Access to finance vs. access to healthcare

A new video on global health features BRAC USA CEO Susan Davis and Partners in Health founder Paul Farmer. BRAC has been a pioneer in taking a holistic approach to reducing poverty, and their healthcare programs reach more than 92 million people in Asia and Africa. Farmer recently spoke as part of NYU’s “Social Entrepreneurship in the 21st Century” speaker series about his success with Partners In Health in providing healthcare services for the poor in Latin America, Africa and Russia.

Davis asserts that "access to healthcare is the most critical component of improving people's well being."  Although her statement refers simply to healthcare, the holistic approach to poverty alleviation that Davis and BRAC support implies the rest of the argument: that access to healthcare and access to finance are inextricably linked –two pieces of the complicated puzzle of poverty.

Improving health conditions requires moving many levers. One angle we’ve been working on is the way that access to healthcare frequently depends on the ability to pull together adequate financing at the right moment.  Health problems can quickly become financial emergencies, pushing poor households deeper into poverty as they exhaust their savings, take on high interest loans or sell off assets to pay for treatment. Or worse, they delay treatment due to lack of financing, and preventable problems turn into ER care, or death. 

Recent financial diaries research finds that health events were the most common causes of financial emergencies among poor families surveyed in Bangladesh and India. Fifty percent of the Bangladeshi families had suffered a serious injury or illness in the past year, and 42% of the Indian families had. And not only are these poor families more vulnerable to risk, but they have fewer financial tools to deal with it. Nineteen percent of households in India and Bangladesh had some form of formal private life insurance, but formal health insurance was nearly nonexistent.

But here is where it gets tricky: thinking about the kinds of financial tools that can facilitate better access to healthcare means thinking beyond traditional insurance schemes. Simple savings accounts and loans can help address a health emergency by making money easily available when it’s needed most.  A study in India by MIT Professors Esther Duflo and Abhijit Banerjee and the Centre for Microfinance showed that, of approximately 3,300 loans given out in a Hyderabad slum, close to one-fifth were used for health expenditures.

Davis and Farmer are right to call attention to the need for better access to healthcare for poor households. We’re learning that the best medical care in the world is useless if you don’t have the savings to pay for your malaria medication, or can’t get a loan to pay for your daughter’s operation. At the end of the day, access to healthcare is a crucial part of a family’s well-being, as is their ability to pay.