Medical costs push millions of people into poverty across the globe

5 DECEMBER 2005 | BERLIN/GENEVA -- Each year 100 million people slide into poverty as a result of medical care payments. Another 150 million people are forced to spend nearly half their incomes on medical expenses. That is because in many countries people have no access to social health protection -- affordable health insurance or government-funded health services.

Paradoxically, people in the world’s poorest countries contribute relatively more for health care than those in wealthy industrialized nations. In Germany, for example, where the average GDP per capita is US$ 32 860 and almost everyone has social health protection, 10% of all medical expenses nationwide are borne by households. In the Democratic Republic of the Congo, by contrast, where GDP per capita is only US$ 120 and where social health protection is scant, about 70% of the money spent on medical care is paid directly by households.

This week, experts from some 40 countries meeting in Berlin at a conference convened by the Deutsche Gesellschaft für Technische Zusammenarbeit GmbH (GTZ), the German Federal Ministry for Economic Cooperation and Development, the International Labour Office (ILO) and the World Health Organization (WHO) will lay out strategies countries and their partners can undertake to prevent such catastrophes.

“Social health protection is feasible even in the developing world, but it has not got the attention it deserves. Countries must begin now to craft well-organized schemes, and international donors will have to help. It takes years to put such a scheme into place, but if we start now, by 2015 – the target for the Millennium Development Goals – we could be well on the way to protecting people worldwide through equitable health financing,” said Dr Timothy Evans, WHO Assistant Director-General for Evidence and Information for Policy.

In low-income countries, it would take an average of about US$ 35 per person per year to finance a social health protection scheme able to provide basic health services, of which US$ 15 to US$ 25 would have to come from international donors.

Social health protection can do more than shield people against poverty – it can also save lives. “At least 1.3 billion people worldwide lack access to the most basic healthcare. Often it is because they cannot afford it. As a result, millions become very sick or die every year from preventable or curable medical conditions. For example, the toll from treatable infections and preventable complications of pregnancy and delivery is more than 10 million deaths each year,” said Dr. Rüdiger Krech, Head of Social Protection in the Division Health, Education, and Social Protection at GTZ.

“Social health protection is not only a key tool to make health care accessible to all and to free millions of people from poverty. It is also an investment in health, productivity and development - an investment that is a prerequisite for international competitiveness”, said Assane Diop, Executive Director of the ILO.

Having to pay for medical treatment can cause a farmer to lose his herd or a family to lose its business, as was recently the case for Amos and Gloria Chinwuba. The Chinwubas and their five children used to live comfortably in Abakpa, Kenya from the earnings of a small building supply shop they owned. When Gloria needed an emergency Cesarean section they were suddenly faced with medical bills of US$ 200-- more than their usual earnings for a four-month period. Unable to pay the entire bill, Amos had to give his motorbike as a safety deposit to the hospital. Without it, he was unable to collect material from the wholesaler, and his business came to standstill. He had to pull the children out of school, because there was no money to pay for fees and uniforms; and the family is now subsisting on one meal a day.

A number of low-income countries--including Ghana, Rwanda and Senegal--have already experimented with innovative ways of protecting people against the financial risks of ill health. Drawing on those experiences, the GTZ, ILO and WHO are offering direct technical assistance to countries seeking to develop social health protection plans.

Contact Information

Judith Mandelbaum-Schmid

Communications Officer, Evidence and Information for Policy

WHO/Geneva

Contact via E-mail