Macroeconomics and Health (CMH)

Achievements through September 2004

The Western Pacific Region (WPRO)

The outbreak of Severe Acute Respiratory Syndrome (SARS) led the Western Pacific Regional Office to concentrate the scarce resources on addressing this grave event. In spite of this, WPRO continued to support strongly the dissemination of the CMH Report's findings, working with member states to increase the uptake of this evidence base into national health policy development and the design of poverty reduction mechanisms. Despite the challenges posed by the SARS outbreak, two states, China and Cambodia, have moved forward substantively and instituted a Macroeconomics and Health process.

In addition, a regional proposal outlining the MH activities and outcomes for governments of Papua New Guinea, Philippines, Lao PDR, and Mongolia has been developed by the country and regional offices. Vietnam has laid the groundwork for a macroeconomics and health proposal.


Cambodia has strong interest in implementing the findings of the CMH Report, especially in light of the desire to move purposefully towards the achievement of the MDGs. The Health Strategic Plan of 2002 provides a framework for cohesion among three other important efforts: a medium-term expenditure framework; a monitoring and evaluation framework for analysing cross-sectoral performance; and guidelines for developing annual operational plans for Health Ministry departments. This is enhanced by the Health Sector Support Project, funded by a broad coalition of donors, instrumental in the government's adoption of a long-term Poverty Reduction Strategy for 2003-2005.

Within this dynamic context, the WHO country office built commitment and support for the first health sector review. This led to the Finance, Planning and Health Ministries to debate how to introduce the MH process and ascertain entry points into health policy issues. In February of 2003, Dr. Jeffrey Sachs visited Cambodia and discussed with senior government leaders how the evidence provided by the CMH Report could be localised to achieve substantive outcomes.

On 22 May 2003, the Royal Government of Cambodia and the WHO Country Office jointly drafted the "Proposal on Macro-Economics, Poverty and Health". Government authorities are ready to scale up access of the poor to essential health interventions as defined by epidemiological evidence on Cambodia's burden of disease, especially among the poor and disadvantaged.

Technical support will be provided to develop several alternative scenarios on how the government can expand its health services. This would take into account the different financing and service delivery opportunities such as the private sector or public-private partnerships and review other issues such as the impact of out-of-pocket payments and empowering the end-user in decision-making. At the end of this process efforts will be made to sensitise the government decision makers and identify policy options aimed at more efficient resource allocation for health.

A major component of the macroeconomics and health work will be linked to the Child Survival Partnership. Activities may include reviewing current national, provincial and district plans for their child survival content, undertaking costing exercises (child and maternal health interventions) and other relevant exercises with the ultimate aim of and developing a child survival investment plan. This is a priority area for the MOH and this plan can be a tool to input into national health planning, including the Annual Health Sector Review, and potentially the PRSP process.

Furthermore, as the Millennium Project (MP) plans to initiate activities in Cambodia in September, efforts will be made to link the two activities in a complementary fashion.

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People's Republic of China

Sparked by a strong expression of interest by the Government for information about MH strategies and the findings of the CMH, the Commission's Report was translated into Chinese in November 2002. Follow-up discussions stimulated authorities to integrate health investment into reform agendas and new developmental policies. Recently, the urgency of investing in health was heightened by the media attention surrounding SARS. China has made considerable progress in the past 20 years towards improving living standards, including health, as well as reducing poverty and achieving strong macroeconomic growth. Large-scale poverty reduction has been one of China’s greatest accomplishments during its economic reform period. Since the early 1980s, GDP growth has averaged 10% per annum, life expectancy and mortality rates have continued to improve markedly, while some 400 million people have been lifted out of poverty.

In the aggregate, China has made considerable progress in improving its key health indicators in the last 50 years mainly because of the public health emphasis of government spending prior to 1980. For the most part, these gains have been maintained or slightly improved with the early market economy reforms which emphasized provision of fee-for-service rural care and rapid adoption of higher technologies. The improvements, however, mask sharp underlying disparities. Inadequate financing of health services in poor areas and limited access in remote areas, particularly in western China, have resulted in widening disparities in health conditions. Over the last decade, the coverage of rural villages by the Cooperative Medical Systems (CMS) has declined due to collapse in financing. Even in urban areas, community health services are under-supplied, while there has been a proliferation of high-cost hospital services.

