How can good health care be affordable in developing countries?

When you consider that there are people in high-income countries who are struggling to afford good health care, it might appear obvious that it can only be afforded by wealthy people, or by people who have access to the bank accounts of wealthy people (including wealthy taxpayers). That perception is not entirely wrong – access to the most advanced medical technologies is often costly. Research, equipment embodying high technology and extensive staff training have to be paid for one way or another.

However, it is surprising how good, and how affordable, the health care available to ordinary people in developing countries could be with appropriate technology and incentives. The book, Pharmacy on a Bicycle, by Eric Bing and Marc Epstein, provides many examples of good health care being provided at low cost in low-income countries.

The authors are well qualified to write on this topic. Eric Bing is a physician with an MBA, who works on global health challenges at the George W Bush Institute. Marc Epstein is a business school professor, who has a special interest in commercializing technology in developing countries. The authors acknowledge assistance of several other people including their editor, Troy Camplin.

The book is written around the acronym: IMPACTS.

“I” stands for innovation and entrepreneurship. In some instances products have been designed specifically for use in developing countries. For example, to detect heart abnormalities General Electric designed a low cost ECG. The product was developed for use in India but is now marketed globally.

“M” stands for maximizing efficiency and effectiveness.  An example provided is the Aravind Eye Center in India which uses a production line process to undertake a large number of surgeries per day. This reduces cost, but it also improves surgeons’ skills and enhances the quality of care they can provide.

“P” stands for partner coordination. This is not always about government regulation. For example, VisionSpring, a non-profit organisation, has developed partnerships with schools and businesses to provide inexpensive spectacles to students and workers.

“A” stands for accountability. As might be expected, the authors emphasize the need to set clear goals and targets, and to monitor and evaluate performance to support effective decision-making. This is easier said than done, particularly in the public sectors of low-income countries, but the authors manage to find examples to illustrate how accountability systems have improved performance.

“C” stands for creating demand. The benefits of services are not always obvious to potential users. One method of creating demand discussed by the authors is the use of vouchers which enable consumers to obtain access to services at reduced cost. They can also create competition among providers and create incentives for them to give low-cost, quality care. Several examples are provided of successful use of vouchers, but the one that appealed most to my imagination was an experiment in Uganda where expectant mothers were given vouchers to take motorcycle taxis to attend a clinic for prenatal care, delivery and postnatal care.

“T” stands for task shifting.  This involves shifting tasks from doctors to nurses and from nurses to community providers or patients. Task shifting reduces bottlenecks and reduces cost.  For example, nurses have been trained to conduct screening in a program for prevention of cervical cancer in Zambia. Photographs were taken as part of the procedure and reviewed on a weekly basis by doctors and nurses. Over time, nurses became nearly as accurate in their diagnoses as doctors.

“S” stands for scaling. How can innovations that have proved successful for small groups of people be scaled up to reach more people? The authors claim:  “By focusing heavily on the fundamentals of program, process and passion, organisations operating in even the most challenging of conditions can achieve scale while maintaining outstanding quality”. The contribution the authors have provided on the scaling question seems to me to be a good example of the well-meaning, but ineffectual, approach that management experts tend to adopt when they are confronted with economic problems.

Readers might have gathered by now that I think the discussion of the scaling issue is the weak point of this book. In scaling up successful pilot programs to reach large numbers of people the prime consideration has to be to ensure that organisations (firms) have appropriate incentives to deliver high quality goods at low cost. It would be useful for more consideration to be given to the question of whether market incentives, such as those that drive high quality service delivery around the world in franchise operations such as McDonalds’ fast food restaurants, could apply to a greater extent to delivery of medical services in developing countries. An irrational aversion to the idea of McDonaldizing health seems to prevent governments from allowing health markets to function effectively in the interests of patients.

My overall impression of this book is favourable, despite the reservations just expressed. The authors have done an admirable job in demonstrating that there is potential for a lot more people in the world to have access to high quality, affordable health care.  

What are the implications for PNG of Australia's new foreign aid policy?

My interest in Australian aid to Papua New Guinea was heightened while I was in Papua New Guinea late last year and earlier this year working on a review of agricultural policy implementation for the PNG government. I was surprised to learn that, apart from some ACIAR projects, not much Australian aid money has gone to agricultural development in PNG in recent years. (In case anyone is wondering, the project I was working on was not funded by foreign aid. Work on this post was not funded by anyone other than myself and I have not discussed the topic with anyone prior to publication.)

