CHAPTER 7

INTERNATIONAL HEALTH POLICY ISSUES

Letting a hundred flowers blossom and a hundred schools of thought contend is the policy for promoting the progress of the arts and the sciences and a flourishing culture in our land.

—Mao Zedong

Protecting Health, Saving Lives—Millions at a Time.

—Johns Hopkins Bloomberg School of Public Health

LEARNING OBJECTIVES

After completing this chapter, you should be able to

• describe the critical health policy issues in developed countries,
• discuss the critical health policy issues in developing countries,
• understand how various countries address their health challenges,
• appreciate the common and unique health challenges in an international context, and
• explore emerging and intensifying global health issues.

CASE STUDY 1

CLIMATE CHANGE AND PUBLIC HEALTH

The natural environment has a profound impact on human health, as reflected in the United Nations (UN) Framework Convention on Climate Change (Singh et al. 2011). Climate scientists predict that the world will warm 4°C by 2100, yet the relationship between rising global temperatures and human health is not fully understood. Severe weather events, such as heat waves, earthquakes, floods, hurricanes, and cyclones, pose direct threats to human life and health. Some argue that changing weather patterns have already indirectly affected food yields, water flows, patterns of infectious disease (e.g., the increasing reach of tropical diseases beyond the typical geographic areas of occurrence, changes in the seasonality of certain diseases), and population displacement (Chowdhury, Dey, and Smith 2018; Hundessa et al. 2018; McMichael et al. 2003).

Public health experts are calling for climate change policy interventions that have an immediate, positive impact on population health. For example, policies to encourage reduced meat consumption mitigate the excess intake of saturated fats and remove some methane (a greenhouse gas) from cattle-producing regions (McMichael and Lindgren 2011). Examples such as these and findings from other emerging research show that a public health discussion must be incorporated into the larger climate change discourse.

A public health perspective can unite all actors from disparate sectors behind the common cause of public health and wellness in families, communities, and nations. Reducing inequities not only within but also between countries is crucial to greater climate change resilience and better global health. Neither can be achieved without sustainable development to address fundamental determinants of health such as access to safe water and clean air, food security, strong health systems with good access, and reduced social and economic inequity. Any focus on global health must therefore prioritize sustainable development and climate change (Watts et al. 2015).

By itself, a top-down approach—creating an international agreement, followed by establishing national legislation for individuals and businesses to follow—to addressing climate change is no longer adequate. Organizations and individuals are already taking their own steps to reduce emissions. At the same time, climate change is only one of many factors considered by decision makers, and rarely the one given the highest priority. Adaptation to climate change is clearly also an inadequate response, and current trends in energy production and consumption are driving the world toward a future of great climatic risk.

The most powerful strategy to protect human health from the risks of climate change would be a government mandate of carbon pricing, in ways that strengthen over time until the problem is under control (Boyle 2015). Like tobacco taxation, the policy of carbon pricing would send clear signals to all actors in the system—from producers to users—that the world’s economies must shift away from the use of fossil fuels, such as coal—the worst offender in terms of carbon intensity and damage. In addition to direct incentives, the revenues generated from carbon pricing could go toward wide-ranging measures including adaptation; the development of renewable, low-carbon energy sources; and the global diffusion of improved technologies and practices. Carbon pricing thus holds great potential, particularly when carried out as part of a comprehensive policy package. This potential solution, however, still faces political obstacles. The current drivers of economic growth force communities into patterns of energy use that no reframing can change without coordinated realignment of these drivers. And the idea that “others” are to blame and should be the ones to address climate change remains a potent excuse for inadequate action (Vignola, McDaniels, and Scholz 2013). The ideal international agreement would support stronger efforts at all levels in every country. To be effective, any agreement will need not only to set goals but also to identify needs at international and national levels to achieve the goals. Such an agreement may also require a motivation mechanism, such as a “feedback loop,” that strengthens national ambitions over time (Marteau, Hollands, and Fletcher 2012).

CASE STUDY 2

PRIMARY CARE AROUND THE WORLD

In 1978, the International Conference on Primary Health Care created the Declaration of Alma-Ata, which underscored not only the necessity of a robust primary healthcare system to sustain a comprehensive national health system but also the importance of establishing healthcare as an essential human right (WHO 1978). Globalization has continued to put pressure on health systems that are under strain to provide services that are high quality, universally accessible, and affordable. There is clear evidence that primary healthcare leads to better health for all and better-functioning healthcare systems.

While global health has improved on aggregate, a number of political, demographic, and epidemiological transitions have increased inequalities in progress within and between countries. These transitions have put a strain on existing healthcare systems, and a focus on primary care as an essential part of healthcare reform is necessary. The World Health Organization (WHO) considers universal healthcare a critical aspect of a move toward reform based on primary care. Since the adoption of the Sustainable Development Goals (SDGs), WHO has framed its advocacy for universal healthcare around Target 3.8 of SDG 3, which focuses on service coverage and financial protection (WHO 2018d, 2018e).

With rising healthcare costs and disorganized systems for financial protection, personal health expenditures now force more than 100 million people into poverty each year. Vast differences in health occur between and within countries and even within individual cities. In reemphasizing primary healthcare, WHO argues that its core principles and approaches are more relevant than ever, a conclusion which several findings support (Van Lerberghe 2008).

Using existing preventive measures more efficiently may reduce the global burden of disease by as much as 70 percent (Van Lerberghe 2008). Tasks performed by specialists may be better managed by general practitioners, family doctors, or nurses. Specialist-oriented care contributes to inefficiency, restricted access to care, and deficiencies in comprehensive care. When healthcare is skewed toward specialist care, a range of protective and preventive care interventions may be lost (WHO 2006). Unequal access to care and disparities in health outcomes are usually worst when health is regarded as a commodity and care is profit driven. Workforce shortages in primary care also pose a significant challenge (as described in Case Study 2, “Primary Care Workforce Around the World,” in chapter 4).

An effective primary healthcare approach protects against many of these problems, emphasizing a holistic view of health in which prevention is as important as cure in a care continuum that extends over the human life span. The primary healthcare approach targets key health determinants in multiple nonhealth sectors, in effect launching an “upstream attack” on threats to health (Van Lerberghe 2008). The main strategy for addressing disparities in healthcare is to shift toward universal health coverage with an emphasis on the values of equity, social justice, and solidarity and the overarching goals of fairness and efficiency in service delivery.

 

This chapter provides examples of important health policy issues from the international community, using selected countries—both developed and developing—to demonstrate their impact. Students’ exposure to these issues not only helps them understand international health policy applications but also introduces them to global health (as defined by Koplan et al. 2009) as a field and globalization (as defined by Shi and Singh 2017) as a reality.

The advent of globalization, technological advances, and shifting global demographics brings challenges in achieving equitable global health. Although globalization brings conformity in some areas of people’s lives, differences in economic policies, political and legal structures, social and cultural norms, and religious beliefs remain from country to country and region to region, creating additional barriers to the equitable delivery of healthcare (see the For Your Consideration box titled “Worldwide Access to Care”).

The greater ease of travel and communications has not only diminished barriers between countries but has also ushered in new concerns of disease transmission and other global health threats. Recently considered a problem predominantly afflicting the developing world, infectious diseases have become a concern for all countries as global trade, tourism, international relations, and migration facilitate the spread of disease. Another issue of global concern is injury prevention, particularly when injuries are the result of violence in the country (see the For Your Consideration box titled “Injury Prevention”). The United Nations (UN) works with several constituent organizations on global health initiatives; in addition, WHO coordinates some health activities between countries and surveillance of global health concerns. These organizations, and policymakers around the world, face varied problems and tough decisions regarding global health.

This chapter begins by discussing issues shared by many industrialized countries. Japan, Denmark, Canada, and South Korea are profiled in terms of their major health issues and the solutions they have proposed to address these issues. Next, the chapter discusses both common and unique challenges faced by developing nations. The variety of unique issues confronted by emerging economies is demonstrated in discussions of China, Ukraine, Nigeria, and Colombia. The chapter also includes several Global Health Impact boxes to illustrate issues that could affect global health in the future, challenging policymakers to rethink their approaches to public health (see, for example, the one titled “Migration”).

	FOR YOUR CONSIDERATION
	Worldwide Access to Care

According to a 2017 global monitoring report, more than 50 percent of the world’s population does not have access to essential healthcare services, more than 800 million people spend in excess of 10 percent of their household budget on healthcare, and nearly 100 million people experience extreme poverty due to healthcare costs (WHO and World Bank 2017). In today’s world, countries face a fast-growing need for equitable, inclusive, and fair primary healthcare systems.

FOR YOUR CONSIDERATION
Injury Prevention

Several governments around the world have developed national injury-prevention policies, strategies, or plans of action (WHO 2018f). Although these instruments vary in nature and scope, they help guide a country’s efforts to prevent injury-related death and disability. WHO suggests that responsibility be assigned for all stages of implementation and that these injury-prevention policies or action plans be developed in a collaborative way, involving both government and nongovernment participants. Some policies are developed by and for a single sector (such as health, transport, justice, or education), but ideally they should be developed across multiple sectors. WHO also recommends that policymakers and planners take into account at an early stage the human and financial requirements that will be necessary for their policies’ implementation.

	GLOBAL HEALTH IMPACT
	Migration

The UN Department of Economic and Social Affairs estimates that 3.1 percent of the world’s people live outside of their country of origin (International Organization for Migration 2017). In addition, many people are internally displaced, meaning that they have been forced from their homes but remain within the country’s boundaries.

People migrate for a variety of reasons, including to take advantage of economic opportunities, in reaction to political instability, and to avoid conflict. Two aspects of migrant health must be addressed. The first is the public health threat inherent in the migratory movement of people. Infectious disease concerns exist in all phases of such a journey, and the ease with which people and products can move around the world directly corresponds to the rapidity with which a disease threat may spread.

The second issue concerns the health needs of individual migrants after they reach their destination. In many countries, the health system restricts migrants’ access to healthcare or does not provide culturally appropriate care, leading to poor health outcomes (International Organization for Migration 2017).

Australia, in which one-fourth of the population was born elsewhere, has a well-developed system of healthcare delivery for migrants (Bulletin of the World Health Organization 2008). In contrast, Spain has only just begun to consider the health concerns and integration issues of migrants (International Organization for Migration 2017). Migrant health issues will grow as people continue to move around the world to find work or to escape undesirable conditions.

HEALTH POLICY ISSUES IN DEVELOPED COUNTRIES

Some health policy issues are unique to advanced economies. Most developed nations have controlled the spread of communicable diseases through well-established public health infrastructures and effective sanitation services (although the threat of importation of communicable disease from uncontrolled regions is a concern caused by globalization and increased travel and trade). However, their health systems are strained by an aging population and widespread chronic diseases.

COMMON POLICY ISSUES

All industrialized nations with established healthcare systems struggle to adapt these systems to meet changing needs. They must maintain an adequate, well-trained workforce and integrate new technologies while keeping costs at a manageable level.

Researchers first found that healthcare spending was rising among the Organisation for Economic Co-operation and Development (OECD) countries in the 1970s; a 2009 study confirmed the continuation of this trend by showing that OECD countries spent an average of 9.5 percent of their gross domestic product (GDP) on health, compared with an average of 5.3 percent in the 1970s (OECD 2011).

Policymakers in industrialized countries constantly seek ways to achieve sustainable growth and allocate adequate funding to ensure fiscal and population health. To meet the challenge of cost control, many countries have experimented with alternative methods of paying for and delivering health services. For example:

• The Australian healthcare system provides universal access to a comprehensive range of services, largely publicly funded through general taxation. Australia has a federal system of government, with a national (Commonwealth) government and six states and two territories. At the time of federation, health remained the responsibility of the states. However, the Commonwealth government holds the greatest power to raise revenue, so states rely on financial transfers from the Commonwealth to support their health systems. This setup makes the Australian healthcare system a complex division of responsibilities and roles across levels of government (Duckett and Willcox 2015).
• The Canadian provinces and territories have primary responsibility for organizing and delivering health services and educating, accrediting, and licensing healthcare providers. Generally, these regional health authorities are responsible for the funding and delivery of hospital, community, and long-term care, and mental and public health services. Some jurisdictions have consolidated a number of these authorities. Healthcare providers are almost entirely private (Hutchison et al. 2011).
• The Danish government consolidated health services administration, decision making, and services provision (Andersen and Jensen 2010).
• Israel placed its health system budget under the jurisdiction of the Ministry of Finance rather than the health ministry as in most other countries (Ministry of Finance, State of Israel 2017). The relationship is intended to help control spending: The Ministry of Finance sets the level at which it will fund the national health insurance after estimating the amount that will be collected from cost-sharing provisions (Ministry of Finance, State of Israel 2016).
• Italy decentralized the authority of the Servizio Sanitaris Nazionale as a way to control federal health spending (Tediosi, Gabriele, and Longo 2009).
• The Japanese government regulates almost all aspects of the universal public health insurance system. The national government sets the fee schedule by developing consensus among stakeholders; gives subsidies to local governments, insurers, and providers to implement its policies; and establishes and enforces detailed regulations for insurers and providers (Ikeda 2004).
• New Zealand replaced its former healthcare model with one called the Primary Health Care Strategy, which increased public funding of preventive and public health activities, encouraged general practitioners to form nongovernmental primary health organizations, and changed payments from fee-for-service to capitated fees paid to primary health organizations (Cumming and Mays 2011).
• In the United Kingdom, the National Health Service (NHS) provides healthcare, including hospital and physician services and prescription drugs, to all of its residents. Under the terms of the NHS Health and Social Care Act 2012, the day-to-day responsibility for running the NHS rests with NHS England, formerly known as the NHS Commissioning Board (Bevan and Hood 2006; Department of Health and Social Care 2012).

