Health Care in Developing Nations

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The success (or corruption) of Microfinance

July 2, 2008 in Economics - General, Health Care in Developing Nations | Permalink

This blog has repeatedly reported on the success of microfinance organizations such as Nobel-prize-winner Muhammad Yunus’ Grameen Bank and ACCIÓN (see 26 Mar 07 and 26 May 06 posts). Up to this point, the organizations who have worked to make loans to the world’s poor have been nonprofit organizations. Now, however, The Economist reports (“Doing good…“) that CompartamosBanco is a private for-profit business who is aiming to make money making loans to the poor.

Having for-profit businesses service loans shows that microfinance is expanding. The profits from these loans can be used to offer more and more loans to the the world’s poor. However, for-profit firms do charge high interest rates. Interest rates at CompartamosBanco are currently 79%. These figures are so high because it costs $152 to service the average $450 loan.

While Muhammad Yunus is somewhat troubled by the advent of for-profit microfinance, ACCIÓN has partnered with CompartamosBanco on some projects.

Should microfinance be a for profit business? What is your opinion?

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Sight-saving Charity

June 29, 2008 in Health Care in Developing Nations | Permalink

An estimated 1.6% of Ethiopia’s the population is blind, with approximately 12% of this blindness caused by trachoma.  Trachoma is a highly infectious disease; it is spread through contact with an infected person’s hands or clothing, or by flies that have come in contact with the discharge from an infected eye or nose.  One good piece of news is that trachoma is entirely preventable.

ORBIS International has been working to try to save the sight of many of those who are suffering from eyes diseases such as trachoma.

For more information on ORBIS, see:

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Are wet babies healthy babies?

June 12, 2008 in Health Care in Developing Nations | Permalink

Does rainfall improve health for children in developing countries? Sharon L. Maccini and Dean Yang (2008) hypothesize that higher rainfall will lead to higher incomes for rural household and higher incomes allows increased food purchases and more disposable income to be made available for health care purchases. The authors find that in Indonesia, “[w]omen with 20% higher rainfall (relative to normal local rainfall) in their year and location of birth are 3.8 percentage points less likely to self-report poor or very poor health, attain 0.57 centimeters greater height, complete 0.22 more grades of schooling, and live in households that score 0.12 standard deviations higher on an asset index.” Similar effects were not found for males however.

It seems to be the case that generating more income for poor households in developing countries is the best way to improve the health status of their female children.

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Poverty and Health in Developing Countries

June 6, 2008 in Health Care in Developing Nations | Permalink

Abhijit Banerjee and Esther Duflo find that for rural households, the probability that the mother is alive is 36 percentage points higher if the family has a daily per capita expenditures (DPCE) of $6 to $10 versus a DCPE of $1 to $2.  Using a panel data set specification, the authors also find that adults over 50 living on less than $2 a day are at least three times as likely to die over the next five to seven years than those living on $6 to $10 a day.

Are people poor because they are sick or do they get sick because they are poor?  The direction of causality is unknown.

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Decreased Mortality leads to increased investment in Education

May 27, 2008 in Health Care in Developing Nations, Labor Economics | Permalink

Economists predict that longer life expectancy leads to more investment in education. For those who live a short time, sacrificing working years for education is not worthwhile if the payback period is short. For those with a longer life expectancy, an individual can reap the monetary rewards from education over a longer period of time.

An NBER working paper by Seema Jayachandran looks at a what happens to educational investment after there was a 70% reduction in maternal mortality risk in Sri Lanka. The decreased maternal mortality rate was due to a number of factors: an increase in the number of hospitals, clinics and health centers, an increase in the number of trained birth attendants, transportation improvements such as free ambulances, and increased adoption of western technologies such as sulfa drugs and penicillin. Further, there was significant success in eradicating malaria during this time. Also, most of the medical services were provided for free.

Jayachandran uses a difference-in-difference-in-difference (DDD) strategy. “The first difference is over time, since maternal mortality fell between 1946 and 1953. The second difference is across geographic areas; the magnitude of the MMR declines varied considerably across Sri Lanka’s 19 districts. The third difference is between genders; maternal mortality is quite unique among major causes of death in that it exclusively pertains to women.”

The results of the study are that the decline in “…maternal mortality risk over the sample period increased female life expectancy at age 15 by 4.1%, female literacy by 2.5%, and female years of education by 4.0%.”

  • Seema Jayachandran (2008) “Life Expectancy and Human Capital Investments: Evidence From Maternal Mortality Declines” NBER WP #13947.

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Mobile Phone Microscope

May 21, 2008 in Health Care in Developing Nations, Supply of Medical Services | Permalink

The Economist (“Doctor on Call“) has an shows that mobile phones may have another use for doctors: a microscope.

“Mr Maamari is a member of a research team led by Dan Fletcher, a professor of bioengineering at the University of California, Berkeley, which has developed a cheap attachment to turn the digital camera on many of today’s mobile phones into a microscope. Called a CellScope, it can show individual white and red blood cells, which means that with the correct stain it can be used to identify the parasite that causes malaria. Moreover, by transmitting an image directly over the mobile network, the CellScope could greatly help with the remote diagnosis and monitoring of many illnesses.“

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Out of Poverty

April 4, 2008 in Books, Health Care in Developing Nations | Permalink

Paul Polak’s book Out of Poverty could have just as easily been titled “How to get rich: a guide for small-time farmers in developing countries” or “Marketing to dollar-a-day earners.” Polak’s book states that donations –especially those run through the developing country government–will not end poverty. They have not so far. One reason is that most donations are used to give away goods for free. But this destroys the incentive of any small businessperson to try to sell affordable priced goods to the poorest of the poor.