PNG is still a major recipient of Australian foreign aid. Development grants to PNG are estimated at about $500 million in 2014-15, which is more than half of all allocations for Pacific countries and about 15 percent of total allocations for country and regional programs.

From a PNG perspective, however, development grants from Australia do not now make a huge contribution to the government’s budget. Such grants currently account for about 6 percent of total PNG government spending; development grants from other foreign sources account for a further 2 percent of spending. The amounts involved are substantial when compared with current tax receipts from sources such as GST and personal income tax, but seem quite small when compared with amounts raised by borrowing – amounting to about 34 percent of estimated government spending for 2014. The high level of borrowing reflects the rapid rise in government spending in recent years in anticipation of substantial revenue flows from LNG exports.

The relatively small amount of Australian aid money flowing to agricultural projects can be explained in terms of the priorities established in the “PNG-Australia Partnership for Development” in 2011. This agreement gives priority to education, health, transport infrastructure, and safety and justice (policing, security, access to justice etc.). Those priorities, in turn, reflect the priorities of PNG’s Medium Term Development Plan 2011-2015 (MTDP).

That all seems to make sense in terms of ensuring that aid money contributes to national goals of the recipient country. The priorities of the MTDP also make sense in terms of its objective of laying the foundation for economic growth by addressing supply side constraints. Improvements in law and order and transport infrastructure have potential to reduce costs and improve the competitiveness of export industries. Improved education and health services (e.g. malaria prevention) have potential to make an important contribution to improving productivity. Moreover, while many services in the priority sectors can be most efficiently provided by private firms, those sectors also encompass core functions of government.

So, what is wrong with the idea that foreign aid should be used to help the government to perform its core functions better? Not much really, except that in the context of a country like PNG there is no magic wand that can be purchased, with or without foreign aid, to improve performance of core government functions. I puzzled over one aspect of this question a few months ago in a post entitled “How do peaceful societies come about?”. History seems to tell us that law and order is more likely to be established through the emergence of better economic opportunities for potential criminals than through massive investments in deterrence of crime.

The dynamics of the development process certainly do not require that improvements in core government functions must necessarily precede the development of more widespread economic opportunity. In the PNG context I think such considerations provide a strong case for agricultural policies to be used to help promote more widespread economic opportunity. I don’t want to attempt to explain why that is so in this post. I think it is adequately explained in the report I helped to prepare, entitled “Towards Agriculture Transformation and a New Direction for Enhancing Productivity in Agriculture”, which is now publicly available. The recommendations of the report have been accepted by the PNG government.

So, that provides the context in which I ask myself what are the implications for PNG of Australia’s new foreign aid policy. The new aid policy has a strong focus on private sector development, growth of international trade and the development of agriculture and fisheries.  The new policy links funding to performance: programs and partner organisations that perform well will be rewarded with additional funding.

There seems to be potential for the new framework for agricultural transformation adopted by the PNG government to mesh well with Australia’s new foreign aid policy. It will be interesting to see how much emphasis there is on encouraging innovation in agriculture in PNG as Australia’s new aid policy is translated into Aid Investment Plans over the next 12 months. 

Postscript:

The following comment has been supplied by the PNG Minister for Agriculture, Hon. Assik Tommy Tomscoll, MP:

“I read your article and agree. In PNG the best opportunity to create wealth, capture a large proportion of the population in economic participation, promote industrialisation and improve living standards for the majority, lies in the development of the agriculture. Around 87% of our people depend on agriculture for both cash and subsistence, and the agriculture sector contributes 24% to 27% to gross domestic product. PNG is an agriculture-based economy, not a hydrocarbon and mining economy.

Thanks for your worthy contribution in the FER - and so the sector is forging ahead at long last.”

Appreciative comments were also received from Dr Vele Ila’Ava, Secretary of the PNG Agriculture Department, and Dr James Kaiulo, Chairman of the FER Steering Committee and FIA Team Leader. Dr Kaiulo commented as follows:

“You have ‘hit the nail on the head’ in relation to the Australian Foreign Aid Policy on social (health, education, law and justice) programs that are being promoted and funded by the Australian Government while ignoring the agriculture sector.  The Australian Aid on agriculture has been focused in the area of R&D programs without any significant impact on the improvements to the livelihoods of the rural farmers.