Each of these countries faced similar problems and shared the goals of providing low-cost healthcare while achieving positive health outcomes. Yet, they developed different solutions, each of which took into account the particular country’s level of political will and societal values.

In addition to experimenting with health system structure, some countries have developed mechanisms for determining suitable treatment methods in the hope of reducing pharmaceutical expenditures without negatively affecting health outcomes (Clement et al. 2009). Australia, the United Kingdom, Canada, and other countries have governmental agencies that evaluate the cost-effectiveness of certain pharmaceutical products by analyzing cost and comparative effectiveness evidence to make national coverage decisions. Australia has taken this measure a step further by often delaying the recommendation of drugs for use until the price is negotiated to a level low enough to be deemed cost-effective (Clement et al. 2009).

Some cost-reduction policies aim to directly improve health outcomes. For example, the United Kingdom has set up a physician payment model called pay for performance, under which physicians treat patients following disease-based clinical practice guidelines. The guidelines are drawn from evidence-based medicine and are designed to reflect the best path to achieving high-quality healthcare and strong patient outcomes. Not all experts agree that evidence-based care is the best mode of service delivery. Researchers assert that because patients experience diseases differently, treatment should be patient centered rather than disease centered (Prey et al. 2014; Starfield and Mangin 2010). Still, this example illustrates that most governments struggle to ensure that the money allocated for health systems is used to deliver the best possible health outcomes and high-quality care. In fact, France codified quality assurance—a medical practice supported by the government—in its creation of the National Agency for the Development of Medical Evaluation in 1990 and the Hospital Act in 1991, which made quality-of-care assessment mandatory. In 2004, a newer agency called the Agency for Accreditation and Evaluation of Health Care was given responsibility for these activities (Legido-Quigley et al. 2008).

Other countries have imposed varying levels of cost sharing, the amount of which depends on income, on their residents in an attempt to reduce government expenditures while ensuring adequate care for society’s poorest inhabitants. Ireland introduced a three-tiered payment system to address health equity issues. Those in the bottom tier (corresponding to the lowest-income residents) receive free health services, the middle-tier population shares some costs, and those in the highest tier overwhelmingly opt out of public insurance and buy private health insurance. Rather than providing equitable access to health services, however, this system created increased inequality in access (Smith and Normand 2011).

These examples illustrate that an individual’s income and sociodemographic status are among the most important predictors of unmet healthcare needs; that is, disparity is a multifaceted issue that extends far beyond the health system (Bryant, Leaver, and Dunn 2009; Chen et al. 2018). To determine the best solutions to meet these challenges, each country’s government must clarify its values and priorities with regard to health equity and cost sharing. As the burden of chronic disease increases in industrialized countries, disease prevention is promoted as a way to improve public health and reduce healthcare costs. Obesity is a preventable risk factor associated with many chronic diseases, such as cardiovascular disease, diabetes, cancer, and premature death. The treatment, management, and health complications associated with these chronic diseases generate high healthcare expenditures (Guy et al. 2017; Sassi 2010). Therefore, some countries are taking a public health approach to addressing obesity by encouraging lifestyle changes. Nordic countries have placed taxes on unhealthy foods in the hope of steering consumers to healthier choices. However, the obesity epidemic is not merely a result of an individual’s food choices; it also reflects broad changes that have occurred in the everyday lives of people in the modern world compared with preindustrial times. As such, some governments are considering new transportation and urban planning policies, among other programs, to improve health and decrease obesity rates.

UNDERLYING FACTORS

Several factors affect healthcare costs in developed countries, including the impact of aging populations and technological progress, as previously discussed. Country GDP, the participation of women in the labor force, and public budgetary values are also important variables that influence cost trends (Lavigne, Brown, and Matzke 2017; Pammolli, Riccaboni, and Magazzini 2012). For instance:

• As a country’s total income rises, so do healthcare expenditures.
• As an increasing number of women enter the workforce, caregiver responsibilities shift from the private sphere to the public sphere.
• Countries tend to spend more money on those social goods most valued by society, which may be related to healthcare or its associated products and services.

UNIQUE POLICY ISSUES, BY SELECTED COUNTRY

Maintaining a healthy population should be a high priority for any nation, just as cost control should be. Taking these two priorities into consideration, countries have approached the creation and implementation of health system administration, quality, and access policies in different ways. We discuss Japan, Denmark, Canada, and South Korea to illustrate unique health policy issues addressed by developed nations.

Japan

Japan adopted universal health insurance coverage in 1961. Since that time, its model has served as a blueprint for other counties to build a successful low-cost, high-quality, and highly equitable health system. However, the Japanese system is reaching a critical crossroads. The population has been rapidly aging since the late twentieth century (currently, more than 20 percent of the population is aged 65 or older), which has enormous implications for the cost of healthcare. At the same time, the government cannot rely on increasing tax revenues to pay for the health system because population growth and, consequently, economic growth are stagnant (Shibuya et al. 2011). In response to these challenges, the Japanese government has introduced innovative ways to slow spending.

In 2000, the government instituted its Long-Term Care Insurance (LTCI) program to care for the country’s aging population. The goal of LTCI is to provide long-term care services to adults aged 66 or older at the institutional and community levels and to ease financial and emotional burdens for both the patient and the patient’s caregivers (Tsutsui and Maramatsu 2007). To pay for LTCI, Japan set aside a portion of general tax revenues and levied a new tax on adults aged 41 or older.

Compared with other industrialized countries, Japan has made few formal efforts to ensure healthcare quality. While healthcare payment is under tight control, healthcare delivery is not; providers within the system are free to deliver care as they see fit. They are reimbursed on the basis of diagnosis–procedure combination categorization, thus diluting healthcare quality data that would be available under a fee-for-service payment system; monitoring fee-for-service data is the primary way providers can be held accountable. Although its health outcomes are comparable to those of other countries, Japan has no accountability mechanism in place, such as the pay-for-performance model in the United Kingdom and the quality assurance law in France. As Japan’s health system continues to undergo reform, structural measures of quality assurance might eventually be considered (Hashimoto et al. 2011).

Out of total health expenditures, 80.5 percent were financed through the public sector through the universal Statutory Health Insurance System in 2009 (Matsuda 2018; OECD 2011). Insurance premiums accounted for about half of the total health expenditure and are determined on a per capita, per-household, income-related, and asset-related basis. Employer-based insurers levy premiums on employee wages, and employers pay half of these employee premiums. The rates of such plans vary from 3 percent to 10 percent of wages, while rates are about 10 percent of income for employees of small- and medium-sized employers, who are insured by the Japan Health Insurance Association (Matsuda 2018; OECD 2011). Rates also vary among municipalities, albeit to a lesser degree. Government employees are covered by their own system of insurers (known as Mutual Aid Societies), as are some groups of professionals (e.g., physicians in private practice). Government subsidies, funded from the general budget, are provided mainly to Citizens Health Insurance insurers, Health Insurance for the Old-Old (a federal program) insurers, and, to a lesser extent, small-business employer-based insurers. There are also cross-subsidies from Citizens Health Insurance and employer-based insurance to Health Insurance for the Old-Old, and between Citizens Health Insurance and employer-based insurance (Ikegami and Anderson 2012).

In 2012, the federal government revised its health promotion objectives, known as Health Japan 21, and made reduction of health disparities a general goal. Its objectives include a target for reducing disparities in healthy life expectancies and cancer treatment delivery between prefectures; the government gives subsidies to prefectures to develop cancer care centers (Ueno 2013).

One emerging trend has been to promote evidence-based policymaking. For example, the current process through which the Central Social Insurance Medical Council revises the national fee schedule has been criticized for a lack of transparency and for vulnerability to potential abuses and conflicts of interest. Introduction of economic evaluation methods into health technology assessments, although highly controversial, has been increasingly discussed. Policymakers have also stressed the importance of prevention and wellness in reducing healthcare costs. Current priorities in prevention include reducing smoking and reducing the incidence of cardiovascular disease, diabetes mellitus, and hyperlipidemia. Since 2008, statutory health insurers have been responsible for delivering annual health checks to beneficiaries aged 40–74 (Matsuda 2018). Policy tools for improving quality and efficiency, such as comparable quality indicators, are being developed. As an early victim of bioterrorism, Japan also has had to consider security threats posed by the deliberate release of infectious diseases and address this issue in its policies and laws (Sugishima 2003; see also the Global Health Impact box titled “Bioterrorism, Global Health Security, and Surveillance”).

Despite a lack of quality standards, Japan’s long-standing health system has achieved successes that other developed countries are still striving toward. All of the measures described here were adopted to maintain good health outcomes and quality of life at low cost to both consumers and the government, making it a model worthy of consideration by other developed nations.

	GLOBAL HEALTH IMPACT
	Bioterrorism, Global Health Security, and Surveillance

A notorious example of bioterrorism is the 1995 attack in a Tokyo subway, where a domestic terrorist group released a chemical weapon called sarin. Sarin is a nerve agent that can paralyze muscles needed for breathing; in the Tokyo subway attack, 13 people were killed and 50 were severely injured. Also in the twentieth century, Iraq and the former Soviet Union were found to have military bioweapons programs (Khan et al. 2000). Scientists in the United States and the Netherlands exposed the possibility of disease-related bioterrorism when they created a highly contagious strain of avian flu in late 2011 (Novossiolova, Minehata, and Dando 2012).

The 2014 Ebola virus outbreak in West Africa was of unprecedented scale and impact and brought attention to global health security—its definition and role in programs and policy. For example, the government sought to strengthen its core public health capacities to meet the International Health Regulations, and experts sought to define global health security concerns. The lessons learned from the Ebola outbreak can serve to inform better global health governance. Once viewed merely as a protection from the pandemic spread of infectious diseases, health security demands greater collective action to ensure “access to safe and effective health services, products, and technologies” for the health security of all individuals (Heymann et al. 2015). This more inclusive definition recognizes that collective health security derives from individual health security, and it compels an adequate global response to provide all people worldwide with access to essential healthcare services (Heymann et al. 2015).

Health policy to counter bioterrorism should focus on preparedness efforts, as with natural disasters and pandemics, and plans that are put in place must be carefully and thoroughly executed. Local jurisdictions can also take measures to reduce their vulnerability to bioterrorism by assessing their infrastructures and environment, health system capacity, and emergency response teams and procedures. International cooperation is required on a far larger scale to establish better disease surveillance systems, laws and policies that strengthen health systems, and preventive measures against violent conflicts to make the world a healthier and safer place for all people.

Denmark

The Danish parliament passed major legislation in 2007 to reorganize and consolidate the country’s governmental structure; 215 local municipalities were condensed to 98, and 13 counties were reduced to 5 regions. The health system underwent a similar recentralization. Key areas in need of improvement had been identified in hospital future planning and current efficiency, primary care coordination, and public health prevention (Andersen and Jensen 2010). Denmark has one of the lowest life expectancies and highest cancer mortality rates in the European Union (Economist Intelligence Unit 2011; OECD 2016). The population is also getting older, and as a result, the chronic disease burden is increasingly cumbersome (OECD 2016).

Denmark’s 2007 health reform legislation, called the Health Act, included several measures to address the country’s pressing health policy concerns. To improve coordination of care, Danish officials put into effect a series of regulations (Andersen and Jensen 2010):

• Regional health authorities were charged with creating patient rehabilitation plans for hospital discharge.
• General practitioners were asked to participate in coordination-of-care strategies by reporting patient data in a shared database.
• The newly formed regions were required to plan hospital systems whereby all hospitals are expected to provide an array of basic, frequently needed services, accounting for about 90 percent of hospital services; one hospital per region is to provide specialized services; and a few hospitals in the country will perform a limited number of highly specialized services.

