Global Public Health through an Economics Lens

To bring this blog series on the potential relationships between microfinance and health initiatives to a close, I thought I would take a look at what large-scale initiatives exist in this realm — specifically, what US policies or multi-lateral efforts exist that support the integration of microfinance into health promotion.

A good deal of research into the topic yielded, in short, relatively little in results. I could find virtually no information that specifically addresses US governmental stance on microfinance as a tool for health advancement. My tentative hypothesis is that there simply is not much in existence yet on a national or large, multi-lateral level in terms of microfinance - health initiatives. The sources for information presented in my previous posts would support this thought, in that coordinated microfinance and health efforts seem to be considered a newer concept, and one that is being explored on the level of individual organizations and campaigns.

That being said, the US government and international organizations such as the world bank certainly do support microfinance in and of itself in a number of ways (though advocates for the form of poverty alleviation argue that more emphasis should be placed on such efforts). For example, USAID considers itself “the leading bilateral donor promoting a strategy critical for both poverty reduction and economic growth — microenterprise development - for more than 25 years.” It supports microfinance in three ways:

• Single-purpose projects (funding for a single microfinance institution or network)
• Umbrella projects with microfinance components (larger acticities or projects with many difference components, one of which is microfinance)
• Microfiance-only umbrella projects (large microfinance funding projects that may support efforts on multiple levels, ranging from the individual MFI or network basis, to nation-wide support for microfinance as an industry)

While health is not mentioned as a specific component or goal of USAID microfinance projects in the sources I found, health projects may be incorporated in the “Umbrella projects with microfinance components” category; for example, USAID may sponsor a maternal health campaign that includes support of microfinance institutions as one of its multiple layers of projects.

In another glance at US support of microfinance, President Obama released in April plans for a $100 million “Microfinance Growth Fund for the Western Hemisphere.” It very much focuses on support of financial institutions and credit systems during this time of economic crisis, providing funds to stabilize microfinance instiutions in countries in the western hemisphere. Health is not mentioned in any of the language about the new fund, so it is doubtful that it will be a programmatic focus at any point in the near future. However, as we have seen, microfinance does much to alleviate the type of devastating poverty that so much harms a community’s health. Hopefully, the safety net provided by the President’s fund will help to keep families that depend on microfinance services from falling through the cracks during the economic crisis.

As a final note on more international / multi-lateral investment in microfinance, I found an interesting campaign spearheaded by the Microcredit Summit Campaign. They, with the support of their many international partners, argue that the World Bank should greatly increase its investment in microfinance that targets those living under $1 a day. This is important to those interested in microfinance’s potential for global health, since the most impoverished are those facing the greatest health concerns. The Campaign quotes Muhammad Yunus, founder of Grameen Bank:

“Given the World Bank’s mission is to alleviate poverty, the Bank should provide increased funds for microfinance and make sure that half of those funds go to families living below $1 a day. If the Bank doesn’t do it, who else will? It’s the right thing to do.”

From the information I have found thus far, it seems that health-microfinance coordinated initiatives are not yet a specific focus of major US government or multilateral initiatives. However, microfinance has been increasingly acknowledged as an effective method for poverty alleviation, and funding seems to be increasing in its support. This in and of itself has postive health benefits, through the easing of the strain of poverty and the empowerment of women through microfinance loans. If the examples of purposefully coordinated health and microfinance efforts explored through this blog in past weeks prove to be successful, perhaps microfinance will not only continue to expand in government and international campaigns, but it will become integrated with large-scale health inititiates in an increasingly intentional way.

Cited:

Microcredit Summit Campaign: http://www.microcreditsummit.org/about/microfinance_advocacy/

USAID: http://www.usaid.gov/policy/budget/cbj2007/si/microfinance.html

Additional information on USAID’s support of microfiance: http://www.microlinks.org/ev02.php?ID=9811_201&ID2=DO_TOPIC

White House Statement on the Microfinance Growth Fund: http://www.whitehouse.gov/the_press_office/New-100-Million-Microfinance-Growth-Fund-for-the-Western-Hemisphere/

I began my blog series exploring the failure of market forces to address global health needs and to achieve equitable outcomes. A later blog looked at the role of foundations (Gates Foundation), in creating financial incentives and igniting action for vaccine development for diseases that primarily plague developing countries. For my final blog post, I propose a hopeful—though not perfect—solution to the inability of the market to naturally lead to desired global health outcomes. The solution is public-private partnerships that utilize each party’s expertise to more effectively and efficiently solve global health problems including the eradication of the big three (HIV/AIDS, malaria, TB) and elimination of neglected tropical diseases.

