I

# **I. Introduction**

In its latest World Health Report (WHR) _Health Systems: Improving Performance,_ the World Health Organization [1] breaks new ground not only by focusing attention on the performnance of health systems, but also by arguing that a key dimension of a health system's performance is the fairness of its financing system. In addition to discussing the ways policymakers can improve fairness in health financing, the report proposes an index of fairness, discusses how it should be operationalized, and goes on to present a league table of the world's 191 countries ranked by the fairness with which their health services are financed. Apparently, the report has been the subject of a good deal of comment-favorable and unfavorable, it seems-but for the most part this appears to have been amongst journalists and policymakers. Critical assessments by researchers of the report's methods and results have been limited to date. Such assessments are, however, clearly important, given the potential impact the report and its league tables may have on policymakers and the international development community.

The aim of this paper is to provide an assessment of the report's quantitative work on the fairness of health care financing. Regrettably, the focus of the paper has been confined to the properties of WHO's fairness index, since no details are available about the empirical work on financing presented in the report.' The only thing that can be said with any certainty is that although values of the WHO fairness index are presented for 191 countries, _in only 19 of these was the index computed from household survey data._ Indeed, in all but one of the countries ranked in the top 40 (Colombia) the FFC index was "estimated". Whilst it is not unheard of to interpolate "missing" data in this way, it is surprising that no documentation is available setting out the methods used. Perhaps even more surprising is that WHO should attach so much importance to the values of the index for the 172 countries where index values were estimated.<sup>2</sup> The concerns that several health ministers have expressed about the WHR rankings are, in such circumstances, understandable.

The paper begins in section II with a discussion of the ethical premise underlying the WHO index-that households ought to be expected to pay for health care in line with their ability to pay. The paper suggests that the ability-to-pay principle is best understood in terms of a desire on the part of policymakers to limit the impact of health care payments on the distribution of disposable income. Whilst there appears to be a good deal of support for the general principle, the proportionality version of it adopted by the WHO is harder to defend. The paper goes on in section III to draw out the properties of the WHO index and in section IV argues that they are highly unattractive. The index is unable to distinguish between progressive and regressive payments, and is also unable to distinguish between cases where households on l Discussion papers have been promised but have yet to appear on the WHO website. One might even have hoped that they would have been written and distributed in time to provide the basis for a discussion of the methods prior to the work being undertaken.

> **2** In the 1991 World Bank's _World Development Report,_ for example, poverty indices were estimated for 22 countries out of 86, but the 22 countries covered 76% of the population of the 86 countries, and only regional aggregates were published (the country-specific values were never made public precisely because they were felt to be too imprecise) (cf. Ravallion et al. 1991).