Health and the SDGs: Out of the doldrums, heading for the rapids


This page in:

Until quite recently, things were looking good for health in the SDG process. It wasn’t always so. Two and a half years ago, at the time of the high-level panel report on the SDGs, the health SDG discussion was actually stuck in the doldrums. Health was the only area to get less column inches than in the MDGs. The proposed goals and targets were pretty much business as usual. The only real hint of any new thinking was the addition of a target to reduce non-communicable diseases, but it was subsumed within an old target and looked very much like an afterthought.

Then much to everyone’s surprise, the health SDGs got an infusion of new energy, and in crept the issue that everyone in the health field had been talking about for some time: universal health coverage (UHC).

UHC is, in fact, the obvious umbrella for all the health SDGs, combining a concern that everyone—poor and rich alike—gets the health services they need, with a concern that getting needed health services doesn’t cause families undue financial hardship.

Jumping on the tailwinds of WHO/World Bank Ministerial-level Meeting on Universal Health Coverage in February 2013 in Geneva, the World Health Organization and the World Bank got busy consulting with civil society and technical experts, and ended up proposing two indicators, one getting at the first side of the UHC coin (service coverage), the other at the second (financial protection). The latter was to be captured by looking at household health expenditures, i.e. out-of-pocket spending on health care. The Bank and WHO proposed counting the fraction of households whose annual out-of-pocket spending might be said to be ‘catastrophic’ (exceeding, say, 10% or 20% of household income) and the fraction whose spending was ‘impoverishing’ (sufficiently big to push the household below the poverty line). These measures were introduced some time ago, and had already been widely used in studies of specific countries and regions, as well as in global studies.

UHC and the SDGs are natural bedfellows. The SDGs have as their objectives “to end extreme poverty” and “to ensure that every person achieves a basic standard of wellbeing”. The financial protection angle to UHC speaks directly to this theme. As Kaushik Basu, chief economist at the World Bank, put it: “…high levels of impoverishment, which happen when poor people have to pay out of pocket for their own emergency health care, pose a major threat to the goal of eliminating extreme poverty,”

Out of the doldrums. Sailing nicely?

Well no, actually. The SDG winds recently changed, this time seemingly pushing the health agenda not into the doldrums but headlong toward the rapids.

The process by which the SDG indicators are finalized is, like everything to do with the SDG process, planned as a broad-based bottom-up process. Technical experts in the relevant field and civil society offer advice, but the ultimate decisions are taken by representatives of the national statistical offices of 28 countries, who pore over and take decisions on literally hundreds of indicators from 12 broad areas as diverse as poverty and “stability and peace”. A daunting task, especially given the tendency for sectoral experts to use terminology that even clever people like statisticians may find quite impenetrable. Not surprising perhaps, then, that an odd decision might emerge.

And emerge it did. It seems the World Bank-WHO proposed indicator for financial protection didn’t resonate with the statisticians. The proposal is to replace it by “the number of people covered by health insurance or a public health system per 1,000 population.”

On the face of it, the replacement seems to make sense. Covering people by health insurance or by a public health system means ensuring they can get health services without financial hardship, surely? And it’s easy to count who’s covered and who isn’t covered, surely?

4 reasons why assessing financial protection isn’t that simple

First, everyone everywhere has recourse to their health ministry’s network of health facilities, i.e. their country’s “public health system”, where prices are zero or at least heavily subsidized. So every country in the world would score 100% on the proposed indicator. Makes monitoring easy, but hardly very informative!

Second, there’s a difference—often a big one—between theory and practice. According to their national policies, both Azerbaijan and the UK operate a national health service (NHS) health system, financed largely through general revenues, with patients paying nothing out-of-pocket at the point of service. That’s the theory. In practice, the share of total health spending in these two countries financed by out-of-pocket payments differs dramatically: in Azerbaijan it’s more than 70%; in the UK, it’s under 10%. We could go badly wrong, then, if we tried to assess financial protection by looking at what’s promised rather than at what people pay in practice.

Third, in many countries, there are formal health insurance schemes that sit on top of the “public health system”. In countries like Brazil and S Africa, they’re voluntary private health insurance schemes. In many countries, they’re social health insurance schemes where formal-sector workers (and their employers) make mandatory contributions, and other groups often have the chance to enroll voluntarily. In some cases, other groups, such as the poor and near-poor, are enrolled at the taxpayer’s expense. This additional layer of coverage creates a gap between those without the additional layer and those with it, with people in the latter group, who are often the better off, getting access to different facilities and/or paying different amounts out-of-pocket. A tiered segmented system would do well in terms of the proposed new indicator—a lot of people would have coverage by both the public health system and a health insurance scheme. But it’s likely to perform badly when assessed in terms of UHC, i.e. everyone getting the services they need, and people not being exposed to financial hardship when they seek care.

