Health Care Around the World

Highlights from The Economist’s article on Health Care in India:

• India spends only about 5% of GDP in medical care.  Of this spending only one fifth is public spending.
• With an overwhelmed public sector, relatively low levels of insurance, a premium is put on frugal innovation.  Fortis, a hospital chain in New Delhi, elects to have ‘world class’ scanners, but not necessarily the newest.
• Surgical procedures are also innovative.  Vivek Jawali has developed an open heart surgery procedure where the patient is still awake.  ”Because such ‘beating heart’ surgery causes little pain and does not require general anaesthesia or blood thinners, patients are back on their feet much faster than usual. This approach, pioneered by Wockhardt, an Indian hospital chain, has proved so safe and successful that medical tourists come to Bangalore from all over the world.”
• Health IT use in U.S. hospitals: 20%
• Health IT use in Indian hospitals: 60%
• Tiered pricing: Aravind, the world’s biggest eye-hospital chain, employs “a tiered pricing structure that charges wealthier patients more (for example, for fancy meals or air-conditioned rooms), letting the firm cross-subsidise free care for the poorest.”
• “In health care, as in life, there is need for both Ferraris and Tata Nanos.”

Soares (2009) examines the relationship between income and life expectancy around the world and particularly with respect to Latin America.  Table 1 shows GDP growth per capita and life expectancy increases around the world.  Table 2 decomposes the gains in life expectancy by age group.  Some notable findings are:

• We see significant progress in East Asia.  East Asia had the largest increase in income (330%) and life expectancy (49%) between 1960 and 2000.  
• Sub-Saharan Africa is still lagging behind other regions.  Income in 2000 was only 10% higher in Sub-Saharan Africa than was the case in 1960.  Further, life expectancy increased by only 15% from 1960 to 2000, from 41 years to 47 years.
• Within Latin America, Haiti was the poorest country in 1960.  
• Both Bolivia and Haiti had a life expectancy of 43 years in 1960.  By 2000, however, Bolivian life expectancy increased to 63 years whereas for Haiti life expectancy increased to only 53 years over this time period.
• Barbados is the richest Latin American country.  Argentina is the richest large Latin American economy.  
• Nicaraguan income per capita decreased by 48% between 1960 and 2000.  
• Overall life expectancy increased in Latin American increased by 23%.
• In Latin America, 58% of the increase in life expectancy is due to decreased mortality among individuals aged 0-19 years.

What is the cause of the increased longevity across Latin America between 1960 and 2000.  Soares claims the following:

“The available evidence suggests that improvements in public health infrastructure – such as provision of treated water and sewerage services – and large-scale immunization programs may have been the key factors behind the mortality reductions observed in the period.”

• Rodrigo R. Soares (2009) “Life expectancy and welfare in Latin America and the Caribbean.” Health Economics, Volume 18 Issue S1, Pages S37 – S54.