Polak’s NGO, IDE, develops products for those in extreme poverty in developing nations. Polak stresses that any good targeted to poor rural farmers must be 1) cheap, 2) small scale and 3) expandable. Drip irrigation is one great way for poor farmers to conserve water and efficiently irrigate their crops. Further, drip irrigation will allow farmers to grow crops during their more lucrative off-seasons, when the price from the crops is higher. Unfortunately, most drip irrigation companies make large, capital intensive products targeting large farms. IDE has taught farmers to use less expensive versions of these drip irrigation technologies to increase their income. IDE has also helped to spread the treadle pump technology to many farmers.

Another NGO with a similar philosophy as IDE is the Scojo Foundation. Scojo gives small entrepreneurs the materials and training to start their own firm selling reading glasses to the poor. Not only do these small-time entreprenuers profit, but customers who’s vision improved also appreciate the market transaction.

Another seemingly obvious point Polak makes is that the cure for poverty is to find a way for the poor to make more money. Increasing the education or medical care the poor receive is not in and of itself a means out of poverty. Poor children get little education because their parents need them to work on their farms to survive, not because they do not understand the value of eduation. Polak claims that once farmers in developing countries increase their income, they do increase their spending on education for their children, and medical care for their entire families.

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Healthcare Super Bowl: Public vs. Private Providers

February 1, 2008 in Health Care in Developing Nations, Physician Compensation | Permalink

Diarrheal disease is a leading cause of childhood mortality in many developing countries. The best treatment when diarrhea strikes is to give the patient Oral Rehydration Solution (ORS). Who provides better care for this disease, public or private providers?

A paper in Health Economics by Waters, Hatt and Black (2008) looks at data from the Living Standards Measurement Surveys (LSMS). This data set draw observations from Latin American and Caribbean countries.

The first item that Waters and co-authors note is that richer household are more likely to see the private physician. “Each additional quintile of household economic status is associated with an increase of 6.5 percentage points in the probability that a child with diarrhoea is taken to a private provider.”

But do these wealthier households receive better care? According to the authors, “treatments provided in the private sector are manifestly of worse quality than in the public sector. A total of 33.0% of children visiting a public provider received Oral Rehydration Solution, compared to 13.7% of those visiting a private provider. Conversely, children treated by a private provider are more likely to receive drugs, most commonly unnecessary antibiotics.”

Private physicians have an incentive to prescribe the more costly antibiotics because they make more money. The publicly financed providers do not have this incentive. The authors claim that prescribing antibiotics may also augment the provider’s reputation with patients. This would be analogous to an American physician preforming an MRI when it is not necessary. The physician makes money on the MRI, the patient believe they are getting high-tech care that is the best in the world, but the MRI may often be a waste of resources.

Winner: Public Providers

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WTO adopts blue toilet seat for its logo

November 9, 2007 in Health Care in Developing Nations | 1 comment

Yes, its true. The WTO has adopted a blue toilet seat for its logo. This is not surprising, however: the World Toilet Organization–you didn’t think I was talking about the World Trade Organization, did you?–is dedicated to improving sanitation issues around the world.
While the blue toilet seat logo, may be amusing, the WTO’s goal is life-and-death serious. In “A Sanitation Crisis that’s no Joke,” the New York Times reports that 40 percent of the worldwide population, or 2.6 billion people, has no access to hygienic toilets. “Diarrhea kills 1.6 million children each year — more, even, than malaria — and the pollution of drinking water with waste is a principal cause.”

During my time spent in El Salvador, I saw that the disposal of human waste was a serious problem. In the low-lying Bajo Lempa region of El Salvador, human feces often contaminated water sources used for drinking until new latrines were installed to prevent this contamination. Many of the children had diarrhea or parasitic worms preying on their health.

While potty jokes are funny, providing quality sanitation to more of the world’s population is not a laughing matter.

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Fighting Diarrheal Diseases in Developing Countries

April 12, 2007 in Health Care in Developing Nations | Permalink

One of the UN Millennium Goals is to halve by 2015 the proportion of people without sustainable access to safe drinking water and basic sanitation. We know that large-scale investments in piped water have dramatic impacts on reducing childhood mortality. Piped water, however, may be prohibitively expensive for the nations to provide to rural residents in low-density areas. Thus, we need to find clean water alternatives for the 926 million people without access to a clean water source who are living in the rural areas of developing countries.

According to a paper by Iyer et al. 2006, nearly all of the $5.5 billion the World Bank invested in rural water and sanitation programs during 1978–2003 focused on improving water supply sources and quality through interventions such as well digging. During my time in El Salvador, many of the NGOs there were digging wells to provide clean water to the residents.

A recent NBER working paper by Alix Peterson Zwane and Michael Kremer, however, suggests that well digging is not an effective means to reduce diarrheal diseases. This diarrheal diseases kill over 2 million children in developing countries each year. One of the major reasons for this are the significant maintenance costs which need to be incurred each year in order keep the well functioning. In fact, one third of rural water infrastructure in South Asia is believe to be not functional. Other studies found that more effective rural interventions included: exclusive breastfeeding, immunization, oral rehydration therapy, micronutrient supplementation, point-of-use water treatment systems, and increased hand washing.

Careful evaluation of future clean water initiatives is necessary in order that money spent on infrastructure in the developing world is used in the most effective manner possible.

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