Global Public Goods for Local Decision-Making: Empowerment through Evidence
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1 Global Public Goods for Local Decision-Making: Empowerment through Evidence Julio Frenk, MD, PhD * OECD World Forum on Statistics, Knowledge, and Policy Measuring and Fostering the Progress of Societies June, 2007 Istanbul, Turkey * Senior Fellow, Global Health Program, Bill and Melinda Gates Foundation, and Chairman of the Board, Institute for Health Metrics and Evaluation, Seattle, Washington, U.S.A.; former Minister of Health of Mexico (2000 to 2006).
2 First of all, I would like to thank the organizers of the OECD Forum, especially Secretary-General Angel Gurría, Enrico Giovannini, and Erica Matthews, for the invitation to address this distinguished audience. I would also like to thank our Turkish hosts for the excellent organization of the meeting and for the opportunity to return to this historical city. It is an additional privilege for me to share the distinction of speaking at this session with my dear friends Margaret Chan and Harvey Fineberg, as well as with the rest of the members of the panel. The OECD Forum focuses on the interplay between knowledge and policy. In order to contribute to the understanding of this crucial interaction, I would like to share with you a real case of national policy making that made extensive use of 2
3 knowledge-related global public goods. During the past six years I have lived through the fascinating experience of conducting a large-scale reform of a health system, in a process that was guided by sound evidence. What I would like to do in the next minutes is to share with you the specific way in which this was accomplished. The main message I would like to leave you with is that evidence-based policy is no longer a buzz word but a real possibility. In our contradictory and often contentious world, we require, more than ever before, the power of knowledge to illuminate the arduous process of purposeful social change. In accordance with the title of this session, I will first briefly examine the main challenges in global health, which provide the context for the evidencebased reform experience in Mexico. 3
4 More than ever before, today we are all keenly aware that in health matters the world has become a single neighborhood. This awareness comes at a time of unprecedented change. We are in the midst of a tense and intense health transition unlike anything the world has seen before, which is linked to broader demographic, social, and economic transformations. The most dramatic expression of the health transition is the fundamental shift in the patterns of disease, disability, and death. Most countries in the world are facing a triple burden of ill health: first, the unfinished agenda of infections, malnutrition, and reproductive health problems; second, the emerging challenges represented by non-communicable diseases and injury; third, the health risks associated with globalization, including the threat of pandemics like AIDS and influenza, the 4
5 trade in harmful products like tobacco and other drugs, the health consequences of climate change, and the dissemination of harmful lifestyles leading to the silent epidemic of obesity (which someone has called globesity, precisely to underscore its link with globalization). Our biggest challenge today is that most health systems in the world simply have not kept up with the pressures derived from this complex transition. As a result, we are facing a number of unacceptable paradoxes. I will mention only four. First, never before has the power of science been greater, yet millions die unnecessarily from diseases whose prevention and treatment were solved decades ago. Second, countless countries simultaneously have rural communities without doctors and urban doctors without jobs. Third, while unprecedented sums of 5
6 financial capital in the form of aid are flowing from North to South, intellectual capital moves in the opposite direction through the migration of health personnel, thus rendering much of that aid ineffective. Fourth, whereas health is a key factor in the fight against poverty, health care itself becomes a cause of impoverishment when hundreds of millions of uninsured families have to pay out of pocket for services and drugs. These are indeed perplexing paradoxes. And they can only be solved with decisive action. But action must be guided. Fortunately, during the past few years we have witnessed the emergence of a new consensus in global health. The first part of the consensus is based on the increasing evidence that health is not only the result 6
7 of economic growth, but also one of its major determinants. The WHO, the OECD, the World Bank, and other multilateral instituttions have made lasting contributions to this line of reasoning. As a result of this first consensus, today we have a greater opportunity than ever before to overcome the barriers to global health equity. While resources remain short of need, there has been a major increase in funding in recent years, and renewed efforts to mobilize additional funds hold the promise of even greater resource capacity. New actors, such as philanthropic foundations, global NGOs, and multilateral initiatives, have brought increased human and financial capacity and public attention to the field. The second part of the emerging consensus is that scientific knowledge represents the driving force 7
