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Will the U.S. Lead on Global Health? Start with Vaccination
February 17, 2011
USAID Administrator Rajiv Shah gave a speech yesterday at the National Institutes of Health, highlighting his aspirations for U.S. leadership on global health. By 2015, among other goals, he hopes that “the majority of all children have access to pentavalent, rota, pneumo and meningitis vaccines and that we have eradicated polio.”
Unlike some aspirational goals, this goal is actually feasible and affordable.
Vaccination is among the most cost-effective health interventions in the world. Fully funding the GAVI Alliance—the organization that funds childhood vaccination in the poorest countries of the world—can prevent 4.2 million child deaths before 2015. (For a great summary of the evidence base on the human and economic impact of vaccination, see here.)
Further, funding GAVI is in the U.S. interest. Given the globalization of travel and transport, increasing vaccination coverage overseas can reduce vaccine-preventable disease outbreaks in the U.S. and—in the case of polio eradication—potentially reduce the costs of U.S. vaccination programs in the future.
But there is a gap between aspirations and budget realities. Although laudable efforts have been made to increase the U.S. contribution to GAVI, the Administration’s FY2012 budget proposal is only $115 million, a nominal increase from its $78 million contribution in 2010. Note also: in the House of Representatives continuing resolution on the FY2011 budget, Connie Veillette reports here that that Global Health and Child Survival account as a whole drops by more than 20% from FY2010 and nearly 40% from the FY2011 request.
To put the potential U.S. contribution in context, in 2009, Norway—a country of 4.8 million people—contributed more to GAVI than the U.S.—a country of 307 million (see here). In terms of cumulative contributions, the U.S. has funded about 13 percent of GAVI activities over the past decade while Norway has provided 16 percent. The Bill & Melinda Gates Foundation—a single (but wealthy!) American family—has cumulatively contributed more than both countries combined, even though communicable disease prevention and control is a classic public good.
To be a true global health leader, it is time for the U.S. to step up. If Norway can contribute 16 percent, the wealthiest country in the world can afford to contribute at least 20 percent. Let’s see a budget allocation of at least $175 million—it still won’t be our fair share, but it would be a step in the right direction.
Possibly Related Posts
- Global Health Is Development: Why USAID Should Lead the GHI
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- G-8 and G-20 (Non) Pledges for Global Health: New Money, Old Ideas?
8 Responses to “Will the U.S. Lead on Global Health? Start with Vaccination”
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February 23rd, 2011 at 11:42 am
Dear Amanda
It will be nice if the US will try to lead on Global Health but please consider that:
At the average, life in the US is shorter in 3 year than in Canada or Spain; while the rate of child mortality in the United States for up to five years old children (8 per 1000 born alive) is 100 % higher than in Spain (4 per 1000 born alive)!!!, 60% higher than in Germany and France and 33% greater than in Canada, Israel and UK.
Much to our regret the US health care system does not respond to any allocative efficiency, rational choice or Pareto-optimal considerations if we consider outcomes, but even more if we evaluate an input/output ratio where the observed poor results are produced with the highest health expenditure in the world, both in absolute terms (6,714 U$S per capita) but also as a percentage of GDP (15.3%).
There is a lot of hard work to do in the domestic front
Dr. Martin A Morgenstern. Dr.Ec. (PhD), MBA, Bsc – Chair Professor Health Economics – Universidad Isalud
February 24th, 2011 at 3:07 pm
Dear Amanda,
What counts isn’t always counted. An important consideration when you compare Norway’s 16% to that of the US, and suggest that we can do 20% based on our GNP.
At Hudson Institute, we measure the U. S. Net Economic Engagement with the Developing World, including ODA, as well as contributions from corporations, foundations, religious organizations, etc. During the period 2004-2008, the Net Engagement from the U.S. was $848.8 billion, of which only 14% was ODA. In 2004, ODA was 20% of our total Net Economic Engagement.
Since most countries in the OECD do not permit tax deductions from either corporate or individual incomes, and the U. S. does, and EU countries consider foreign aid to be the responsibility of their governments, and the U. S. doesn’t, this makes country to country comparisons problematic.
