Macroeconomics & health in the era of global economic recession: an
Frederick Mugisha, PhD Economic Policy Research Centre
Health Economics and Policy Network, Imperial Royale Hotel Kampala, November 16-19, 2009
Adverse effect on capital inflows ◦ Remittances, AID, FDI, exchange rate, and interest rate
Adversely affect ◦ Investment ◦ Employment ◦ Economic growth
Reduction in economic growth would arise mainly from reduction in export, lower private consumption and investment
How we define investments in health
Pathways for investment in health to impact
economic development
How we conceptualize and deliver health investments How we analyze these investments in health to be more efficient
Preservation of good health
Prevention of ill-health
Restoring health
Mitigation of consequences of ill-health
Improved labor productivity through improved mental and physical activity
Increased labor supply as healthier individuals seek to earn higher incomes through devoting more time to work Improved education and skill acquisition as healthier children stay longer in school and are more productive in adulthood Increased savings as healthier populations save more due to the associated improvements in life expectancy
Fogel (1994) – the increase in productivity witnessed in 20th century Britain is mainly attributed to better health Schultz (2005) – an increase of 1 centimeter in height results in a 6-8 percent wage increase in Ghana
Bloom & Canning (2005) – a one percent increase in life expectancy leads to a 2.8 percent increment in labor productivity Miguel & Kremer (2004) - Worm treatment of primary school pupils reduced school absenteeism of treated kids by 7 percent and untreated kids by 5 percent – Western Kenya EPRC & GI (2009) – investment in contraceptive reduces years of life lost and years lived in disability by 34 percent, and 1 UGX invested saves 3 UGX in medical costs
12,000 Unintended pregnancies 10,000
9,619
Intended pregnancies
8,151
8,000 5,274 6,000
6,816 3,806
2,471
4,000 2,000
5,481 1,136
4,345
4,345
4,345
4,345
No method use
Current method
Half of need for
All need for
use
modern methods
modern methods
met
met
0
Cost in million USD
418 362 306 250
600,000
Unintended pregnancies 500,000
476,811
Intended pregnancies
441,575 394,300
400,000 284,488 300,000
249,252
316,209 201,977 123,885
200,000
100,000
192,324
192,324
192,324
192,324
No method use
Current method use
Half of need for
All need for modern
modern methods met
methods met
0
Population Health
Construct & maintain roads
Dietary provision Behavior change
Income generation
Make laws & by-laws Micro-finance Enforce the law e.g. alcohol
Water & Sanitation
Child & adult education Provide water & basic sanitation Promote exercise
Provide curative & preventive services
Population Health
Maximum attainable population health
Reduce pathogens
Enhance prevention mechanisms
Incomes & knowledge
Fair trade & generate income Proper nutrition
Provide curative & preventive services
Demand health services
Improve population health
Global investments vs detailed analysis of investments
Primary health care recurrent expenditure – Uganda shillings (billions) 120 100
Recurrent Wages
80
Non-Wages 60 40 20 0 1997-98
1999-00
2001-02
2003-04
2005-06
2007-08
Health Economics and Policy Network, Imperial Royale Hotel Kampala, November 16-19, 2009
Adverse effect on capital inflows ◦ Remittances, AID, FDI, exchange rate, and interest rate
Adversely affect ◦ Investment ◦ Employment ◦ Economic growth
Reduction in economic growth would arise mainly from reduction in export, lower private consumption and investment
How we define investments in health
Pathways for investment in health to impact
economic development
How we conceptualize and deliver health investments How we analyze these investments in health to be more efficient
Preservation of good health
Prevention of ill-health
Restoring health
Mitigation of consequences of ill-health
Improved labor productivity through improved mental and physical activity
Increased labor supply as healthier individuals seek to earn higher incomes through devoting more time to work Improved education and skill acquisition as healthier children stay longer in school and are more productive in adulthood Increased savings as healthier populations save more due to the associated improvements in life expectancy
Fogel (1994) – the increase in productivity witnessed in 20th century Britain is mainly attributed to better health Schultz (2005) – an increase of 1 centimeter in height results in a 6-8 percent wage increase in Ghana
Bloom & Canning (2005) – a one percent increase in life expectancy leads to a 2.8 percent increment in labor productivity Miguel & Kremer (2004) - Worm treatment of primary school pupils reduced school absenteeism of treated kids by 7 percent and untreated kids by 5 percent – Western Kenya EPRC & GI (2009) – investment in contraceptive reduces years of life lost and years lived in disability by 34 percent, and 1 UGX invested saves 3 UGX in medical costs
12,000 Unintended pregnancies 10,000
9,619
Intended pregnancies
8,151
8,000 5,274 6,000
6,816 3,806
2,471
4,000 2,000
5,481 1,136
4,345
4,345
4,345
4,345
No method use
Current method
Half of need for
All need for
use
modern methods
modern methods
met
met
0
Cost in million USD
418 362 306 250
600,000
Unintended pregnancies 500,000
476,811
Intended pregnancies
441,575 394,300
400,000 284,488 300,000
249,252
316,209 201,977 123,885
200,000
100,000
192,324
192,324
192,324
192,324
No method use
Current method use
Half of need for
All need for modern
modern methods met
methods met
0
Population Health
Construct & maintain roads
Dietary provision Behavior change
Income generation
Make laws & by-laws Micro-finance Enforce the law e.g. alcohol
Water & Sanitation
Child & adult education Provide water & basic sanitation Promote exercise
Provide curative & preventive services
Population Health
Maximum attainable population health
Reduce pathogens
Enhance prevention mechanisms
Incomes & knowledge
Fair trade & generate income Proper nutrition
Provide curative & preventive services
Demand health services
Improve population health
Global investments vs detailed analysis of investments
Primary health care recurrent expenditure – Uganda shillings (billions) 120 100
Recurrent Wages
80
Non-Wages 60 40 20 0 1997-98
1999-00
2001-02
2003-04
2005-06
2007-08
