The health improvements in southeast Asia over recent decades have been nothing short of extraordinary. Infant mortality rates have fallen dramatically, life expectancy at all ages has increased and effective programmes to address communicable diseases have been put in place. Since 1950, life expectancy at birth has risen by more than 30 years, from 43 then to 75 now.
Universal health coverage in a number of southeast Asian countries (for example, in Thailand) has significantly contributed to this. Coupled with better education, improved women’s rights, effective communication and political will, hundreds of millions now live in better health.
In some ways, though, the easy part has been done. Targeting reductions in infant mortality and communicable diseases has led to significant improvements in health outcomes, but these positive effects must continue. Populations in the region are ageing rapidly – more quickly than in Europe – and a productive and healthy workforce will be essential for future economic development and social cohesion.
However, health costs continue to increase for reasons including medical inflation, higher demand and the changing nature of healthcare challenges. The financing and quality of services is also an issue.
At the same time, coverage remains patchy in some countries, with those most vulnerable often outside the system or only able to access basic health care – even for those who in theory have the right to benefits. Those not covered tend to be the poorest, and often already suffer from health problems. Typically, in the region’s universal schemes, access to healthcare is 100% among the wealthiest quintile, 75% among the poorest quintile.
The challenge is therefore to ensure that coverage continues to increase, financing mechanisms are appropriate, and health provision, including staffing resources, remains of sufficient quality.
The role of actuaries
On this politically sensitive issue, actuaries are essential in providing evidence-based policy recommendations. As an actuary at the International Labour Organization (a specialised agency of the UN), I work with ILO health experts, as well as providers, governments and social security institutions, to provide the analysis and framework for long-term and durable policy, delivery and financing decisions that are in society’s broader interests.
The actuarial valuation, which projects a health system’s future costs and income, provides results, recommendations and reform options, including:
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Input into financing approaches (for example, direct payment, fee-for-service or a capitation approach to providers)
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Recommendations for improving coverage and service provision
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Analysis of prevention measures’ effectiveness
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Assessments of a health system’s distributional impacts and recommended reforms to improve them.
Actuaries also assess the impact of different financing options, such as increases in provider payment rates, the effect of co-payment increases (out-of-pocket costs are typically regressive, falling disproportionately on the poorest), and the extension of coverage (new groups tend to have worse health outcomes).
There are challenges ahead where health,societal,environmental,economic and urbanisation impacts collide. If these are not considered,current systems will not cope
The ILO in the region
The International Labour Organization (ILO) provides technical support to governments,social security institutions and social partners on the design,financing and implementation of social health protection in several countries in Asia,including Cambodia,Laos and Vietnam. These efforts have led to significant progress towards universal health coverage.
For example,in Laos,the ILO-Luxembourg project ‘Building social protection floors for all:support to the extension of social health protection in Asia’ works with the country’s ministry of health to formulate and implement policy reforms that have extended population coverage and improved benefits. This work also involves strengthening administration and governance,including through systems development and capacity building. Additionally,the project provides evidence-based recommendations for strengthening social health protection schemes’ financial sustainability,particularly through actuarial analysis.
Future challenges
Health policy must consider the future,rather than assuming that the past will repeat itself. There are challenges ahead where health,societal,environmental,economic and urbanisation impacts collide. Current systems are not fit to cope unless these are taken into account. Four key challenges for southeast Asia are:
Challenge 1:Unhealthy ageing
Globally,for every year of life expectancy gained from age 50,only nine months is lived in good health. Asia and the Pacific is no exception. As the proportion of health costs accounted for by the over 60s increases,family structures are changing,with children and grandchildren often no longer living near elderly relatives. According to market research firm Euromonitor,the number of single-person households in the region will increase by 78% between 2022 and 2040,compared with a 26% increase for households consisting of couples with children.
Challenge 2:Health inequality
Unequal access and fragmented systems may exacerbate inequality. For example,in Thailand,different levels and quality of provision exist for civil servants,social security scheme members and the rest of the population. Southeast Asia’s growing income inequality is also leading to poorer health outcomes for those who are worse off.
Challenge 3:Financing and resources
Health costs increase as populations age,and informal care provision is already an issue as families get smaller. Not only does this mean higher future contributions – there is also a question of whether countries will have enough health staff. Richer countries will continue to recruit health professionals from southeast Asia (more than half of all Filipino health professionals work outside the country,according to the Philippine Health Ministry),and for those who stay,pay is often low. This is reflected in the region’s low doctor-per-population ratios.
Challenge 4:Non-communicable diseases
Non-communicable diseases account for two-thirds of deaths globally,and have increased significantly more quickly in southeast Asia than in Europe. They include:
Air pollution-related illness– in Thailand,10 million people sought treatment for such illnesses in 2023,according to the country’s Office of the National Economic and Social Development Council,and the situation worsens every year
Obesity and diabetes– According to an analysis published in The Lancet,‘Global,regional,and national burden of diabetes from 1990 to 2021,with projections of prevalence to 2050’,more than four million people in the Philippines have diabetes – the highest rate in the region. Worryingly,the increase in cases is higher than in Europe and North America,and half of those who have diabetes are not even aware of it
Mental health– The number of suicides in the region increased significantly during Covid,when several countries had severe lockdown policies,and ongoing mental health issues remain
Traffic accidents– Around 20,000 people die on the roads in Thailand every year,while a million are injured. These are often young people,leaving families in difficulties and causing an estimated economic cost of about $14bn – about 2.5% of GDP,according to the World Health Organization.
Possible approaches
The role of actuaries is to address and analyse these issues and propose appropriate solutions. Experience shows that we have a significant role to play in these new areas. So,what are the possible approaches?
Universal coverage.The more people in a health system,the more robust a society is,and the better its health status. Actuaries must continue advocating extension,providing clear recommendations on financing,and working with others to design appropriate systems.
Prevention.Prevention-spending is less than it should be,and often directed into areas with a low return on investment. Actuaries can help to cost prevention programmes’ implications for health spending.
Focus on inequality and policy consistency.Both provision and financing must ensure that systems meet national policies to reduce poverty and inequality.
Develop consensus.Develop consensus around the importance of health spending as an investment,not a cost.
If we can find solutions to the four key challenges faced by southeast Asian health systems,we can ensure the huge gains of the past few decades can continue into the future.
Simon Brimblecombeis head of the Regional Actuarial Services Unit at the International Labour Organization. He is based in Bangkok,Thailand
Image Credit | Shutterstock
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