Secondly, as admirable as it might seem to show that the US is a “true global health leader” on immunizations, wouldn’t it be a more potent signal for the rest of the world if we could demonstrate that concept right here at home. For the past 5 years, at least 10,000 primary and secondary students in the D. C. school system (about 20% of the total) show up at the start of each year without having been immunized. This in spite of the fact that the Howard and Georgetown University Medical Schools send mobile vans into disadvantaged neighborhoods during the summer, offering free access to immunizations.
Lastly, when mentioning the US percentage of healthcare expenditures against GNP, it would be useful to note that we are the only country in the world to count in that percentage the cost of mal-practice insurance; the accelerated depreciation on plant and equipment; the contributions from employers/employees to their pension plans; and cash receipts from Canadians attending our hospitals and clinics along a line running west to east from Seattle to Buffalo, though the services they seek are available free of charge in their home country. While these costs are added to US health expenditures, they are subtracted from Canadian expenditures.
The world of global aid has changed greatly in the past decade. ODA is no longer the sole metric by which one can judge a nation’s contribution to the alleviation of pain and suffering among those less advantaged in the developing world.
Best,
Jeremiah Norris
Hudson Institute
Washingto, DC
February 24th, 2011 at 6:01 pm
Thanks to Martin and Jerry for your thoughtful comments.
In this post, I am focused on support specifically for vaccination. While there may be private US donations to vaccination in poor countries beyond those counted in contributions to GAVI and UNICEF, there is no easy way to determine its magnitude. So I am only referring to contributions to GAVI and UNICEF. This is also my focus given Administrator Shah’s recently stated goals for global health leadership from his post at USAID.
Since prevention and control of vaccine-preventable disease (VPD) is a global public good, I wholeheartedly agree with Jerry that it makes sense to discuss US vaccination rates while we are talking about vaccination rates in developing countries. Part of the reason the US is so vulnerable to imported VPD outbreaks is because our own vaccination rates are relatively low. However, US rates are low for a variety of reasons that are not mainly related to funding constraints (inaccurate beliefs about safety, lack of insurance coverage, few incentives for prevention). US leadership on this global public good should surely include its actions to improve vaccination in both the US and abroad.
I’m glad that Martin is writing from Argentina! US health outcomes are certainly lower than other developed countries, particularly for the funds invested. See the Incidental Economist blog for a great overview of how the US compares to other OECD countries on quality and costs http://theincidentaleconomist......roduction/
If the recent health reform ever reaches implementation, it should help with some of these challenges.
But is the fact that the US has its own health problems a reason NOT to contribute to the vaccination effort in poor countries via GAVI and UNICEF? The US is already spending on global health via USAID’s maternal and child health account and family planning account as well as State’s PEPFAR and HHS/CDC’s own work. The issue is — what is the most allocatively efficient use of US funds going to global health, particularly in the context of budget cuts? I would argue that vaccination is at the top of the list.
Thanks again, Amanda
February 24th, 2011 at 10:03 pm
Given the small amount of money required to cover immunization in the developing world and the benefits that it brings couldn’t Jeremiah just save his time by not arguing with the case. I’m afraid he didn’t convince me that more USAID expenditure on vaccination is a bad idea, nor am I persuaded that the Canadians are a major cause of the problems with the US health care system.
February 25th, 2011 at 10:27 am
Dear Amanda,
I appreciate your thoughtful comments and most certainly agree that since the US has its own health problems, this isn’t a reason for it to reduce contributions to global immunization efforts.
Yet, our own thought leaders question why we don’t do more.
On February 5, the Washington Post ran an editorial: Killing the Patient. On forthcoming budget cuts, it stated: that “if the pain isn’t shared among Medicare and Social Security [recipients], then deserving items such as foreign aid will have to take a disproportionate hit”. It then mentioned the need for increased aid to eradicate endemic polio in four countries: India, Pakistan, Nigeria, and Afghanistan.
The first two are nuclear powers with intercontinental launch capabilities. India has averaged an annual economic growth rate of some 7% over the past decade, and is host to a multi-billion dollar medical tourism industry. Nigeria exports 4.5 million barrels of oil a day at prices now above #114 per/b. Afghanistan, riven by civil strife, war torn, with its population living a day by day stressful existence, is quite eligible for aid assistance on polio eradication.
