Module 6: Primary Players in Healthcare Worldwide

The economics of healthcare are determined by a multitude of actors, including individuals and families, communities, non-governmental organizations (NGOs), government-funded public health management programs, and international policies on healthcare investment. When addressing healthcare crises in the face of economic deprivation, these players must work together to rebuild the often fragile healthcare systems in place and mend their inefficiencies.

Individual Expenditures and Out-of-Pocket Payments

When governments do not provide adequate financial support or universal healthcare programs, individuals and families must finance their own healthcare. Low and middle-income countries (LMIC) typically experience the highest levels of independent and out-of-pocket payments (OOPs), as do the poorest populations of many developed countries. These expenses take huge tolls on familial incomes, driving many into poverty.(1) Spending reaches “catastrophic” levels when the cost to keep an individual in the hospital or on continued treatment exceeds a certain percentage of the family’s household income. Even seemingly inconsequential health complications can lead to tremendous financial strain when family members become too ill to work and generate an income. When expenses become too great, the impoverished often stop seeking healthcare altogether, exacerbating their illnesses and their family’s level of poverty. LMICs would benefit from health insurance reforms that pool the nation’s finances, thereby broadening coverage.(2)

Due to underfinanced public health programs and inadequate international support for developing countries, LMICs primarily finance their healthcare through individual payments and OOPs. In low-income countries, 25-60% of overall healthcare spending comes from private and individual finances, while in high-income countries this form of payment comprises only 15-25% of healthcare spending. This information has been gleaned through surveys, taxes, and censuses that analyze the accumulation of transport services, private and public hospital costs, unofficial sums paid to staff, as well as preventive care, medicine costs, and outpatient expenses. Though it is difficult to determine exact costs, particularly in developing countries, this policy of “every man for himself” is detrimental to countries already experiencing extreme poverty.(3)“Catastrophic spending” reduces familial finances, as does “distress financing”, during which individuals are forced to borrow money to pay for healthcare. Without an adequate safety net, many people buy pharmaceuticals or treatments (which may not be high-quality) from local suppliers or traditional healers because they cannot afford the full course of medication; this accounts for a large portion of OOP expenditures.(4)

Case Study: Healthcare Insurance and Personal Payments in the United States

Health insurance is not provided equitably to Americans under the current system; as costs for insurance are high and insurance companies discriminate when awarding coverage, many Americans are forced to pay for their healthcare out-of-pocket. The number of uninsured Americans is rising as the economic crisis becomes more pronounced, and citizens are forced to spend more OOP money. Health insurance is intended to help patients avoid the astronomical expenses that may accompany acute or long-term medical procedures; those without insurance are left to finance these procedures on their own. In the absence of healthcare reform, the gap between the insured and uninsured will widen exponentially. More affordable insurance would protect Americans from falling into poverty when a health crisis hits.(5)   

Case Study: Individual and OOP Healthcare Expenses in West Bengal, India

Because of high poverty levels in West Bengal, India, many families who are already financially destitute also struggle with numerous and severe health problems. Depending on the required care, number of household members, and proximity to health facilities, (among other variables,) families can fall into poverty as a result of a single hospital visit. Without financial assistance from the government or insurance organizations, many Indians in this region are forced to forego education, stop improving their homes, and cease mortgage payments in order to avoid extreme debt. The costs of healthcare are manifold, and include hospital beds, inpatient care, medications, post-operative appointments, transportation fees, food, and accommodation for family members. Residents of urban areas of West Bengal are more likely to resort to “catastrophic spending”, while those in isolated rural areas are more likely to experience increased transportation costs. Studies have shown that persistent health problems requiring long-term treatment slowly drain family funds. Hospitalization, childbirth, and chronic illness can significantly deplete familial savings depending on geographic location, social status, and the number of family members living in one house. As of 2010, only 5% of West Bengal residents had health insurance. By adopting a system that pools funds in order to distribute healthcare more equitably among the population, India could break away from the cyclical trend of high disease and poverty rates.(6)

