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Poverty Times #2

Accounting for good health?

Mrs Beeton’s celebrated Victorian tome on Household Management stands as one of the all time top selling management books. We have much to learn from her today. Every one of her thousands of recipes was costed. And she provided technical specifications for the different staff and equipment required to do the job, how to select them, comments on labour market problems and the options of in–house production and outsourcing, as well as guidance on the process of service delivery.
By John L. Roberts

Compare that with recent international reviews of environmental management and you are in for a shock. They claim to be aids for decision-making. They say that environmental and social costs and gains are factored into policy measures, regulatory frameworks and planning processes. But the guides to environmental policy typically avoid such practical issues as costs and cost–effectiveness. This contrasts starkly with the modern field of public health management, land-marked by the World Development Report of 1993, in which the World Bank analysts presented, in the Beeton way, a series of costed recipes for providing an essential package for primary health. For $12 a head you could have safe water and sanitation, plus essential primary care. The package included the measure of health gains to be achieved from the interventions.

The World Bank’s work from its inception became a basic tool for health planners. A best seller and a best buy. It helped to bridge the gaps between the quantification of health problems, the gains to be achieved and the resources required. It addressed political issues of priorities in a very practical way.

Now the World Health Organisation has gone one step further. It hired Jeffrey Sachs. His job was to extend the analysis and calculate the cost of reaching the Millennium Development Goals for health. No small task, and his work has eclipsed Mrs Beeton and the World Bank. Sachs and his colleagues, working with who, have surveyed the best evidence on intervention for the biggest health problems in the world; they have identified the most cost-effective interventions, examined the size of the health problems in the different regions of the globe, and provided the best estimates of the sums required to resolve those problems and the expected results to be achieved. Sachs then compares the sums required with the levels of existing expenditure in different parts of the world and produces a series of figures for the investment required for achieving better health.

For busy policy makers forced to choose between saving the pink pigeon and reducing infant mortality, there is already a bias for babies. But when the prices and expected results are also presented, the pigeon fancier may be left out in the cold.

In truth there is plenty of economic theory and useful frameworks for environmental accounting for not just the value of the environment, and the cost of its degradation, but also for pricing the investments required for effective sustainable intervention and providing estimates of the likely yield. To make sense of Agenda 21, the Millenium Development Goals and wssd we need the missing prices and measures of impacts of the necessary investments; not just ticks on lists of treaties agreed and implemented in terms of local legislation. We need to see the bottom line in terms of changes in resource allocation.

The policy makers also need to have a catalogue of costs.

“So we want to save our coast-line from erosion; what does that cost per kilometre saved and what results can we expect in terms of ecological gains? And on my desk tomorrow the list of approved contractors who can do the job.

Wait a minute! A briefing at the same time on what it will cost to reduce pollution in our depleted fishing zones and what yield will we get from increased catch size? Will we save anything on health costs from having lower levels of contaminants in fish and seafood?

By the way, set out the capital costs and the recurrent costs separately. All by close of play today. Right!”

In bridging the gap between environmental and health economics, let’s take the water crisis: The Centre for Environment and Development in the Arab Region and Europe tells us that “every 8 seconds a child dies from a water related disease; 80% of diseases in the developing world are caused by contaminated water … the absolute minimum that the world community must provide to the world’s poor without water, are: low cost technologies such as hand pumps, gravity-feed systems and rain-water collection.”

If we look at the relationship between safe water supply and infant mortality, derived from the 2003 undp Human

relatedillnessDevelopment Report (see figure), the health gain is evident although diminishing at each level of increased proportion of the population with safe water. This big picture is also well documented by who. It reckons that to bring safe water and safe sanitation to 98% of people living in countries in African and Eastern Mediterranean regions, with high adult and infant mortality, would cost I$486 billion (the prices are in international dollars which take account of variations in purchasing power). This would reduce mortality and disability, especially from diarrhoeal infections, to the extent of saving 583 million Disability Adjusted Life Years (dalys are a measure that combines, in one index, loss of life with years lived with disability). In addition, the interventions would save on average 88 hours of time per person per year. Thus there is a cost of I$834 per daly saved, plus the time savings for all individuals benefiting from the measures. All the environmentalists need to do is to add the environmental savings to complete the picture.

To stimulate further thinking on the relative value of environmental interventions to help in assessing priorities, the table above shows some figures derived from further technical estimates from who revealing the relative cost-effectiveness in poor parts of Tanzania Africa of iron supplements for pregnant women, water disinfection, and arv treatment in cases of hiv/aids.

If only environmental policy makers had material like this in a Beeton-style manual together with the technology requirements, the contractors on the approved lists and the estimated prices, set out in tables for reducing soil erosion, saving rain forests, cleaning up the world’s rivers and lakes, putting the fish back in the sea in numbers; even for saving the pink pigeon. Come in Jeffrey Sachs, here’s the next assignment!

Just as environmentalists could take a leaf from Mrs Beeton’s book, to be true, we would rather expect her to include nutritional values in a modern edition.

Dr John L. Roberts is an international consultant on economics and health policy. He is a consultant to unep in the Africa Environment Outlook process and publication series.

  1. Sachs J (2001), Macroeconomics and health; investing in health for economic development, who, Geneva
  2. Cedare 1999, The Water Crisis, cedare Chronicle, March p 7.
  3. Undp 2003, Human Development Report, OUP.
  4. Who (2002) World Health report, some strategies to reduce risk; improved water supply and sanitation p. 128
  5. Who (2002) op.cit. p. 130-136