An Example: The Global Health Initiative

Founded in 2002 by the World Economic Forum, the Global Health Initiative (GHI) connects for-profit companies, government agencies, NGOs, and international organizations in order to make use of resources and knowledge to address the needs of the world’s poorest. More specifically, such partnerships run projects that provide testing and treatment to developing countries through various methods, including professional and community initiatives. Many for-profit companies grapple with ethical and capitalist issues—should they take a loss to provide developing countries with treatment for which they lack the ability to pay or should they require a minimum cost to break even? To assist businesses with this dilemma, GHI creates frameworks and targets that offer incentives to both companies and government agencies to get involved and also illustrate why their involvement is important to the health needs of the global community.

Successes of Public-Private Partnerships: India Business Alliance to Stop TB

India has a very successful and prosperous economy, yet it ranks highest in the world in TB infections. To put this in perspective, one thousand people in India die of TB everyday; the equivalent of two people every three minutes. Additionally, HIV/AIDS and TB are highly correlated, because of the weakened immune systems characteristic of both diseases. The Global Health Initiative started the India Business Alliance to Stop TB (IBA) in March 2004 by creating a partnership between the WHO, the Global Partnership to Stop TB, the Revised National TB Control Program, and the Confederation of Indian Industry. By using both workplace and community initiatives to allocate information, testing, and treatment to the population, the IBA treated 4 million people by late 2006. This illustrates how in just over two years, the private-public partnership approach to global public health had tremendous success in addressing and treating the health needs of TB-infected individuals in India.

Though it is unfortunate that market forces fail to naturally achieve desired global health outcomes, private-public partnerships offer hope. GHI partnerships between for-profit businesses and the public sector allow for diseases such as HIV/AIDS, TB, and malaria to be more efficiently and properly addressed with the ultimate goal of eradication.

Sources:

1. World Economic Forum. “The Global Health Initiative: A Catalyst for Partnerships in Global Public Health” 2002
2. Asante, Augustine, and Anthongy Zwi. “Public-private partnerships and global health equity: prospects and challenges.” Indian Journal of Medical Ethics IV (2007).
3. Jacobsen, Kathryn, Introduction to Global Health, Jones and Bartlett, 200

In my final blog, I’d like to go back and look at a point mentioned in the first post: that the global food crisis is a huge part of the UN’s Millenium Development Goals. In fact, it is the first goal: “Eradication of extreme poverty and hunger”. The UN set two targets for 2015
•    Target 1: Reduce by half the proportion of people living on less than one dollar/day
•    Target 2: Reduce by half the proportion of people who suffer from hunger

What is being done? What is the approach?

The UN group of Environmental Programs composed an evaluation of the Environmental Food Crisis. They give 7 ideas for increasing food security, each with effects for different time-lines.
Options with short-term effects:
1. Decrease highly volatile food prices
2. Remove of subsidies that support first generation biofuels, instead encourage biofuels based on waste
Mid-term Effects
3. Reduce the amount of cereals used to feed fish and animals, develop alternative feeds
4. Support local farming of diversified and resilient eco-agriculture that provides ecosystem services and food
5. Reduce barriers to trade (without eliminating safety nets of government subsidies)
Long-term effects
6. Limit global warming, promote sustainable land-use
7. Raise awareness about pressures of population growth and consumption

This graph from the UN’s task force on Ending Hunger shows that food insecurity has an incredible number of inputs. They range from degraded natural resources to price insecurity to poor infrastructure to disease.

Fig 1. Vulnerability and Food Insecurity

This second figure from the task force on hunger shows the UN’s plan to make progress with its first MDG and tackle world hunger.

