Foreign Policy Blogs

The other side of the coin: Cost

On Friday, Julia touched upon one of my favourite subjects: Community Health Workers.  I am a strong advocate of her position for paying CHWs – and for reasons that ironically have to do with lowering costs. 

For the last couple weeks, I’ve been focusing on the financing of healthcare and advocating for new mechanisms to ensure equity in care for rich and poor.  But what about costs?  There is another side to the quality coin – that is, the cost of the inputs in healthcare.  There is much to be said for bringing down the cost of quality healthcare in an effort to ensure greater access and availability.

Interestingly, quality doesn’t necessarily mean more expense, and in fact, necessity may be the mother of invention after all. ISN Insights, the news service of the ISN Network, recently published an article that I wrote about community health workers.  In it, I reinforced some of Julia’s facts from Friday:

The shortage of healthcare workers now stands at more than four million globally. The WHO estimates that 57 countries, most in Africa and Asia, face critical shortages which hinder their ability to meet the Millennium Development Goals and provide basic primary health services. With long lead times for training and development, as well as structural inefficiencies in health worker placement (migration, for example), this gap will not be filled by physicians and nurses quickly or cheaply…
In this context, Community Health Workers (CHWs) have re-emerged as a solution to the workforce crisis. Recent evidence has shown that CHW programs can significantly improve health outcomes in countries with the most critical shortages. Global and country policymakers have lauded the approach as cost effective and called upon health systems to delegate tasks to lesser skilled workers including CHWs (known as ‘task-shifting’).

CHW programs have been promoted since the 1980’s as a cost-effective means of plugging human resource gaps in resource-constrained settings.  In the historical interpretation of these programs, CHWs were often voluntary roles only, supposedly incentivized by increased stature in the community and a sense of goodwill.  Throughout the 90s, however, these programs were dismantled because of poor performance and an influx of funds for vertical programs that required specialized, highly skilled workers.

To my mind, the programs overlooked a critical piece.  CHWs are not just a cost containment measure, they are an innovation in the health worker team.  Community workers often have access to households – through cultural affinity, common language and shared history – in ways that traditional health workers do not.  Their positions as layworkers and peers may also be able to cross boundaries of stigma and intimidation differently than higher skilled workers.  In other words, the lower cost option may actually provide higher quality care, if coupled with the appropriate medical interventions.  Lower cost, but not free.  The CHW innovation requires a commitment to training and compensation, which increases retention and dedication.  As Julia mentions, several countries are now investing in programs that are having remarkable success.

Let me go somewhere else with this.

Reverse innovation is something I’ve written about before – when innovation flows from “developing” country to developed.  Cost may be the driver, but improved effectiveness can be the result.  Last week, I presented the case study of mothers2mothers at an MBA social entrepreneurship class at Duke University’s Fuqua School of Business, taught by Cathy Clark.  After the m2m case, the class studied Aravind Eye Care, an organization that operates 7 hospitals and conducts over 300,000 eye surgeries per year, all while remaining independently financially sustainable.  It achieves this financial stability through using full-paid clients as subsidization for clients who cannot pay.

While contemplating the case, I was impressed not only with the implications for low income countries, but also for lessons to be gained by high resource settings, such as the United States.  Aravind’s innovation is an entire system which depends upon codification of surgical procedure, transfer of skills to lower-credentialed workers, routinization of patient care and economies of scale.  These are not innovations that have limited application to developing countries or eye care in general.  Aravind recognizes this and is now pioneering its model through training and capacity building for eye care professional from around the globe.  

The innovation doesn’t stop with the clinical model.  Aravind has also pioneered a payment system that has created financial stability amongst a population where very few can afford to pay.  This has application in developed systems, in particular the US.  Paying patients in the US already subsidize poor patients through a non-transparent pricing system that loads costs of non-payers into insurance premiums and out-of-pocket payments.  Is it possible that a more transparent system, with appropriate incentives, could be a way forward?

Apologies for the slight ramble, but here’s the bottom line: equality of care has two sides – revenue and cost.  Increased funds for global health are critical to ensuring greater access and quality, but cost is equally important.  And it is here where developing countries have much to teach the rest of the world.  Resource-constrained settings can serve as laboratories for cost-effective innovations, creating methods and models that can serve the entire globe.



Cynthia Schweer Rayner
Cynthia Schweer Rayner

Cynthia Schweer Rayner is an independent consultant and philanthropy advisor specializing in public health, social entrepreneurship and scalable business models for positive social change. As a recovering management consultant, she spent several months living in South Africa, and later co-founded the US branch of an organization providing support to orphaned and vulnerable children. In 2009, she was an LGT Venture Philanthropy Fellow, working with mothers2mothers (m2m), a multinational non-profit organization employing mothers living with HIV as peer educators to positive pregnant women. She currently works with individuals, companies and nonprofits to finance and develop models for positive change. Cynthia has an MBA from INSEAD and a BA in English Literature from Georgetown University. She currently lives in Cape Town and visits New York frequently, where she co-owns a Manhattan-based yoga studio, mang'Oh yoga (