Health and Healthcare Systems

Global healthcare: the $300 billion question

A child is given vitamin A drops during a house-to-house vaccination campaign in Sanaa, Yemen February 20, 2017. REUTERS/Khaled Abdullah - RC1DBA8D3350

Delivering quality healthcare to a global population of 9 billion will require innovative solutions. Image: REUTERS/Khaled Abdullah

Arnaud Bernaert
Dessislava Dimitrova
Head of Healthcare Transformation, Health and Healthcare, World Economic Forum
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More than nine billion people are anticipated to be living on the planet by 2050, with two billion above the age of 60. To address the challenges inherent in population growth on this scale, governments have agreed on a very ambitious set of Sustainable Development Goals (SDGs). SDG 3 addresses healthy lives and wellbeing, but achieving it will require new investments increasing over time from an initial US$134 billion annually to $371 billion by 2030, according to recent estimates by the World Health Organization, published in the Lancet.

This figure would address the health challenges of just the 67 low and middle income countries alone. To give an idea of the magnitude of this amount, the total global development aid across all sector reached an all-time peak of $ 142.6 billion in 2016, an increase of 8.9% from 2015 after adjusting for exchange rates and inflation.

No single government, civil society, or private sector can foot this bill. New mind-sets, technologies, models for collaboration, financing and delivery approaches are needed to ensure all people receive the care that they need. Fortunately, a few projects have already successfully tackled challenges of similar magnitude.

We immunized 640 million children, preventing more than nine million deaths, in the past 17 years. How?

By 2000, global programmes for vaccinations had begun to plateau. So a new business model was introduced to accelerate access to life-saving vaccines for countries that needed them the most. Gavi, the Vaccine Alliance was established at the World Economic Forum Annual meeting in Davos, 2000.

Gavi’s model is to pool demand from the world’s poorest countries, sending a clear signal of a large and viable market for vaccines to manufacturers. Predictable, long-term donor support, together with co-financing from countries, provides security for countries to adopt vaccine programmes. It also makes it possible for manufacturers to invest in production capacity. As a country’s income grows, its co-financing payments gradually increase to reduce the reliance on donors and sustainably cover the full cost of vaccines.

Manufacturers are better able to plan their production and to supply the right vaccines at affordable prices.

We prevented 22 million deaths from the deadliest infectious diseases - AIDS, malaria and TB - in just 15 years. How?

A new financing and partnership model was developed based on the principle that all those involved in the response to these diseases should be part of the decision-making process. Governments, civil societies, communities affected by the diseases, technical partners, the private sector, faith-based organizations, and other funders must partner in the response, which in turn must be implemented by the countries themselves.

Country ownership means that people determine their own solutions to fighting these three diseases and take full responsibility for them. Each country tailors its response to the political, cultural and epidemiological context. Ongoing financing depends upon performance and proven results, carefully monitored and verified by external parties called Local Fund Agents.

This is how the Global Fund to Fight Aids, TB and Malaria operates: it a financing institution, providing support to countries without implementing programmes on the ground. Its 10th anniversary was celebrated at the Annual Meeting of the World Economic Forum in Davos by a new funding round of $750 million by the Bill and Melinda Gates Foundation

We can avoid the annual costs of a severe global pandemic, which can reach up to $570 billion, or 0.7% of global income. How?

Ebola and Zika demonstrate the persistent risks to countries which do not possess adequate capacities to prepare and respond to emerging pandemic threats. Ebola alone affected 28,639 people and caused 11,316 deaths, leading to $2.2 billion in lost GDP in Guinea, Liberia, and Sierra Leone. This threatens not only macroeconomic stability but also food security, human capital development, and private sector growth.

How can the world prepare for the next pandemic? The Coalition for Epidemic Preparedness Innovations (CEPI) is investigating. CEPI wants to galvanize the development of new vaccines against diseases that we know could cause the next devastating epidemic. It aims to do this by creating an innovative partnership between public, private, philanthropic and civil organisations to tackle the barriers to epidemic vaccine development, advancing safe, effective, and affordable vaccines to contain outbreaks at the earliest possible stage.

The focus is on two main objectives: (i) advancing at least four vaccine candidates against two to three priority pathogens to proof-of-concept in five years, to enable clinical efficacy testing in the initial stages of a potential outbreak; (ii) building technical and institutional platforms to accelerate R&D response to known or unknown pathogen emergencies. CEPI is also exploring how to support multivalent Ebola vaccine R&D and facilitate regulatory preparedness and stockpiling.

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We can help emerging economies gain access to life-saving healthcare innovation. How?

Most of the innovative technologies and healthcare delivery approaches today are very expensive for emerging economies. For example, access to healthcare professionals: Nigeria has roughly 14% of the number of doctors per capita of OECD countries. To catch up, it would need approximately 12 times as many doctors by 2030, requiring, under current training models, about $51 billion – or 10 times the current annual Nigerian public health spend.

Therefore new models and approaches have to be adopted. One such approach is innovative financing provided through risk pooling, social impact bonds or equity investments, and deployed via health insurance, loans, extended payment terms or leasing structures such as managed equipment services (MES). In Kenya, the government is giving citizens access to improved medical services including the latest medical technologies, training and skills development across 98 Ministry of Health hospitals through an MES with GE Healthcare for over $450 million.

It convenes implementation partners, lenders, risk insurers and advisory services in a new approach for risk- and reward-sharing and credit underwriting. This is big ticket healthcare modernization. Another approach is based on innovative delivery systems. In Andhra Pradesh, India, the Health Management and Research Institute developed a program enabling pregnant women in remote areas to consult obstetricians and gynaecologists in Hyderabad through an internet-based video system, while accompanied by community health workers. Initial results indicate that the system has helped raise the rate of safe hospital or clinic deliveries by 50%.

Building on these experiences with public-private partnerships, we might yet be able to find answers to the $300 billion question of global health.

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