Fig 2. Task force recommendations at global, national, community levels

The most important aspect of the global food crisis to take away is its interrelatedness. It is an issue that is so centrally linked to other health, environmental, and development issues. Likewise, its solutions must cross scales and come from both the local community and governments world-wide.

Sources:
http://www.grida.no/publications/rr/food-crisis/ebook.aspx
http://www.undp.org/mdg/goal1.shtml
http://mdgs.un.org/unsd/mdg/Default.aspx
http://endpoverty2015.org/goals/end-hunger
http://www.unmillenniumproject.org/reports/tf_hunger.htm
http://www.unmillenniumproject.org/documents/HTF-SumVers_FINAL.pdf

As I bring this blog to a close, I thought it would be very useful to wrap up by focusing upon one recurring underlying question that kept coming up in my posts. Though it took many forms and was presented in many different contexts, most of my posts grappled with the notion of MDG attainment. I have discussed various factors that perpetuate MDG attainment, such as malaria eradication programs, the fields of science and technology, and the involvement of the media. I have also discussed some things that could hinder MDG attainment, such as climate change issues, the right to development (however, this can help some goals and hinder others), economic partnership agreements, and the economic crisis. I have discussed the many ways in which these things can either be very effective in aiding countries and societies in achieving MDG targets or explained ways in which they can serve as severe obstacles. But the question remains: in spite of all this talk, this effort, these promises, can MDG targets be reached by 2015?

I read a very excellent article about progress made on a global level, and will present you with some of the main points of the article so that you can get a good idea of where the world is right now. The full article can be found at this address: http://mdgs.un.org/unsd/mdg/Default.aspx
• While many countries – developed AND developing – are making considerable progress, much action and reform is needed to ensure that the goals will be met
• The world – for the most part - is on track to meet the poverty goal in terms of income as they are to meet the goal of child mortality.
• Universal primary education seems to provide some optimism, as the number of countries on target to meet this goal has increased
• The sub-Saharan region, however, is presenting some disappointing results, and the number of people living in absolute poverty has actually gone up. If things continue this way, many countries in the African region.
• In terms of hunger, absolute numbers are sadly rising in spite of the progress made in terms of income.
• More dismally, all regions of the world are off track in goals concerning gender equity, maternal health, and deadly diseases such as HIV/AIDs, malaria, and TB. South Asia and sub-Saharan Africa are off track in ALL of these areas.
• The progress made toward environmental sustainability is both good and bad. For example, the world is on track to meet the drinking water target, but over a billion people still lack access to improved water supply. Essentially, while progress made looks promising, there is still a long way to go.
These points were just a few of the many indicators of progress – or lack there of – in terms of MDG attainment by the year 2015.

As this blog has demonstrated, achieving the MDG goals isn’t nearly as straightforward as we would hope. There appear to be competing incentives and priorities, such as development and economic growth, and obstacles toward attainment. If anything, our experience has demonstrated that the MDGs are not going to be achieved on their own; they will require a tremendous amount of work and the implementation of specific policies and programs that are designed around these goals.

Personally, I feel that the MDGs are achievable, but I also feel that a lot has to change in terms of incentives, programs, and actions taken by every country at every level. I hope that my posts provided some insight into how complex and intricate MDG attainment has been and will continue to be. I hope that once we all finally get to 2015, we can reflect and be proud.

In my past blogs I’ve touched on a variety of global health issues (mostly specific to women’s health) and the way they are sustained and perpetuated because of economics. For this final blog post, I would like to touch on a topic closer to home and that is the impact of the current recession on health, particularly in terms of family planning.

NPR reports that many clinics like Planned Parenthood have reported an increase in the number of clients seeking their services last month. Many of these clinics, which in the past have primarily served women between the ages of 18-24, are now seeing an older client pool, many of whom do not have health insurance. The rise in clients includes “women seeking no-cost birth control, middle-class women who have forgone preventive care because of costs, older women who are without insurance for the first time and women with questions about abortion” (NPR report).