8 for health progress. We all agree that research is a value in itself, an essential part of human culture. At the same time, knowledge has an instrumental value as a means to improve health. This is achieved through three mechanisms. First, knowledge gets translated into new and better technologies, such as drugs, vaccines, and diagnostic methods. This is the best-known mechanism through which it improves health. But, second, knowledge is also internalized by individuals, who use it to structure their everyday behavior in key domains like personal hygiene, feeding habits, sexuality, and child-rearing practices. In this way, knowledge can empower people to modify their lifestyles in order to promote their own health and also to become informed users of services and citizens conscious of their rights. 8
9 Finally, knowledge becomes translated into evidence that provides a scientific foundation for decisionmaking both in the delivery of health services and in the formulation of public policies. Recent developments in my country illustrate this last point. Thanks to the cooperation among several academic and international organizations, notably the WHO, the OECD, and the World Bank, the analytical armamentarium for health policy has been greatly enriched during the past few years to include such robust tools as the measurement of burden of disease, cost-effectiveness analysis, national health accounts, and standardized surveys. The rigorous application of these knowledge-related global public goods, coupled with excellent countryspecific data and long-term investment in capacity 9
10 building, helped to catalyze a structural reform of the Mexican health system. I will not go into the details of this reform, which has been the subject of a series of seven articles in The Lancet, one of the leading scientific journals in the world. In addition, the OECD published in 2005 an excellent study of the health sector in Mexico, which included an initial appraisal of the reform. For the purpose of this presentation, it will suffice to mention that the Mexican reform is probably a textbook case of evidence-based policy, since it was designed and implemented making use of the best available knowledge. Because of this feature, the Mexican experience can hold interesting lessons for other countries. Indeed, policy makers all over the world require sound evidence in order to understand and act upon the complexities of our times. 10
11 In the Mexican case, solid analysis made decision makers and the public aware of critical realities that required solution. Thus, the careful calculation of national health accounts revealed that more than half of total expenditure in Mexico was out-of-pocket. This proved to be a direct result of the fact that approximately half of the population lacked health insurance. These findings were unexpected as it was generally believed that the Mexican health system was based on public funding. Instead, the analysis revealed one of the unacceptable paradoxes that I mentioned before: we know that health is one of the most effective ways of fighting poverty, but medical care can itself become an impoverishing factor for families when a country does not have the social 11
12 mechanisms to assure fair financing that protects the entire population. The realization that households had been paying catastrophic out-of-pocket sums generated a different perspective on the operation of the health system. Policy makers extended their focus to include financial issues that proved to have a great impact on the provision of health care and on levels of poverty among Mexican households. Another global public good that helped to make the local case for reform was the WHO framework for the assessment of health systems performance. This framework, launched in 2000 as part of the World Health Report, highlighted fairness of financing as one of the intrinsic goals of health systems. 12
13 As a direct result of its high levels of out-ofpocket spending, Mexico performed very poorly on the international comparative analysis of fair financing. Instead of generating a defensive reaction, this poor result spurred detailed country-level analysis in 2001 that showed that impoverishing health expenditures were concentrated among poor and uninsured households. The analysis was undertaken jointly by the Ministry of Health of Mexico, WHO, and the Mexican Health Foundation, an example of how national governments, international organizations, and non-governmental institutions can join forces. The country-level analysis was based on data from the National Income and Expenditure Surveys for Mexico, yet another global public good. These surveys are produced by many countries in the world 13
14 and provide homogenous data sets that are key for cross-national comparisons, yet are seldom used for health policy formulation and evaluation. The careful interplay between national and international analyses generated the advocacy tools to promote a major legislative reform establishing a system of social protection in health, which was approved by a large majority of the Mexican Congress in This system is reorganizing and increasing public funding by a full percentage point of GDP over seven years in order to provide universal health insurance, including the 50 million Mexicans, most of them poor, who had been excluded until now from formal social insurance schemes because they are 14
15 self-employed, are out of the labor market or work in the informal sector of the economy. The increased funding is spearheading a major effort to realign incentives throughout the health system. Poor families can now enroll in a new public insurance scheme called Seguro Popular. Enrolment is the basis for allocating federal funds to states, which are responsible for the delivery of services. In this way, the old model of bureaucratic budgeting, which subsidized providers without regard to performance, is being replaced by democratic budgeting, whereby money follows people in order to assure the best balance between quality and efficiency. To achieve this aim, the macro-level financial reform is being complemented by a micro-level 15
