Why Gerdds

Millions of Children and adults in the third world die every year from diseases readily treated by essential drugs. Mr. Kofi Annan, former UN Secretary General, estimates that, one-third of the world's population lacks regular access to essential drugs of which the figure rises to over 50% in the poorest parts of Africa and Asia. In Ghana for example, one child in every ten dies before the age of five compared to one in every 150 in the UK. This is a result of poor healthcare provision in most developing countries. The average per capita spent in Switzerland on health service is over $6,000 per year compared to the average of less than $40 in West Africa, (Ghana is $66. Niger is $19 per capita per year. Haiti is $44 and Liberia, $29). The US spends nearly $8,000 per capita per year. The poorest countries carry the greatest burden of ill health and the impact is particularly profound when HIV infection is widespread.

For most developing countries total government spending on healthcare is minimal. Healthcare cost is supplemented by foreign aid and immigrant remittances to their home countries. In 2007 contribution from external sources was a little less than 25% of total health expenditure; with most developing countries struggling economically, it means most people don't have access to healthcare.

According to the World Bank, 111 billion was remitted worldwide in 2001. In 2011, it was estimated at $375 billion. Of this, about 65 percent went to developing countries, with half of that money going to countries considered to be 'lower-middle income countries.' Of this amount about 50% is intended to be consumed in healthcare and prescription medication. For most families, the money is transferred through third party individuals, (cash to cash), and the money is either abused or finds uses other than for the purpose to which it was sent. As a result most developing world countries, especially countries in Africa suffer from rational use of medication, relying on local unorthodox medical practices and unregulated concoctions adding to medical complications and poor health, (morbidity and mortality).

Due to this financial loss, most patients in poor countries do not often obtain the right medication. Those who do, do not purchase enough to complete the rational course of the treatment, rendering the drug ineffective at treating the targeted illness; a prognosis that leads to increased poor health.

The cost of transferring money in itself also represents a significant loss to immigrants and their families. The Inter-American Development bank estimates that the total cost of sending remittances to Latin America and the Caribbean reached $4 billion in 2002, or about 12.5 percent of the remittance to that region. It is estimated that the total cost of the average money transfer ranges between 15 and 20 percent. This is a huge loss to what could go towards the cost of healthcare.

Key messages (WHO REPORT 2012)

  • No country has yet been able to guarantee everyone immediate access to all the services that might maintain or improve their health. They all face resource constraints of one type or another, although these are most critical in low-income countries.
  • Every country could raise additional domestic funds for health or diversify their funding sources if they wished to.
  • Options include governments giving higher priority to health in their budget allocations, collecting taxes or insurance contributions more efficiently and raising additional funds through various types of innovative financing.
  • Taxes on harmful products such as tobacco and alcohol are one such option. They reduce consumption, improve health and increase the resources governments can spend on health.
  • Even with these innovations, increased donor flows will be necessary for most of the poorest countries for a considerable period of time. Donor countries can also raise more funds to channel to poorer countries in innovative ways, but they should also do more to meet their stated international commitments for official development assistance (ODA) and to provide more predictable and long-term aid flows.