According to Nancy Boothe from the Feminist Women’s Health Center, the number of abortions in her clinic has not increased. On the other hand, the Planned Parenthood Center in Illinois reported its highest rates of abortion in history during the month of January. Steve Trombley, the CEO of Planned Parenthood in Illinois mentioned that thre are “’whole communities where people are suddenly being closed off from access to health care, and they rely on the social safety net that we’re a part of. I think it’s understandable that people who face an unintended pregnancy are weighing their decision about what they want to do about it.’”

Many family planning organizations say that the high cost of contraceptives is one of the most significant causes of unwanted pregnancies. Some women face transportation challenges, particularly in rural areas—even getting money for gas is a deterrent to seeking help. While 41 states do have funding to cover the cost of transportation, abortion, and childcare, Medicaid only covers the cost of abortion for low income women in 15 states. The National Network of Abortion Funds, which covers abortion-related costs, has seen an increase in women requesting help.

Many anti-choice groups are worried that based on these statistics, the economic downturn will lead to an increase in women with unwanted pregnancies seeking abortion. However, these facts only show that women are taking greater advantage of public halth centers for health treatment, rather than medical centers. It seems that the role of public health in our country (as well as globally) is starting to be increasingly important as more and more people are facing changes in their employment and health insurance. Perhaps this will lead to significant public health reform, as citizens begin to demand changes for better health. In some sense, then, perhaps the economic downturn will be for the better in terms of improving our public benefits.

Resources:

http://www.medicalnewstoday.com/articles/143154.php

Last week we discussed the Copenhagen Consensus, a so-called “answer” to the criticisms leveled at projects focused on privatization, deregulation and overall macroeconomic issues. The Copenhagen Consensus, in its attempts to focus on “rational prioritization” and welfare economics, attracted critics of its own, specifically of its rather unique attitude toward global warming.

In the 2008 meeting, the group placed global warming at the very bottom of the list, claiming that “climate change is a reality… but the Kyoto Protocol was not a cost-effective way of addressing it. Limiting greenhouse-gas emissions would postpone the problem only slightly, and at unacceptable cost” (1). Economist Jeff Sachs criticized the group for their “either/or” approach, since the concept of ranking meant that problems like malaria, hunger, and global warming, if not placed high enough on the list, would be ignored or pushed aside as not “cost effective.” However, Jeff Sachs himself has been widely criticized (even by some of our guest lecturers) at simply thinking that throwing money at a problem will immediately solve it. Clearly, the word “consensus” is a far cry from reality.

These criticisms are only productive to an extent. As economists and academics debate the best way to go about achieving “development,” people are still suffering at remarkable rates. “The replacement of neoliberalism by some new ‘ism’ will not in itself make poor people’s lives better, nor render them less vulnerable to deprivation and disease. Reforming international market mechanisms so as to guarantee greater stability and predictability for the investors and firms that operate in those markets may be laudable, but it is insufficient” (2).

It’s important to couple these debates with an emphasis toward on-the-ground dynamic change, so that we are actively reaching populations who need help rather than standing by while academics figure out cost-maximization and efficiency. In my analysis of the economics behind development, I’ve discovered the blatant imperialistic overtones that plague these discussions. It’s amazing how even though the colonial age has come and gone, industrialized nations often take on an attitude of “help poor people help themselves” in a way that often paints individuals in the developing world as incompetent, bumbling fools. In any argument surrounding development, whether a macro or micro focus is better, whether nutrition takes precedence over global warming, it’s important to remember the human face of the problems we face. Amidst donor politics, international agendas, and political alliances, we must be conscious of the power that we have to affect change, and the power we have to destroy it.

(1) http://www.timesonline.co.uk/tol/news/environment/article3993299.ece

(2) Jim Yong Kim, Dying for Health, 8.

As I’ve touched on in a number of previous blogs, there is a huge gap between the vaccines that are developed and the vaccines that are needed. I have explored the reasons for why this exists and have come to the conclusion that the market forces fail in global health. The vaccine and health industry work towards the demands of the customer, and in this case the customers are children and those in developing countries especially. The history of the vaccine industry involves funding solely from private investors who have a self-cultivated interest in vaccine development. However, there are only a handful of investors who want to invest their money in preventive medicine that will primarily benefit impoverished countries. This borders on philanthropy and no longer “investment” in the traditional sense. Furthermore, vaccines can take 20 to 30 years from discovery to manufacture. This is a long and expensive process with long turn around and thus, vaccine production is not very appealing to the typical investor.