16 management reform, which is strengthening delivery capacity through a series of specific interventions, such as long-term planning of new facilities, technology assessment, efficient schemes for drug supply and rational prescription practices, human resource development including managerial training, outcome-oriented information systems, facility accreditation, provider certification, quality improvement in the technical and the interpersonal dimensions of care, and performance benchmarking among states and organizations. These are all critical components of the stewardship role that ministries of health must fulfill with increasing proficiency, especially to deal with the problems of quality in both the public and the private sectors. The element that articulates the financial and the managerial reforms is an explicit package of benefits, 16
17 which was designed using cost, effectiveness, and social acceptability as the guiding criteria. Apart from serving as a planning and priority-setting tool, the package is a means of empowering people by making them aware of their entitlements. A hallmark of the Mexican experience has been a substantial investment in research to design the reform, monitor progress towards its implementation, and evaluate its results. This is a clear example of the possibility of harmonizing two core values of research in health: scientific excellence and relevance to decision-making. The value of research for enlightened decisionmaking is underscored by the worldwide search for better ways of strengthening health systems. Because of the gaps in our current knowledge, every 17
18 reform initiative should be seen as an experiment, the effects of which must be documented for the benefit of every other initiative, both present and future. This requires a solid investment in research on health systems. Each innovation constitutes a learning opportunity. Not to take advantage of it condemns us to rediscover at great cost what is already known or to repeat past mistakes. To reform it is necessary to inform, or else one is likely to deform. Let me conclude by drawing the global lessons from the Mexican reform experience as we did in The Lancet series. I will summarize those lessons as the ABCDE of successful reform. 1 A stands for agenda. The first ingredient for success is to link health to the broader agenda of 18
19 development and security. Public health experts must learn to address the larger concerns of heads of government, legislators, ministers of finance, and other policy makers who have to balance the claims of many different sectors. In this advocacy effort we can make use of global evidence showing that, in addition to its intrinsic value, a well-performing health system contributes to the overall welfare of society by relieving poverty, improving productivity, increasing educational abilities, developing human capital, protecting savings and assets, and directly stimulating economic growth with a fairer distribution of wealth. In other words, a well-performing health system is a crucial determinant of the progress of societies, the topic of this OECD World Forum. Because it is concerned with economic development, the OECD is particularly well positioned to advance 19
20 the centrality of health in this broader agenda. A decisive step was taken when the OECD organized in May 2004 its first-ever meeting of ministers of health, which I was honored to chair and which included an exemplary encounter with ministers of finance. Recalling that historic encounter leads me naturally to the B, which stands for budget. By placing health at the center of the development agenda of a country it is possible to endow it with the degree of priority that it deserves. These arguments enhance the negotiating power of ministers of health, who can then convince decision makers to allocate more money for health. But we should also assure, in the words of the legendary Professor Ramalingaswami of India, that we develop the capacity to deliver more health for the money. 2 20
21 And this takes us to the C, which stands precisely for capacity. There is no substitute for long-term investment in capacity building in two main areas. The first refers to health-service delivery, through investments in physical infrastructure and, most importantly, in human resources. The second has to do with the development of institutions that can undertake the necessary research and analysis to generate sound evidence for policy. In the case of Mexico, the current reform has reaped the benefits of 20 years of sustained efforts to establish and nurture organizations such as the National Institute of Public Health and the Mexican Health Foundation. These centers of excellence have produced relevant research and policy analysis, trained researchers who occupy key policy-making positions, carried out 21
22 independent and credible evaluations, and greatly enriched the quality of information. With this capacity, we can then move to the D, which stands for deliverables. A key ingredient to gain public support for a reform is to identify and communicate its specific benefits. The best way to do so is to focus on priority diseases and risk factors. In this way, the public can link abstract financial and managerial notions to concrete deliverables. This is also the way to bridge the divide between two publichealth traditions: on the one hand, the vertical approach, focusing on specific disease priorities, and, on the other, the horizontal approach, aimed at strengthening the overall structure and functions of the health system. In order to go beyond this false dilemma, it is necessary to extend the geometry metaphor and develop what Jaime Sepúlveda calls 22
