SDG 3: Achieving Equitable Health
It has been a little over five years into the Sustainable Development Goals (SDG) era and we find ourselves in the middle of a global pandemic.
Surely, progress towards achieving the SDGs must have slowed down. However, the pandemic has thrown light on many questions regarding the healthcare infrastructure across the globe. One of the SDG – Goal 3 – promotes healthy lives and well-being for all. Are we close to achieving this goal? Â
Over these years, global spending on health continues to rise and has contributed to about 10% of GDP in 2018. Such health expenditures are critical for reaching universal health coverage (UHC). But do people have access to quality health services they need without suffering financial hardship? Anyone who is keeping up with the news about COVID-19 knows that this is far from the truth. So, the question is whether global expenditure on healthcare, alone, is a good indicator for measuring progress towards the SDGs or UHC?Â
Source: https://data.worldbank.org/indicator/SH.XPD.CHEX.GD.ZS
Also Read: Sustainable Financing and The Economics of SustainabilityÂ
 The global spending on health includes several categories – government expenditure, out-of-pocket payments (OOPs) and sources such as voluntary health insurance, employer-provided health programs, and activities by non-governmental organizations. When access to quality healthcare was deemed as a human right, public healthcare which largely includes government funding, became an important source for achieving UHC. As of today, governments provide an average of 51% of a country’s health spending, while an average of 35% of health spending comes from out-of-pocket expenses. Therefore, the data on out-of-pocket spending is a key indicator towards UHC. But is it a progressive or a regressive indicator? That is to say, does higher percentage of OOPs means equitable or non-equitable access to healthcare? Before we get into this, let’s understand what exactly is OOP?Â
What is Out-of-Pocket expenditure?Â
Out-of-pocket payments (OOPs) are defined as direct payments made by individuals to health care providers at the time of health service use. When an individual goes to a clinic for cough and cold, the consultation fee and the medicines, is often paid from the individual’s pocket. One might wonder, what is new about this? Is not spending one’s money normal?  Â
As healthcare systems are developing, costs of healthcare are also rising. This is creating a barrier for many who are unable to afford high-cost healthcare. This is where UHC plays a role – where the aim is to provide affordable, quality healthcare for all. One of the ways it is doing this is funding through taxes, providing social insurance and influencing policies. This is important because at least half of the world’s population is still unable to obtain essential health services, according to Global Monitoring Report from the World Bank and WHO.  Â
Why is OOP controversial?Â
Each year, large numbers of households are being pushed into poverty because they must pay for health care out of their own pockets. Currently, over 930 million people (around 12% of the world’s population) spend at least 10% of their household budgets on health expenses for themselves, a sick child or other family member. For almost 100 million people these expenses are high enough to push them into extreme poverty, forcing them to survive on just $1.90 or less a day. Economically, if one is not able to pay for healthcare services, their ability to work also diminishes leading to further catastrophic conditions. A high proportion of households experienced catastrophic expenditure and impoverishment following an injury, highlighting need for programs to prevent injuries. Such high expenditure can mean that people must cut down on necessities such as food and clothing or are unable to pay for their children’s education. Â
To combat such issues, “free healthcare†is introduced to support those who face financial hardships. However, it is argued that free healthcare will create more demand and put pressure on healthcare providers. In poor resource-settings in particular, where health care providers tend to be inadequately paid, user fees constitute a major source of revenue for health workers. This helps to sustain the provision of health services. If health workers are not paid adequately, this can hinder access to healthcare for those who rely on free healthcare.Â
Global status on OOP
Health services are improving around the world. However, the lack of financial protection means increasing financial distress for families as they pay for these services out of their own pockets.  Â
Reliance on out-of-pocket payments varies considerably across the globe but there is a very strong correlation between the level of OOPs and catastrophic and impoverishing health expenditures. In the US, Senator Elizabeth Warren stated that, “If we make no changes over the next 10 years, Americans will reach into their pockets and pay out about $11 trillion on insurance premiums, copays, deductibles and uncovered medical expenses.â€Â  Â
However, the situation is very different in middle- and low-income countries, where OOP is 15-25% more than high income countries. Meaning, in these countries, people are spending more on healthcare out of their own pockets. Inequalities in health services are seen not just between, but also within countries: For example, only 17 percent of mothers and children in the poor households in low- and lower-middle income countries received at least six of seven basic maternal and child health interventions, compared to 74 percent for the well to do households. Â
Why Sustainable Finance in Health Important?Â
Such high levels of OOPs are leading to catastrophic and impoverishing health expenditures, impacting not just access to health but also food and education. To address this issue, several individuals and organization have introduced innovative mechanisms to make quality healthcare affordable for all. But to truly make an impact, we need to provide greater financing for consumers and greater incentives for healthcare providers to achieve SDG 3.  Â
To know more about sustainable finance and health, join experts in these fields in our webinar series on sustainable finance here.  Â
Read more:Â
Why is Green Finance Important?Â
Sustainability: What to Focus On?Â
Origin Story for Sustainable Development GoalsÂ
 References:Â
- health-expenditure-report-2019.pdfÂ
- Global Health Expenditure DatabaseÂ
- Outâ€ofâ€pocket health expenditure and debt in poor householdsÂ
- Financial burden of household out-of-pocket health expenditure in Viet Nam: Findings from the National Living Standard Survey 2002–2010Â
- Out-of-pocket expenditure and catastrophic health expenditure for hospitalization due to injuries in public sector hospitals in North IndiaÂ
- Economic Survey | ‘High out-of-pocket expenses for health can lead to poverty’Â
- Published in Blogs
Why is Green Finance Important?