Since both India and Pakistan can eradicate entire populations beyond their borders, is it really too much for Medicare and SS recipients in the US to ask why they can’t afford to pay for a vial of polio vaccine and eradicate this disease for their own citizens! Since our recipients worked for 45 years to get their first band-aid from Medicare, they do need a more compelling reason to have their benefits cut than the one provided by the Washington Post.
Nigeria could leave its oil pumps running for an extra five minutes per month to pay for its pocket of endemic polio and eradicate this disease–if it was as concerned for its own citizens as are our Medicare and SS recipients.
There are other ways that the US expresses its interest in the support of global immunizations. It was the $100 million grant from Rotary that initiated the global eradication effort for polio. In 2010, the U. S. Fund for UNICEF (separate from UNICEF) contributed $487 million, mainly for immunization efforts, and provided it with tax-free offices in mid-town Manhattan. In 2008, US religious organizations contributed $8.2 billion to the developing world, with some 38% of it going into health programs, and much of that to immunization efforts.
Perhaps as important is a reference to your previous blog when Norway was mentioned as a global leader in funding immunization programs, at levels much higher than the US. Norway sits astride a tub of oil and every barrel of it that is exported across sea lanes of the world is secured by, and at the expense of, U. S. Naval forces. Given that its price has increased about $25 per barrel in the past few days, and its extraction expenses haven’t, Norway can now well afford to contribute even more to global immunization efforts.
The US is a global leader in health, yet what counts isn’t always counted in that regard.
Best,
Jeremiah Norris
Hudson Institute
February 25th, 2011 at 12:54 pm
Dear Dr. Morgenstern:
There are many ways to look at the US healthcare system and one you suggested is via “allocative efficiency … if we consider outcomes”. And you commented earlier that life expectancy “in the US is shorter than in Candada or Spain, while the rate of child mortality is 60% higher than in Germany and France”.
All true, no doubt. Yet, I wonder how the US as the New World would compare with Europe as the Old World over a 100 year period. This could be an important consideration in that Europe was deep into social health investments since Bismark Germany in 1885, while the U. S. was still pushing Westward in covered wagons.
The US entered the 20th Century (1901) with a population of some 80 million, mainly from immigrant stock, and a life expectancy of 47 years. The majority of its labor force was involved in agricultural pursuits. It ended that Century, despite two World Wars, having re-built Europe through the Marshall Plan, suffering through a Great Depression, wars in Korea and Vietnam, etc., with a population of 295 million, a life expectancy of 75 years, and less than 2% of its labor force involved in agriculture.
There was no record of healthcare expenditures until the late 1950s, when it was less than 5% of GNP. By 2000, it was 13% of GNP according to the World Bank.
On an annualized basis in that Century,then, would you not consider this a fairly decent rate of allocative efficienty relative to the return on a country’s most sensitive health indicator: life expectancy?
When many comment that the US expenditures are way to high, shouldn’t that be compared to … what? It’s not that these expendures go off into some dark hole in space. Rather, there are a lot of shoes, ties, cars, pension plans, homes, tuitions, vacations, capital construction projects, etc. in that figure. When we ended that Century with only 2% of our labor force in agriculture, where did the other 48% find work (out of the more than 50% in ag. activities in 1901)?
They went into our service industries–and mainly into healthcare. The fastest rise in Union membership is in this sector, whle it has declined dramatically in manufacturing.
Sometimes it is worthwile to consider where we’ve been as we judge where we are today and use that as the metric for policy decisions.
Best,
Jeremiah Norris
Hudson Institute
February 28th, 2011 at 4:51 pm
Dear Amanda;
Thank you very much for your comments and the site you suggest. I propose that instead of using secondary sources you can observe the Global Health Observatory (GHO) of the World Health Organization (WHO) http://www.who.int/gho/countries/en/ to assess very quickly comparisons of outcomes and relative inefficiencies in many countries.
Thanks again for your kind feedback.
