June 25 - July 01, 2007

Good health is recognized as a right in the Universal Declaration of Human Rights. It is defined as a 'state of complete physical, mental and social well being and not merely the absence of disease of infirmity' by the World Health Organization (WHO). Prominent countries in the world today have moved towards being 'welfare states' in the sense of providing for the health of their citizens such as Britain, France and many others.

The concept of a welfare state has been highly debated for the past century. It has been argued that increasing social security will form a sort of 'dependency culture' and cause economic inefficiency due to the higher taxes required to sustain it. But these concerns can easily be laid to rest by looking at the examples of countries that have a very strong social security network. In these countries, the burden of healthcare is borne completely by the state and not through any private funding. Countries such as Finland, Denmark, Iceland, Norway, Sweden, and the Netherlands have not only been able to provide national healthcare, education, pensions, and other social services but also have been able to form strong economies. These countries have been able to combine social welfare with high income levels, solid economic growth and a narrower income gap between the richest and the poorest households.

Pakistan's expenditure on health is among the lowest in the world, according to the recent Pakistan Economic Survey, public expenditure on health is as low as 0.6 percent of GDP. The survey excuses this away with writing: "In Pakistan the expenditure in health sector has been low as compared to other countries of the region due to macroeconomic difficulties...." .Even though we have all been exposed to the rhetoric of Pakistan having achieved excellent macroeconomic indicators during the Musharraf regime. This measly allotment of healthcare covers only 5% of the population but represents about 40% of federal and provincial spending on health. Formal social security systems are restricted to a select few such as the army, the police, civil servants as well as some formal sector enterprises. This represents less than 3 % of the total employed labor force.

The void in the healthcare system is filled up by private health insurance, social health insurance and out-of-pocket payments. In Pakistan, total health expenditure is $18 per capita and private health spending comprises 75.6% of this with national health expenditure being only $4 per capita. A small proportion of the 50 million poor is provided assistance by two funds: the Zakat fund and Bait-ul-Maal. Those who cannot avail the two funds and do not have insurance have to buy healthcare from private providers.

Presently there are 54 private health insurance companies operating in Pakistan. Health insurance offered by these companies is not only costly but also leaves the major bulk of Pakistan's workforce which is informally employed, ineligible for insurance due to absence of financial guarantees to the insurer.

The best example of a state where healthcare is mostly provided by private health insurance companies may well be the United States. Per capita expenditure on health by the US at $6700 is the highest in the world, but the US healthcare system is ranked 37th by the WHO. Not only is a sizeable population without healthcare (50 million Americans), but the ones that do have health insurance face the drawbacks of for-profit insurance companies. Just the cost of managing private insurance policies is estimated at $98 billion a year. Companies hire "denial management specialists" whose job it is to find a reason why a claimant's ailment is not covered by their policy. According to some past 'specialists' when a claim is denied, they are saving the company money. The United States' second-to-none medical technology and expertise does not benefit many, if not most Americans.

The health care system in France, with a per capita expenditure half that of the US, is ranked first by the WHO. Health care in France is socialized. Expenditure on health in France is 9.8% of GDP. Pakistan at 0.6% of GDP has a long way to go. But it is essential to start the uphill task of improving the healthcare system on the model that actually works in improving the welfare of the majority, as in France. And not in giving the best medical supervision to a select few as in the United States.