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\kerning2 \dbch \af4 \hich \af4 \loch \f4 \lang9 \langnp9 the role of government in
to health economy develop}{\fs22 \kerning2 \dbch \af4 \hich \af4 \loch \f4
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\fs21 \kerning2 \dbch \af2 \hich \af0 \loch \af0 {\fs22 \kerning2 \dbch \af4
\hich \af4 \loch \f4 \lang9 \langnp9 Healthcare performance is strongly dependent
on the economy, but also on the health systems themselves. This link should not be
underestimated. }{\fs22 \kerning2 \dbch \af4 \hich \af4 \loch \f4 \lang9
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\dbch \af2 \hich \af0 \loch \af0 {\fs22 \kerning2 \dbch \af4 \hich \af4 \loch
\f4 \lang9 \langnp9 Investment in health is not only a desirable, but also an
essential priority for most societies. However, our health systems face tough and
complex challenges, in part derived from new pressures, such as ageing populations,
growing prevalence of chronic illnesses, and intensive use of expensive yet vital
health technologies.}{\fs22 \kerning2 \dbch \af4 \hich \af4 \loch \f4 \lang9
\f4 \lang9 \langnp9 Moreover, we must deal with higher expectations of citizens and
resolve persistent inequities in access and in health conditions among different
groups. Little wonder that the issue of how to ensure the financial sustainability
of health systems while making a positive contribution to macroeconomic
performance, has moved to the top of the policy agenda across the OECD area. Much
of the work undertaken in the OECD Health Project has aimed at providing
policymakers with the evidence they need to promote more value for money in the
health sector, while ensuring universal access, equity and raising quality of care.
We have learned a lot, though there is more to discover.}{\fs22 \kerning2 \dbch
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\kerning2 \dbch \af4 \hich \af4 \loch \f4 \lang9 \langnp9 A basic message has
emerged: investments in health and the design of health financing policies should
be addressed in terms of the interaction between health and the economy. Just as
growth, income, investment and employment are a function of the performance and
quality of the economic system, its regulatory frameworks, trade policies, social
capital and labour markets, etc, so health conditions (mortality, morbidity,
disability) depend not just on standards of living, but on the actual performance
of health systems themselves. Let us go over some of these interactions Health
performance and economic performance are interlinked. Wealthier countries have
healthier populations for a start. And it is a basic truth that poverty, mainly
through infant malnourishment and mortality, adversely affects life expectancy.
National income has a direct effect on the development of health systems, through
insurance coverage and public spending, for instance. As demonstrated in 1997 by
the WHO Commission on Macroeconomics and Health for a panel of 167 countries, while
health expenditures are determined mainly by national income, they increase faster
than income.}{\fs22 \kerning2 \dbch \af4 \hich \af4 \loch \f4 \lang9 \langnp9
\par }\pard \plain \ql \li0 \ri0 \lisb0 \sa200 \lisa0 \sl276 \slmult1 \widctlpar
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\hich \af0 \loch \af0 {\fs22 \kerning2 \dbch \af4 \hich \af4 \loch \f4 \lang9
\langnp9 Another well-known relationship is an institutional one. Take the case of
tobacco use. Efficient fiscal systems in the OECD have meant that increases in
taxes on tobacco could reinforce other public health policies like rule-based
restrictions on smoking in public places. Some countries have gone very far in this
respect, with Ireland actually banning smoking in its famous pubs! Such courageous
initiatives cannot succeed without institutional backing, whether legalistic or
otherwise.}{\fs22 \kerning2 \dbch \af4 \hich \af4 \loch \f4 \lang9 \langnp9
\langnp9 Another example of how institutional arrangements can help is through
universal provision of insurance coverage, which a larger fiscal base and a small
informal sector help to attain. Globalisation in general, and trade liberalisation
in particular, also affect healthcare, via constrained pricing and trade policies
of pharmaceuticals, and the need for enhanced health surveillance across borders
and populations.}{\fs22 \kerning2 \dbch \af4 \hich \af4 \loch \f4 \lang9
\f4 \lang9 \langnp9 The effects of health on development are clear. Countries with
weak health and education conditions find it harder to achieve sustained growth.
Indeed, economic evidence confirms that a 10% improvement in life expectancy at
birth is associated with a rise in economic growth of some 0.3-0.4 percentage
points a year.}{\fs22 \kerning2 \dbch \af4 \hich \af4 \loch \f4 \lang9 \langnp9
\par }\pard \plain \ql \li0 \ri0 \lisb0 \sa200
\lisa0 \sl276 \slmult1 \widctlpar \aspalpha \aspnum \adjustright \lin0 \rin0
\itap0 \fs21 \kerning2 \dbch \af2 \hich \af0 \loch \af0 {\fs22 \kerning2 \dbch \af4
\hich \af4 \loch \f4 \lang9 \langnp9 Disease hinders institutional performance too.
Lower life expectancy discourages adult training and damages productivity.
Similarly, the emergence of deadly communicable diseases has become an obstacle for
the development of sectors like the tourism industry, on which so many countries
rely.}{\fs22 \kerning2 \dbch \af4 \hich \af4 \loch \f4 \lang9 \langnp9
\langnp9 Policy choices cannot be taken lightly. Health financing, through out-of-
pocket expenditures, is inequitable and can expose whole populations to huge cost
burdens that block development and simply perpetuate the disease/poverty trap. On
the other hand, health systems need financing and investment to improve their
performance, yet this need cannot in turn impose an unfair burden on national
spending or competitiveness.}{\fs22 \kerning2 \dbch \af4 \hich \af4 \loch \f4
\lang9 \langnp9 \par }\pard \plain \ql \li0 \ri0 \lisb0 \sa200 \lisa0 \sl276
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\kerning2 \dbch \af2 \hich \af0 \loch \af0 {\fs22 \kerning2 \dbch \af4 \hich
\af4 \loch \f4 \lang9 \langnp9 This is a very delicate balance for policymakers to
have to strike. There are other challenges too. For instance, in high-income
countries, the lack of benefit portability associated with employer-provided health
insurance often constrains worker mobility, so impeding the efficiency of labour
markets we all want to see. And there are indirect effects on other spending
decisions, both by households and governments. In other words, if you want to raise
investment in health spending, you may need to find cuts elsewhere in the economic
system.}{\fs22 \kerning2 \dbch \af4 \hich \af4 \loch \f4 \lang9 \langnp9
\langnp9 As policymakers with public responsibilities, we must never forget that
decisions taken in one sphere affect conditions, stakeholders and policies in
another. We all want better health systems, but the impact of health on the economy
should not be underestimated. Our challenge is to harmonise health and economic
policies to improve health outcomes, of course, but also to minimise any negative
impacts while promoting synergies wherever possible. We cannot do this alone and
need the international evidence and shared learning that organisations like the
OECD can provide . }{\fs22 \kerning2 \dbch \af4 \hich \af4 \loch \f4 \lang9
\f4 \lang9 \langnp9 \par }}

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