Transcript The Role of the Private Sector in Health in Africa

Globalization of Healthcare
From Crisis to Opportunity
Chicago June 1, 2010
Globalization of Healthcare
Outline
•
Global Marketplace for Healthcare
•
Major Trends that Affect the Market
•
Way Forward
2
Global Marketplace for Healthcare
Outline
•
From Local to Global
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Size of Global Market
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Sub-markets
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Economic Zones
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Aggressive Posturing by Emerging Markets
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Cross-border Demand
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Firms Strike Back (Porter’s Five Forces)
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How Big is the Global Marketplace for Healthcare (IMF)
Rounding Up
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Global GDP US$55 trillion
• Global Health Spending US$5.5 trillion
• Spending on Health in all Low Income US$550 billion
• Spending on Health in Africa US$25 - 30 billion
4
The Devil is in the Detail (IMF)
Rounding Up
•
US GDP US$16
trillion
• Global Health Spending US$5.5
trillion
• Financial Bailout US$3.0 trillion
• US Health Spending US$2.7 trillion
• New Health plan
US$800 billion
• US derivatives markets
US$666 trillion
5
Binding Constraints
Fiscal Space •
Overall level of GDP
• Share of GDP channeled through the public sector
 Share of public sector resources allocated to health care
• Share of health expenditure in public sector used to pay
for health workers and health education
• Share of GDP channeled directly through households
 Household spending of health care
• Share of private expenditure on health care devoted to
health workers and health education
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Sub Markets
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The Case for Investing Across Subsectors
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The Case for Investing Health Services Subsector
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Economic Zones
HiA Facility
US$1 Billion Total
• 500 million loans
• 300 million equity
• 200 million for TA
Other Zones
• EU
• Eastern Europe
• North America
• South America
• Middle East
• South Asia
• East Asia
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Expanding Beyond Borders
Multi-nationals
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Old World
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Major US and European Companies
Brave New World
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South Africa (Netcare)
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India (Apollo)
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Cross Border Demand
What/Where
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Medical Tourism
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US (Mao Clinic, Leahy Clinic, Cleveland Cl)
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Thailand (Bumrungrad)
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Jordan (King Hussein)
Beyond Tourism
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Hong Kong
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Singapore
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How Firms React to Competitive Threats
Michael Porter’s Five Forces
Major Trends that Affect The Market
Outline
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Opportunities
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Expansion in Health Insurance
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Global Financing Mechanisms
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Epidemiological shits
Threats
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Financial Crisis
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Technological Arms Race
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Human Resources Crisis
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Scaling up From 40 Million to 4 Billion: Who is Doing it?
100 Years of Reform in the US – New York Times
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It is Popular Everywhere
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The New and the Old Players in Health Financing
So Four Years Ago Things Looked Rosy
7 years of 5% ave. growth …
Annual GDP Growth (%), Sub-Saharan Africa, 2000-06
… with reducing inflation …
Annual CPI (%), Sub-Saharan Africa, 2000-06
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The Sky Was the Limit
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Then Suddenly Everything Changed
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The World Economy went into a Tail Spin
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Normal Market Response
But This Time that Didn’t Work
Consumer Confidence Rapidly Collapsed
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New and Realistic Approaches were Needed in Health Care
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As in the Past Donor Funding is Already Affected
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Need for Renewed Political Commitment to Public Spending
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Ghana
Chad
Cote d'Ivoire
Kenya
15
Namibia
Swaziland
Senegal
Comoros
Mauritania 10
Mozambique
Sudan
Cameroon
Congo, Rep. 5
Equatorial
Guinea
Nigeria
Gambia, The 0
1
Togo
Gabon
Sierra Leone
-5
Burundi
Eritrea
Guinea
Central Afr. Rep.
Zambia
Percentage Point Change in Public Health Expenditure as %
of National Budget (2000-2006) in Sub-Saharan Africa
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5
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9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45
Average
25. Lesotho
26. Zimbabwe
27. Seychelles
28. Ethiopia
29. Madagascar
30. Benin
31. Angola
32. Guinea-Bissau
33. Tanzania
34. South Africa
35. Mauritius
36. Mali
37. Uganda
38. Cape Verde
39. Sao Tome & Pri
40. Congo, DR
41. Burkina Faso
42. Botswana
43. Malawi
44. Liberia
45. Rwanda
Median
29
Instead Ministers of Finance Recently Rescinded
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Somalia
0.0
Equatorial Guinea
Madagascar
Liberia
Congo
Sierra Leone
Comoros
Mauritius
Burundi
Libyan Arab Jamahiriya
Mauritania
Central African Republic
Niger
Democratic Republic of Congo
Gabon
Burkina Faso
Algeria
Mali
Morocco
Public spending on health as % of GDP
Cameroon
Benin
Nigeria
United Republic of Tanzania
Sudan
Kenya
Egypt
Cape Verde
Angola
Senegal
Eritrea
Seychelles
Rwanda
Ghana
Ethiopia
Tunisia
Guinea
Zambia
Mozambique
Swaziland
Botswana
Lesotho
Côte d'Ivoire
Guinea-Bissau
Djibouti
Chad
Namibia
Gambia
Uganda
Zimbabwe
South Africa
Malawi
Togo
Sao Tome and Principe
% of GDP
Need to Capture the Very Valuable Private sector Resources
Figure A2.1.3.1Health spending by Source as % of GDP
Private spending on health as % of GDP
12.0
10.0
8.0
6.0
4.0
2.0
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This is Not the First Financial Crisis
• Great Depression 1930s
• Oil Crisis of the 1970s
• Inflation 1980s
• East European Crisis (1990-1997)
• East Asian Crisis (1997-1998)
• Argentinean Crisis (2001)
• Russian Crisis (1997-1998)
• Peruvian Crisis (1988-92)
• Mexican Crises (1980s and 1990s)
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In Healthcare What Goes Down always Comes Back Up
World Bank Lending
• From US$ 20 billion
• To US$100 billion
US Health Spending
• Up 100 Billion /year
Medical Technology Arms Race
Hi Tech
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Human Resources Crisis
Outline
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The Way Forward
Discussion
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Strength in Numbers
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Role of the World Bank Group
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Role of the IHF
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Role of Others
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