Community-Based and Non-Governmental Health Organizations

Communities can advocate for and provide localized healthcare for their residents in the form of economic assistance and tailored policies. A critical element of community-based healthcare is a trusting relationship between patients and healthcare workers. When community-based healthcare organizations work directly with residents to understand their needs, they can more effectively guide fundraising efforts. For women and children in particular, who have increased health risks in both developing and developed countries, education and financial assistance from a trusted advocate tremendously improves uptake of healthcare. Health awareness, a key component to healthcare, can be fostered through education regarding nutrition, child-bearing, immunization, and disease prevention measures. Educational programs can be provided for free or at a small and subsidized cost, so as not to deter potential participants. This awareness acts as a preventive measure to offset the financial costs that often accompany healthcare. By addressing a community’s health needs from within the population itself, residents can be monitored locally and more cost-effectively, and home visits and interventions are facilitated by grassroots participation and community health workers familiar with the area.(7)

In many cases, financial costs and logistical issues (such as the time needed to train staff or reach clinics) prevent individuals from seeking healthcare. By improving outreach and education, community-based healthcare groups can give families the tools for self-referral and basic home emergency care. In addition, by collecting communal funds and developing local microcredit schemes, community finances can be collected and distributed as needed. This money can then be allocated according to the community’s needs, from ordering more medical supplies to training medical staff. USAID has given the example of many Indian communities in which money is collected in collaboration with grain sales, so that increases in grain production lead to a greater percentage of money set aside for community healthcare.(8)

Case Study: Community Health in Jakarta, Indonesia

Posyandu is a community health facility established to help pregnant women and their children by administering preventive vaccines and introducing nutritional additives to their diets. The Posyandu also provides monthly appointments, preventive care, education, and assistance for the elderly. There are many Posyandu facilities throughout Indonesia, though some lack the funds, staff, and governmental support to sustain them. The Posyandu post is currently supported by Save the Children and Kraft foods to prevent hunger and spread hygiene awareness, which has led to decreases in malnutrition and underweight children. With similar initiatives throughout Indonesia and the developing world, populations can work in smaller communities with integrated finances to enact positive change.(9)

Case Study: Community-Based Health Care Organizations in the United States

A recent health program developed for military men and women recovering from armed service on American soil works to visit soldiers in the comfort of their own homes (if possible) and to provide transportation to those that need to be seen at a health clinic. This community-based health service allows soldiers to remain with their families as they recuperate, and gives local nurses the freedom to coordinate their appointments and monitor health improvement, while maintaining standards observed at army-run care facilities.(10)

Non-governmental organizations (NGOs) contribute to a different facet of healthcare economics. A 2008 article on healthcare NGOs gave examples of work that various groups are carrying out, such as allocation of mosquito nets in sub-Saharan Africa, the provision of primary healthcare in Cambodia, and the distribution of nutritional supplements in Argentina. These development projects are region-specific and cannot necessarily be globally simulated.(11) International NGOs often have headquarters located in developed, Western countries, and have smaller field offices within developing countries, working to fill the national healthcare gaps left by the governments. They typically work in conjunction with the government, though many criticize them for crippling public government healthcare initiatives. NGOs often have to respond to donors with specific achieved goals that demonstrate that their funding has been well spent; as a result, local healthcare ideas are sometimes. The goals can be lofty and may be short-term; regular relocations of contracted staff may lead to a lack of continuity or a disruption of the trusting relationship established between NGO workers and locals. NGOs can also offer higher salaries to both expatriate workers and locals, (in Mozambique that salary is twenty times that of a job in national healthcare,) again diverting attention from public healthcare. Though NGOs fill a vacuum in crucial healthcare services, a more sustainable long-term solution would be to build up a strong national healthcare system that hires locals to create an equitable public healthcare system.(12)