These initiatives are meant to work together to provide coordinated and high-quality care for all Danish patients, whether they have an acute condition or a chronic disease.

The 2007 reform aimed to centralize hospital care administration to enhance the coordination of delivery and improve quality and efficiency. The five regions established under the reform are reorganizing their hospital systems, closing or merging small hospitals, and building new hospital infrastructure, at a total cost of 40 billion Danish kroner, or about US$7.2 billion (Rigsrevisionen 2013). Reorganization of acute care with stronger prehospital services and larger specialized emergency departments is an important aspect of this new structure. The Danish Health and Medicines Authority has also issued new guidelines for the localization of specialized treatments and departments; generally, these guidelines support centralization. The structural reform also introduced municipal cost sharing (about 20 percent of the cost of treatment) for hospital services to encourage municipalities to emphasize disease prevention and health promotion. Mandatory agreements between municipalities and regions are also intended to promote collaboration. These agreements are formalized at least once during each four-year election term for municipal and regional councils, and they must be approved by the Danish Health and Medicines Authority (Rigsrevisionen 2013).

Apart from the government, semi-independent organizations also play a governance role. The Danish Healthcare Quality Program (known by its Danish abbreviation, DDKM) consists primarily of medical professionals and works to develop extensive accreditation standards to improve quality across all healthcare sectors. The DKKM is developed, planned, and managed by the Danish Institute for Quality and Accreditation in Healthcare (known by its Danish abbreviation, IKAS), a board that comprises representatives from the Danish Health and Medicines Authority, the Danish regions, and the Ministry of Health. The International Society for Quality in Healthcare, in turn, oversees both the DDKM and the IKAS. The DDKM has now been implemented in all hospitals and is being introduced in primary care and pharmacies. It aims to include all healthcare delivery organizations, and it applies both organizational and clinical standards. The core of the program is a system of accreditation based on annual self-assessment and external evaluation (every third year) by a professional accreditation body. The self-assessment involves reporting of performance against national input, process, and outcome standards, which allows comparison over time and between organizations. The external evaluation considers the self-assessment when determining the status of providers’ overall quality improvement activities and opportunities. Quality data for a number of treatment areas are captured in clinical databases and published online. The data are used for a variety of purposes, including patients’ choice of hospitals and the management of hospital quality (EU 2011).

The implementation of Danish health reform is well under way, but it is progressing at a sluggish pace. Successful implementation seems to depend on the goals of the dominant political party in each region. Yet to be seen is how political and ideological tensions—such as those present in most countries—will affect the end result of the Danish health reform (Andersen and Jensen 2010).

Canada

Canada’s health policy issues are different from those of Japan and Denmark. Its population is not aging as rapidly as Japan’s, and, unlike Denmark, its provincial decentralization of the healthcare system has been stable since the late twentieth century. However, Canada faces problems related to paying for healthcare and an increasing public health burden from preventable diseases.

Based on OECD (2011) data, Canada spends a greater percentage of its GDP, and more per capita, on healthcare than many industrialized countries do (but less than Germany, Denmark, and the United States spend). In the twenty-first century, the country has taken steps to control healthcare spending at all levels of government. For example, the Common Drug Review process was introduced in 2003 to assess the safety, clinical effectiveness, and cost-effectiveness of new drugs presented by pharmaceutical companies and to provide recommendations regarding eligibility for public reimbursement to all participating drug plans (CADTH 2018). In this way, Canada seeks to promote the use of the most effective and least expensive pharmaceuticals.

Canada’s drug plans, which are administered separately from general health services plans, attempt to use cost-sharing mechanisms to control public expenditures. For example, the province of British Columbia implemented the policy Fair PharmaCare in May 2003. It is an income-based benefits program with three main goals: (1) to keep government spending low while (2) providing access to all necessary medication (3) in a way that is equitable for people of all income levels. Analyses show that decreases in public pharmaceutical funding would work against stated policy goals and that federal money infused into the states is key to access and equity (Morgan et al. 2006).

Canada’s struggle to achieve equity in medication access and affordability reflects its larger struggle with health disparities. The life expectancy at birth of an aboriginal man living on a reserve (67 years) is nine years less than that of a man in the general population (76 years); aboriginal status and socioeconomic status are the biggest contributors to health inequities in Canada, with disadvantaged populations having increased infant mortality rates, risky health behaviors (e.g., smoking), infectious disease, and chronic disease (Health Council of Canada 2011). These disparities are primarily attributable to differences in access to resources and opportunities (Farmer, Peressini, and Lawrence 2017; Frohlich, Ross, and Richmond 2006; Rocheleau et al. 2017). As with the public health agencies of other countries grappling with similar issues, research findings about Canadian health issues are slowly being translated into programs and policies designed to reduce health disparities.

According to the Canadian Institute for Health Information (CIHI 2012a), private health insurance covers about two-thirds of the 23 million people who make up the Canadian population. In 2010, it accounted for approximately 12 percent of total health spending (CIHI 2012a). Private health insurance covers services such as vision and dental care, prescription drugs, rehabilitation services, home care, and private rooms in hospitals (which are not covered by public programs). Out-of-pocket payments made by private households accounted for about 15 percent of total health expenditures in 2010 (OECD 2011). According to CIHI (2012a), the main services sought with out-of-pocket spending in 2010 were dental care (20 percent), nonhospital institutions (mainly long-term care homes) (20 percent), prescription drugs (17 percent), vision care (12 percent), and over-the-counter medications (10 percent). In 2011, approximately 85 percent of premiums for private health plans were paid through group contracts with employers, unions, or other organizations (CLHIA 2018). Supplementary private insurance to provide faster access to publicly funded physician and hospital services was not available. Providers set their own fees for services covered by private insurance, and each insurer sets its own reimbursement level (e.g., based on the lowest fee among representative providers in a particular geographic area).

In 2010, of the 69,699 total doctors in Canada, about half were family doctors and half were specialists (CIHI 2011). Primary care physicians largely act as gatekeepers for further care. Most physicians are in private practices and are remunerated on a fee-for-service basis, although an increasing number of family doctors receive alternative forms of public payment such as capitation, salary, and blended funding. For 2010–2011, fee-for-service payments made up 50 percent of payments to family physicians in Ontario, compared with 70 percent in Quebec and 86 percent in British Columbia (CIHI 2012b).

South Korea

South Korea adopted universal health insurance coverage in 1989. Since then, it has worked to improve the health system, but with minimal success. Although the country has achieved admirable gains in health outcomes (e.g., increased life expectancies), the health system is plagued with several problems, including the following:

• The healthcare benefits that citizens enjoy are still limited compared with those of other developed countries.
• The public sector has little involvement in healthcare delivery.
• Costs are rapidly rising.
• Some insurance plans are in financial distress.

These problems are caused by a diverse set of factors and will likely take significant effort over many years to resolve (Moon and Shin 2007).

From 1989 to 2000, South Koreans were covered under a multi-insurance fund that included about 370 insurers. The National Health Insurance Act, enacted in 2000, integrated these multiple insurers into a single insurer and established the Health Insurance Review and Assessment Service (HIRA) to review medical fees and assess the quality of healthcare services provided to those who are insured (HIRA 2018a, 2018b). The government instituted the National Health Insurance Corporation (NHIC) in 2000 under the Ministry of Health, Welfare, and Family Affairs (MIHWAF). South Korea is currently working to increase health insurance benefits, which is particularly difficult because of the variety of sources that fund the NHIC, including the public sector, out-of-pocket payments, private financing, and voluntary and charitable contributions (Ahn et al. 2015; Chun et al. 2009).

In South Korea, under the Medical Law, only authorized healthcare professionals—doctors, dentists, nurses, oriental medicine doctors, and midwives who are licensed by MIHWAF—can provide health services. Nurse’s aides, acupuncturists, and massage therapists are considered “quasi-medical professionals.” Based on OECD health data, there were 91,400 physicians, 23,114 dentists, 16,663 traditional oriental medicine doctors, 57,176 pharmacists, 8,587 midwives, and 235,687 nurses in South Korea in 2007 (Moon and Shin 2007). To address the high utilization of physician and medical technology services, South Korea piloted a diagnosis-related group financing mechanism with promising results (Moon and Shin 2007).

A major problem concerning healthcare resources in South Korea is regional disparities in medical services. Due to medical profit maximization strategies, most private medical facilities are located in urban areas, as are 92.1 percent of physicians, 90.8 percent of hospital beds, and 79.7 percent of the population (National Health Insurance Corporation 2018).

South Korea is becoming an aging society faster than any other country in the world. Along with the increase in the elderly population, there has been a rise in medical expenditures for chronic degenerative diseases, which has become a great social burden. The South Korean government is trying to reduce the financial burden, especially for younger people, with comprehensive healthcare reform. The MIHWAF is also taking various measures to care for the elderly, such as expanding healthcare facilities and introducing Long-Term Care Insurance Program (National Health Insurance Corporation 2018).

HEALTH POLICY ISSUES IN DEVELOPING COUNTRIES

The health policy issues of developing countries are, in many ways, fundamentally distinct from those of developed countries. Developing countries face a range of health problems, from communicable, highly contagious diseases to incipient, invisible problems that manifest from exposure to polluted environments. These nations must address the drivers of preventable morbidity and mortality to improve health outcomes and, relatedly, increase economic growth and development.

In this section, we discuss the policy issues shared by developing countries, including the communicable and noncommunicable diseases that cause the highest burden of disease. Because developing nations rely heavily on international governing bodies to provide assistance regarding health concerns, we also outline the types of policy actions these international agencies take to address these concerns. Finally, as with the selected developed countries, we delve into the particular problems faced by selected developing countries—China, Ukraine, Nigeria, and Colombia.

COMMON POLICY ISSUES

Distinct policy issues and risk factors related to both communicable diseases and noncommunicable diseases are common problems in developing countries. Communicable diseases include acute diarrheal disease, sexually transmitted diseases, HIV/AIDS, tuberculosis (TB), malaria and other tropical diseases, and other infectious diseases, particularly when they spread quickly and become a worldwide threat (see the Global Health Impact box titled “Pandemics: SARS, H1N1, Avian Flu, and Zika”). Noncommunicable diseases—illnesses not traditionally seen in abundance in developing nations, such as cancer, cardiovascular disease, diabetes, chronic pulmonary disease, and mental illness—are becoming increasingly common in developing countries and come with a different set of health policy considerations (George et al. 2017; Walker et al. 2018).

A common theme among these diseases is the economic depression that accompanies the high incidence of disease and the paradoxical need for large economic inputs (capital, labor, and innovation) to prevent the transmission and onset of disease, which places low-income, developing countries at a particular disadvantage in solving these public health problems.

The way to address health policy issues in developing countries is increasingly envisioned as a stewardship of trust and legitimacy between a government and its people for improving the welfare of a population. Health policy today involves multiple actors and increasingly involved global and international agencies. Increased investment in the context of the Millennium Development Goals (a UN effort to improve health and healthcare around the world) is also placing greater attention on good national and international governance (WHO 2008). This approach has demonstrated benefits for the specific diseases being addressed, yet it threatens other programs and the capacity of local authorities to meet broad health needs. National governments in developing countries should set clear priorities on the basis of health needs and infrastructure capacity as well as on sound ethical guidance that will help achieve maximum improvement in health for minimum expenditure.

Comprehensive national health accounting is an important policy tool to track health spending from all sources. Performance assessment can support policymaking in monitoring and evaluating progress toward critical outcomes and the efficiency of the health system in a way that allows comparison over time and across systems. Particular attention is being given to financing healthcare for the more than 1.3 billion people in rural poverty and workers in the informal sector in developing countries who have no financial protection against catastrophic costs of healthcare (González-Block et al. 2009).

Success with these and other efforts will depend on solving the multiple challenges facing the health workforce. Relying on a public–private mix of services to address health infrastructure raises the question of the capacity of government to develop contracts, set prices, and monitor and supervise private providers. It is not always easy to reconcile efficiency with equity in health policy. Equity should be a primary concern for sustainable policymaking, and tools are available to measure how greatly national investments benefit the poor and needy. In many respects, health policy in developing countries is all about the encouragement of innovation and the scaling up of lifesaving technologies and systems (see the Global Health Impact box titled “Technology and Innovation”). Access to knowledge and technology has accounted for a high proportion of the decline in mortality rates. New strategies for organizing health research systems can contribute to making evidence-based policy a reality in developing countries (González-Block et al. 2009).

The term universal health coverage is gaining popularity among countries that have not yet attained it. A majority of the world’s developing countries plan to implement universal health coverage to protect vulnerable citizens who cannot afford healthcare services and thus may incur catastrophic expenses as individuals and families. If a nation can provide universal health coverage, it can bring all of its citizens under the provision of equal and high-quality care. However, implementation of universal health coverage is not an easy task. Good governance and a sustainable health financing system are fundamental to establishing universal health coverage in developing countries (Zaman and Hossain 2017).