Climate change is a myth for many politicians globally. However, consumers and investors are increasingly becoming aware of it. This is why green finance and green projects have increased exponentially over recent years.Â
Traditional financial instruments fund development activities offering huge returns and economic growth. The issue: these returns come at the cost of the environment.Â
And the result? Catastrophes. Floods, forest fires, highly infectious diseases, and earthquakes. We are seeing increased water, land and air pollution, high mortality, loss of livelihoods, increased inequalities.Â
For instance, the COVID-19 pandemic that we are in the middle of currently is also rooted in climate change. The impact of such disasters is not limited to a species or a section of people. For instance, COVID-19 has led to deaths, job losses, economic crashes, affected education, disrupted supply chains, business closures and killing of animals.Â
Why Green Finance Over Traditional Finance?Â
The need for sustainable development has become a necessity. And, it is essential to fix environmental degradation and social inequalities that have considerably increased over the years.Â
The World Economic Forum has put together the Global Risks Report 2021 to highlight the biggest risks threatening Earth in 2021. Â
Quite unsurprisingly, the report puts the following as the top five risks, by likelihood:
- Extreme weather,
- Climate action failure,
- Human environmental damage,
- Infectious diseases and
- Biodiversity risks Â
We talk about climate change day in and day out, but how do we tackle it?Â
To begin with, we, humans, need to make conscious changes to our lifestyles. That means, less dependency on private transport, more recycling and reusing, and changing our consumption patterns. For instance, avoiding single-use plastics, reducing overdependency on meat and meat products, and ensuring we don’t waste food, water and electricity.
Not easy, and not enough either.Â
Secondly, our industries, corporates, government, and educational institutions need to work together. This will help create a chain reaction model of small impactful actions brought about by the conscious changes we make in our daily activities, decisions, and lifestyles. Â
Thirdly, our economic activities like manufacturing, construction, farming, fishing, and transportation should not take a toll on the environment. This can be done by managing emissions and waste generated from these activities.
Funding activities that focus on solving environmental problems should come from both private and public sectors alike. Â
What is Green Finance?Â
Green Finance is a financial activity that creates an inflow of funds into activities tackling environmental issues. This means it engages traditional capital markets to create and distribute financial products and services.  These are then used to fund environmental projects and yield investable returns.Â
Green financing is done through a slew of measures like loans, debt funds and investments. For instance, green bonds, sustainability bonds, social bonds, sustainability-linked loans and green loans.Â
As per the Global Sustainable Investment Alliance Report of 2018, sustainable investments stood at $30.7 trillion for countries like USA, Japan, New Zealand, Australia, Canada and Europe.  All the regions, except for Europe, showed an increase in sustainable investing. Â
Where Can Green Finance Funding Be Used?Â
Green financing can be used to fund activities like:Â
- Renewable energy production and improved energy-efficiency projectsÂ
- Preventing and controlling pollution Â
- Controlling emissionsÂ
- Nature conservationÂ
- Circular economy – making stronger Reduce, Reuse, Recycle frameworksÂ
- Sustainable agricultural practicesÂ
- Sustainable use of natural resources like land and waterÂ
Why is Green Finance Needed?Â
Until now, public and private sectors have mostly aimed at profits. This was being done without giving a thought about the impact of our activities on the environment. However, now there is increasing awareness. All development should happen in tandem with ecological conservation and not at a cost of it.Â
It is essential that the private, not-for-profits and public sectors work towards sustainable development goals (SDGs). But to fund SDGs, international financial systems also have to align themselves to these goals. This can bring in more investments into green projects. Â
Traditionally, financial institutions have always shown more interest in funding projects like fossil fuel that offer high ROI. However, keeping the long-term impacts of such projects in mind and the necessity to achieve the SDGs, it is essential to scale up green financing.Â
Funding projects that tackle environmental and social problems is important for a sustainable, healthier, and equal world for all.Â
Green Finance is a way to work towards achieving these.Â
References:Â
Sustainable Financing And The Economics of SustainabilityÂ
- Published in Blogs
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