3. Health and Service Provision Takashi Yamano Development Problems in Africa Spring 2007.

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3. Health and Service Provision

Takashi Yamano

Development Problems in Africa

Spring 2007

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Health and Service Provision

1) Health Concepts and Measurements

2) Child Health

3) Economics of Communicable Diseases

4) Market Failures for Vaccine Development

5) Push and Pull Programs

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1. Concepts and Measurements• Hunger: a condition, in which people lack

the basic food intake to provide them with the energy and nutrients for fully productive lives. (Hunger Task Force, UNDP, 2003)

• FAO: the prevalence of undernourishment• Per capita dietary energy supply: production + stocks

– post-harvest losses + imports + food aid – export• Criticisms (i) poor data, (ii) poor information about

distribution, (iii) evidence show underestimations of hunger.

• But this is the only measure available for many years for many countries.

See Behrman, Alderman, and Hoddinott (2004)in Global Crises, Global Solutions

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Anthropometric Measures• Height for Age Z-score

• Long-term health measure• Below -2: stunted• Below -3: severely stunted

• Weight for Height• Short-term measure• Below -2: wasted• Below -3: severely wasted

• Weight for height• Long & short measure• Below -2: underweight• Below -3: severely

underweightSexAge

SexAgeii DS

WeightWeightWAZ

,

,

..

SexAge

SexAgeii DS

HeightHeightHAZ

,

,

..

SexHeight

SexHeightii DS

WeightWeightWHZ

,

,

..

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DALY: Disability Adjusted Life Years

DALYs sum the years of life lost due to premature mortality (YLL) and the years lost due to disability (YLD), weighted by the severity of the disability.

One DALY is equivalent to one year lost of healthy life. One DALY could be evaluated at the average income.

DALY = YLL + YLD

YLL = N x L (# of deaths x life expectancy at age of death)

YLD = I x DW x L (# of incident cases x disability weight x average duration of disability)

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Other Measurements• Anthropometric Measures of Malnutrition

>> Next slide• Measures of Micronutrient Deficiency

• Prevalence of iodine deficiency• Among pregnant women >> Low birth weight• Among children >> high mortality rates

• Prevalence of low iron intake in children and women• Among women >> anemia, low birth weight• Among children >> low cognitive ability

• Prevalence of vitamin A deficiency• Blindness • Child mortality

FASIDFASID From Strauss and Thomas(1996) AER

How about self reporting?Strauss and Thomas found that reported height is systematically shorter than the measured height for younger children. They speculate that this is because parents remember the last measurement, but younger children grow faster than older children.

They also found that the difference between the two is related with income. High-income parents may monitor more closely.

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2. Child Health: Why should we care?

• Humanitarian reasons• A link between child nutrition and cognitive development and

education; and a link between child nutrition and life-time productivity

• Previous studies have shown that school going children have higher academic records if they were healthy in their early childhood (0-5 years old).

• Previous studies shown that adults who were healthy in their early childhood have higher education levels and income.

• Saving resources: healthy children require less medical expenditure and higher returns from education systems.

See Behrman, Alderman, and Hoddinott (2004)in Global Crises, Global Solutions

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Child Mortality Rate Overview

1970 1980 1990 2000

Sub-Saharan Africa

218 192 178 171

South Asia 206 176 129 101

East Asia & Pacific 127 79 59 45

Europe & C. Asia 44 38

Latin America 123 84 53 36

Under 5 mortality rate per 1,000

Source: World Bank Development Indicator 2004

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Angola

Burundi

Benin

Burkina Faso

Botswana

Central African RepublicCote d'Ivoire

Cameroon

Congo, Rep.

Comoros

Cape Verde

Eritrea

Ethiopia

GabonGhana

Guinea

Gambia, The

Guinea-Bissau

Equatorial Guinea

Kenya

Liberia

LesothoMadagascar

Mali

Mozambique

Mauritania

Mauritius

Malawi

Namibia

Niger

NigeriaRwanda

Sudan

Senegal

Sierra Leone

Sao Tome and Principe

Swaziland

Seychelles

Chad

Togo

Tanzania

Uganda

South Africa

Congo, Dem. Rep.Zambia

Zimbabwe

01

00

20

03

00

Mo

rta

lity

rate

pe

r 1

,00

0

0 2000 4000 6000 8000GDP per capita

Child Mortality and GDP per capita in 2000

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Burundi

Benin

Burkina Faso

Botswana


Cameroon

Congo, Rep.

Comoros

Cape Verde

Eritrea

Ethiopia

Ghana

Gambia, The

Guinea-Bissau

Equatorial Guinea

Kenya

Liberia

Lesotho Madagascar

Mali

Mozambique

Mauritania

Mauritius

Malawi

Namibia

Niger

NigeriaRwanda

Sudan

SenegalSwaziland

Chad

Togo

Tanzania

Uganda

South Africa


Zimbabwe

01

00

20

03

00

Mo

rta

lity

rate

pe

r 1

,00

0

0 20 40 60 80 100GDP per capita

Child Mortality and Illiterate Rate Female in 2000

Illiterate rate among female in 2000

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Burundi

Benin

Burkina Faso

Botswana


Cameroon

Congo, Rep.

