Here's how to close the $176 billion health financing gap

The question of how we pay for healthcare has taken centre stage on the global agenda. US presidential candidates are debating concepts like “Medicare for All". South Africa’s parliament is reviewing its first National Health Insurance bill. Vietnam is exploring new health benefits for people with disabilities. And in September, the world’s leaders are gathering in New York City for the United Nations High Level Meeting on Universal Health Coverage (UHC).

Is the world on track to meet the Sustainable Development Goal of achieving universal health coverage by 2030?

According to a recent study by the World Bank, the answer is no. On the current trajectory, the world’s 54 poorest countries – home to 1.5 billion people – will face in 2030 an annual $176 billion gap in their ability to pay for essential health services. Beyond the human toll of lives lost, uneven health coverage in low and middle-income countries can be a drag on global growth, a threat to health security, and a source of business risk in our ever-more-interconnected world. Closing the health financing gap benefits everyone, whether you’re at a desk in Mumbai or a doctor’s office in Munich.

Governments, development partners and non-governmental organizations are critical players in advancing universal health coverage, but they can’t do it alone. As with other big global challenges, the private sector has a critical role to play. Here are three things companies can do, starting today, to ensure no-one is left behind.

Businesses large and small can help governments collect the funds needed to pay for health coverage by doing something that already makes business sense: going digital.

For starters, companies can embrace the sweeping changes in how consumers are paying for products and services. Advances in “digital financial services” enabled by the reach of mobile phone networks make the goal of universal access to financial services within reach. Neighborhood kiosks and multinational conglomerates alike can use these new platforms to reduce their dependency on cash-based transactions, increasing transparency of business performance, reducing fraud and making it faster and easier to close sales.

There are more opportunities to digitize the back office, too. IT-based payroll processing, accounting and “enterprise resource planning” tools once were reserved for large corporates. Now, a range of new cloud-based services from both start-ups and established vendors are putting user-friendly digital back offices within reach for small and medium-sized enterprises. Combined with new ways of interacting with customers on the front-end, adopting these platforms can reduce the friction companies and individuals encounter when paying taxes, helping governments collect the funds necessary to make progress towards UHC.

The multinational companies and platform businesses anchoring our globalized economy can accelerate UHC by working with suppliers to address the health needs of people in their value chains, whether “gig economy” freelancers or outsourced workers.

There is a clear case to be made for investing in the health of people who power businesses, regardless of whether they are formal employees. Companies that provide wellness programs experience decreases in absenteeism and increases in productivity. Investments in increasing health benefits have been shown to have an impact on worker retention as well, and not just for highly skilled office employees.

Companies do not have to shoulder the burden alone. Through clever behavioural nudges like automatic payroll deductions, they can encourage savings for medical expenses and increase adoption of mandatory contributions.

Further, many global brands have acted on the insight that consumers can and will pay more for ethical products, including ensuring the person making their sneakers or jeans has access to quality health services. New technologies and new business models can make these choices easy and transparent for customers who want to invest in increasing health equity.

By extending these mechanisms to employees’ families and communities, large corporations can advance the “equity” dimension of UHC by harmonizing benefits not only for workers within countries, but also across them. They can also help to make coverage more “universal” by protecting people who would otherwise fall through the cracks.

Private-sector capabilities, including those developed for other industries, can support transformation in how health insurance, where adopted, operates and how health services are delivered, increasing the reach and sustainability of UHC programs.

Mobile-based digital solutions can extend access to pre-paid, affordable coverage options, tapping into the roughly half trillion dollars of out-of-pocket health payments annually.

“Digital first” interfaces and back-end systems can reduce the cost and time required to process insurance claims while providing more transparency to beneficiaries. New models of delivering medical care can extend the reach of services without requiring costly investments in facilities or under-utilized staff. And novel techniques to promote healthier lifestyles and behaviour change – sometimes as simple as SMS messages – can reduce the burden of costly and debilitating non-communicable diseases like diabetes, hypertension and cancer.

A host of new ways are emerging to bring private sector capabilities to bear in addressing public goods like health services. Public-private partnerships are being explored by many health systems to drive efficiency and accountability. “Blended financing” models combine commercial investments and concessional funding to mobilize resources in support of projects that have strong impact on health but different financial risks than traditional investments. And tools such as “development impact bonds” are already being used to incentivize outcomes while giving practitioners flexibility on the methods they use to achieve results.

As leaders around the globe lay out their plans to pursue UHC, partnering with the private sector should be part of their equation.

Closing a health financing gap of nearly $200 billion a year, over the next decade, may seem daunting but is within reach. Combined with ramped-up public sector investments, the interventions described above have the potential to strengthen the pathway to delivering health, financial protection and wellbeing for all.