	GLOBAL HEALTH IMPACT
	Pandemics: SARS, H1N1, Avian Flu, and Zika

A single businessman traveling from the Guangdong province of China through Hong Kong and on to Hanoi, Vietnam, brought severe acute respiratory syndrome (SARS) to global attention. He, and the doctor who diagnosed him, died of the disease while it was spreading rapidly throughout Asia, and later to 24 other countries worldwide (A.D.A.M. Medical Encyclopedia 2018). The story of SARS illustrates the negative impact of globalization and migration and the ease with which a highly contagious disease can spread worldwide and cause a pandemic (Shi and Singh 2017).

Threats of widespread illness from H1N1 (swine) influenza and West Nile virus evolved in similar fashion, and avian flu is the next major infectious disease to watch, according to observers (CDC 2017b; Pompe et al. 2005). Typically, only people who had worked in close contact with infected birds are known to have been infected with avian flu. However, it is a highly deadly influenza virus, and if it were to mutate and become easily transmitted from human to human, serious consequences would follow.

The Zika virus is a growing public health concern. As documented by Flahault and colleagues (2016), the Zika virus is found in parts of Africa, was reported in Southeast Asia, and is rising in the Americas and Caribbean. Since it was first detected in Brazil in 2015, it has become a major public health challenge in the Americas. Although the virus can cause mild illness (characterized by conjunctivitis, fever, rash, and joint pain), many affected countries also reported neurological and autoimmune complications potentially related to the Zika virus, including more cases of Guillain-Barré syndrome and birth defects such as microcephaly. Aware of the growing body of evidence suggesting an association between infection by the Zika virus and the development of neurological disorders, including adverse pregnancy outcomes, WHO established a framework to systematically assess for a causal relationship based on three types of clinical outcomes: (1) autoimmune disorders, including Guillain-Barré syndrome; (2) acute central nervous system disorders, including myelitis; and (3) congenital anomalies, including microcephaly (Flahault et al. 2016).

In efforts to thwart pandemics, worldwide reporting and surveillance systems have been developed and are improving, but many countries lack critical laboratory infrastructure and access to vaccines and antiviral medications. Any country that has not already done so should establish emergency preparedness plans that account for social distancing, travel, health system processes, and mass vaccination procedures.

	GLOBAL HEALTH IMPACT
	Technology and Innovation

The advancement of information technology, and of clinical technology in particular, has greatly altered how healthcare is delivered. Examples of these technological innovations in healthcare include health informatics, mHealth, electronic medical records, telemedicine, and virtual physician visits. Medical innovations have also brought safer surgical and imaging procedures; genetic testing and gene therapy; and therapeutic uses for vaccines to treat diseases such as cancer and HIV/AIDS.

As with any area of technological innovation, the positive aspects of clinical technology are accompanied by a number of challenges. The development of useful medical technologies often comes at a very high cost, which may make it difficult for poorer countries to bring technological innovations to their populations. In addition, technological advances in processes can threaten the privacy of individuals and patient confidentiality because of increased access to medical records.

The US Department of Health and Human Services, in its Global Health Initiatives statements, has described the need for the government to strengthen regulatory systems and to monitor the safety of the medical products, food, and feed that enter the United States through global manufacturing and supply chains (HHS 2013). Another approach to addressing the challenges brought by technology is for the health department of a country to assess community needs and ensure that appropriate medical devices and technologies reach people in need in a cost-effective manner.

Communicable Diseases

Acute diarrheal disease and other diseases attributable to poor water sanitation (e.g., acute respiratory disease, some tropical diseases) account for about 10 percent of the global burden of disease. Nearly 1.7 million deaths each year are attributable to acute diarrheal disease; about 95 percent of these deaths occur in children aged four or younger in developing countries (Van Minh and Hung 2011). Worldwide, at least 2 billion people lack access to a clean water supply—one of the most important preventive measures that can be taken to lower mortality rates (WHO 2018b).

The UN has recognized this type of disease as a global public health problem. In its Millennium Development Goal (MDG) 7.C, the UN stated that it aims to “halve, by 2015, the proportion of the population without sustainable access to safe drinking water and basic sanitation” toward ensuring environmental sustainability (UN 2010). Cost–benefit analyses suggest that achieving this MDG could result in a total worldwide economic benefit of $38 billion annually (Van Minh and Hung 2011). Some countries have accepted the challenge, but, as the UN has noted, “disparities in urban and rural sanitation remain daunting” (UN 2010). These challenges were illustrated by the cholera epidemic in Haiti following the devastating earthquake there in 2010, which showed that poor sanitation and resulting diseases can shut down entire industries (Haiti Libre 2010). By 2018, at least 2 billion people worldwide still were using a drinking water source contaminated with feces (WHO 2018b).

The MDG also addresses HIV/AIDS, TB (which often accompanies AIDS), malaria, and other major diseases in MDG 6 (UN 2010), as the burden of these diseases is felt more strongly in developing countries. At the same time, some global health experts argue that the attention given to HIV/AIDS prevention and treatment diverts resources from more basic public health and health system needs (Wu, Roychowdhury, and Khan 2017; Yu et al. 2008).

Noncommunicable Diseases

Much has been written about the devastating effects of communicable diseases, as well as their prevention and treatment modalities (on HIV/AIDS, see, e.g., Bongaarts and Over 2010; Potts et al. 2008; Sambo and Kirigia 2011; Stanecki et al. 2010; UN 2010; Weiss et al. 2008; and on TB and other infectious diseases, see Avert 2018b; Kirwan 2009; WHO 2018a). However, noncommunicable diseases are beginning to have an equally disruptive impact on developing countries (Islam et al. 2014; see also the Global Health Impact box titled “Noncommunicable Diseases”). In these nations, 80 percent of deaths related to noncommunicable diseases occur before the age of 60—the age at which people tend to reach their peak economic productivity, therefore reducing economic growth and progress in the country.

Mental illnesses are a group of noncommunicable diseases responsible for about 13 percent of the global burden of disease. Mental illnesses in particular do not generally attract international health policy attention. Neuropsychiatric disorders that affect people in developing countries include unipolar depressive disorder, bipolar disorder, schizophrenia, epilepsy, substance abuse disorders, dementia, anxiety disorders, mental retardation, and some neurological disorders (Patel 2007). Those who experience mental illness often endure many years of living with a disability. In addition, the societal costs of mental disorders, such as the impact on families, social services, and the criminal justice system, are significant and essentially immeasurable.

Globally, most people in need of mental health care lack access to high-quality mental health services. Stigma, insufficient human resources, fragmented service delivery models, and lack of research capacity for implementation and policy change contribute to the mental health treatment gap. The global mental health landscape has transformed since 1990 with the raised visibility of the disease burden of mental health and substance-use disorders. Mental health disorders comprise 7.4 percent of disability-adjusted life years and 22.7 percent of years lived with disability worldwide (Baingana et al. 2015). The main contributors are depression and dysthymia, which account for 9.6 percent of all mental health disorders; anxiety, which accounts for 3.5 percent; and schizophrenia, substance-use disorders, and bipolar disorder, which together account for about 2.0 percent (Baingana et al. 2015). According to Baingana and colleagues (2015), alcohol and substance-use disorders are the second-leading cause of mental health disorders in most of the developing world, especially for southern Africa (drug use) and Eastern Europe (alcohol). The global prevalence of mental health and substance-use disorders is predicted to rise in coming years, with the most dramatic increase expected in low- and middle-income countries as a result of longer life expectancy, population growth, and underresourced healthcare. For example, the associated health burden of alcohol and substance misuse is predicted to increase by 130 percent in sub-Saharan Africa by 2050 as a result of population growth and aging (Baingana et al. 2015). Untreated mental health disorders are associated with a high burden on the economy. Yet commonly used health metrics do not reflect the additional social burdens of living with mental illness. Pervasive stigma and human rights violations increase the suffering associated with these disorders and exacerbate the social vulnerabilities of people with mental illnesses (Baingana et al. 2015).

People who are poor, less educated, or experiencing acute financial strain are at a greater risk for mental illness than are those who are financially secure and educated. In turn, those who suffer from mental illness are likely to remain impoverished due to lost wages or the cost of medical care. Mental health disorders can be effectively treated, but policymakers in developing nations face enormous challenges in legislating and financing effective interventions; the average government mental health spending (in US currency) in 2016 was a mere two cents per person per year in low-income countries and $1.05 per person per year in lower-middle-income countries, as compared with $2.62 per person per year in upper-middle-income countries and a whopping $80.24 per person per year in high-income countries (WHO 2018c). People in developing countries experience similarly huge disparities in their access to mental health professionals (including psychiatrists, other medical doctors, psychologists, social workers, nurses, and other paid workers working in mental health). In 2016, low-income countries had an average workforce of 1.6 mental health professionals for every 100,000 people, and lower-middle-income countries had an average workforce of 6.2, as compared with 20.6 in upper-middle-income countries and 71.7 in high-income countries (WHO 2018c).

To help countries identify gaps in their existing mental health system and address any deficiencies with system-level policy changes, WHO developed the WHO Assessment Instrument for Mental Health Systems (WHO-AIMS), which evaluates countries across several domains (e.g., policy/legislative framework, existing mental health services) to present a broad picture of their mental health provision capabilities (WHO 2009). Nearly 40 low-income and lower-middle-income countries have used WHO-AIMS, and the resulting data reports are available through WHO (2009, 2018g). As additional countries implement WHO-AIMS, policymakers can comprehend the state of their country’s mental health services and policy as a whole, which will enable them to make better policy decisions that can lead to improvement.

	GLOBAL HEALTH IMPACT
	Noncommunicable Diseases

The global rise in noncommunicable and chronic diseases is one of the greatest current challenges faced by all countries, whether they are developed, emerging, or developing. In September 2011, WHO Director-General Dr. Margaret Chan discussed noncommunicable disease in her address to the General Assembly (UN 2010):

The worldwide increase of non-communicable diseases is a slow-motion disaster, as most of these diseases develop over time, but unhealthy lifestyles that feed these diseases are spreading with a stunning speed and sweep. I can understand why some developing countries are being taken by surprise by the onslaught of these diseases. Their initial burden was greatest in affluent societies.

Noncommunicable diseases were once considered to be confined to wealthy people and wealthy nations. That paradigm is shifting as the burden of noncommunicable and chronic diseases, and associated risk factors, is now being felt worldwide. A fundamental shift is also being seen in the United States and other developed countries as community wellness and preventive care are increasingly viewed as a vital part of controlling and reducing chronic disease prevalence in their populations (Bauer et al. 2014; Navarro et al. 2007). In general, noncommunicable diseases are quickly becoming the leading cause of death worldwide and have been associated with nearly 70 percent of all global mortalities (Bauer et al. 2014; Navarro et al. 2007). Although not currently the largest cause of mortality in sub-Saharan Africa, deaths from noncommunicable diseases in the region are projected to surpass deaths from maternal, perinatal, and nutrition-related diseases by 2030 (Bauer et al. 2014; Navarro et al. 2007).

The risk factors associated with many noncommunicable diseases are well documented in the scientific literature. Risky behaviors such as tobacco use, alcohol abuse, unhealthy diet habits, and physical inactivity have been linked to cancers, cardiovascular diseases, chronic respiratory diseases, and diabetes. Lifestyles in developing nations are changing to include these behaviors, sometimes as a consequence of development, such as the emergence in low- and middle-income countries of supermarkets—the largest providers of processed foods that are high in fat, sugar, and sodium and low in nutritional value (Vancampfort, Stubbs, and Koyanagi 2017; Wagner and Brath 2012). The health-related costs of development are stunning: In 2005, the estimated national economic losses from heart disease, stroke, and diabetes were (in US dollars) $18 billion in China, $11 billion in the Russian Federation, $9 billion in India, and $3 billion in Brazil (WHO 2006).

Researchers working in developing countries have produced a robust literature on the epidemiology of noncommunicable diseases in most regions of the world (except for sub-Saharan Africa, but see Dalal et al. [2011]). Evidence suggests that public health policymakers have several policy tools by which to address noncommunicable diseases and their risk factors. Yet such policies are not well defined at the national or global levels, even though science and medicine have enhanced our understanding of the determinants of chronic disease. Observers note that the most effective policies are long-term, collaborative approaches that engage both the public and private sectors. For example, WHO has deemed “best buy” interventions to be cost-effective in reducing disability-adjusted life years associated with noncommunicable diseases. Examples of such interventions include raising tobacco taxes, restricting access to alcohol, providing primary care diet counseling, promoting healthy living and physical activity in mass media, and offering vaccination programs (Dalal et al. 2011).

