15 July 2023

How best to allocate healthcare funds

It's striking how unrelated is healthcare funding to need. Medical experts have little capacity or incentive to see beyond their own institution or speciality. Governments respond to pressure from interest groups and industry, and allocate funds accordingly. Slipping through the cracks are unglamorous diseases, such as some mental illnesses. Even within a class of diseases, such as cancer, funding discrepancies are stark. I think government here is failing in its purpose. It should target for improvement the broad health of all its citizens rather than merely respond to lobbyists, however dedicated, sincere and hard working. It should, as far as possible, be impartial as to the causes of ill health, and direct resources to where they can return the biggest health benefit per dollar spent. Applying the Social Policy Bond principle to health could do this. At the national level, governments could gradually divert an increasing proportion of its healthcare spending to create and expand a fund to redeem Tradeable Health Outcome Bonds  (For a shorter treatment see here.) 

At the global level - I'll be realistic - such an approach is even less likely to be followed so, having read Peter Singer's The Life You Can Save: acting now to end world poverty, I can recommend the approach he takes when it comes to choosing which charities to support, which are those that, in his assessment, generate the highest increase in well-being per dollar spent. As he points out, 'The best charities can be hundreds or even thousands of times more impactful than others.' See here for more.

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