23 the diagonal approach, 3 namely, a strategy in which explicit intervention priorities are used to drive the required improvements into the health system. A fundamental lesson from the Mexican experience is that health-system capacity can be built up through the scale-up of effective preventive and therapeutic interventions against specific priority problems grouped in an explicit package of benefits. Finally, E stands for evidence. The Mexican experience confirms what several researchers 4,5 have pointed out: that the health of people in rich and poor countries alike is depending more and more on their ability to locally adopt knowledge that has been generated as a global public good. In this respect, the Mexican case shows that the dilemma between local and global research is a false 23
24 one. The process of globalization can turn knowledge into an international public good that can then be brought to the center of the domestic policy agenda in order to address a local problem. Such application, in turn, feeds back into the global pool of experience, thus generating a process of shared learning among countries. This virtuous process can only take place if we mobilize international collective action for the common good of all countries. 6 It is this enlightened conception of international cooperation to generate knowledge-related global public goods that has inspired the very recent establishment of the Institute for Health Metrics and Evaluation. Affiliated to the University of Washington in Seattle and supported by a $105 million dollar grant from the Gates Foundation, with an additional $20 million dollars from the University, this institute 24
25 will conduct independent evaluation of health initiatives worldwide, develop new methods and tools, disseminate its products through multiple publication outlets, and offer free access to an electronic data base on global health. The Institute for Health Metrics and Evaluation will complement existing efforts by developing innovative indicators and carrying out rigorous analyses. 7 Indeed, the Institute may contribute to the larger endeavor of measuring the progress of societies, as stated in the goals of this conference. The new institute represents a constructive piece of the institutional architecture for global health, because it aspires to provide an independent assessment of performance. There are three main reasons that make such an initiative needed at this particular juncture: first, to sustain interest in global 25
26 health by demonstrating results from the increased investments in this field; second, to enhance efficiency by building a solid knowledge base of what really works and may be transferred across countries when it is culturally, politically, and financially reasonable; third, to promote the values of transparency and accountability as essential ingredients of democratic governance both at the national and global levels. Those of us involved in the development of this exciting new institution are determined to make it an excellent example of what global health requires today: global partnerships for the creation of global public goods that will foster global understanding to help us address common global problems by empowering local actors with the formidable tools of evidence. 26
27 Fortunately, the topic that gathers us today the value of knowledge to inform policy involves at its essence the possibility of sharing. It is a topic in which we can all participate and from which we can all benefit. It is a topic where the self interest of each country coincides with the common interest of all nations. One of the thinkers who best captured the sharing character of knowledge was Thomas Jefferson, who almost two centuries ago stated: He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me. I am certain that through our common commitment, many candles will be lit. The path is 27
28 clear: scientifically derived evidence must be the guiding light for designing, implementing, and evaluating programs in national governments, bilateral aid agencies, and multilateral organizations. This is the path that will lead to more equitable development through better policymaking for health and that will make an enduring contribution to the progress of societies. 28
29 References 1. Frenk J. Bridging the divide: global lesson from evidence-based health policy in Mexico. Lancet 2006; 368: Ramalingaswami V. Personal communication. 3. Sepúlveda J. Foreword. In: Jamison DT, Breman JG, Measham AR et al, editors. Disease control priorities in developing countries [2 nd edition]. New York: Oxford University Press for The World Bank, 2006: xiii-xv. 4. Deaton A. Health in an age of globalization. Draft prepared for the Brookings Trade Forum, Brookings Institution, Washington, DC, May 13-14, Jamison DT. Investing in health. In: Jamison DT, Breman JG, Measham AR et al, editors. Disease control priorities in developing countries [2 nd edition]. New York: Oxford University Press for The World Bank, 2006: Jamison DT, Frenk J, Knaul F. International collective action in health: Objectives, functions and rationale. Lancet 1998; 351: Editorial.A new institute for global health evaluations. Lancet 2007; 369:
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