I hope they take note of your comments.”

Some of my colleagues on the FER team have also provided supportive comments. I would like to draw attention to the comment provided below by Dr Eric Omuru: 

"Increased funding support to agriculture by PNG government is gaining momentum. The findings and recommendations of the FER report have been well received by the government. The support and efforts to this cause by our minister and secretary is the best I have seen in the sector in a long time. If Canberra can join the party and contribute a certain % of what it gives to PNG as foreign aid specific for agriculture, it will be a meaningful contribution. 

Enjoyed reading your article."

Should researchers recognize that emotional states are influenced by life evaluations?

There is nothing novel about the idea that people who have a positive frame of mind about the opportunities and challenges that life offers tend to experience positive emotions as they go about their daily lives. 

We are not surprised that people who smile and laugh a lot, obtain enjoyment from whatever they are doing, feel they are learning or doing something interesting and feel that they are treated with respect tend to rate their lives highly. If such people don’t consider their current lives as close to the best possible, it is likely to be because they are optimistic about the potential for their lives to get even better. It might be reasonable to suppose that their positive emotions reflect frames of mind stemming from their dispositions and their evaluations of their lives as well as from their current experiences.

However, when I looked up “positive emotion”, “frame of mind” and “research” on Google I found a lot of references to research on cognitive approaches to improving well-being, but I didn’t see any on life evaluations as a determinant of positive emotion. Researchers do not seem to have perceived life evaluations – for example, responses to survey questions asking people to rate their lives between best possible and worst possible – as frames of mind. Emotional state variables (positive emotion and negative emotion) are sometimes included in analyses which seek to explain life evaluations, but I am not aware of studies which view life evaluations as a potential explanatory variable.

The question posed in this post is linked to the finding in my last post that average positive emotion ratings in countries in the former Soviet Union are lower, while those in Latin American countries are higher, than might be expected on the basis of negative emotion ratings in those regions. I suggested that the most likely reason for this was the development of shared frames of mind by people in those regions. That poses the question of whether these shared frames reflect life evaluations or something more profound.

Which variables should be included in a regression model to assess the influence of frames of mind on positive emotions at a national level? The most obvious measure of positive emotions to use is the Gallup measure which reflects the extent to which people are well-rested, smile and laugh a lot, obtain enjoyment from what they are doing, are learning or doing something interesting and feel that they are treated with respect. It seemed appropriate to include the Gallup measure of negative emotion (reflecting pain, worry, sadness, stress or anger) as an explanatory variable to take account of experience that might lead people to have a negative frame of mind. Regional variables were included for reasons just discussed. Gallup data was used to reflect average life evaluations at a national level (Cantril ladder).

Three other frame of mind variables were included because they have previously been found to be significant determinants of both life evaluation and positive emotion ratings. (See, for example, the research by John Helliwell and Shun Wang presented in Table 2.1 of Chapter 2 of World Happiness Report 2013.) These variables were satisfaction with freedom, perceptions of social support and generosity. All data was obtained from the online appendix to Chapter 2 of the World Happiness Report.

Separate regional variables were included in the initial regressions but only Latin America, the Former Soviet Union, Central and Eastern Europe and Middle East and North Africa were found to be significant. The final regression model explains about 70 percent of the variation in positive emotion at a national level. The results of the analysis are reflected in the Figure below. (All estimated coefficients were significantly different from zero at the 95% level. Further information can be made available on request.)

Two important points are evident from the Figure:

• The relatively low positive emotion ratings of people in the former Soviet Union and the positive ratings of people in Latin America are still evident after controlling for several other variables. These anomalies cannot be explained in terms of life evaluations or the other frame of mind variables considered.
• The influence of life evaluations on positive emotion involves more than just satisfaction with freedom, perceptions of social support and generosity.

Postscript 1:

I acknowledged above that frames of mind can stem from dispositions as well as from life evaluations. In retrospect, I should also have noted that dispositions can affect life evaluations.

A paper just published by Eugenio Proto and Andrew Oswald explores the role of genetics in influencing average life evaluations at a national level (“National Happiness and Genetic Distance: A cautious exploration”, July 2014, IZA DP 8300). The paper suggests that genetic distance from Denmark is a significant determinant of life satisfaction.

