The economic costs of non-communicable diseases in the Pacific Islands

Written by Ian Anderson

The economic costs of non-communicable diseases in the Pacific IslandsThere are three main messages contained in the recently released World Bank report ‘The economic costs of Non-Communicable Diseases in the Pacific Islands: a rapid stocktake of the situation in Samoa, Tonga and Vanuatu (available here [PDF]) (the report did not include analysis of Papua New Guinea).

First, Non-Communicable Diseases (NCDs) impose large health, financial and economic costs on developing countries, including those in the Pacific. NCDs, including heart disease, diabetes and cancer, are already the leading cause of death in 12 Pacific Island Countries for which data is available, frequently accounting for 70% of all deaths. Life expectancy in Tonga has fallen as a result of NCDs. Cardiovascular disease is the leading cause of death in the Pacific, often occurring at rates twice that of more traditional communicable diseases. Importantly, at least one quarter of NCD deaths are premature in Tonga, Samoa and Vanuatu, robbing families of relatively young mothers and fathers, and robbing the economies of potentially productive workers. Rates of premature deaths from NCDs in the Pacific are generally much higher than other lower middle income countries. NCDs also impose significant and growing financial burdens on Ministries of Health and Ministries of Finance. This is particularly significant in the Pacific where governments already finance – and provide – the bulk of health services. Glucose testing strips for a diabetes patient may cost only US$ 0.45 cents per day in Vanuatu. But used every day, as is required, this amounts to US$ 164 per patient per year, more than the total government expenditure on health per capita.

Second, risk factors in the Pacific are feeding a pipeline of potentially expensive-to-treat NCDs, but governments are already fiscally constrained in how much more they can provide to the health system. Each of the ten countries in the Pacific for which data is available have 60% or more of the adult population overweight, and in six countries more than 75% of adults overweight. In four countries of the Pacific at least half the adult population is obese. Over two thirds of people in Kiribati smoke tobacco daily. Only 5% of adult females, and 10% of adult males, were free of any of the preventable risk factors for acquiring NCDs in Vanuatu. But governments in the Pacific are limited in how much more they can provide to the health sector in terms of additional public financing. Governments have relatively limited “fiscal space” to expand expenditure on public health due to generally low and volatile economic growth, a small and shallow tax base, and competing demands from other sectors such as education.

Third, there are strategic responses available to Ministries of Health and Ministries of Finance that will benefit public health and public finances simultaneously. Many NCDs are avoidable — or their health and financial costs can at least be postponed — through good primary and secondary prevention. Financial costs to government, and health and social costs to patients, rise dramatically in often step-wise fashion if a diabetes patient has to move to insulin treatment or dialysis, or a person with high blood pressure has a stroke. Stabilising the conditions at earlier stages of the diseases through effective primary and secondary prevention is therefore a critically important, affordable, and often cost-effective strategy. Averting (expensive to treat) complications from NCDs, such as blindness related to stroke and diabetes, through good primary and secondary prevention aligns the objectives of public health and public finance simultaneously. Raising the price of tobacco in the Pacific is another example of a “win-win” for public health and public financing: decreasing the uptake of NCD inducing diseases through reduced tobacco consumption, whilst simultaneously raising government revenues.

A video discussion on the causes and consequences of NCDs in the Pacific Islands was recently organised by the World Bank office in Sydney, drawing on the report. The panel consisted of Dr Jimmy Rodgers, Director General of the Secretariat of the Pacific Community (SPC); Dr Temo Waqanivalu, Coordinator, NCD and Health Promotion, World Health Organisation; and myself, Ian Anderson, lead author of the report. The video discussion is available here:

Ian Anderson is a Research Associate with the Development Policy Centre. Ian was lead author of the World Bank report, ‘The economic costs of Non-Communicable Diseases in the Pacific Islands: a rapid stocktake of the situation in Samoa, Tonga and Vanuatu’.

Ian Anderson

Ian Anderson is an Associate at the Development Policy Centre and a PhD student at Crawford School of Public Policy, ANU. He has over 30 years international development experience with AusAID, the World Bank and the Asian Development Bank and as an independent economics consultant. He is a regular Devpolicy blogger and contributor on issues relating to global health.

