Health, government, and the poor : the case for the private sector

Abstract

The authors present a case for user charges and some privatization of health care in developing countries. They demonstrate that - consistent with public choice theory - government actions in the health sector are neither equitable nor efficient in developing countries. In general, they increase the real income of influential middle and upper income groups - despite the fact that the greatest mortality gains would come from directing health spending to the poor. They discuss why government health interventions will become less effective than they have been. They point out that high mortality in developing countries is related more to poverty than it used to be, while pressure on governments to finance health care for the middle class and the rich is increasing because the population is aging and the costs of handling adult chronic diseases are rising. The inequity and inefficiency of government health programs reflect the current political equilibrium which, unfortunately, cannot be easily changed. Opportunities for change, including marginal changes in the distribution of political power, must be recognized and exploited whenever they arise. Information that increases public awareness of current inequities, fiscal stress, and tactical use of newly available resources may also create opportunities to alter the equilibrium.Health Systems Development&Reform,Environmental Economics&Policies,Agricultural Knowledge&Information Systems,Health Monitoring&Evaluation,Health Economics&Finance