Comoros

Cape Verde

Eritrea

Ethiopia

Ghana

Gambia, The

Guinea-Bissau

Equatorial Guinea

Kenya

Liberia

LesothoMadagascar

Mali

Mozambique

Mauritania

Mauritius

Malawi

Namibia

Niger

NigeriaRwanda

Sudan

SenegalSwaziland

Chad

Togo

Tanzania

Uganda

South Africa


Zimbabwe

01

00

20

03

00

Mo

rta

lity

rate

pe

r 1

,00

0

0 20 40 60 80Illitrate Rate (Male adults)

Child Mortality and Male Illitrate Rate in 2000


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Factors that affect child health• Income• Education of mother

Usually its impacts are stronger than father’s education

• Education of father• Gender preference of parents (especially in South

Asia) • Infrastructure • Micro-nutrients of food intake• Exposures to diseases >> Next Topic

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Fertility by the education of mothers

0

1

2

3

4

5

6

7

8

Africa S.Asia & S.E.Asia Latin America &Carribean

No EducationPrimarySecondary

Created from Demographic and Household Surveys in the 1990s

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HAZ by the education of mothers

Created from Demographic and Household Surveys in the 1990s

-2.5

-2

-1.5

-1

-0.5

0Africa S.Asia & S.E.Asia

Latin America &Carribean

No EducationPrimarySecondary

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Mother’s education and Child Health

• Mother’s education has been found a key factor• Why does mother’s education improve child health?• Glewwe (1999) argues that

• Formal education may directly transfer health knowledge• The literacy and numeracy skills acquired in school may e

nhance the capability to diagnose and treat child health problems

• Increased familiarity with modern society through schooling may make women more receptive to modern medicine

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3. Economics of Communicable Diseases

Background on Communicable Diseases Infectious and parasitic diseases account for

one-third of the disease burden in low-income countriesover half in Africa

only 2.5 percent in high-income countries

A key reason for the spread of infectious diseases in low-income countries is weak health-care systems:

Low budgets in generalAbsenteeism among health workersPoor conditions of clinics (often no drugs)

Chaudhury et al. (2006, JEP) found 25 to 40 percent of health workers were absent from their posts, and 40 percent of doctors were absent in surprised visits. More on this next week.

Kremer and Glennerster (2003) “Strong Medicine”

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Three Major Communicable Diseases

Every year, 1.1 million people, mostly children and pregnant women, die of malaria (90% of them are in Africa)

Every year, 1.9 million people die of tuberculosis (98% in developing countries, many in Africa).

In 2003, 2.9 million people died of AIDS (total of over 20 million since 1981). About 38 million people are living with HIV.


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Deaths from Diseases for which Vaccines are Needed

Diseases Deaths (millions)

%

AIDS 2.3 27.5

Tuberculosis 1.5 18.0

Malaria 1.1 13.3

Pneumococcus 1.1 13.2

Rotavirus 0.8 9.6

Shigella 0.6 7.2

E.Coli 0.5 6.0

Others - -

Total 8.3 100Kremer and Glennerster (2004) “Strong Medicine”

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4. Failures in the Market of Vaccines

Under Consumption of Vaccines Individuals who take vaccines not only benefit

themselves, but also break the chain of disease transmission. They do not, however, such external benefits into account.

The chief beneficiaries of vaccines are often children.

Individuals seem much more willing to pay for treatment than prevention.


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Monopoly Market

A

B

E

C

D

Monopoly Price (MP)

Manufacturing Cost (MC)

Monopoly Profit

Alternatively: The government pay A + B + C + D to the firm, taxing Group X just below MP and Group Y just over MC. >> everyone is better off !

Willingness to pay

Fraction of population vaccinated Group A

01

Group B


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Social vs. Private Returns Private returns to curing the disease is based on the income saved by

taking drugs or vaccines.

But because infectious diseases spread among people, the social returns have to take into account the saved incomes of potential patients who would be infected by the disease from the particular patient.

Thus, Social Returns of a communicable disease is higher than the private returns. Negative Externality!

Implication: medical costs of communicable diseases should be subsidized. Earlier the interventions are, the lower the costs.


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5. Push and Pull Programs

Push Programs: subsidize research inputs through means such as grants to academics and tax credits for R & D investment.

Pull Programs: increase the rewards for developing specific products by committing to reward success, such as patent systems

Kremer and Glennerster (2004) Strong Medicine

Push Programs

R & D

PullPrograms

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Advantages and Limitations Push ProgramsAdvantages: can support basic research, require sharing of

research outputsLimitations: misallocation of fund (fund providers may not

know how to allocate fund or are unable to monitor research activities)

Pull Programs Advantages: fund is provided only when products are

produced, scientists and firms allocate their resources efficiently, suitable for product developments

Limitations: no sharing information until the products are produced, difficult to specify research outputs


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The Patent Trade-off Without patents, pharmaceutical companies have no incentive to

develop vaccines and drugs. With patents, pharmaceutical companies charge high (monopoly)

prices on vaccines and drugs.

The challenge is to achieve the following two goals: Goal: Creating R&D incentives to develop new pharmaceuticals Goal: ensuring wide access to pharmaceuticals once they are

developed.


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Patents in Developing Countries

Many countries do not have effective patent laws on pharmaceuticals (vaccines and drugs).

In India, for instance, pharmaceutical products cannot be patented. Thus, Indian companies produce patented pharmaceuticals without paying patent fees and sell them at low prices domestically and internationally.

See the LA times new article on drugs in the Philippines.


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TRIPS: The 1994 Agreement on Trade-Related Aspects on Intellectual Property Rights

TRIPS requires all member countries to provide twenty-year patent protection for pharmaceuticals.

However, Article 31 states that the patent requirement “may be waived by a Member in the case of a national emergency or other circumstances of extreme urgency or in cases of public non-commercial use.”

Furthermore, WTO adopts a separate declaration that extends the transition period for instituting patent protection for pharmaceuticals to 2016 in the poorest countries.


3. Health and Service Provision Takashi Yamano Development Problems in Africa Spring 2007.

Documents

child health

healthy children

underweight slide

younger children

older children

healthy life

x dw x

years of life lost