The Global Alliance for Vaccines and Immunization (GAVI) was created in 1999 as a response to disparities in access to vaccines and immunization programs. GAVI facilitates private and public partnerships that aim to save people’s health through the widespread use of vaccines. Major partners affiliated with GAVI include the Bill and Melinda Gates Foundation, UNICEF, and WHO. Additionally, GAVI’s goal is to introduce priority vaccines for developing countries and establish a system of sustainable financing in developing countries. The Vaccine Fund was created with starting funds of $750 million from the Bill and Melinda Gates Foundation. With over $1 billion in commitments over the next five years, the Vaccine Fund plans to initiate programs with GAVI partners that provide new and underused vaccines to developing countries. GAVI and the Vaccine Fund act as mechanisms by which the health needs of developing countries can be met. The research arm of GAVI and the Vaccine Fund together aim to understand the current vaccine market, manufacturers, and consumers and the investment choices made during research and development of new vaccines in order to better understand the role that economics has played and continues to play in the vaccine industry.

Sources:

1. Sheldon H. Jacobson “The Economics of Vaccine Manufacturing, Distribution, and Delivery: Past, Present, and Future” WTEC Study, March 2007

1. Global Alliance for Vaccines and Immunization & World Health Organization “Key Concepts: Economics of Vaccine Production”

1. Teri Shors “Understanding Viruses” February 2008 http://biology.jbpub.com/book/virology

Biofuels are a type of energy that use biomass, or plant material, to make gas or liquid fuels. Biofuels are different from fossil fuels in that they are made from recent biological material, and are seen as a potential energy solution to replace oil and natural gas. There are many convincing arguments in favor of the use of biofuels. In the U.S., most biofuels are made from soybean oil, a major domestic crop. If we increase our production and use of biofuels, it could help to significantly reduce our dependence on foreign oil. In addition, unlike fossil fuels such as coal and gas, biofuels are an environmentally sustainable energy source. More than being renewable, biodiesels actually have fewer hazardous emissions (greenhouse gases) than standard diesel.

Biofuels seem like a great solution to the energy crisis. However an unintended consequence of their use has been that biofuels have significantly worsened the global food crisis. There is a strong connection between biofuels and the food shortage. Corn and soy are two of the main crops used to make biofuels, and governments of industrialized nations have been encouraging farmers with subsidies to switch to these two crops. This increases the cost of food worldwide because reduction in domestic farming requires that food be imported. The relationship between food prices and the price of oil is already correlated. As energy costs increase, so do prices for fertilizers and transportation. Biofuels only exacerbate the problem by further strengthening the correlation between food and oil prices.

Farming corn and soy for biofuels means that these crops, unintended for human consumption, compete for cropland. The UN estimates that the conversion of cropland could reduce the required cropland by 8-20% by 2050. However, they also estimate that yield must increase by more than 40% by 2050 to meet food demand (assuming all other factors remain constant).

One solution that the UN offers in regards to biofuels and improving food security is to encourage the removal of subsidies for biofuels that use corn or soy, which are called first generation biofuels. Later generations of biofuels can be made from agricultural waste, such as the stalks of wheat, corn, and wood cellulose. This reduces the competition between crops for food or fuel. Biofuels can also be made from algae, an alternative that is energy efficient to produce. By switching to these later generation biofuels, biofuels could potentially tackle multiple crises at once: dependence on foreign oil, food shortages, greenhouse gas emissions…

Sources:
UNEP: The Environmental Food Crisis
http://www.grida.no/publications/rr/food-crisis/ebook.aspx
“How Biodiesel Works”
http://auto.howstuffworks.com/fuel-efficiency/alternative-fuels/biodiesel3.htm

This week I wanted to explore the issue of scale-up of microfinance efforts, which I have discussed in past weeks as a potentially powerful partner to health initiatives. The question of whether microfinance institutions (MFIs), which address poverty on individual levels (micro is in the name!) can have major, sweeping impacts on global poverty is an important one. In researching the issue of microfinance scale-up, I found a particularly interesting article in the New York Times, “Microfinance’s Debate Sets off Debate in Mexico;” I would like to focuse on the dilemma it presents: whether microfinance should turn to more business models in order to reach millions of people, or whether turning too much to private sector models is a form of unethically “proffiting from the poor.”