Case Study: NGO Healthcare Economics in Ghana

In 2000, the Ghana Coalition of Healthcare was launched. This NGO works with the Ministry of Health to organize hundreds of NGOs to provide public, standardized care on a local level. Prior to this program, Ghana lacked a sufficient number of doctors and suffered from high disease rates. Through this combination of bottom-up NGO work and financial assistance coordinated with top-down government implementation, health policy has made positive changes. For example, the work of the Ghana AIDS Commission resulted in a decrease of HIV/AIDS infection rates by encouraging testing and spreading awareness about the virus while also working to diminish the stigma associated with HIV. Similar programs have been established for other health crises, including malaria, recreational drug use, and tuberculosis.(13) 

Faith-based organizations (FBOs) have also become a popular form of grassroots aid, particularly in Africa, where they comprise 30-70% of continent-wide healthcare. Just as community-based groups and NGOs supply critical healthcare in the absence of government assistance, FBOs establish localized projects with heavy participation from the surrounding community, using funds granted from the wider international NGO economy. The trust that comes with local accountability and cooperation is the result of a long-term presence in a region, facilitating effective care under fiscal constraint, which FBOs are able to establish to create continuity and sustainability.(14) FBOs create a “legacy of caring” in the words of Georgetown’s Medical Center, where those at risk can receive medical help at an affordable cost (or no cost at all). FBOs often act as a liaison between local communities and public health organizations, channeling people into government hospitals and distributing medications and resources from the government level directly to communities. By serving the poor and uninsured (who are sometimes unfamiliar with the larger healthcare system), successful FBOs respect local cultural practices in their efforts to encourage individuals to monitor their health.(15) The international Capacity Project, for example, works to promote healthcare improvement in developing countries, establishing their causes locally through grassroots FBO cooperation.(16)

Case Study: Methodist Healthcare in Tennessee, United States                 

Methodist Healthcare in Memphis, Tennessee aims to care for communities consistently and equitably, without discriminating against patients unable to pay medical fees. An advocate for Methodist Healthcare has said, “It’s not to provide shareholders with returns. It really is to provide benefit to the community.” This missionary stance stands in contrast with the (arguably) “corporate” vision of healthcare that is hotly debated in the United States. Not only does Methodist Healthcare work to treat patients through regular appointments and preventive measures (such as nutritional guidance and blood pressure testing), but they also work with local congregations to advocate for healthy living through education and local health initiatives. This emphasis on preventive care has decreased the number of hospital emergencies in the area, and has been attributed to the work done by Methodist Healthcare in conjunction with other FBOs.(17)

Case Study: Lowell Community Health Center in Massachusetts, United States

The Lowell Community Health Center demonstrates how community-based NGO and FBO organizations can improve healthcare in an area through inter-group collaboration. In Lowell, Massachusetts, the Community Health Center partnered with a local Buddhist temple to provide health information and treatment to the Cambodian population. Through public service announcements and discussion groups, the monks at the temple helped spread information on the dangers of smoking, and even banned smoking in the temple itself, without exerting extra financial resources. In addition, the monks also served as counselors and held meditation sessions for those with mental health problems, employing traditional spiritual health practices while respecting cultural norms. The Lowell Health Center recognized the significance of spirituality in the Cambodian community’s perception of wellness, and connected that to their physical healthcare through a faith-based group with direct well-established connections to the surrounding population.(18)

Government Public Health Policies

Public health initiatives, particularly in developing countries, often leave much to be desired. In developed nations, governments can often supply subsidized healthcare through GDP allocated to health facilities, medical staff, and supplies. However, funding is also needed to ensure access to these facilities, particularly for impoverished rural areas. Individuals in poor health generally cannot work, creating a cyclical pattern of illness and poverty. Developed countries allocate approximately one hundred times what low-income countries spend on healthcare, and consequently have more resources and staff. Governments would need to put greater economic focus on equal healthcare coverage and promote community involvement in order to create sustainable public health practices. Resources, for instance, might be used to improve communication networks, or maintain road conditions to improve access to healthcare and facilitate transportation of medical supplies. If public healthcare is ineffective, or if community members prefer private facilities with better resources, the public will become frustrated and unwilling to spend tax money on government healthcare. One aspect of healthcare that has been historically equitable and manageable is the administration of oral rehydration therapy for patients with diarrheal diseases and consequent malnutrition, as the therapy is inexpensive to transport and distribute. Similar healthcare initiatives that can be practiced on a large scale will foster trust in national healthcare and a subsequent willingness to invest in it.(19)