The consequences of failing to stem noncommunicable diseases are enormous. In developed countries, where clinical chronic care is currently available, the increasing burden of disease will place increasingly greater strains on the health financing system. In developing countries, where clinical chronic care is less available and more people go undiagnosed, primary prevention is essential to saving lives and improving life expectancies (Alaofè et al. 2017). Policymakers at all levels, as well as other stakeholders, have the power to reshape this intensifying public health issue.

Weak Health Infrastructure

The lack of a sound health system infrastructure affects care for all diseases and impedes access to essential health services. At the beginning of the twenty-first century, governments in developing countries generally spent about 5 percent of their total budget on health (Nambiar et al. 2007); in contrast, the average developed country spent more than 10 percent of its GDP on health, according to OECD data. Low government spending leads to extremely low quality of care and creates long waiting times, constant shortages of essential drugs and supplies, and inadequacy of staff training. In addition, out-of-pocket expenses can prohibit residents of developing countries from seeking care.

Modern Environmental Hazards

In the developing world, substances such as mercury, lead, pesticides, asbestos, air toxins, and hazardous waste are commonly released into the environment by unregulated mining operations (e.g., mining for gold ore), soap product and paint manufacturers, gasoline producers, agricultural operations, emissions from automobiles, and industrial waste disposal. Such toxins are associated with a host of complicated health problems, including nerve or nerve tissue damage, birth defects, and hormone dysfunction—problems that the health systems of many developing countries are ill equipped to handle.

These and other modern environmental health hazards are emerging in a health environment that is already overwhelmed by poverty, malnutrition, and communicable and chronic diseases. With the understanding that governments in developing nations must take swift preventive measures, the United Nations Environment Program has made headway with its Partnership for Clean Fuels and Vehicles initiative for removing lead from gasoline and sulfur from diesel fuel. Other initiatives aim to reduce or control stockpiles of harmful pesticides, introduce cleaner methods of gold mining (which is strongly associated with mercury poisoning), and initiate substance monitoring programs for manufacturing and other operations.

Most of this work has been performed by nongovernmental organizations, with less substantive action taken by national governments. Going forward, policymakers must take a population-level approach toward addressing modern environmental health hazards to reduce the burden of preventable ill health and premature mortalities (Nweke and Sanders 2009).

UNDERLYING FACTORS

These health-related challenges raise the question of how to use health policy to strengthen health systems and public health infrastructure in developing countries. Industrialized countries are seeking ways to provide aid to developing nations that will help their overwhelmed ministries of health. The sectorwide approach, which focuses on centralizing public health leadership, improving health sector management, and increasing coordination, is one such method that has had some success.

In recognition of the fact that good governance is essential for an effective health system and overall development, WHO devised a method for assessing health system governance. This framework allows researchers to assess public health problems with health system leadership and governance at the policy and operational levels and to suggest improvements. Using the WHO method allows motivated governments to effectively promote and protect population health (Siddiqi et al. 2009).

Addressing noncommunicable diseases requires that health policies be designed to work together at various levels of government. For example, one policy might impose taxes to deter people from smoking cigarettes, and other policies might ensure that people who need it can access care for chronic obstructive pulmonary disease.

UNIQUE POLICY ISSUES IN SELECTED COUNTRIES

Many blanket statements have been made about health issues in developing countries, but it is essential to recognize the great diversity between and within countries when considering health issues and health policies. China, for example, has a huge land mass and a diverse population of urban and rural dwellers. This situation poses health policy challenges that are unique to that country. Each country is dealing with a particular set of factors that largely determine what health issues are pertinent and what policy solutions are feasible in that particular country. In the following sections, we examine the unique situations of four developing countries: China, Ukraine, Nigeria, and Colombia. The small nation of Singapore is also highlighted; see the For Your Consideration box titled “Singapore’s Healthcare Delivery.”

	FOR YOUR CONSIDERATION
	Singapore’s Healthcare Delivery

Singapore has one of the most successful healthcare systems in the world, based on its efficiency in financing and the positive results it has achieved in community health outcomes. The Singaporean government combines the ideas of individual responsibility and government control in a financing system of federal subsidies for primary care, hospital services, pharmaceuticals, and individual savings accounts (Bai et al. 2018; Brookings Institution 2018). In 1983, the government established a National Health Plan, which detailed plans for the infrastructure for the next 20 years, together with the idea of individual savings accounts, called Medisave. The restructuring of public-sector hospitals in 1985 started merging the business and financial sectors into healthcare services to provide higher-quality services and more efficient financing. In 2002, the government promulgated the ElderShield plan to help the elderly and people with severe disabilities in particular.

Singapore provides all citizens with universal healthcare coverage, funded by a combination of federal subsidies, financing schemes, and individual savings, all administered nationally. Capital expenditures for healthcare are calculated at the national level in the federal budget. In the first tier of financial protection, the government subsidizes up to 80 percent of the total bill in public hospitals and primary care polyclinics. Subsidies of up to 80 percent are also provided for bills in government-funded intermediate and long-term care institutions. This coverage is funded by a network of savings and insurance programs known as the “3Ms” (Medisave, MediShield, and Medifund) to help individuals and families pay for their care. Together, these programs play a critical role in maintaining the health and welfare of all Singaporeans.

China

With more than 1.4 billion people, China has one of the largest populations in the world (Worldometers 2018). The country has experienced overwhelming transformations since the late twentieth century, which have dramatically affected population health.

Prior to 1978, the Chinese government headed up extensive public health improvements, leading to lower infant and maternal mortality rates, greater life expectancies, and improved quality of water and sanitation. The associated policy decisions emphasized disease prevention and community involvement, reflecting an approach to health rooted in basic public health principles (Gong, Walker, and Shi 2007).

A major change in China occurred in 1978, when it moved from a communism-based to a capitalism-based market economy. This shift brought many positive developments as well as a number of challenges to China’s health system:

• Overall spending on healthcare has rapidly increased, while government funding for public health institutions has steadily fallen (Gong, Walker, and Shi 2007; Nofri 2015).
• Rates of noncommunicable diseases and health disparities are on the rise (Hu, Liu, and Willett 2011; Zhu et al. 2017).
• The cost of healthcare has become prohibitively expensive for many people, particularly those living in rural areas (Hu, Liu, and Willett 2011).

In response to these emerging issues and to create a solid health policy framework for the coming years, in 2008 the Chinese government passed the Healthy China 2020 act to address healthcare equity and accessibility through five mandates that correspond to major health problems identified by the Chinese Ministry of Health (Chen 2009; Hu et al. 2011; Ling et al. 2011):

1. Health insurance must be expanded to cover 90 percent of the population.
2. A national drug system must be established to meet basic pharmaceutical needs.
3. Grassroots-level improvement of medical care and public health must occur.
4. Basic public health services, including preventive health, must expand.
5. Hospital reform must be instituted to abate the health system’s increasing tendency to commercialize.

The development of a “Healthy China” is central to the Chinese government’s agenda for health and development. President Xi Jinping has placed health at the center of the country’s entire policymaking operations, and China’s leaders have made health a national political priority with the approval of the Healthy China 2030 Planning Outline by the Central Party Committee and the State Council (Tan, Zhang, and Shao 2018).

Through advanced technologies and an improved health insurance system, China hopes to achieve health equity for its people by 2030. Significant steps have already been taken toward that end. In 2009, China embarked on a major national health system reform (Nofri 2015), aiming to extend care to those residing beyond its prosperous urban centers. At the beginning of the twenty-first century, less than one-third of the population had access to health insurance. Now nearly 100 percent do (Tan, Zhang, and Shao 2018). China has provided its huge population a healthcare safety net that protects its people from becoming impoverished by the costs of healthcare (Tan, Zhang, and Shao 2018).

Still, China faces many health challenges. They include increasing rates of cancer; higher incidence of cardiovascular disease linked to such lifestyle factors as smoking; and demographic trends such as an aging population (Nofri 2015; Tan, Zhang, and Shao 2018). These challenges cannot be met sustainably in a health system that relies solely on hospitals. Therefore, a key component of Healthy China is the promotion of healthy lifestyle behaviors and physical fitness, including through the development of the Healthy Cities program, to emphasize prevention over treatment. One of the most important steps toward a Healthy China is a national smoke-free law, which would have a significant impact on the prevention of many associated noncommunicable diseases.

According to Tan, Zhang, and Shao (2018), to better protect people’s basic right to health, a series of plans have been implemented, including the Healthy China 2030 Planning Outline, the National Fitness Program (2016–2020), the Thirteenth Five-Year Plan for Medical and Health Service Development, and the Plan for Deepening Reform of the Medical and Healthcare System During the Thirteenth Five-Year Plan Period (2016–2020). The Chinese government has set a “three-step” goal: (1) establishment of a sound basic medical and healthcare system with distinctly Chinese characteristics covering both urban and rural residents, such that its main health indicators would place China in the forefront of the rankings of high- and middle-income countries by 2020; (2) improvement of the health-promotion system such that its main health indicators would be in the ranks of those of high-income countries by 2030; and (3) existence of a healthy China that conforms to the requirements of a modern socialist country by 2050 (Tan, Zhang, and Shao 2018).

Ukraine

Over the five years following the fall of the former Soviet Union in 1991, Ukraine faced—and continues to battle—several debilitating public health issues. The population is plagued by epidemics of HIV and TB, which are interrelated: In 2015, 22 percent of tested TB patients were HIV-positive (CDC 2017a). In addition, cardiovascular disease, the leading cause of mortality in the country, is highly prevalent among the population, partly because of high rates of smoking and alcohol consumption.

Inconsistencies in public health legislation and implementation, resulting from an unstable parliament, create a difficult political environment in which to address these challenges and improve health (Lekhan, Rudiy, and Shevchenko 2015). For example, the Global Fund for AIDS, Tuberculosis, and Malaria initially granted $98 million to the Ukrainian government to respond to the combined AIDS/TB epidemic; however, the Global Fund switched its grantee to community organizations instead because the government was not transparent with the use of funds (Hurley 2010). As a result, local community organizations now provide most HIV/AIDS prevention and treatment services in Ukraine, with funding from the Global Fund (Hurley 2010).

Poor development and implementation of policies distinguish Ukraine’s TB control from that of the rest of Europe. For example, TB infections are often transmitted through the prison system, but postincarceration treatment plans are not coordinated before prisoners’ release. Furthermore, many ex-prisoners do not adhere to medication plans and transmit the disease to the public, as evidenced by higher-than-average TB infection rates in areas surrounding prisons. In addition, Ukraine lacks a centralized TB monitoring system, and most regional TB recording and reporting systems do not meet WHO recommended standards (Atun and Olynik 2008).

Policies aimed at reducing the burden of noncommunicable disease in Ukraine have been more successful—the tobacco excise tax is one example. Estimates from 2005 suggest that 66 percent of men and 20 percent of women smoked cigarettes (Ross, Stoklosa, and Krasovsky 2011). Following the lead of other countries that adopted tax policy reform in response to high rates of disease, premature death, and lost productivity, Ukraine implemented excise taxes on tobacco in 2009 and 2010. These taxes significantly reduced tobacco consumption, illustrating that tobacco use is price sensitive (Ross, Stoklosa, and Krasovsky 2011). By 2015, cigarette smoking rates had fallen to about 49 percent among men and 14 percent for women (Tobacco Atlas 2018).

From 2006 to 2012, the average life expectancy in Ukraine increased, even with little progress in policy implementation. During the 2010s, armed conflict created a new, large-scale humanitarian crisis in Ukraine, and the health system proved ill equipped to cope with it. Even before the turmoil that led to this crisis, the Ukrainian health system was weak and far from equitable. Pilot reforms initiated in 2010, which aimed to reorient the system toward a primary care focus, were still in early stages, and scale-up was delayed indefinitely (Lekhan, Rudiy, and Shevchenko 2015). In many respects, as Lekhan, Rudiy, and Shevchenko (2015) observed, the pilot reforms showed that change is possible in the system, although a lack of meaningful reform since independence from the Soviet Union meant that many inefficiencies were deeply entrenched. In October 2017, the Ukrainian Parliament approved a bill that made major changes to the country’s healthcare system effective January 1, 2018, including the establishment of a National Health Care Agency and a financing model similar to that of the United Kingdom (Raczkiewycz 2017). However, the country’s political instability made successful implementation of the approved changes uncertain.

As Lekhan, Rudiy, and Shevchenko (2015) contend, successful implementation of the health system reforms requires both political will and popular consensus, including community and health worker engagement in the reform and belief in its benefits. Perhaps most important, changes to a health system need policy windows. For example, although economic crises can spur focused efforts to make health systems more efficient, a policy environment of political, social, and economic turmoil can push health systems concerns far down the policy agenda. The successful implementation of health systems reform requires a certain degree of stability, but stabilizing such conditions is beyond the control of the health sector.