6 Comments

  • Thanks for raising this significant issue. I like the fact that you point out the strategic approach can have ‘win-win’ consequences. My comments may relate to what was said in the video, which I am unable to watch due to data limitations. So my apologies if I am repeating what is already said.

    It seems to me that one of the issues regarding finances is that governments actually need to invest simultaneously in health promotion/primary prevention and secondary prevention (in order to prevent future NCDs and the progression of disease in those with early risk factors or disease) and tertiary care for those who already experience the consequences of advanced disease. There are difficult trade-offs to be made and the people who will die if they don’t get dialysis (for example) often have an emotive pull over those who do not yet have signs of disease.

    Further, this is not merely a challenge for any country’s health system. It is multi-sectoral, related to wider issues, such as income, land access, education, gender roles, and cultural perceptions surrounding body size and image (to name a few). Addressing NCDs and their risk factors requires social and economic changes. To my mind, it is certainly a ‘wicked problem’ that requires a whole-of-government approach and coordinated action.

    I will read your report with great interest.

    • Good comments, Jo. You are certainly right in saying that Governments need to invest in primary, secondary and tertiary care for all sorts of reasons, including public health, ethical, and political reasons. The question they face is, what is the “right” balance, given growing needs and constrained resources.

      There are certainly some expensive and technically complex operations that can only be done in hospitals – and possibly even overseas – that are justified on public health, public finance, and ethical grounds. Surgery to repair a hole in the heart (an NCD, but one often arising from rheumatic fever) for young children would often fall into this category. That is because it restores a young person to essentially good health. Removing cataract blindness, if necessary in a tertiary hospital, may also be entirely justified on public health, public finance, social, ethical and other grounds.

      But there are other examples where so called “curative” treatment at the tertiary level is hard to justify, other than on political grounds. The report shows that dialysis treatment in the Pacific can be very expensive in absolute and relative financial terms to Government, whilst being of limited effectiveness in terms of extending life (around two thirds had died within two years).

      Perhaps most importantly, expensive dialysis treatment in response to diabetes related kidney failure carried very high “opportunity costs”. That is, every one thousand dollars spent on expensive but largely ineffective dialysis on an (often elderly, and often not particularly poor) dialysis patient was then another thousand dollars that then could not be spent on more cost-effective interventions, reaching many more poor people, to meet their needs, including immunisation, family planning, and other basic health services.

      As you very correctly point out, this all involves very difficult policy choices and trade offs for governments. My argument is that better and more effective primary and secondary prevention is often likely to be more effective, and equitable, in terms of health financing than some end – of – life ‘curative’ treatments at tertiary hospitals. And to the extent that primary and secondary prevention is effective it will also reduce – or at least postpone – over time the costs associated with treating complications of NCDs at the tertiary level.

      Thanks again for your thoughtful comments.

      • Thanks Ian. I’m totally with you. Just when it comes to the politics of it all, I’m not so sure that dispassionate analysis translates into what might be the best course of action. But that said, it shouldn’t undermine the analysis, which is crucial and will hopefully have some impact.

  • Thanks for this post Ian, it raises some very important points. However, I can’t help feeling that within your 3 points above, the third is largely contradicted by the second. Yes there are significant financial and economic benefits to focusing on primary and secondary interventions to manage risk factors but if the ‘fiscal space’ really is that limited then is this actually achievable?

    • Thanks Tess for your thoughtful comment. There will always be more demands for health care than there are resources, so in that sense there is a conflict. However I think the more important point for Pacific Islands is that with limited resources (“fiscal space”) Governments have to use their resources in the most effective and equitable way. The report shows that some governments in the Pacific allocate quite large shares of their scarce resources to very expensive, and not very effective, “curative” care, often in hospitals where costs are higher. The argument I am making in the report is that reallocating scarce resources to primary and secondary prevention at earlier stages in the diseases will be a more cost-effective approach than end stage “curative” care, and improve public health more broadly. Being more affordable, primary and secondary prevention will also be able to treat more people as well. But even then, there will always still be budgetary and other constraints (eg availability of skilled health workers) to address needs.

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