If the genetic influence on disposition had an impact on positive affect in addition to its influence on life evaluations (and other variables including negative affect and regional variables) that should be reflected in the residuals of the regression described above. However, the residuals for Denmark and countries that are genetically close to Denmark (Norway, Sweden, Czech Republic, Austria and Switzerland) are small and mainly negative.

Postscript 2:

Inclusion of genetic distance from Denmark in the regression analysis made little difference to the results obtained. The coefficient on the genetic variable had the 'wrong' sign and was not significantly different from zero. The results suggest that any genetic influence on positive affect occurs via life evaluations and other variables.

Postscript 3:
Research by Gian Vittoria Caprara, Nancy Eisenberg and Guido Alessandri on the dispositional basis of happiness is relevant to this post. The authors note that life satisfaction, optimism and self-esteem have recently been traced to a common disposition, namely positivity. The authors' measure of positivity reflects all these factors. Their research suggests that positivity predicts future positive affectivity, rather than vice versa. 

Why don't we see a close relationship between low negative emotion and high positive emotion?

Think about how you felt yesterday. Did you feel much pain, worry, sadness, stress or anger? If you felt less of those negative emotions than the world average, then do you think it would be reasonable to predict that your experience of positive emotions might be higher than the world average? The relevant positive experiences are smiling and laughing a lot, feeling enjoyment, well-rested and treated with respect, and learning or doing something interesting.

Apparently that prediction is not as reasonable as I thought it would be. People in countries where average levels of negative emotion are relatively low do not necessarily have relatively high average levels of positive emotion. This is apparent in the Figure below which has been drawn from data from recent polls conducted by the Gallup organisation.

The Figure does show an inverse correlation between positive and negative emotion, but most of the action is at the upper end of negative emotion. It seems to be much less common for people with high negative emotion to also experience high positive emotion than it is for people who experience low negative emotion to also experience low positive emotion.

Interestingly, the chart also shows that the average of positive emotion for people in Bhutan - the home of Gross National Happiness (GNH) - is low by comparison with both of its giant neighbours, China and India. Gallup has suggested that Bhutan’s low score on positive emotion is attributable to the fact that the percentage of the population who feel that they are treated with a “great deal of respect” was the lowest for all countries included in the 2013 survey. Perhaps this reflects the restrictions on individual liberty imposed by the government in pursuit of its GNH objective. It is also possible that the GNH objective gives participants in happiness surveys an incentive to use their responses to tell the government that they are not happy with its performance. 

   

However, the main point I want to make concerns the salient characteristics of the countries which combine low negative emotion with low positive emotion or unusually high positive emotion. Most of the countries in the first category were formerly members of the Soviet Union (shown with red diamonds). By contrast, most Latin American countries (shown with purple diamonds) have unusually high positive emotion scores.

The most likely explanation of the different emotional experiences of people in the former Soviet Union and Latin America is the development of shared frames of mind (cultural framing). Sonja Lyubomirsky has observed that expressions of happiness or success in Russia are often perceived as inviting envy, resentment, and suspicion, at least partly because there is a cultural belief in Russia that anyone who is happy or successful might have used immoral means for achieving these states. (Reported in a recent article on happiness aversion by Mohsen Joshanloo and Dan Weijers). I guess such beliefs could have been reinforced by living under communism and the regimes that have followed the fall of communism. It is also possible that negative emotions would be understated in a culture where people had incentives to adopt a “must not complain” attitude to life.

With regard to Latin America, Jon Clifton, the author of the report of the Gallup survey suggests:

“That so many people are reporting positive emotions in Latin America at least partly reflects the cultural tendency in the region to focus on the positives in life”.

There is evidence (for example in a report by Eduardo Loro) that when people in Latin America are asked about their health, they tend to report a higher level of satisfaction than is warranted, given objective indicators of their health status.

The existence of such a cultural bias does not mean that the high positive emotion reported for Latin America is not genuinely felt. Research by Mohsen Joshanloo provides some evidence of lower happiness aversion in Latin America than in many other parts of the world. It seems reasonable to predict that the high positive emotion in Latin America would provide health benefits e.g. lower rates of hypertension, as in other parts of the world (see research by David Blanchflower and Andrew Oswald). Unfortunately, I haven’t been able to find studies that control for the relevant variables to confirm whether that is the case. There are studies suggesting that rates of hypertension are relatively high in some Latin American countries, but that seems to be attributable to obesity and other risk factors.