The private market often carries informal fees, particularly in developing countries, as a form of patronage. As a result, some people have proposed that public healthcare introduce user fees to fund medications, supplies, and doctors’ salaries. By encouraging equitable access to healthcare for historically disadvantaged groups, as well as by incentivizing lower interest rates and debt incurred from health procedures, national healthcare programs may be able to provide universal coverage. When the community develops faith in the effective healthcare program, it will be easier to bring in increased user fees and funds from the tax-paying public, who will in turn have a voice in the healthcare system. This is especially true for the poor, who often struggle to pay for transportation, food, and lodging, though this can be changed if governments are able to build more conveniently-located facilities. In Mexico, for example, the Progresa program allows families to receive funding and benefits for frequenting health services, especially during and after pregnancy for women, but also for health education and dietary advice. Many governments only recognize the importance of national healthcare after a crisis, as was the case in China. China’s public health system had long minimized the importance of financial support for healthcare (focusing instead on bolstering the economy) until the SARS outbreak led to a reexamination of national policies.(20)  

Case Study: Government Healthcare in South Africa

Though South Africa spends 9% of its GDP on healthcare, this percentage has been utilized ineffectively; without national insurance reforms, the funding does very little to improve or coordinate healthcare efforts. In the midst of a global economic crisis, the level of financial assistance from NGOs has plummeted. The President’s Emergency Fund for AIDS Relief (PEPFAR) created under President George W. Bush is still active, however, as are other NGOs that provide funding for South African health initiatives. The South African government is also working to hire doctors from all over the world to provide high-quality medical care. Though sophisticated healthcare is available in South Africa, many at-risk patients do not receive the coverage necessary for operations, procedures, or preventive care. Currently, national healthcare funds are distributed equally among the nine provinces. However, once the money has reached each province, it is the responsibility of the provincial government officials to distribute the funds. By the time the money reaches the poor in the form of coverage, there is rarely any left, especially in rural areas lacking in industry. Xulu’s Right to Care is one NGO that receives most of its funding from the South African government, and works to eliminate HIV/AIDS, tuberculosis, and other diseases in South Africa. Right to Care demonstrates the positive role that national governments can play in allocating finances on a grassroots level, thereby achieving goals more cost-effectively.(21)

International Organizations Fund and Advocate Health Care

International organizations often infuse funding into healthcare, and establish norms and regulations for the global health economy. The 1948 Universal Declaration of Human Rights asserts, “Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control.”(22) Similarly, all states included in the 1966 International Covenant on Economic, Social and Cultural Rights pledge to “recognize the right of everyone to the enjoyment of the highest attainable standard of physical and mental health” which specifically discusses female and infant care as well as stemming the spread of epidemic diseases.(23) These international vows, though they are soft laws and only exist as long as they are upheld by party members, ensure healthcare as an individual right, and declare the need to help states that are economically unable to endorse that right themselves.

The United Nations Millennium Summit of 2000 instituted targets to eliminate severe economic deprivation and health problems including a decline in child mortality, an increased focus on maternal care, and a decline in HIV/AIDS and malaria rates. Though these goals have not yet been achieved, the UN is working to make these targets a reality by 2015 with the help of the World Bank, United Nations Development Programme (UNDP), the World Food Programme (WFP), UN Children’s Fund (UNICEF), and New Partnership for Africa’s Development (NEPAD), as well as through work by national governments and local NGOs. The aims of the Millennium Summit can be achieved through adequate financing and investment in infrastructure, as well as through healthcare administration from loans and credit given at the community and government levels with low interest rates.(24)