Fourth, affiliation to an insurance scheme is not necessarily a good indicator of financial protection.  Korea reached 100% population coverage in 1989, but in that year about 65% of total health spending came from out-of-pocket payments.  By 2007, this share fell to 38%, suggesting an improvement had occurred with no change in population insurance coverage (still 100%). And as China saw in the early days of its rural health insurance scheme, expanding formal insurance coverage can actually increase out-of-pocket payments. So greater scheme affiliation doesn’t necessarily mean better financial protection; and protection can get better (or worse) without any change in insurance coverage.

Time to change tack

A good monitoring indicator would measure the objective of interest and avoid risking encouraging countries to implement misguided reforms because it would make them look good on SDG performance. The proposed indicator does neither.

One option would be to stick with what was originally proposed: count the fraction of the households whose annual out-of-pocket spending might be said to be ‘catastrophic’ and/or ‘impoverishing’. On the plus side: the indicators measure what we want to measure; and they’re easy enough to compute with a household expenditure survey that contains information on out-of-pocket spending and total household income (or expenditure or consumption), and a poverty line. On the minus side, it’s probably true they’re a little harder to get your head round than, say, “the fraction of the population with access to safe water”, and the Bank and WHO for sure could have done a better job at explaining them.

Another option that has been suggested as a compromise is to go for something that’s very accessible but still gets at the idea we need to know how much people spend in practice: “household health expenditure as a share of total household income (or total expenditure or consumption)”. This can also be computed easily from a typical household expenditure survey. It’s simple—simpler than catastrophic and impoverishing spending—and it correlates quite highly with the incidence of catastrophic spending.

It’s true this alternative indicator correlates less strongly with impoverishing spending, because it doesn’t tell us whether it’s the near poor or the well-off who spend out-of-pocket, and therefore whether it’s a large or small fraction of the population that’s plunged into poverty because of the money they spend getting health care. But that’s not an insurmountable problem. Just as in the MDGs, there will inevitably be supplemental indicators to the main indicators in the SDGs. So we could make ‘impoverishing expenditures’ a supplemental monitoring indicator for the financial protection angle to UHC.

The important thing is we get away from the rapids—from thinking we can capture UHC by counting “the number of people covered by health insurance or a public health system” to focusing on households’ spending on health services.


Adam Wagstaff

Research Manager, Development Research Group, World Bank

Joseph Kutzin

Coordinator, Health Financing Policy, World Health Organization

Join the Conversation

Anna Marriott
March 23, 2016

I agree. The consensus we now have in support of the concept and goal of UHC is unprecedented. The notion that this huge opportunity to galvanize global and national action towards (and accountability for) achieving UHC could be squandered through a technical misunderstanding seems unbelievable, but is clearly very real. It is this risk that explains why over 300 organisations and academic institutions from across the world have called on the IAEG members to review this indicator and revisit its objective - that it's not there to measure intent, but instead to measure effectiveness of financial protection measures. And it's certainly not there to dictate what type of financial protection measures a country should adopt - this would surely be at odds with the 2012 UN resolution on UHC which clearly states that the choice of a health financing system should be made within the particular context of each country.
I would add one thing.
Firstly, your point that prices are zero or at least heavily subsidized in a country's public health system overlooks a crucial and relevant point. Prices are actually rarely zero in many countries as user fees do apply and they have large scale catastrophic and impoverishing consequences. So your UK-Azerbaijan example is a good one, but in building our argument against the current indicator let's not overlook those many public systems that do have official user charges and which send millions of households into impoverishment each each.

Omer Zang
March 24, 2016

Who protects whom?
Indicators on financial protection should be accompanied by the simple question of “who protects whom?” In Cameroon - a country with at least 56% of out-of-pockets (OOP) expenditure on health -, latest assessments of household financial protection show that the better-off spend more on health care as a percentage of their revenue than the poorer. In terms of equity, this sounds like a good result, but it is not. Actually, given the high level of OOP, poor households have developed mitigation mechanism (self-financial protection) ranging from informal/traditional self-treatment to buying illicit drugs on the street through refraining themselves from seeking conventional care until they have no other alternatives. Within 5 years (from 2007 to 2012), non-conventional health care demand (utilization) has increased by 10% among the two poorer quintiles, and has decreased by as much among the two richer quintiles.
I therefore understand the idea of pushing for a health insurance coverage that addresses more or less the issue of the quality of the financial protection.
At the root of these two points, I would say YES for an indicator on financial protection - BUT a financial protection after using formal (conventional) health care.

