 I'm not sure how many of you had the chance to go to the presentation on human development yesterday because I thought that what I would try to talk about a little is the context of more specifically health in relation to human development and some of the discussions that we had yesterday and sort of amplify some of the issues, say particularly in comparison health to the education sector and also social protection like the pension sector. So first of all, so I now work at the Global Fund for AIDS, Tuberculosis, and Malaria, but I took a break for, oh, I'm sorry, I took a break for seven years and worked in OECD countries. So I was at the OECD working on health and development. In fact, I actually did a lot of work in Finland and I worked at the Ministry of Health in the UK. And so what I would say from the OECD standpoint from higher income countries that health is one of the most important issues for most ministries of health and in government. It's a critical challenge and that's partially because health spending is rising very, very rapidly. And in general, health rises very rapidly with income. It's driven partially by the aging of the population but also by rapid technological change in the health sector. So there's all these new technologies and you have to pay for them. And most OECD countries currently spend about 12% of their GDP on health and the US, which is the highest in the world is 17%. So we're talking about spending a sixth of the economy. So it's a major part of the economy and growing, growing very rapidly. And in most OECD countries, the critical challenge is how to control health spending partially because most health spending comes from the public sector. So almost all health spending, if you look at OECD countries, 90% of spending comes from public sources from either general revenues or from taxation, from labor taxes in social insurance systems. What's slightly different in developing countries, and I think this is one of the key things to think about as one of the development challenges, is that although there's a fair amount of health spending, it's not necessarily coming from the government budget. So often in low income countries, 70% of health spending comes from private spending and often from out-of-pocket spending. So people paying user fees at health facilities. So that's one of the critical challenges is the transformation from moving from private to public spending. And the other thing that makes it even more complicated is this kind of fiscal intermediaries, having health insurance companies. So if you have a social insurance system, you have a fiscal group that gets the money. Often you have transfers from the central government to that. So you, for example, might have tax deductions for employers who put in money into health insurance. And that actually is ultimately really a public subsidy to private health insurance or to social insurance. But it is a critical challenge for public revenues. And that's gonna be a critical challenge for developing countries, how to generate public revenues to actually spend for the health sector. So one of the points made in the talks yesterday by the woman from Oxford who worked on the Human Development Index was that in all the sectors in human development, the one that's made the most progress that has the most convergence is in the health sector. We've seen the greatest gains actually in the health sector. So life expectancy is improving in all countries like low, middle and high income countries. And a lot of that has to do with rapid technological change in the health sector. So since the Second World War, I mean there's been just like an explosion of technological change. You have to actually go back and think it's not actually that long ago that we didn't actually have interventions that actually cured pneumonia. Actually penicillin was not really widely used until after the Second World War. So we didn't even have a treatment for pneumonia. Now everyone has access to that even in low income countries. And then we have a whole slew of new technological innovations. We can replace people's hips. We have new gene therapy. So it's a transformational thing that is really amazing. We don't have the same kind of transformations in the other parts of like in the education sector. I don't think there's been major huge innovations in social protection. And so that technology is now available to everyone. And that's one of the reasons why we see the growing convergence across countries in terms of improvements. And that's one of the reasons why there's so much donor interest because we have all these amazing technological innovations. We have immunizations that are very successful regardless of income. So although there is growing convergence globally there's still huge inequality actually in outcomes because actually the growth in improvements is so rapid actually in high income countries compared to low and middle income countries. And even within countries like I just used the UK as an example, you see huge inequalities. So people may know there's like a 10 year health difference between social classes for example in the UK between the professional classes and then sort of people who don't work. So there's very large inequalities in access to these kinds of improvements in health. The other thing that Lance Pritchard was talking about was the sort of how universal like the way education is organized. So the education system tends to be dominantly, a public system through public taxation it's like one mode of organization. And one of the things that's actually really interesting about the health sector is the incredible diversity of organizational forms actually. So there's kind of two classic organizational forms in the health sector. You have the Bismarckian system, the social insurance system which is dominant in continental Europe. So that's Germany and France and actually Japan and Korea where you have social insurance. You have labor unions and employers with a tax, a labor tax that then goes to some type of fiscal intermediary that then usually you have some type of system that picks up the rest of the workers. And in fact, that's the origin now of Obamacare which is to tie to complete social insurance similar to what the French and the Germans and the Japanese have. But then you have an alternative system which is often known as the beverage system or the Samashko system which is the Soviet health system which is a publicly funded health system where the government owns the delivery system. And so almost all former communist countries have that system, actually that's the common system in Scandinavia and the Nordic countries. So those are the two sort of radical ideal types of organization but even within those organizational forms you have quite large differences. There's a big difference between the UK national health service which is a single unitary national health service and the Finnish health system which is decentralized actually to the county level. So you can actually have quite different organizational forms and increasingly in higher income countries even social insurance forms have actually taken on a much larger part of public taxation. So for example, the French health system the French government owns all the hospitals and most of the funding now increasingly comes from government and not through social insurance. So you have quite mixed forms. And so it's interesting then to look at that from a development standpoint. So and to some extent many of the countries in the developing world inherited their system from who colonized them actually. So if you were colonized by the British then you're likely to have a national health insurance system. And in fact many African countries not only did they inherit that partially from the British but also they received Soviet technical assistance after the Second World War in the 1950s. And so most African health systems are national health service systems similar more to the UK. Whereas if you go to Asia you see much more social insurance and a rising system of social insurance and in fact Japan and Korea have a social insurance system and now China has adopted social insurance and that's the form in Thailand and a lot of other countries and they have a lot of