Nigeria

Nigeria’s health issues are all-encompassing, ranging from communicable diseases, such as HIV/AIDS, TB, rare tropical diseases, and even poliomyelitis (polio), to noncommunicable diseases, such as cardiovascular disease and the effects of modern environmental health hazards. Each of these health problems has been inefficiently managed by the Nigerian government and exacerbated by a weak health system, little health financing, and loss of health professionals through emigration (FMTalk360 2016; GPEI 2018).

Two key health issues set Nigeria apart from other sub-Saharan nations with otherwise similar health problems. First, Nigeria is the only African country (and one of only three countries in the world, the other two being Afghanistan and Pakistan) to have failed to ever eliminate polio (GPEI 2018). Efforts implemented by the Global Polio Eradication Initiative (GPEI) beginning in 2009 greatly reduced the total number of cases, to the point that the country went for two years with no new cases of polio detected. However, in July 2016, one type of wild poliomyelitis reemerged, triggering a GPEI response in which nearly 58 million children were vaccinated to help prevent further outbreaks (GPEI 2018; WHO 2016).

Second, Nigeria has encountered particular difficulty implementing key components of standard disease control protocol in combating HIV/AIDS. In 2016, only about 30 percent of the 3.2 million people living with HIV in Nigeria were receiving antiretroviral therapy, and the death rate from AIDS was about 148,000 people per year (Avert 2018a). The rate of mother-to-child transmission remains high—at 22 percent in 2016—and Nigeria accounts for nearly 27 percent of all the mother-to-child transmission cases in the world (Avert 2018a).

Several types of barriers impede Nigeria’s ability to effectively address the HIV/AIDS epidemic, including the following (Avert 2018a):

• Cultural practices that increase HIV vulnerability among the general population (e.g., female genital mutilation, marriage of young girls to much older men, encouragement of men to have multiple female sexual partners, low levels of condom use) as well as the social stigma of being known as HIV-positive, which inhibits testing
• Strict laws against homosexuality (punishable by up to 14 years in prison) that discourage men who have sex with men from seeking treatment; laws against sex work (punishable by two years in prison) that make sex workers reluctant to disclose their occupation to healthcare workers during provision of healthcare services
• Lack of sites for HIV testing and treatment for those willing to seek it
• Low levels of funding by the Nigerian government to address the epidemic, exacerbated by gender inequality, with less than 1 percent of government spending on HIV allocated for women despite the fact that 58 percent of the people living with HIV are women

Closely related to the challenges in addressing the HIV/AIDS epidemic is the dramatic rise in Nigeria of TB, which is a common coinfection that can develop in people living with HIV and has likewise reached an epidemic level (Avert 2018a, 2018b). Multidrug-resistant strains of TB in Nigeria increased by 30 percent between 2015 and 2016, making the disease even harder to treat effectively (Avert 2018a).

Unavailability of modern equipment and obsoleteness of existing equipment is a major issue with the Nigerian healthcare system. Lack of proper or properly functioning equipment has been identified as a root cause of incorrect diagnoses and is reportedly a key reason foreign medical trips remain the only option for affluent Nigerians or patients in dire need of a correct diagnosis (see the Global Health Impact box titled “Medical Tourism”). Stories of medical errors and how they have accounted for avoidable deaths in some Nigerian medical facilities have also been reported, further contributing to Nigerians’ discomfort with seeking medical care in their own country (FMTalk360 2016).

Despite these difficulties, the prospects for improving global health policies are promising. The 2011 presidential election in Nigeria was deemed by some experts as the most legitimate and transparent election the country ever held. The National Assembly passed the National Health Bill in May 2011, placing health at the top of the national agenda with an emphasis on ensuring basic access to health services for all citizens, retaining trained health professionals, and holding the government accountable for complete implementation of the bill’s mandates (Lancet 2011). With widespread support from health professionals and the general public as well as a demonstrated commitment to health by the Nigerian president, the bill was signed into law on October 31, 2014, and became known as the National Health Act (Enabulele and Enabulele 2016). A study in December 2015, however, found that although most health professionals were aware of the National Health Act and viewed it favorably, nearly 74 percent of them showed poor knowledge of it (Enabulele and Enabulele 2016), signaling a need for further education on the provisions of the act.

In 2016, the Nigerian Sovereign Investment Authority (NSIA), along with the country’s Ministry of Health, agreed to modernize and expand healthcare services with the involvement of the private sector. They aimed to build the capacity of specialist hospitals and diagnostic centers to ensure that they can provide advanced medical care. Ten memorandums of cooperation had already been signed between the NSIA, Ministry of Health, and various healthcare facilities in the country’s six geopolitical zones, with six of them in advanced stages. Although Nigeria’s National Health Insurance Scheme (NHIS), introduced in 1999, aims for universal coverage, penetration remains low. In 2016, less than 5 percent of the population was enrolled in the NHIS, and an estimated 120 million people lacked health insurance (Oxford Business Group 2018). Stakeholders in the insurance sector—such as the NHIS and health maintenance organizations—also called for legislators to make it mandatory for employers with more than ten employees to provide them with health insurance (Oxford Business Group 2018).

	GLOBAL HEALTH IMPACT
	Medical Tourism

Medical tourism is an international phenomenon by which people travel to another country for medical services. Travel often occurs on a regional level, and most procedures are elective (e.g., weight loss surgery, cosmetic surgery, dental care, fertility treatment). For example, Americans travel to Mexican border towns for dental procedures that are very expensive in the United States (IMTJ 2012) and seek affordable healthcare procedures, such as knee and hip replacements and cardiac surgery, outside of the country. Some countries are known to specialize in the provision of medical tourism procedures, including gender reassignment surgery in Thailand and cell transplants in China (Aizura 2010; Alleman et al. 2011; Song 2010).

Major US medical schools have partnered with other countries to set up tertiary and referral hospitals that provide higher-level care and procedures. These ventures can control costs for private insurers and improve the standards of care for those seeking care abroad. Joint Commission International has accredited more than 600 hospitals and certified hundreds of other specialty facilities and programs worldwide (JCI 2018). People also travel to the United States to receive healthcare at leading institutions, such as the University of Texas MD Andersen Cancer Center in Houston; Mayo Clinic in Rochester, Minnesota; and Jackson Memorial Hospital in Miami.

Since 2003, the government of Thailand has attempted to make its country a global center for medical tourism through the Center of Excellent Health Care of Asia initiative. It has held international road shows and allowed tax exemptions for investment in new health facilities to target medical tourists and recruit patients. In 2011, revenues from medical tourists generated the equivalent of an estimated 0.4 percent of Thailand’s GDP (Noree, Hanefeld, and Smith 2016). Despite such financial benefits, there is concern about the impact of medical tourism on equity in care, especially in areas with weak health systems and limited resources that may be diverted toward caring for patients from abroad (Noree, Hanefeld, and Smith 2016).

Facilitators of medical tourism have established an industry focused on connecting people with medical services abroad. However, several challenges have arisen with this emerging field. Reports have surfaced of complications after surgeries that could have been avoided if proper quality standards had been followed, underscoring the need for uniform standards of care across various settings, such as those used by Joint Commission International. Public health concerns also can be an issue for medical tourists, as they may become vectors (able to spread infectious agents) or victims of multidrug-resistant bacteria—a threat whenever physicians are unprincipled in their use of antimicrobial medications (Cusumano et al. 2017; Rogers, Aminzadeh, and Paterson 2011). Critics cite ethical issues regarding the use of the healthcare workforce and resources for medical tourism that takes away resources from the basic local medical needs of the country’s citizens. Another concern is the current lack of regulation and oversight of the providers of medical tourism; ethical issues have been raised concerning patients traveling after being given very limited information and foreign patients purchasing organs or surrogacy services from local populations in low- and middle-income countries (Noree, Hanefeld, and Smith 2016). As the medical tourism market continues to develop and become established, these and numerous other issues will need to be addressed.

Colombia

Colombia faces challenging public health issues that are deeply rooted in an ongoing conflict and urban–rural disparities.

Insurance Scheme

Colombia’s health disparities are evident in examinations of its universal health insurance system. Law 100 was approved in 1993, granting all citizens the right to health insurance with an essential benefits package, regardless of ability to pay. By 2009, about 80 percent of Colombians were covered under one of two health insurance schemes—the Contributory Regime (CR) or the Subsidized Regime (SR). The CR covers those who work and earn more than a set minimum level of pay, and the SR covers those who are considered poor, as determined by a means test. The SR offers a meager benefits package compared with that for the CR; for example, the SR offers only basic primary care services and coverage for catastrophic costs, whereas the CR offers comprehensive coverage. Critics say that the managed care model used by insurers covering both CR and SR limits access to care, restricts utilization, and has changed public providers’ behaviors to suit a competitive market scheme—all resulting in increased health disparities (Vargas et al. 2010). Meanwhile, proponents argue that this universal health insurance approach improved on the previous model covering SR subscribers by increasing access and reducing catastrophic health spending (Giedion and Uribe 2009). Although the government plans to implement policies to reach 100 percent insurance coverage of the population, no concurrent strategy is in place to address the great disparities inherent in this insurance scheme.

Vector-Borne Diseases

Colombia is also working to prevent and treat vector-borne communicable diseases, which are still prevalent and dangerous across about 20 percent of the country’s land area (Castillo-Riquelme et al. 2008). Vector-borne diseases include malaria, Chagas disease, and dengue fever, which are preventable with the proper insecticide treatment measures. However, prevention measures are not executed in a systematic, efficient way in Colombia (Castillo-Riquelme et al. 2008), and the bulk of the money allocated to vector-borne diseases is spent on treatment several years after contraction.

For example, sufferers of Chagas disease, which is typically transmitted by an insect, usually do not present with symptoms for at least a decade after exposure, and when symptoms do manifest, they often resemble other general cardiac illnesses (Cucunubá et al. 2017). Significant amounts of money, at levels that far surpass prevention efforts, are needlessly spent on diagnostic testing for and treatment of cardiomyopathy (deterioration of the heart muscle) and congestive heart failure (Castillo-Riquelme et al. 2008; Cucunubá et al. 2017). The government pays the majority of costs under Law 100, which grants universal health insurance coverage, but those with Chagas do not experience a positive health outcome (Castillo-Riquelme et al. 2008; Cucunubá et al. 2017). A comprehensive study by Cucunubá and colleagues (2017) concluded that a “a firm commitment from all levels of government and a coordinated, collaborative global response from international organizations and other stakeholders” are needed to successfully address the issues associated with Chagas disease in Colombia.

Colombia has had some success in its efforts to prevent vector-borne diseases, however. In 2013, it became the first country in the world to eliminate onchocirciassis (river blindness), an infection caused by a parasite, as verified by WHO (Cucunubá et al. 2017; Nicholls et al. 2018).

Violence

Colombia is among the leading Latin American countries in homicides, fueled by gang activity, civil strife, and general civil disobedience exacerbated by alcohol consumption. The murder rate in 2012 was 30.8 homicides per 100,000 people, compared with the US rate of 4.7 per 100,000 (UNODC 2013).

Law enforcement policies are in place to tackle gangs and paramilitary forces, and municipalities address the “culture of violence” through social outreach and restrictive policies that mitigate the effects of alcohol use (Ceaser 2007). For example, between 2004 and 2008, the government of Cali enacted three policies dictating the availability of alcohol. Studies showed that when alcohol sales were stopped earlier in the night, homicide rates dropped significantly (Sánchez et al. 2011). To further reduce the homicide rate, Colombia must address underlying social factors leading to multiple types of violence.

Overall, Colombia’s health policy issues reflect larger societal problems. Tropical diseases, health inequities, and violence must be curbed in conjunction with broader social and economic policies. The Colombian government under Alvaro Uribe, president from 2002 to 2010, began to address these issues (especially those related to violence), and his successor, Juan Manuel Santos, has followed suit.

Healthcare Reform

In 2015, Colombia underwent an economic recovery and transitioned toward an improved healthcare system, enacting important health-sector legislation, such as the Statutory Health Act (Act 1751) in basic welfare law and the National Development Plan (Act 1753), which builds on the General System of Social Security in Health and emphasizes key healthcare topics such as health system equity, access, quality, timeliness, trust, legitimacy, and sustainability. The revised health system includes features such as an integrated healthcare policy; an integrated healthcare model that comprises primary healthcare, a family and community healthcare focus, risk management, and a differential approach; further development of the Ten-Year Public Health Plan (2012–2021) in the country’s regions; creation of a unit to administer system resources; and strengthening of the pharmaceutical policy that was implemented in 2012. The Colombian government made peace with the armed rebel group Revolutionary Armed Forces of Colombia (known by its Spanish initials, FARC) in 2017 and in early 2018 was pursuing talks with another rebel group, the National Liberation Army (known by its Spanish initials, ELN), in a continuing effort to bring an end to Colombia’s ongoing civil strife (Charles 2018). As a result of the FARC talks, Colombia established a public health and postconflict policy jointly coordinated by the Ministry of Health and the Ministry for Post-Conflict. It also created a program for psychosocial and integrated care for victims of armed conflict, which guarantees the right to health and restoration of physical, mental, and psychosocial conditions according to relief and rehabilitation measures in the Victims Act (Charles 2018).