The World Health Organization is another branch of the UN that provides economic support for healthcare worldwide through the training and deployment of field workers, as well as by allocating money for preventive care and treatment. There are six provincial headquarters worldwide that oversee specific health catastrophes and determine regional solutions with on-the-ground collaboration. Currently, the WHO is focusing on endemic diseases, nutritional health, and maternal/infant health.(25) By offering economic assistance to healthcare providers around the world, the WHO can help curb the current economic crisis and reduce its effects on impoverished communities vulnerable to ill health and lack of care. This assistance addresses short- and long-term goals, linking economic success to physical wellness, further emphasizing the importance of prioritizing healthcare.(26)

Case Study: World Bank Intervention in Nigeria’s Healthcare Economy

A World Bank vote provided a 150 million dollar boost to the Nigeria State Health Investment Project, to be partitioned to provide financial incentives for healthcare institutions and staff that carry out medical care in an equitable and efficient manner. This boost was due in part to the complete deterioration of the Millennium Goals in three Nigerian states, resulting in further grants. Though this infusion of monetary assistance is commendable, governmental and non-governmental actors will need to ensure that this money is put to positive use in the existing healthcare system.(27)

Case Study: Alma-Ata Declaration of 1978

The Alma-Ata Declaration of 1978 was an initiative to incorporate long-term, accessible, inexpensive healthcare into existing national structures. This was later reinforced by the “15 by 2015” program to improve healthcare in developing countries. This measure encouraged supporting organizations to allot 15% of their finances to improve healthcare by 2015. The Alma-Ata proposal received renewed attention in 2008 as an effort to restructure national healthcare systems and encourage local control of healthcare rather than resorting to emergency interventions. These long-term goals are aimed to bring families out of poverty when a crisis strikes by having a national safety net.(28) 


(1) Lu, Chunling, Brian Chin, Guohong Li, and Christopher JL Murray. "Limitations of Methods for Measuring Out-of-Pocket and Catastrophic Private Health Expenditures." Bulletin of the World Health Organization. WHO Press, 29 Jan. 2009. Web. 10 Sept. 2012. <>.

(2) Acharya, Arnab, Sukumar Vellakkal, Soumik Kalita, Fiona Taylor, Ambika Satija, Margaret Burke, Edoardo Masset, Prathap Tharyan, and Shah Ebrahim. "Do Social Health Insurance Schemes in Developing Country Settings Improve Health Outcomes and Reduce the Impoverishing Effect of Healthcare Payments for the Poorest People?" Cochrane Database of Systematic Reviews. N.p., n.d. Web. 11 Sept. 2012. <>.

(3) Rannan-Eliya, Ravi P. Estimating Out-of-Pocket Spending for National Health Accounts. Rep. Institute for Health Policy World Health Organization, Sept. 2006. Web. 05 Sept. 2012. <>.

(4) Peters, David H., Anu Garg, Gerry Bloom, Damian G. Walker, William R. Brieger, and Maria Hafizur Rahman. "Poverty and Access to Health Care in Developing Countries." Annals of the New York Academy of Sciences 1136.1 (2008): 161-71. Wiley Online Library. 25 July 2008. Web. 11 Sept. 2012. <>.

(5) Mahon, Mary, and Bethanne Fox. "Out-Of-Pocket Health Care Costs Rise For Workers With Employer Coverage." The Commonwealth Fund. N.p., 02 June 2009. Web. 11 Sept. 2012. <>.

(6) Mondal, Swadhin, Barun Kanjilal, David H. Peters, and Henry Lucas. Catastrophic Out-of-Pocket Payment for Health Care and Its Impact on Households: Experience from West Bengal, India. Rep. Future Health Systems, June 2010. Web. 05 Sept. 2012. <>.

(7) USAID, and Access. "Home and Community-Based Healthcare for Mothers and Newborns." Access to Health. Maternal and Child Health Division USAID, Sept. 2006. Web. 10 Sept. 2012. <>.