China’s public health spending shrank as a share of GDP (to 1.3%). During the same period patient fees and insurance payments, mainly for non-public health services, rose sharply in both absolute value and their relative importance. External funding by the foreign assistance community remained an important stimulus and source of finance, helping central and local authorities attend to immunization, nutrition, tuberculosis and other infectious diseases, and to emphasize the needs of the poor and creation of public goods in health. A key constraint to effective delivery of health services includes a decentralized system of inter-governmental finances, exacerbating regional inequalities and the effective delivery of health services. Local governments bear heavy expenditure responsibilities, including for providing health services, which are not matched by adequate own-revenue sources or sufficient government transfers.

Strategic, targeted increases in government spending on the health of the poor will build their capacity for production and increase their ability to contribute to the rural economy. This will help ensure overall socioeconomic stability and create options for sustainable health insurance systems. Health investments can be an important development objective, as it will improve rural health conditions, decrease regional health disparities and, by improving the health of the local workforce, augment the output of the rural economy.

Along with Health Partners in China, the Ministry of Health has set forth an outcome-oriented follow-up to the CMH Report. Chinese authorities are building a local evidence base to systematically link poverty alleviation and health reforms to the UN Development Assistance Framework, especially in conjunction with the UN Theme Group on Health. The CMH process has built momentum among China's policy makers to use the Report's evidence to design national policies that integrate health and economic development. The challenge is to better integrate individual initiatives within an overall policy framework to provide common direction based on the nature of poverty and health in China. The initial analyses undertaken that placed the CMH recommendations in the China context included a study on the sub-provincial linkages on health and local economic growth, an analysis of China’s macroeconomic policies (in conjunction with DFID), a study describing the economics of rural health, and an analysis of the effect of migration patterns on health care.

In April 2003, the Ministry of Health and the Chinese Health Economics Institute held a work session to review follow-up activities, strengthening their conviction to develop a Macroeconomics and Health strategy. At the 2nd Global Consultation on Macroeconomics and Health (October 2003, Geneva), the Ministry of Health presented China's broad strategic vision for macroeconomics and health, describing, in the post-SARS period, China's desire to achieve a society in which economic and social benefits are shared by everyone. The document presented the limited capacity of the health system to meet growing health needs of the population and the importance of coordination between health and economic reforms. This document identified three main issues: 1) Inadequate health service capacity, 2) Inadequate health services for disease control and prevention; and 3) Incompatibilities between the health management system and the new economic system.

China’s activities have focused on continuing the work already begun, including expansion of the sub-national National Health Accounts analysis and new studies that will potentially analyse the options for rural health scale-up under the New Cooperative Medical Schemes and analyse community-based social insurance for health. Other work includes the analysis of the effect of SARS-related investments on pro-poor health investments and health system development and the development of the overall MH strategy. The MH work will continue to develop further the evidence to put health at the centre of social reforms and to demonstrate that health investments will contribute to overall development, focusing on health care financing, development of universal access to basic health care, and government health spending. In collaboration with the National Development and Reform Commission (NDRC), macroeconomics and health work aims to support the development of a China specific macroeconomics and health report for the purposes of advocacy and integrating evidence into pro-poor policy and reform initiatives.

The WHO office is engaged with the MOH and representatives from the Ministry of Finance and the NDRC in the inclusion of health interests in this year's planning efforts for the 11th Five Year Plan. WHO will support the MOH in developing, a proposal for the health component in this plan. This work will be carried out in cooperation with high-level government participation, the WHO office, local academics and experts and in integration with existing bilateral and multilateral initiatives and projects.

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Lao People's Democratic Republic (Lao PDR)

Lao PDR has almost 40% of its population living under the national poverty line and is developing policies to improve the health outcomes of its poor. Lao’s Vision 20/20 is the country's long-term health plan and under its National Poverty Eradication Plan, Lao PDR plans to focus health policies and interventions by geographical area, prioritizing its poorest districts for health targets.

