Not a surprise

Governments in developing countries have cut the budgets of their health ministries as a result of aid donations they receive for healthcare from wealthy nations, according to a study published today.

Shrug.

Money is fungible. What did anyone expect would happen?

There\’s two more things though. The overall effect rather depends upon where those budgetary savings get allocated. If it\’s to the military or the WaBenzi then this isn\’t a good idea. If it\’s to poverty reduction or education then it might well be a good idea.

There\’s another thing though. There\’s a flaw with the basic underlying assumption: that greater resources in means greater output out. While this is normal for evaluating the government part of GDP it\’s still a conceptual error. We really don\’t care how much is spent on health care (\”not care\” in the sense of more is not necessarily better). We care about whether more and better health care is being provided, whatever the budget being allocated to it.

And as we also know from our own dear NHS more in doesn\’t necessarily mean more out. No, I\’m not talking about the Brown Splurge for you can indeed say that the reduction of waiting lists is an improvement and worth the extra money (however expensive that reduction has been). While I and others might not agree, you can assert that.

No, something rather different. The NHS for England has adopted notably more market based organisational methods than the NHS Scotland or NHS Wales. And the improvement of output to inputs has been greater in NHS England than NHS Scotland or NHS Wales (despite the famous lowering of productivity over the system as a whole as a result of the Brown Splurge).

The method of how you spend the money is important, quite possibly more so than the amount of money being spent. By measuring health care in poor countries purely by inputs we miss that.

1 thought on “Not a surprise”

  1. The overall effect rather depends upon where those budgetary savings get allocated.

    One rather gets the impression that too much of it ends up in Switzerland. 🙁

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