All Colombians have access to the same services as well as financial protection from excessive healthcare spending. Patient out-of-pocket expenses make up 14 percent of all health spending—one of the lowest proportions in Latin America and lower than the OECD average of 19 percent (OECD 2011).

In Colombia, the informality of the labor market presents a significant challenge to raising health system revenues. About half of the total health system funding comes from contributory sources (employer and employee payroll contributions). It has proven difficult to substantially increase this component of funding due to the size of the informal labor market: about 60 percent of the workforce. Informality narrows the contributory and tax bases and creates financial hurdles in all public sectors. These financial issues are exacerbated in the health sector, however, because of the Constitutional Court’s requirement to expand the range of services in the SR and make them equal to the CR.

Healthcare providers in Colombia tend to be largely concentrated in densely populated areas, with a notable increase in the number of private providers in those areas since the beginning of the twenty-first century. In contrast, people living in remote and rural provinces have very little choice of provider, even for simple outpatient care. Providers in these areas tend to be public providers and often struggle with issues such as high operational costs and difficulties in attracting and maintaining an adequate number of health professionals, which is likely to affect the quality of care provided.

Although unmet healthcare needs and visit waiting times have been significantly reduced, health insurers in Colombia have not yet transformed into effective, efficient purchasers of healthcare services. Payments to providers should reward quality of care and good health outcomes, rather than volume of services provided (Charles 2018).

KEY POINTS

• Although most developed nations have controlled the spread of communicable diseases, their health systems are strained by an aging population and widespread chronic disease. They must maintain an adequate, well-trained workforce of health professionals and integrate innovative technologies while keeping healthcare costs at a manageable level.
• Several factors affect rising healthcare costs in developed countries, including aging populations, rapid technological progress, the participation of women in the labor force, and public funding for healthcare.
• Developing countries experience a range of public health problems, from communicable, contagious diseases to incipient, invisible health effects from exposure to pollution. These nations must address the drivers of preventable morbidity and mortality if they are to increase economic growth.
• The lack of a sound health system infrastructure in most developing countries affects the spread of all diseases and impedes access to essential health services. Further, low government spending leads to low quality of care and creates long waiting times, constant shortages of essential drugs and supplies, and lack of trained staff.

CASE STUDY QUESTIONS

CASE STUDY 1

Based on your own research on climate change and its impact on public health, answer the following questions:

1. Why is addressing climate change important for public health?
2. What health policies and public health strategies could mitigate the effects of climate change?

CASE STUDY 2

Based on your own research of the global primary care workforce, answer the following questions:

1. Why is there a shortage of primary care providers worldwide?
2. What strategies might nation states adopt to expand their countries’ primary care workforce?

FOR DISCUSSION

1. What are the primary health policy issues in developed countries? In developing countries?
2. What are the specific health challenges in Japan?
3. What has Denmark’s health reform accomplished?
4. What is Canada’s health policy agenda?
5. What are the public health challenges facing South Korea?
6. What goals is China’s Healthy China 2020 attempting to accomplish?
7. What are the public health challenges faced by Ukraine?
8. What are the public health issues of Nigeria?
9. What factors do Colombia’s health policies target?

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CHAPTER 8

Quantifying the Quality Performance Gaps

INTRODUCTION

The objective of this chapter is to lay out a strategic planning framework driven by organizational performance considerations. This framework is based on setting of performance targets and then identification of gaps between the current status and the performance targets. In contrast to the conventional finance-centered planning process, this framework will be driven not only by financial performance targets but also by quality performance targets. Thus, any strategy adopted will have to balance the financial and quality aspirations of the organization both in the short run and in the long run.

GOALS AND OBJECTIVES

After reading this chapter, the reader should be able to:

1. Define performance measurement.
2. Describe the process of performance measure selection.
3. Describe the relationship between financial performance and quality performance.
4. Describe the equilibrium between financial performance and quality performance.
5. Describe why and how organizations should assess their performance status.
6. Describe the role of an organization’s values and mission in assessment of organizational performance.
7. Define the business case for quality.
8. Explain how performance targets could be set.

PERFORMANCE MEASUREMENT

As discussed previously in this text, it is helpful to have a good understanding of what is involved in the definition and achievement of organizational success. The next important step once success is envisioned is measurement; for without measurement, the organization will not know where it stands along the path to defined success. It may not even know how to communicate its vision of success to others. Therefore, this chapter will focus on measurement and quantification of performance expectations and performance gaps, which is necessary to communicate direction as well as distance to success.

The basic concepts of strategy and performance were previously introduced in this text, and the importance of finance and quality in organizational performance and success were reviewed. Performance measurement, not surprisingly, is often a poorly defined concept. Even if defined, the degree of variability involved in measurement of performance across a range of dimensions often makes organizational comparisons difficult. There exist models that have been used for measurement of performance in an organization with various dimensions of success, such as balanced scorecard,¹ performance prism,² and competing values framework.³

Lack of a clear definition of what constitutes a business performance measurement (BPM) system spans from features of such a system to its role and even its processes.⁴ The roles of a BPM can be captured in one or more of the following⁴:

1. Performance measurement
2. Strategy management
3. Communication
4. Behavior modification
5. Learning and improvement

The process of creating a BPM is captured in the following categories⁴:

1. Selection/design of measures
2. Collection/manipulation of data
3. Information management
4. Performance evaluation
5. System review

It is important to reemphasize that organizational performance is not synonymous with financial performance. If there ever was a time that finance was the only focus for business executives, that era has long passed, and modern business executives need to (and often do) look beyond immediate financial goals.

There is no dispute that a long-term goal of businesses is financial viability, which in turn may have somewhat different meanings depending on the for-profit versus nonprofit nature of an organization. As the business environment has grown in its complexity and sophistication, the path to long-term success may go through long periods of shifting priorities for the organization. Such priorities all aim to secure the organization’s future viability; these priorities may at times be at odds with financial objectives, but management recognizes that to win the war, it may have to lose a particular battle here and there.

By assuming such a position, management realizes that “enhanced competitiveness depends on starting from scratch and asking: ‘Given our mission, what are the most important measures of performance?’ ‘How do these measures relate to one another?’ ‘What measures truly predict long-term financial success in our businesses?’”⁵

Decline in product quality while management had its eyes on the financial ball has been blamed for the eventual downturn in the financial performance of some businesses.⁵ Today, the story of GM versus Toyota is common knowledge. Although this does not directly translate to medical care, local, regional, and national competition in health care is a fact of life today, and we are already seeing some international travel for medical care, the so-called medical tourism phenomenon.^6,7 For now, the main drivers are cost and value as defined earlier; in the future this may also include specific consideration of quality. As it is widely recognized that quality of health care is an important component of performance, two questions need to be answered:

1. How should quality be measured?
2. How can finance and quality be balanced?

Both of these questions can be answered by iterative processes similar to the eight-step process described for balanced scorecard⁸ and are discussed further in the following paragraphs.

Measures, Indicators, and Metrics

As described previously in this text, a quality measure is defined as “a mechanism to assign a quantity to quality of care by comparison to a criterion.”⁹ This definition was expanded to define measure as a mechanism to assign a quantity to a variable of interest according to a criterion. This is to ensure consistency of definition across different aspects of organizational performance.

As described previously, an indicator is defined as a composite of measures grouped together according to a consensus. Subsequently, a quality metric was defined as a composite of quality indicators that represent a specific dimension of quality. In the context of this text, different aspects of healthcare quality are grouped under six main categories represented by the six aims (dimensions) introduced by the Institute of Medicine (IOM). Therefore, there will be six groups of quality indicators.

Finally, a performance metric is defined as a summary representation of a group of indicators that are closely related to a broad aspect of organizational performance, such as each of the six IOM aims for a group of operations (Figure 8-1).

The example of labeling medication bags with patient’s name and medical record number was used to illustrate the grouping of measures into indicators and the use of indicators to create metrics. It must, however, be emphasized that the organization’s management and board of directors will determine what indicators and metrics will best provide them with quality information they need.

Financial Performance Metrics

There exist multiple financial metrics for measurement of performance and to aid decision making during strategic planning. These metrics are strongly related to other financial indicators and to more subtle financial measures in a financial performance measurement system. As part of the discussion of interactions of finance and strategy, it is important to recognize the high-level financial metrics. Two of these, NPV and IRR methods, were discussed earlier in this text, and that discussion will not be repeated here. This context for organizational performance has evolved and has been refined over a long period of time. To a large extent, the treatment of quality performance has yet to go through a similar evolution and refinement.

FIGURE 8-1. A hierarchical view of quality measures, indicators, and metrics. A metric corresponds to one or more of the IOM aims. An organization can create an aggregate value of the metrics as “top quality metric” and define it as appropriate to represent its quality performance level. Of course, boundaries have to be defined, and the metric must have true meaning. This will allow an organization to monitor periodically its performance with respect to quality.

Quality Performance Metrics

Like most other things in life, outcomes are the bottom line with respect to measurement of success along the path of quality improvement. However, without a careful analysis of the link between access, process, and structure of care, improvements in outcomes seem unattainable.

Fortunately, this important relationship has been recognized, and such relationships are being actively studied. Various government and nongovernment organizations are investigating a number of clinical (process) and organizational (structure) variables to determine their role in improvement of outcomes. The catch is that there are too many variables, and their weights in how they affect outcomes are different. Additionally, the ultimate net effect of modifying these variables is confounded by the prevalence, acuity, and natural course of different illnesses.

As a result, the organization that plans to include quality as a major performance metric must have a deep understanding of the related indicators and measures, its patient population, and its case-mix before it can optimally allocate its resources and deploy them to specific tasks. Quality measures must clearly be linked to modifiable elements in domains of access, process, or structure so that an intervention could be introduced as needed. As discussed in the “Measures, Indicators, and Metrics” section, indicators are groups of measures that are closely related under a domain or dimension of care, and metrics are constructed from groups of indicators that address one or more domains or dimensions of care for operational categories or the entire enterprise. To build the aggregate indicators and eventually metrics, the organization’s management should develop a framework that adequately represents its patient population and the range of diagnoses and procedures that the organization covers according to their frequency and level of importance. Unfortunately, such a system is not available “off the shelf” and must be developed by the organization’s management. Successful execution of this important step will create meaningful, reliable, and valid metrics for quality that can be used and understood by the executives and the board of directors. The potential is there for complexity and excessive detail in pursuit of this important aspect of organizational performance. Consequently, each organization will have to decide what areas within its clinical services will receive the highest priority and focus in building its quality performance system. To try to cover all areas with maximum detail will overwhelm the resources of the organization and therefore will defeat the overall purpose of introducing quality alongside finance as an important basis for organizational performance.

In addition to creation of aggregate metrics for the six IOM aims, a healthcare organization may create a top metric that is an aggregate of all quality metrics. To be meaningful, such a metric must represent the weighted sum of the IOM metrics and must be evaluated over time within the organization to ensure its reliability and validity in representing the aggregate level of quality within the organization. The weighting must also be determined according to the needs of the organization. For example, because safety has life and death consequences, it may carry more weight than efficiency. Organizations, depending on the population they serve and their for-profit, nonprofit, or government status, may have different priorities, which may be reflected in the weights they give to the six IOM aims.

An important caveat is that such a top metric will not be appropriate for comparison of one organization with another. Rather, it will be a measure of the internal state of quality and will serve to guide the organization’s direction along its quality path. As such, it will be of use to board members and executives as part of the organization’s navigation system. If properly linked to real-time data, this metric can be updated frequently and serve as one of the vital signs of the organization’s own health. Should there be an unexpected change, management can trace back the source of the deviation and address it accordingly using drill down functions to get to lower level metrics, indicators, or even measures. The IOM metrics can also be treated the same way; however, at times a single metric may be more desirable than six.

Later in this text, organizational feedback and control will be discussed in more detail.

Determination of Measures of Performance

What to measure and how to measure are the key questions when it comes to measurement of performance. There exist multistep processes that add more detail on how this can be done, the most popular one being the balanced scorecard.^8,10

Researchers suggest that the best approach would be to start with five generic measures: technical quality, customer satisfaction, speed, product cost reduction, and cash flow from operations, ensuring they are¹¹ (1) integrated, hierarchically and across business functions, and (2) based on a thorough understanding of the organization’s cost drivers.

