ARE UHC KIDDING ME? 5 ALTERNATIVES TO EQUITABLY FUND HEALTH FOR ALL

Renée de Jong

While Universal Health Coverage (UHC) as initiated by the World Health Organization is a promising concept, I remain critical about the current ambitions in the declaration of the High-Level Meeting on UHC at the United Nations Headquarters in September. The vision is there, but what intrigues me, is what remains unsaid. In this era where global inequalities are bigger than ever[1], I believe it is time to do some thinking outside of the box on how we will fund our healthcare.

UHC and Equity

UHC is based on the principle of equity. An equitable health system runs on a publicly pooled funding system. If a government fails this duty, from the United States to Malawi, we see that people face catastrophic health expenditures. In the proposed options to fund UHC in low- and middle-income countries (LMICs), most funding comes directly from citizens, for example through their contribution to insurance, income taxes and sin taxes (alcohol and tobacco). Nevertheless, in many countries, this simply won’t do the trick to provide accessible and affordable quality health care in order to realise the human right to health. The resources are simply not there.

 

Development assistance for health can play an important role in LMICs to fill a part of the funding gap. However, up until today, the financial flows leaving LMICs are way higher than the flows entering countries through aid. Therefore, we need to reconsider the global economic system if we want to achieve UHC globally.

 

I dare say there are alternatives. Let me share five ideas that could actually contribute significantly to UHC.

 

Alternative 1: Taxes on wealth

Global inequality is bigger than ever. Today, the 26 richest people in the world own as much as the poorest 50% of the population (around 3.6 billion people). And this income inequality is growing, which is outrageous. While to earn an income with labour and natural resources people face limits in time and availability, people with capital can earn from interest on loans, investments, and speculation at the stock market at an increasing scale. Capital can also be easily moved across borders and put into ‘safety’. On top of that, labour has been increasingly taxed in comparison to capital. This explains why ‘the rich get richer’.

 

I say, introducing taxes on inherited funds, property and profit from investments is a fair policy for all societies. Rather than solely fixating on taxing those who work, there should be a progressive and equitable tax system geared to those who accumulate wealth.

 

 

Alternative 2: Taxes on natural resources

Taxing natural resources is a logical follow-up on taxing capital and wealth. Many LMICs own national resources, which are needed to produce modern technological devices and serve as raw material for products globally. These products are often ‘harvested’ from countries by private (inter-/multinational) companies who do not pay their fair share of taxes, let alone a fair price for the resources extracted from a country. If we could capture this money in a progressive way, we could make sure that the extraction of natural resources contributes to the prosperity of the country and its population, rather than the prosperity of (foreign) companies, their shareholders and the country’s elite.

 

Alternative 3: Taxes on carbon dioxide emission

In the debate on natural resources, we cannot exclude pollution from the equation. Climate change is a major global threat, directly linked to our health. A solution suggested by economists worldwide is to tax carbon dioxide emission. A tax of 50-100 USD per ton of carbon dioxide could provide the world with 4 trillion USD in taxes. It is a relatively easy measure to implement. And – if done globally – it could raise more than enough funds to realize UHC (371 USD in 2030 annually).

 

Besides being an effective way to reduce pollution from greenhouse gasses, it is an equitable way of taxing. Even while many emerging markets such as India and China produce more carbon dioxide than western countries (i.e. in total, not per inhabitant; the US emits 8.7 times more carbon dioxide than Indian citizens), it is mostly for providing products to the west. When Northern consumers pay carbon tax on Southern products, this would bring about a global shift of resources to the direction of the global South. Another suggestion: why not redirect the 5.3 trillion of subsidies that are still provided to the fossil fuel industries worldwide to UHC? This would even stimulate a (terribly needed) quick transition towards sustainable energy!

 

Alternative 4: Financial transaction tax

This tax has been known for several years as the ‘Robin Hood Tax’. Tremendous amounts of money pass national boundaries every day. Since most of these financial transactions are not performed by citizens, but by multinational corporations and internationally operating banks, this tax is a way to fairly redistribute wealth. Even a small transaction tax of just 0.5% on every transaction could generate billions of dollars worldwide. And this could be redirected to investments in access to health care, nutrition and poverty eradication.

 

Alternative 5: Addressing tax evasion and avoidance

A no-brainer, really. However, tax avoidance and evasion by individuals and companies are still happening on a huge scale. In addition, governments participate in a global race to the bottom lowering corporate tax rates in order to attract foreign investment. In the Netherlands, for example, companies like Shell and Philips did not pay taxes on their tremendous profits last year due to legal (!) exemptions granted by the Dutch government, in contrast with the many small- and medium-size enterprises and households that do pay taxes annually. Legal loopholes and tax havens contribute to the rich getting richer. Why not change this, and reinvest these funds in the public interest? The concept is simple: if everyone pays their fair share, there would be sufficient public funds to realise basic human rights.

 

Let’s brainstorm some more

These are just five ways how we could equitably fund health for all. If you are looking for more inspiration, you might consider debt relief and debt restructuring, adjusting global treaties as TRIPS, tackling capital flight, or rethinking structural adjustment. I am happy to hear any further suggestions.

 

My conclusion? Merely raising revenues of health users in low- and middle-income countries won’t do the trick. Redistribution of wealth is crucial for all universal human rights, including the right to health. The only way I can actually believe in UHC, is if we address the underlying global inequality.

 

[1] https://inequality.org/facts/global-inequality/#global-wealth-inequality

 

Recent Blog items

Is blended finance the key to health and development?

31-01-2020

Barbara Fienieg

How can we better align our spending and finance with the Sustainable Development Goals (SDGS)? This was one of the central questions at the Organization for Economic Cooperation and Development’s (OECD) third high-level annual conference ‘Private Finance for Sustainable Development’, held in Paris on January 29th 2020. On January 28th, I participated as a panelist in an expert discussion on blended finance in the health sector preceding this conference.

Continue reading

The warm heart of Africa

07-01-2020

Valeria Huisman

Looking down from the plane, I see a vast green landscape. A house here and there, and beautiful mountains in the background. It is my first glance of “the warm heart of Africa” as Malawi is affectionately called. I feel excited. In the days ahead I will visit health facilities and talk to nurses, midwives and other health workers, to hear about their experiences first hand. As Wemos’ communication manager I of course know of the challenges in the Malawian health system; the facts, numbers, and graphs, all leaning to the wrong side of the balance. But, being there, seeing, hearing, sensing the personal stories; it will make a big impact on me.

Continue reading