The main challenge facing health providers is improving service efficiency and making treatment affordable without compromising the quality of care.
This entails lowering the cost of treatment and tackling inefficiencies that hamper access to care. Two primary areas of focus in health reform are lowering cost of drugs and eradicating corruption and waste of resources.
The high cost of drugs can be managed through increased use of generics with the same efficacy as the more expensive branded drugs. Inefficiencies Inefficiencies typically include wastage, corruption, fraud and misallocation of human and non-human resources.
These have been cited as a major factor pushing up the cost of health-care globally. By some estimates, six per cent of the annual global health expenditure of $5.3 trillion is lost to corruption. Up to 40 per cent of health spending is sucked by systemic inefficiencies.
This is a huge amount considering the positive impact it would otherwise have on the lives of millions of poor people around the world. Eliminating such inefficiencies is therefore critical in cutting costs. Eradicating corruption in procurement is often a volatile process with charged political undertones.
Typically, inefficiencies drive the cost of healthcare up. Escalating costs invariably lead to higher medical insurance premiums. This hurts those covered by private medical insurers and even public health insurance schemes like the National Health Insurance Fund (NHIF). It also increases the claims ratios leading to declining revenue for health insurers.