Upon closer examination of these five generic measures, one may conclude that these five actually belong to two broader categories of measures: financial measures (speed, product cost reduction, and cash flow from operations) and quality measures (technical quality, customer satisfaction). Of the two performance categories of finance and quality, the former has been the center of attention of executives and investors for a very long time. Therefore, the measures for financial performance have become well developed and accepted. In contrast, especially in health care, quality performance measures are still evolving. Fortunately, in recent years research in this area has picked up some momentum and has grown in sophistication.

From a practical point of view, quality measures must meet the general requirements of a business performance measure. Although this is a necessary condition, in the case of health care it is not sufficient; more is expected of a healthcare quality performance measure. To that end, the Agency for Healthcare Research and Quality has established a clearinghouse that evaluates proposed healthcare quality measures based on a set of requirements. This entity is called the National Quality Measure Clearinghouse, or NQMC.⁹

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FIGURE 8-2. Measure design process.
Source: Adapted from Neely et al.¹²

To develop a properly and fully operationalized performance measure, a process must be in place. There are many such processes described in the literature, and one that has the most relevant features is presented here¹² (Figure 8-2).

Selected measures must be clearly defined and owned. The link between the measure, related outcomes, and consequences of success and failure with respect to the measure must be firmly understood. Finally, intervention with respect to the measure must be possible.¹²

Linking Financial and Quality Performances

When quality measures are selected and incorporated into the performance model for an organization’s quality, an estimate of the impact of the measures on other performance indicators for the organization is useful in the evaluation of the remedial actions necessary for overall performance. Although this will establish a link between quality and finance, it does not necessarily mean that the financial bottom line will dictate the course of action. Rather, it means that management will be able to foresee the consequences of the alternative actions and determine the most cost-effective alternative given the conditions in the business environment. In other words, a value can be quantified for quality that can help with decision making; there is supporting evidence in the literature for the usefulness of such efforts.¹³

This is not dissimilar to the conflicts between marketing and finance¹⁴ and should be resolved in a similar fashion.

Equilibrium of Finance and Quality in the Strategic Plan

With the recognition of the bidirectional link between quality and finance in a healthcare organization, it follows that any changes to one can have an echo in the other. To determine the net result of a change in overall performance status of the organization, one must determine the point where the results of echoes will reach equilibrium. This state of equilibrium will give a much more accurate picture of the organization’s performance status as a result of a strategy, and alternatives could be evaluated more rigorously.

To implement such a model, the consequences of strategic adjustments to affect quality performance on the organization’s financial performance must be determined along with any potential feedback that might affect quality performance. The opposite is also true in the case of changes made that affect financial performance that in turn may have consequences on quality and subsequent feedback to financial performance.

The following example will illustrate this effect. Suppose that due to a difficult economic environment, an organization decides to reduce its nursing staff to save cost and improve the bottom line. If such an action results in deterioration of quality (increased medication errors or increased rate of preventable mishaps), quality may decline, and the organization will likely lose more in nonpayment from the payers than it will save. This in turn will further jeopardize the financial bottom line resulting in further decline in quality. Overall, this will have been a bad decision. However, if a decrease in nursing staff is judicious or is coupled with other measures that ensure maintenance of the quality level (through technology or other less expensive alternatives), the effect on quality may be negligible, making the move strategically sound.

Although the implications of this example may appear obvious, similar dynamics in more complex situations may well be overlooked during the planning process. Hence, the point of this text is that in very much the same way that the financial impact of any strategic decision is measured, the quality impact of any such decision must also be considered.

ASSESSMENT OF CURRENT QUALITY PERFORMANCE STATUS

Assessment of quality involves assessment of access, process, structure, outcomes, and patient experience.^15,16 For practical purposes, the IOM’s definition of quality and the six related aims are appropriate areas that deserve primary focus.¹⁷ It is incumbent upon management to systematically examine the quality of care delivered within the organization with respect to those six dimensions using instruments that are valid and reliable. Other characteristics of such an instrument are listed in Figure 8-2.

Other elements in quality will come to light when one looks at the processes in terms of overuse, underuse, and misuse.¹⁸ Evaluation of error and defect rates in the organization by auditing processes will also reveal valuable information about quality of care delivered. These are different vantage points that provide invaluable information that could be used to address the underlying causes of the observed effects.

Useful indicators that reflect performance in each of those areas must be identified and validated by the management and then processed into relevant and clear quality indicators on the dashboard or quality report card. This is an incremental process and should always be considered as a work in progress given that the flow of new discoveries and treatments is a fact of life in health care. A measurement framework that consists of measures, indicators, and metrics with respect to organizations operations, as well as domains and dimensions of quality, was discussed elsewhere in the text. This framework must be implemented in conjunction with a performance presentation and reporting framework to enable the organization access to performance data as shown in Figure 8-3.

Insight into an Organization’s Standing on the Quality Scale

A well-designed quality performance measurement system is not only able to identify and report variances but also is useful in identifying contributing causes. Management must prioritize the variances and problems in terms of their impact on mortality, morbidity, financial bottom line, and other factors that affect the overall effectiveness of the organization in provision of quality care and then initiate corrective action to address the problems.

Focusing of efforts on quality and quality improvement in a healthcare organization requires the broad participation of the rank and file of the organization. The only way to ensure that the organization as a whole is appreciative of and sensitive to the quality of care it provides would be to engage all parties involved.

FIGURE 8-3. The quality measurement framework must have a matching framework for presentation and reporting of the performance data. Only then can the collected data be used to calculate composite metrics for each of the six IOM aims and even a single metric of quality if the organization so chooses. There is evidence in the literature that active participation of nurses may play a significant role in improvement of outcome, potentially at no additional cost.¹⁹

Lower levels will be concerned with what happens in their own domains, but executives and boards must be involved in all aspects of quality in the same way they are concerned with the overall financial performance of the organization.

Reconciling Values, Mission, and Vision with Quality Status of the Organization

Values and mission are the foundation of an organization’s identity. They are the fundamental motivation and clarity of purpose that constantly guide all employees and members of the organization toward the same goals. The organization’s vision, which management wants all to participate in achieving, is constructed on a foundation of values and mission. These foundational principles should provide a clear message as to what the organization’s attitude and purpose is with respect to the quality of care it delivers. It would not be surprising to find that the employees of many healthcare organizations are not aware of the values, mission, or vision of their respective organizations.²⁰

For an organization effectively to improve the quality of care it delivers, not only is it necessary to reconcile the values, mission, and vision statements with the organization’s quality status and goals, but also it is imperative that all employees be familiar with these statements, as the statements will provide a valuable sense of direction to employees in the daily performance of their duties.

Beyond Regulatory Requirements: The Business Case for Quality

It is possible that an organization may satisfy the regulatory requirements for quality. It may even be possible that the organization may not perceive any real quality threats vis-à-vis its competitors. Should the organization continue with its quality improvement initiatives? Should it set goals beyond what is required ? How can the investment be justified?

If a healthcare organization seeks to improve its quality of care beyond the minimum requirements, both regulatory and competitive, then expecting a return on the investment in that improvement would seem logical. This expectation and associated results have been studied, and consequently, a “business case” for quality has emerged.

A business case for a healthcare quality improvement intervention exists if the organization realizes a financial return on the investment required for the intervention in a reasonable time frame using a reasonable rate of discounting. This return may be in the form of profits, reduction in losses, or avoided costs. A business case may also exist if the organization believes that a positive indirect effect on its function and sustainability will accrue within a reasonable time frame.²¹

One of the most influential forces in the healthcare quality movement is, no doubt, the payment system. In order for healthcare organizations to provide higher-quality care, they must make specified investments and commitments. Where chronic diseases and third-party payers are involved, the benefits of these investments might not accrue directly to the healthcare organization making those commitments. A deliberate study of the current environment and the mechanisms by which quality improvement efforts can potentially be rewarded or punished is a topic that involves all parties in the U.S. healthcare system, but more importantly, it involves the payers and policy makers.

Pay-for-performance is an attempt at aligning the incentives between payers and providers, including healthcare organizations, to adopt quality-enhancing interventions. This applies especially where there may exist a negative business case for quality from the perspective of the provider; however, the payer may benefit from the intervention. In these circumstances, a business case can be made if the sum of these two effects is positive. Consequently, a pay-for-performance agreement can be made between the payer and the provider, and therefore the intervention can be adopted.²² It is imperative to understand that for such arguments to be made, the costs of quality-enhancing interventions, including investment and operating costs of implementation as well as the changes in revenue and costs that result from the interventions, must be carefully tracked and projected.^23,24

ESTABLISHING QUALITY PERFORMANCE TARGETS

The first priority after identifying the measures and developing the indicators and performance metrics that will be used to declare success or failure is to review the organization’s standing for each and every one of the quality indicators selected. This will establish the point of origin from which the organization hopes to advance.

The next step is to establish targets. The usual exercises of selection of targets as part of any strategic planning process apply here as well. Targets must be derived from an organization’s mission and be relevant to its vision. The targets must take into account a realistic application of an organization’s capabilities and must also recognize (and exploit) the opportunities that the organization faces. Finally, they must also realistically acknowledge the internal weaknesses and external threats facing the organization.

Overreaching targets that are incompatible with an organization’s capabilities will only serve to disappoint or frustrate, and setting of too modest a target will result in an organization falling far short of its potential. Therefore, a thorough exercise in analysis of strengths, weaknesses, opportunities, and threats (SWOT analysis) is essential. In addition, the quality targets must be reviewed in light of their impact on overall outcomes indicators such as mortality. This is one way that management can prioritize where it wants to allocate resources. Synergistic interactions among targets must also be examined.

The organization will have to be cognizant of at least three distinct levels for quality performance, or any other performance metric for that matter. The first level (A) is the minimum requirement as set by regulations or otherwise below which there is no point in remaining in the business. The second important level (B) is where an organization’s competitors in that market stand and their relative distance to where the organization is. The third level (C) is where the organization’s ideals picture it to be. Thinking in these terms will allow the organization’s board and management to find a sense of direction by surpassing the minimum requirements, setting their posture relative to competition, and moving toward the ideal. This process, often referred to as positioning, is central to the long-term viability of the organization.

When the current state is determined and targets are set, the gaps will determine the time frame and resources needed to undertake the tasks that will result in achieving the targets. Once the organization has identified its current position and determines its existing (and desired) relative position to the competition, it can position itself in the community or marketplace. In many industries, quality (a subtype of differentiation) is one of the three generic recipes for success, the other two being cost leadership and focus.²⁵ This may be different in health care, as it is not clear whether the informed consumer will choose lower quality over cost. A safer strategy would be to match or surpass the competition while containing cost by way of improved productivity. At times, circumstances may necessitate matching or surpassing the competition even at greater cost in the short term, although unless this is coupled with increased productivity or other cost recovery measures over the long term, this strategy will not be sustainable. Figure 8-4 depicts these dynamics.

In looking at Figure 8-4, the reader is cautioned against simply considering productivity as a function of outputs given the inputs of the organization. An instance of this definition that is most widely used by healthcare organizations uses the number of encounters, discharges, or patients served as the output. This interpretation of output in this definition is a narrow one at best and can be misleading. To measure productivity properly, quality must be factored in when output is measured.

FIGURE 8-4. Relationship between quality, cost, and productivity. A, B, and C are iso-quality curves plotting organizations that deliver the same quality of care at different average costs. The higher the cost, the lower the productivity. The dashed line denotes a path to improvement of quality that is coupled with an increase in productivity.

To demonstrate the flaw in the above definition, consider a hospital that serves n patients per year, with a cumulative mortality and morbidity rate of m. This hospital finds out that by cutting certain costs, it can serve the same n patients per year at a 5% reduction in its use of resources (i.e., at 95% input). The drawback is an increase in cumulative mortality and morbidity rate. Using the common instance of the definition (i.e., number of patients n served per year over input), one can show an increase in productivity (Equation 8-1).

Equation 8-1. Increased productivity P as a result of a reduction in input.

However, this comes at a cost: decreased quality. It must be emphasized that oftentimes, such changes are not linked to changes in quality. It is, therefore, appropriate and even necessary to consider the role of quality in measurement of productivity.

By looking at Figure 8-4, one can see that different organizations that share a similar quality performance level will fall on a curve plotted against average cost and productivity. Achieving a higher level of quality for one organization would mean moving from one curve to the next one. Depending on an organization’s strategy, this could result in increased average cost (the y axis will represent incremental average cost) at the same level of productivity or a smaller increase in cost if combined with increased productivity. In rare instances, it may even be possible to have no increase in cost by simply improving productivity and at the same time achieving a higher level of quality.

Other factors that influence these curves and movement from one to another include cost recovery strategies, competition, and time frame envisioned for the change.

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