(8) Ibid.

(9) "Indonesia: Bid to Revitalize Community-based Healthcare." Integrated Regional Information Networks. N.p., 24 Feb. 2012. Web. 10 Sept. 2012. <>.

(10) "Community Based Health Care Organization." Benefits. N.p., n.d. Web. 10 Sept. 2012. <>.

(11) Peters, David H., Anu Garg, Gerry Bloom, Damian G. Walker, William R. Brieger, and Maria Hafizur Rahman. "Poverty and Access to Health Care in Developing Countries." Annals of the New York Academy of Sciences 1136.1 (2008): 161-71. Wiley Online Library. 25 July 2008. Web. 11 Sept. 2012. <>.

(12) Maltha, Jessica. "NGOs in Primary Health Care: A Benefit or a Threat?" Global Medicine. N.p., 08 Apr. 2010. Web. 10 Sept. 2012. <>.

(13) Ikando. "Ghana Coalition of Healthcare NGO's." Go Abroad. N.p., 2004. Web. 10 Sept. 2012.   <>.

(14) USAID. "Integrating Faith-Based and Nongovernmental Organizations." The Capacity Project. N.p., n.d. Web. 10 Sept. 2012. <>.

(15) Georgetown University Medical Center. Sharing a Legacy of Caring Partnerships Between Health Care and Faith-Based Organizations. Rep. U.S. Department of Health and Human Services, Winter 2001. Web. 10 Sept. 2012. <>. 

(16) USAID. "Integrating Faith-Based and Nongovernmental Organizations." The Capacity Project. N.p., n.d. Web. 10 Sept. 2012. <>.

(17) Shorb, Gary. "Faith-based Health Care." Interview. Faith and Leadership. Duke University, 2012. Web. 10 Sept. 2012. <>.

(18) Georgetown University Medical Center. Sharing a Legacy of Caring Partnerships Between Health Care and Faith-Based Organizations. Rep. U.S. Department of Health and Human Services, Winter 2001. Web. 10 Sept. 2012. <>. 

(19) Peters, David H., Anu Garg, Gerry Bloom, Damian G. Walker, William R. Brieger, and Maria Hafizur Rahman. "Poverty and Access to Health Care in Developing Countries." Annals of the New York Academy of Sciences 1136.1 (2008): 161-71. Wiley Online Library. 25 July 2008. Web. 11 Sept. 2012. <>.

(20) Ibid.

(21) Patterson, Molly. "International Health Care in Developing Countries: A Right to Care." Yale Journal of Medicine and Law 7.2 (2011): n. pag. Yale Journal of Medicine and Law. 09 Apr. 2011. Web. 10 Sept. 2012. <>.

(22) United Nations. The Universal Declaration of Human Rights. N.p., 1948. Web. 12 Sept. 2012. <>.

(23) UN General Assembly, International Covenant on Economic, Social and Cultural Rights, 16 December 1966, United Nations, Treaty Series, vol. 993, p. 3. Web. 12 Sept. 2012. <>.

(24) "Development." United Nations. N.p., n.d. Web. 11 Sept. 2012. <>.

(25)“Health.”United Nations. N.p., n.d. Web. 11 Sept. 2012. <>.

(26) United Nations. Department of Economic and Social Affairs. Economic Crisis Calls for Strengthening Health N.p., 09 July 2010. Web. 11 Sept. 2012. <>.

(27) World Bank. News and Broadcast. Nigeria: World Bank’s Results-Based Financing for Healthcare Improvements to Benefit 3.8 Million Women And Children. N.p., 12 Apr. 2012. Web. 11 Sept. 2012. <,,contentMDK:23168497~pagePK:34370~piPK:34424~theSitePK:4607,00.html>.

(28) World Health Organization. "Funding for Primary Health Care in Developing Countries." The Partnership for Maternal, Newborn & Child Health. N.p., 08 Mar. 2008. Web. 12 Sept. 2012. <>.