Informality and health: universal health coverage in the era of SDGs
Authors: Lawrence P O Were
Journal: The Lancet Global Health (2017)

Universal health coverage (UHC), the idea that “all individuals and communities receive quality health-care services that they need, and are protected from health threats without suffering financial hardship”, is a key agenda item for WHO and other global health stakeholders.1United Nations Department of Economic and Social AffairsSustainable Development Goal 3: ensure health lives and promote well-being for all at all ages.https://sustainabledevelopment.un.org/sdg3Date: 2015Google Scholar This concept is reflected in Sustainable Development Goal (SDG) 3, which calls for ensuring healthy lives and promoting wellbeing for all at all ages, and the specific target on UHC (SDG 3.8). The agreement on these goals and targets has led to a proliferation of initiatives that aim to track progress in their attainment by 2030. The regions that would benefit most from meeting these SDG targets and indicators also have the highest disease burden and are characterised by informality— a collection of firms, workers, and activities that operate outside the legal and regulatory frameworks or outside the modern economy.2Loayza NV Informality in the process of development and growth. Policy Research working paper no WPS 7858. World Bank Group, Washington, DC2016Google Scholar Informality is considered one of the most difficult challenges facing developing countries because it not only reflects underdevelopment, but could also lead to further economic retardation.2Loayza NV Informality in the process of development and growth. Policy Research working paper no WPS 7858. World Bank Group, Washington, DC2016Google Scholar Notably, most developing countries produce about 35% of their gross domestic product (GDP) and employ over 70% of their workforce informally.2Loayza NV Informality in the process of development and growth. Policy Research working paper no WPS 7858. World Bank Group, Washington, DC2016Google Scholar Informality is therefore important for health and achievement of UHC by 2030 because it is connected to poverty, low productivity, and absence of social protection. Informality thus affects access to health insurance (a crucial pillar of UHC) and access to quality and affordable health care, leaving many dependent on out-of-pocket payments.3The Rockefeller FoundationInsights into urban informal workers and their health. The Rockefeller Foundation, New York, NY2015Google Scholar This situation presents a challenge to people in the informal sector in developing countries, as well as their governments and health-care systems. Additionally, it raises questions about the future of informality and what it portends for UHC. Norman Loayza of the World Bank presented the probable future of informality by tracing the expected trajectories of basic types of informal labour across developing countries from 2010 to 2030.2Loayza NV Informality in the process of development and growth. Policy Research working paper no WPS 7858. World Bank Group, Washington, DC2016Google Scholar These projections are aimed at helping to understand informality as an indicator and consequence of economic development. Loayza showed that improving financial and contractual participation for informal firms will increase informal wages, but will also cause an expansion of the informal sector.2Loayza NV Informality in the process of development and growth. Policy Research working paper no WPS 7858. World Bank Group, Washington, DC2016Google Scholar Further, he noted that if labour regulations were streamlined in economies with superior technology, the formal sector would expand, not eliminate, the informal labour in low technology economies in the short term. In superior technology economies, sustained improvement in labour would reduce informality over the long term.2Loayza NV Informality in the process of development and growth. Policy Research working paper no WPS 7858. World Bank Group, Washington, DC2016Google Scholar This analysis shows that, in different scenarios, informality will continue to be an enduring characteristic of the economies of developing countries, albeit with variations across these economies. Therefore, to achieve the UHC targets by 2030, existing gaps and challenges that informality presents to health-care systems must be addressed. Karin Stenberg and colleagues4Stenberg K Hanssen O Edejer TT et al.Financing transformative health systems towards achievement of the health Sustainable Development Goals: a model for projected resource needs in 67 low-income and middle-income countries.Lancet Glob Health. 2017; 5: 875-887Summary Full Text Full Text PDF PubMed Scopus (213) Google Scholar show that many countries will need substantial additional investments in health to meet SDG 3 and the 2016 Global Burden of Disease study on SDGs5GBD 2016 SDG CollaboratorsMeasuring progress and projecting attainment on the basis of past trends of the health-related Sustainable Development Goals in 188 countries: an analysis from the Global Burden of Disease Study 2016.Lancet. 2017; 390: 1423-1459Summary Full Text Full Text PDF PubMed Scopus (196) Google Scholar concluded that accelerated progress in implementation of SDGs is needed. Given the competing demands on limited resources across different sectors in developing countries, it would be hard to justify increasing health budgets especially in countries that maintain high rates of informality. Moving forward, innovative ways of financing health care need to be considered as different countries transition through informality. One strategy used in low-income and middle-income countries is community-based health insurance, whereby individuals with similar backgrounds set up, own, and operate a health-insurance scheme. Although such schemes have been associated with increases in health-care use and some financial protection from out-of-pocket payments, they have excluded the lowest income groups, and sustainability of these schemes is always a concern because of non-renewal of membership.6Panda P Chakraborty A Raza W Bedi AS Renewing membership in three community-based health insurance schemes in rural India.Health Policy Plan. 2016; 31: 1433-1444Crossref PubMed Scopus (15) Google Scholar Thus, innovations need to centre around variants of national-level, social health insurance schemes akin to those implemented in China and Mexico.7Cotlear D Nagpal S Smith OK Tandon A Cortez RA Going universal: how 24 developing countries are implementing universal health coverage reforms from the bottom up. World Bank Group, Washington, DC2015Crossref Google Scholar, 8Aterido R Hallward-Driemeier M Pages C Does expanding health insurance beyond formal-sector workers encourage informality? Measuring the impact of Mexico's seguro popular. Institute for the Study of Labor (IZA) Discussion Paper Series no 5996. Institute for the Study of Labor, BonnSeptember, 2011Crossref Google Scholar Such innovations need to be based on the six building blocks of the WHO health-system framework (service delivery, health workforce, information, medical products and technologies, financing, and leadership). The innovations also need to take advantage of mobile phone technologies, which are shifting the development and health-care landscape in developing countries. An example is M-Pesa, a mobile payment service in Kenya that is being used for direct billing services for health-care users and providers, collection of health insurance premiums by insurance companies, and development of health savings products.9Haas S Nagarajan G M-Pesa and access to health in Kenya. IRIS Center, University of Maryland, College Park, MDNovember, 2011Google Scholar Furthermore, the innovations must champion equitable and efficient health-care systems, and there must be a clear linkage to service delivery and provider systems. I declare no competing interests. Adding clarity to the universal health coverage pictureIt has been a busy year for universal health coverage (UHC) advocates. A series of high-level meetings and events (World Health Assembly, WHO DG election, UN General Assembly, to name only a few) have signalled strong political interest in their cause. As 2017 comes to a close, the anniversary of the UN's 2012 endorsement of UHC, on December 12, is the last de facto opportunity to ramp up advocacy for access to quality care without the risk of financial hardship for everyone around the globe. This year, celebrations will include a 4-day UHC Forum in Tokyo, Japan (Dec 12–15), where more high-level political and technical discussions will take place. 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