out-of-pocket spending. And so they actually, there's quite different organizational forms. And then on top of that's just on the fiscal side then you have the complexity of the way the delivery system is organized in the health sector. So not only do you have hospitals, you have tertiary hospitals, secondary hospitals and increasingly in countries that have undergone the demographic transition they're struggling with try to how to reorganize the delivery system to deal with chronic diseases because people go in and out of that. So the original system was to set up that you would be go to a hospital, you would be treated and then you would be cured if you have an infectious disease. But if you have a disease like diabetes or schizophrenia you go in and out of hospitals. And so people are trying to figure out how to bring the primary care system together with the hospital system and to not see them as separate and then increasingly also with social care what to do with people after as they get older like if they have Alzheimer's disease how to deal with nursing homes and how to link these into a unified delivery system and stuff like that. And so to try to develop integrated service delivery platforms. And then you also have the growth of patient involvement and patient involvement in their own care the growth of the internet, patient groups and various other things. So this is what creates huge diversity and complexity within the health sector. So one of the things that I wanna talk about from an economist standpoint is around purchasing new ways of thinking about how we purchase health services and moving from inputs, outputs and outcomes. So one of the things that I would say compared to almost all the other sectors say compared to education or social protection that we actually do have really good measures of outcomes. I mean, one of the things that we have in the health sector is whether somebody dies or not actually. So you could be in school but we don't know if anybody learns anything in school actually. Whereas in the health sector we have much clearer outcomes. People live or they die actually. But one of the things that I think that's interesting about the discussion around the human development index is how out of date it is actually given what's going on in the health sector. So if you think about it, increasingly it's less of an issue of mortality whether people die or not and much more about morbidity. So the number one cause of the burden of disease now in higher income countries is depression. So depression leads to suicide. So yes, there are implications for mortality but it's largely about morbidity. And actually most of the interventions that we're talking about are around morbidity. And there's been a huge growth in abilities to measure the quality of life for morbidity. And I mean, just as an example, I mean what's commonly used in the health sector are something called disability adjusted life years or dallas. But there's other measures as well. And that's really the way that something like the human development index needs to change actually because life expectancy is no longer really the correct measure because what we're interested in is the compression of morbidity. We're interested in whether or not people live healthy lives and actually that they don't actually have disease, that they're disease free or that their disease is controlled. Something more like healthy life expectancy or disability adjusted life years. And then we also, as Yoko said, we have rich data from household surveys, particularly in developing countries but in actually all developed in OECD countries we have a lot of different information such as the demographic health survey which is Yoko was working on which gives you mortality data. So what I would say is that the health has become one of the biggest challenges for ministries of finance. And I explained some of that. That's because it's a very complex system both public and private spending. You have like what is the role of the government particularly when you have like a lot of private actors involved including health insurance companies, you have the professions involved, you have a complex delivery system. And just to go through some of the categories around health financing you have a problem of how to fund the system in terms of resource mobilization. Whether or not you want to use hypothesated or earmarked taxes. For example, a tax on labor which is how social insurance systems and whether that actually creates problems in the labor market because you then tie your coverage of health insurance to labor or whether you should use general taxation whether you should start thinking about other forms of taxation like earmarking syntaxes. Then you have problems around risk pooling. So if you have a multiple insurance system you have to then figure out how to actually pool risk across all the different insurers and to equalize the risk. And that's a big challenge for all the big social insurance systems like Germany and Japan. And then one I'm gonna talk in more detail about is about purchasing methods. How to move away from inputs, input-based purchasing to other things to more output-based purchasing. And then you have all these new technologies. So how you do health technology should you cover it as part of the public package? What to put to do health technology assessment? How to organize service delivery? And then finally things like social determinants of health, things that are outside of the control of the health sector. Like how you actually get changes in, for example, behavior to control things like the rising epidemic of obesity, which is leading to huge increase in demand in the health sector. So one of the things I think is particularly critical for developing countries is new approaches to public financial management to try to move away from input-based budgeting. If anybody's worked in any health systems in Africa or actually increasingly in Asia, they generally use a very old style budget-based system where they purchase based on inputs. So they basically have a line item budgets to health facilities. Now in most developed countries that's not been used for the last 30 years. So they need to change their public financial management system through the ministries of finance to move towards purchasing outputs, to go away from input-based budgeting to purchasing outputs such as what's commonly used to pay hospitals now in OECD countries or something called diagnostic related groups, which is a form of output-based budgeting which adjusts for severity. So if you have more complex case, you get paid more but you get paid a fixed amount per diagnosis or pay for performance schemes in primary care. So adjusting for quality. And this requires a real change in the way ministries of finance work in developing countries because they're used to using line item budgeting and we need to help ministries of finance change the way they actually will allow the health sector to change the way that they, the public financial management system. And also to contract with non-state providers. This is a critical issue particularly for HIV AIDS but actually for reaching ethnic populations to not just use the public delivery system but allow purchasing to non-state providers like NGOs. So what I would say is that, I think they're critical challenges that there are too many health in a way. We have a lot of health people involved in the health sector in development but the critical challenges are really working with ministries of finance to change the organization and financing of the health sector. And if you look at Africa right now, for example, I just came back from Kenya. They're doing a new health financing strategy. They're thinking of introducing social health insurance. They're trying to move away from line item budgeting in Kenya. So I think that this requires a lot more interest from economists who could actually play a critical role because these are not clinical questions, they're economic questions. And there hasn't been enough sort of focus on bringing more economists into the health sector in development actually to work on some of these issues. And that's been, I think, a roadblock to progress in development. So thank you very much. Thank you.