David Dror
March 24, 2016

Is there real scope to change the SDGs so as to include more meaningful indicators of enhanced financial protection? If yes, I would suggest another indicator: the degree of "hardship financing" people are exposed to; in many instances, people must borrow money with interest, liquidate savings or sell assets in order to pay for their health expenditures. The cost of interest is additional to the cost of care, and there is evidence that it can be considerable, and occur not just in cases of inpatient care but also for outpatient care and even maternity care. As hardship financing occurs everywhere, and can be expressed as % of income (or a proxy, such as monthly per capita expenditure), it is more relevant that limiting the measurement to the healthcare costs, or - as proposed in this blog earlier - to only the rather limited segment of cases where healthcare expenses cost more than 10% of income. The cost of the money to pay for healthcare is no less catastrophic than the cost providers charge, and therefore hardship financing may be a more pointed indicator. One could of course easily devise a combination of both types of costs, but I would think that "hardship financing" is sufficient by itself.
It is certainly more meaningful than counting the number of people that are insured, because

Archana Joshi
March 25, 2016

Household spending on treatment is difficult and expensive to measure as each episode of illness for which expenses are incurred and follow-up visits will have to be tracked. Instead, how many private health providers provides cashless services and no. of IPDs (in-patients) and bed occupancy in govt. health facility per First Referral Unit are better substitutes to measures OPE on health care.

Florence Mbogu
March 26, 2016

Thank you for the mail on Health and the SDGs: Out of the doldrums, heading for the rapids.Most of the issues raised are facts that need to be addressed properly for SDGs Strategy to work well in Countries alike. I also support the last paragraph of the article on:
The important thing is we get away from the rapids—from thinking we can capture UHC by counting “the number of people covered by health insurance or a public health system” to focusing on households’ spending on health services. I suggest that Nigeria be included in the study of countries implementation level to help give us clue to the degree of implementation and impact of out of pocket financial drain and poverty outcome and death indices truly present in some countries to help guide decision taken. We all contributed during the beyond 2015 agenda based on our experiences and countries perspectives, but unfortunately it is only a few that will seat and take decisions based on their own convictions. Kindly check out financial household out of pocket expenses of countries UHC or NHSS that do not cover Non-communicable diseses in the scheme.It will be really too bad if at the end these issues are neglected. Thank you.
Time to change tack

Georgina Smith
March 26, 2016

this article is a good start, but may well lead somewhere else than more money for healthcare (more income of doctors, medicines, and clinics) .
Scandinavia (link below) suggests that actually the best way to get to the SDGs is to just give people money so they can buy food (and the 1 billion hungry people will be healthier, per dollar spent, than if governments keep funding corrupt health ministries) . Once that is accomplished, governments have to provide public goods where they do not exist, but are needed.
Except for infectious diseases, sanitation, water, pollution , and similar issues where governments have to manage very large externalities, "healthcare" is mostly a private good. Please read about Finland initiative to get rid of government social services providing private goods:
What you write is also misleading and surprising to find errors on an official webpage:
The international community now has 17 SDGs for 2030.
The goals are further split into 169 targets.
There is one health goal, split into 13 targets. One of the targets is UHC; UHC is but one of 169 targets.
UHC is but one of the 13 health targets.
Undeterred by this signal that universal access to health care is not the main concern that the world's governments approved and that health outcomes (especially prevented diseases!) the World Bank blog frequency is about 1 about UHC : 5 about all the other 169 targets.
UHC is certainly a populist target. It will make the healthcare industry bigger and more profitable. Dollar-for-dollar healthcare is not an effective way to improve the health of poor people. Public health measure are far more impactful, cost less, and keep people from getting ill in the first place.
Poor people, especially, deserve conditions where they STAY healthy. It is so sad that we cannot so far read about World Bank targets for preventing illness.
Lucy Winters, MPA

Curtis Doebbler
March 28, 2016

This is a good comment not only on how the SDG indicator work has gone off-track, but also why UHC is not the right direction to go. UHC is seen as insurance coverage by most of its supporters, especially Americans. Obama-care is the classic example of an insurance-based approach to UHC, is welfare for health insurance companies that guarantees them profits as long as they don't squander their revenues.
More sensible and meaningful would have been a rights-based approach to health. This would have emphasized the State's responsibility for enduring actual health coverage--not merely insurance coverage. Unfortunately the World Bank and WHO gave upon or even opposed this. When civil society belatedly called for a rights-based approach to health at the 2014 DPI/NGO Conference, the World Bank and WHO largely ignored them and sometimes even spoke against them.
Even now, as this comment indicates, the Bank is still wandering the wilderness of old economic solutions.
The proposed out-pocket indicator--just like WHO's reasonable suggestion for a vaccination coverage indicator--makes sense in the business-as-usual economic focus on UHC, but it won't get us any closer to protecting peoples health. Just like 70 years of classical development paradigms have left most of the most vulnerable people in the world further from the wealthiest people in the world, so does a economic-based UHC merely attempts to coverup the problem instead of resolve it.