About 60% of total health expenditures in Lao PDR are from private sources, mainly out-of-pocket expenditures, resulting in the probability of the exclusion of the poor from access to health care. Mainly due to low levels of government revenue, even public health institutions rely heavily on patient fees and revolving drug funds. Although the poor are to be exempted from fees, the implementation of this policy is uneven throughout the country.

Lao PDR plans focus its macroeconomics and health activities in the following areas:

  • Costing and financial projections of income and expenditure in health;
  • Strengthening financial management, including management of recurrent costs;
  • Developing sustainable national health accounts; and
  • Promoting pro-poor health care financing mechanisms.


Mongolia is working to strengthen pro-poor policy. Mongolia’s new Economic Growth Support and Poverty Reduction Strategy strives to improve access to primary health care services. Within the framework of this strategy, the quality and accessibility of health care to populations in rural areas will be improved through establishment of family group practices in large "soums" (villages) and towns (completed in urban areas), implementation of "soum" health development programme, establishment of regional diagnostic centers, licensing and accreditation of health professionals and hospitals, development of the health technology programme.

This strategy also aims to improve the efficiency of health insurance law, revised to include outpatient care and primary health, relocation of resources to primary health care and use of needs-based funding to sub-populations, Public Sector Management and Financing Act - output based funding, incentives for cost-effectiveness, development of national health account (including health spending monitored by socioeconomic groups), health sector restructuring through introduction of management contracts, establishment of hospital boards and self-financing.

Mongolia has completed a national launch meeting of the CMH report involving key stakeholders and the Report has been translated into Mongolian. The proposed macroeconomics and health activities in Mongolia are expected to focus in the following areas:

  • Costing exercise with a focus on economic costs and benefits in view of the targets of the Millennium Development Goals (MDGs);
  • Strengthening of financial management to monitor recurrent costs;
  • Analysis of equity in access to basic health care;
  • Strengthening of pro-poor health policy and appropriate implementation mechanism that reaches the remote population in difficult settings.

The expected outcomes of the proposed plan include achievement of the MDGs targets with increased emphasis on the health of the poor and vulnerable; Evidence based pro-poor health policy that ensures equity access to essential health services by the poor and vulnerable; and development of tracking system to monitor health components of MDGs and the Poverty Reduction Strategy Paper.

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Papua New Guinea (PNG)

PNG is experiencing an important challenge in developing and implementing a comprehensive health policy addressing poverty, health and equity. Currently, PNG is classified as a "low income poor" country especially in terms of food consumption. The 2000 census suggests that PNG's population has now reached 5.1 million but that much of the population is unable to obtain minimum caloric requirement for adequate nutrition. Survey data suggest that 16% of the population have no capacity to provide for their own food. The proportion of children under five who are underweight ranges from 12% in the capital city to 45% in remote provinces.

PNG has a highly decentralised system of health services, which is not fully functional due to lack of resources and other political and administrative factors. Some work has been started in preparing National Health Accounts and also in costing of health services. Like many other low-income developing countries, donor funding is the main source of health budget. Infant mortality, under-five mortality and maternal mortality in PNG are extremely high compared to other countries in the Pacific Region. Rural poor, women and children are most affected by preventable diseases such as malaria and tuberculosis.

In consultation with national counterparts, the following country specific MH focus activities have been identified as follows:

  • Ensuring greater resources for health through strengthening the link between national development strategies and MDGs and by supporting donor coordination in the health sector;
  • Prioritising diseases and health intervention that affect poor and marginalized populations;
  • Introducing community social health insurance.


55% of total health expenditures in the Philippines are from private sources, mainly out-of-pocket expenditures. Reliance on private funding of health perpetuates the inequity of health care access and health care goals. From 3.3% in 1998, the share of health expenditure of GNP stood at 3.1% in the year 2001. According to the National Statistics and Coordination Board (NSCB), this is the lowest in 6 years. Though per capita health spending has slightly increased, there is still a need to allocate a larger share of government total budget for public health care since the current pattern shows a larger share spent for personal health care.