Dear Mr. Norris:
In your comments you suggest three interesting hypotheses that should be analyzed at least as proper null hypotheses for consideration.
a) A significant part of the largest U.S. health spending is due to the care given to Canadian citizens who consume health goods and services provided in the United States, increasing the denominator (expenditures) and without certain knowledge of the true denominator (people consuming healthcare).
b) The worst results in terms of life expectancy and infant mortality observed in the United States (when compared to most European countries), it is essentially due to the tradition of the Bismarckian system (driven from the nineteenth century German unification).
c) It is also important to note not only the current performance but the process of improvement that the health indicators in the U.S have followed through the years.
Regarding the first point in this thesis, you should perhaps add the undocumented people, however these figures seem insignificant to alter the level of real healthcare spending in the US. Following a microeconomic logic, we can achieve a better explanation of the expenditure level, when comparing the cost of drugs and fees charged in the U.S. for medical practices of low, medium and high complexity. This is not a comparison against nothing (like you suggests) but against the same pharmaceutical molecules and the same medical practices in terms of complexity and quality elsewhere. In very simple terms …RSA behavior.
About the second point while it is true that the historic Bismarckian illness funds of nineteenth century may have influenced the culture of certain countries, in fact the different Lord Beveridge conception which emerged during and after World War II, had more influence in Western Europe. While the former transformed into a system of universal coverage only a few years ago, the second was born with this inception from the beginning.
In order to compare the trajectory of health outcomes and expenditures, I would recommend the observation of USA and Spain. Until the Moncloa pact and the decision to enter the EU, Spain have had a mixed and fragmentary Health Care System (as USA and Argentina have). Their change to a National / Regional Healthcare System has helped to dramatically improve their health results at a speed that has been never experienced by our countries.
Again many thanks for the opportunity to discuss these important matters
Best regards
Dr. Martin A Morgenstern. Dr.Ec. (PhD), MBA, Bsc – Chair Professor Health Economics – Universidad Isalud
March 1st, 2011 at 1:35 pm
Dear Dr. Morgenstern:
Great thanks for taking the time to respond. I obviously left you with the impression that by mentioning the different items which comprise the sum total of goods and services in the US percentage of healthcare against GNP,e.g., the Canadian inputs, that I was proposing this as a “null hypothesis for consideration”.
I wasn’t, nor is the Canadian input “a significant part of US health spending”.
I was simply–trying, to say that when comments are made about US healthcare spending being so high, we have to recognize that it has items which are not calculated in other developed countries health expenditures. Among these items is Canadian expenditures in the US, which are added to ours and subtracted from Canada’s percentage. Larger external expenditures can be found in patients coming to the US from the Middle East. This income stream is not a problem for us; rather, it is a benefit.
If I left you with a different impression, then I regret that.
As to your item (c), “we can achieve a better explanation of the expenditure level when comparing the cost of drugs and fees charged in the US …”, perpaps the most authoritative source on this subject can be found in the consistent studies done by the Wharton School of the Univ. of Pennsylvania on international drug pricing comparisons.
The following results are instructive:
a. Te results are very sensitive to such factors as the measure of price, whether generics are included, and whether prices are weighed by US or foreign quantities. When we include generics and compare price per gram of active ingredient, Japan and Switzerland are more expensive than the US. Comparing price per standard unit (a rough measure of dose,which differs across countries), Canada, Germany, Switzerland and Sweden are more expensive than the US.
b. Most governments,other than the US, regulate prices either directly or indirectly. France and Italy directly regulate prices at launch and subsequent rate of price increase. Germany, the Netherlands, Denmark and New Zealand operate reference price systems of reimbursement and therby exert strong pressure on prices charged by manufacturers. And many governments, such as Japan, Denmark, the U. K., and France sugbsidize the R&D components of their pharmaceutical and vaccine industries, making international comparisons difficult.
On the other points you raise, Dr. Morgenstern, I yield to your professional experience and knowledege, e.g., Spain in terms of outcomes and expenditures vs the US. We would have to net out certain expenditure items, such as the cost of mal-practice insurance in the US, which is worth 2.5 percentage points, etc.
Best,
Jeremiah Norris
Director
Center for Science in Public Policy
Hudson Institute
Washington,DC