the poor have less access to health care. At the same time, underinvestment in government-funded health care has yielded poor quality of care in public facilities, characterised by staff absenteeism, overcrowding, and drug and equipment shortages, particularly in rural areas that lack private alternatives.

Recognising disparity in access to health services, many governments in south and east Asian LMICs are focusing health reforms on universal health coverage (UHC),6 briefly defined as affordable access to adequate health services for all who need them. To varying degrees, reforms focus on both the demand side (through various financing schemes and subsidies, tacit or explicit encouragement of private services, and community education) and the supply side (through improvements in policy, logistics and infrastructure, and human resource development).7 For a decade, China has invested heavily in fairness-enhancing health insurance schemes, vertical programs and subsidies, and more recently, in massive health infrastructure and broader health system reforms, with UHC as the key objective.8 Indonesia is developing a national health insurance scheme for the poor, and other incentives to improve financial and physical access to health care for all.9 Thailand's successful UHC scheme followed decades of failed attempts to improve service access, but was finally established after intense public pressure.3 Vietnam has introduced equity-focused fee exemptions for various groups, and is introducing social health insurance; Cambodia too, heavily supported by donors, has introduced social health insurance and other measures to improve financial access.10 India has committed to tripling government funding for health as a proportion of gross domestic product, improving stewardship of its dysfunctional informal health sector and mobilising the non-health sectors to influence the social determinants of health.11 These and other initiatives show the eagerness of south and east Asian governments to meet popular demands for better access to health care. However, while most of these reforms focus on financial access to services, UHC also assumes physical access and a minimum standard of quality.

The impact of these initiatives on equity among LMICs in south and east Asia is variable. In China, while the equity-enhancing influence of subsidies and health insurance on service access and certain health outcomes is clear, escalating prices means that the risk of facing catastrophic health expenditure has not declined; in the poorest quartile of households it remains almost double that in the richest.12 Malaysia and the Philippines provide other examples of high insurance coverage but limited financial protection, mostly affecting the poor.3 Indonesia is struggling to manage the incentives driving doctors, particularly specialists, to neglect rural areas,13 and service fees too high to benefit national health insurance scheme members.3 Similarly, Vietnam's high out-of-pocket expenditure and commercialisation of health care, particularly specialist services and health technology, suggests that doctors' priorities, not equity-focused UHC, are driving developments there.14 India's reforms are too recent to evaluate, but its plan to engage private providers in public services may prove difficult. Private health care costs have increased much faster there than public sector costs, and health care is effectively unavailable in some rural areas.2 All these nations exemplify the difficulty of regaining control in the private sector (in terms of fees charged and doctors' geographic distribution) once providers have become accustomed to weak regulation.3 This is particularly true when many private practitioners are public sector workers engaged in dual practice.15

By contrast, Thailand now provides both very high coverage and financial protection for its population, and health outcomes are more equitable.16 This has resulted from:

• the Thai government's relatively high expenditure on health and contribution to THE;
• pro-poor, tax-financed social health insurance;
• payment mechanisms that prevent mercenary provider practices and improve provider stewardship;
• good infrastructure;
• high-quality health information systems; and
• improved health literacy and a mechanism for public feedback on service quality.16

In short, the Thai government has established a balance of supply-side and demand-side initiatives and characteristics.

Health system reforms focused on UHC can reduce inequity in access to health services, but must also accommodate changing political, economic and demographic circumstances. For example, administrative arrangements must enable equitable access to health financing and somehow engage the large informal (non-tax-paying) workforce in many LMICs, including in south and east Asia.3,7 More importantly, solving access and other supply, demand and quality problems equitably will require solving other problems in the health system.

First, equitable access to health services relies on a well maintained network of public health facilities, as demonstrated in Thailand. This requires funding, and although government input to THE among the region's LMICs is increasing slowly, it remains mostly below 50% (Box), compared with 71% in high-income nations.3 Second, health system reforms must tackle marketisation of health services, particularly through better regulation of private providers and those who practice in both the private and public systems.15

Third, support for health system reforms must come from all stakeholders, public and private, and from all related government sectors at different levels. This may be particularly difficult in decentralised contexts, where subnational authorities are often more accountable to local government or economic interests than to national priorities.17,18 Governance of the health sector must strengthen providers' accountability to national priorities and local communities. This has led to calls for a shift from governance directed at health systems (“governance of health”), to multisectoral “governance for health”. It recognises that health is a critical macro-economic influence and requires “the joint actions of health and non-health sectors, of public and private sectors and of citizens for a common interest”.19 Such a shift from state- centred to diffused governance at state, societal and supranational levels is likely to have a major impact on health equity. Finally, health reforms must also tackle underlying social and economic determinants (such as employment, housing, literacy, sex equity, clean water and sanitation), and aspire to the aim of “health for all”.

What does all this mean for health system reforms in the increasingly complex and pluralistic societies of LMICs in south and east Asia, and can Australia offer support? Enhancing equity through UHC-focused health system reform is a challenge for LMIC governments. It will require additional public funding for the health sector, administrative and institutional capacity to manage a UHC system, complementary measures to redress distributional inequity in service access, improved regulation of professional practice and stewardship to ensure quality of care. It may also require restoration of subnational accountability to central government.20 Australia is well placed to support such reforms through: collaborative research to inform the design of UHC systems; technical support for institutional capacity-building; funding for complementary investments, possibly through appropriate commercial partnerships; and providing development assistance funding for the cost of covering the poor and the informal (non-tax-paying) workforce and their dependents.

Addressing the remaining inequalities in access to quality health care and the disparities in health outcomes within LMICs in south and east Asia will require long-term reforms, not just in health financing, but also in the governance, monitoring, stewardship and regulation of health services. Support for these reforms from Australian government, academic and professional institutions will contribute to the welfare and economic growth of the region, strengthen governance of public institutions, and build international and regional links, and is in our national interest.