As of year 2002, the coverage of the National Health Insurance Program among the total population stands at 49%. Enrolment and benefits to members have steadily grown in the past three years. The government aims to reach 85% coverage by the end of year 2004. Although much remains to be done in shifting the burden of health financing to social insurance, some slight improvements have been achieved in this area. The share of social insurance in health spending has increased from 7.1% in 2000 to 7.8% in 2001.

There do exist interim locally-managed, or community-based, health insurance schemes. These schemes may be desired primarily because of their proximity to the members, making it possible for their claims and benefits to be paid with less hassle and waiting time. However, organizational and management problems remain as challenges to their sustainability.

In an effort to improve resources for health and protect the poor from the burden of health expenditures, the proposed macroeconomics and health activities of the Philippines is part of a sub-regional project proposal.

The Philippines plans to focus its macroeconomics and health activities on the following areas:

  • Ensuring increased investments in public health programs;
  • Extending National Health Accounts to provincial levels; and
  • Improving health insurance towards universal coverage.

These proposed macroeconomics and health efforts in the Philippines are aimed at achieving broad long-term objectives: 1) increased investments in public health programs; 2) achievement of universal social health insurance coverage; and 3) development of a tracking system to monitor health components of MDGs and PRSP.

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Viet Nam

Viet Nam has a population of nearly 80 million and an estimated 29% of the population is below the international poverty line. GDP growth averaged around 7% per annum for the last decade. Although Viet Nam is among the poorest countries in the world, its vital health indicators are comparable to those of middle-income countries. Life expectancy, for instance, is ten years longer for Vietnamese women than would be expected given the level of development. Viet Nam has been highly successful in providing preventive health services, controlling the spread of communicable diseases and achieving good health for the population. This was achieved in part because of its extensive health care delivery network with a strong primary health care component and well organized national health programmes. However, considerable disparities in health status exist between different geographical regions and between population groups.

The main challenge facing Viet Nam is therefore to protect the achievements gained (in term of health outcomes and health services) and to ensure that the health system contributes fully to the improvement of the health of the population, the reduction of health inequalities and the attainment of the Millennium Development Goals / Viet Nam Development Targets (MDGs/VDTs). In 2002, the Government published the Comprehensive Poverty Reduction and Growth Strategy (CPRGS), which recognized the impact on poverty reduction and growth of both poor health and the cost of health care for the poor.

The Central Committee for Science, Health and Education of the Communist Party of Viet Nam, together with the Ministry of Health and with support from WHO, has conducted a series of four fora on Health and Development: Commission on Macroeconomics and Health (CMH), Health and Equity, Expanding Social Health Insurance and the Role of Hospitals. In addition, the National Assembly with support from WHO has organized a series of workshops to discuss the importance of health in the development of the country and ways to increase investment and financing for health care.

Viet Nam is working to prepare a clear plan and proposal for support for CMH activities. The proposal will include support for a systematic assessment the key findings of the CMH applied in the country specific context, advocacy for CMH and linking CMH to ongoing national planning and decision making.

It is the intention of the Ministry of Planning and Investment to integrate the CPRGS and MDGs/VDTs into the socio-economic development planning. In this context the Ministry of Health is starting preparation of their five-year plan, which, it is hoped, will be developed as a National Health Plan 2006-2010, with the main findings of the CMH being an important part of the planning assumptions. WHO is supporting an Inter-Ministerial Steering Group (involving Ministries of Planning and Investment, Finance, etc.) to oversee the development of the National Health Plan.

Specific activities are expected to include:

  • Further analysis of the linkages between poor health and poverty and macro-economic growth in Viet Nam and related advocacy;
  • Work on the burden of disease in Viet Nam to identify the package of cost-effective interventions, particularly at the district and commune level, which will reduce excess mortality and morbidity in poor and marginalized populations; and
  • Consistency of the National Health Plan with the overall macroeconomic framework.

Expected outcomes of MH work include a better understanding of the link between poverty, poor health and sustainable macroeconomic growth in Viet Nam, analysis of the burden of disease, especially of the poor, cost-effectiveness of service delivery strategies to ensure access to an essential package of interventions, and development of a National Health Plan and Master Plan for Health financing.

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