Compartamos is an MFI in Mexico that in 2008 sparked debate as the first big example of microfinance going “big business.” Rather than relying mostly on donations, Compartamos runs by bringing in profits to investers. They argue that this allows them to better serve the poor, since they have been able to expand their loans to reach a million people, up from 60,000 in 2000 (Compartamos began as an NGO, running similarly to most MFIs). As one of its directors says, ““It’s marvelous to have one creditor but it’s marvelous to have one million creditors, and that’s where we really start to change the face of opportunity.”

Critics of Compartamos, including Muhammad Yunus, say that it is unethical to make money off of the poor. They argue that all income should serve the poor, keeping the focus of MFIs on poverty eradication. From a health standpoint, one section in the article stood out particularly me:

Lynne Patterson, a founder of Pro Mujer, a nonprofit microfinance group with branches in several Latin American countries, agrees [with critics of Compartamos]. “We use the profit to reinvest in the service of the clients,” she said, referring to loan repayment profits.

Since lack of access to credit is just one of the problems the poor face, Pro Mujer also offers services like breast cancer screenings, advice on dealing with domestic violence and financial education.

Perhaps a business model approach to MFIs will limit their ability to incorporate health promotion services into their work. However, there remains the possibility of partnering with other health organizations, so the MFI does not have to directly fund health services, and the argument holds that private sector models allow massive numbers of people to be reached, in levels yet unequalled through non-profit means. In fact, both supporters and critics of MFIs like Compartamos agree that there is a capital demand in microfinance that is too great to be met by donor groups alone. Some even argue that it is inefficient and harmful to humanitarian efforts to MFIs to compete for donor funds when they can successfully (or potentially better) operate using investers, allowing the donor funds to go toward other causes and social services.

It is estimated that there is currently a global demand for microfinance loans of over $250 million, but only 10% of that is being met. So whether through the business approach of Compartamos or another angle, microfinance will need to adapt to have the trully revolutionary effect on global poverty and health that many believe it can.

Cited:
http://www.nytimes.com/2008/04/05/business/worldbusiness/05micro.html?pagewanted=1&_r=1

Last week we discussed welfare economics, which looks at the economic impacts of political and social decisions on the individual micro level rather than the macro level. Much like the Washington Consensus is the policy-making center of neoliberalism, the Copenhagen Consensus serves the same purpose for welfare economics and human development theory.

In 2004, a group of economists met in Copenhagen, Denmark (thus, the name) for a discussion on why, despite the billions of dollars being thrown at development problems across the world, targets set for the Millennium Development Goals were grossly behind schedule. In their meetings, they decided to investigate methods of “rational prioritization,” which would outline which development projects were the most effective for the money that they were spending on the issues at hand. “The economists who forged the Copenhagen Consensus were clearly convinced of the important link of health to development, the relatively inexpensive ways of addressing a number of key health concerns, and the high returns that would come from doing so.” (1)

In looking for potential solutions, leaders looked at 10 “challenge areas”: climate change, communicable diseases, conflicts, education, financial instability, government and corruption, malnutrition and hunger, population/migration, sanitation and water, and subsidies and trade barriers.

In the 2004 meeting, participants chose four projects that they listed as “very good” in terms of their return on investment: the control of HIV/AIDS, providing micronutrients to general populations, focusing on eliminating trade barriers, and controlling malaria. In 2008, economists met to update their goals, and came out with three new projects and one repeat: providing microsupplements to children, passing the Doha development agenda, providing micronutrient fortification (specifically iron and salt iodization), and expanding immunization for children. (2)

The group plans to meet every four years (much like the Olympics) to reassess the problems at hand, hoping to ensure that financial resources are continually being contributed to projects that will produce results rather than a running tab for international donors.

(1) Richard Skolnik, Essentials of Global Health, 50.

(2) http://www.copenhagenconsensus.com/Default.aspx?ID=788