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“The Joint Learning Initiative and in particular the working group on demand would

like to acknowledge the generous financial and technical support of the Rockefeller

Foundation, and the World Health Organization (WHO) in the production of this report.

The responsibility for the contents, analyses, and recommendations of this report rests

solely with the membership and leadership of the members of the working group 3”.

Editors:Suwit WibulpolprasertPintusorn Hempisut Report Lead Author:Vern Hicks Independent Consultant, Canada

Members of the Working Group:-

Co-chairs:Suwit Wibulpolprasert Ministry of Public Health, ThailandOrvill Adams World Health Organization, Switzerland Members:Frances Brebner Department of Health, SamoaJames Buchan Queen Margaret University College, UKDelanyo Dovlo Independent HRH Consultant, GhanaAkram A. Eltom World Health Organization, RussiaPaulo Ferrinho Garcia de Orta Association for Development and

Cooperation, PortugalThomas L. Hall University of California at San Francisco, USARiitta-Liisa Kolehmainen-Aitken Management Sciences for Health, USAGustavo Nigenda Mexican Health Foundation (FUNSALUD), MexicoJudith A. Oulton International Council of Nurses, SwitzerlandAlex Preker The World Bank, USADavid Sanders University of Western Cape, South AfricaAgus Suwandono Ministry of Health, IndonesiaChristiane Wiskow International Labour Organization, SwitzerlandTimothy Evans World Health Organization, Switzerland Secretariat:Piya Hanvoravongchai International Health Policy Program, ThailandPintusorn Hempisut Ministry of Public Health, Thailand

Publishing office: International Health Policy Program, Thailand (IHPP)Ministry of Public HealthTiwanon Rd. Nonthaburi 11000

E-mail: suwit@health.moph.go.thyolk@health.moph.go.th

Website: http://www.globalhealthtrust.org/

ISBN 974-465-739-1

First Printing: October 2004, 1,000 copies.

The Joint Learning Initiative (JLI) on HumanResources for Health is a project supported bythe Rockefeller Foundation, WHO, and other inter-national organizations and donors. The primary aimof the JLI is “to better understand the role of workersin health systems and to identify new strategies tostrengthen their performance.” This workforce, andthe volunteers who aid it, are commonly referred toas human resources for health (HRH).

The Joint Learning Initiative (JLI) was launched inNovember 2002 in recognition of the centrality ofthe HRH. At that time, HRH was comparativelyneglected as a critical resource for the performanceof health systems. To the founders of the JLI, itbecame progressively clear that the workforce, thehuman backbone of all health action, was compara-tively overlooked. Human resources presented asboth a huge opportunity as well as a major bottle-neck to overcoming global health challenges.

The JLI was crafted as a multi-stakeholder parti-cipatory learning process with the dual aims oflandscaping human resources and recommendingstrategies for strengthening the workforce for healthsystems. It was designed as an open, collaborative,and consultative process involving a diverse mem-bership from around the world. More than 100members joined seven working groups to pursue - ina decentralized manner - a learning agenda craftedby the working groups themselves. Each of theseven working groups was assigned a theme - history,supply, demand, Africa, priority problems, innovation,and coordination - and encouraged to pursue thattheme.

The Working Group on Demand has undertaken aninquiry into the demand for HRH and the ways inwhich HRH can be organized and managed in orderto meet that demand. In this report, we present theresults of the inquiry and a series of recommendationsaimed at helping countries, especially low-incomecountries, find ways to better meet the demand forHRH with limited resources.

The Objectives of the Working Group on Demand are:• To analyze information that will allow us to under-

stand demand for HRH, including the origins ofdemand and implications for health policy.

• To formulate policy options and practical sugges-tions for HR management. These options shouldsupport the goals of more equitable, efficient, andbetter quality health systems.

• Policy options should be developed within thecontext of public/private mix labor markets, anda broader framework of social reform, public sectorreform, health systems reform and macro-economicpolicies.

Preface• Policy options should be based on evidence and

experiences from countries as well as institutions,both public and private. They may also includecapacity building and priority research questions.

Organization of the ReportChapter one is an introduction that includes theconceptual framework adopted by the WorkingGroup. The chapter includes a model of HRHdemand, supply and management issues as well asan illustration of the scope of HRH involvement inprevention and health care. Target audiences andkey messages are also defined.

Chapters two and three address issues that havebeen identified as priorities by the Working Group.The objectives of each chapter are (1) to understandthe characteristics, effects, significance and trends offorces that bear on success or failure of HRH policiesand (2) to identify what we would like to achieve oneach topic to improve the situations for HRH demandand management.

Chapter 2 deals with forces that are usually externalto health system control, such as economic andpublic sector reform policies. Chapter 3 deals withforces that are primarily or potentially under thecontrol of health sector management, such as the useof incentives and coordination between the demandand supply sides of HRH management.

Chapter 4 discusses strategies to implement recom-mendations in the short or medium term subjectto financial conditions, institutional and managerialcapacity in each country. Each topic area is accom-panied by a discussion of specific measures that wouldserve to implement the policy objective, constraintsto implementation and options for assistance.

An appendix provides a table listing policies andthose with primary responsibility for implementingthem. The table identifies international organizations(e.g. WHO, World Bank) and provides a moregeneric classification of responsible agencies withina country (e.g. Departments of Health, Finance orLabor, civil society).

This report summarizes knowledge gained or reviewedduring activities of the working group. These activitiesincluded workshops in Annecy, France, May 2003,and Pattaya, Thailand, February 2004. Formalpresentations at the Annecy workshop are referencedin footnotes; a conference report has been preparedand is available on the JLI website1. The workinggroup commissioned a number of special studies,which are referenced throughout this report

EXECUTIVE SUMMARY 1

CHAPTER 1 : INTRODUCTION 5

CONCEPTUAL FRAMEWORK 5

DEFINING THE SCOPE OF HUMAN RESOURCES FOR HEALTH 11

WHO SHOULD RESPOND TO PRESENT CHALLENGES ? 12

CHAPTER 2 : INFLUENCES EXTERNAL TO HEALTH SECTOR CONTROL 15

MACRO ECONOMIC EFFECTS AND POLICIES 15

PUBLIC SECTOR REFORM AND HRH DEMAND 18

DECENTRALIZATION 21

HEALTH SECTOR FINANCING REFORM 24

INTERNATIONAL TRADE AND SERVICE AGREEMENTS 26

INTERNATIONAL MIGRATION 28

DISCUSSION 32

CHAPTER 3 : HRH MANAGEMENT CHALLENGES 37

DEMAND PROJECTION 37

WASTAGE OF HRH 39

IMBALANCES - CAUSES AND RESPONSES 41

PUBLIC PRIVATE MIX OF HEALTH CARE PROVIDERS 43

MANAGEMENT OF HRH 44

INCENTIVES TO IMPROVE MOTIVATION AND PRODUCTIVITY 46

DISCUSSION 48

CHAPTER 4 : STRATEGIES FOR FUTURE IMPLEMENTATION 51

GLOBAL KNOWLEDGE MANAGEMENT INSTITUTE 53

HEALTH POLICY 53

INTERNATIONAL MIGRATION 55

HRH MANAGEMENT 56

APPENDIX: RECOMMENDATIONS AND AGENCIES RESPONSIBLE

FOR IMPLEMENTATION 58

REFERENCES 59

Table of CONTENTS

The Working Group on Demand for humanresources for health (HRH) has chosen a broadperspective that considers health needs andcurrent initiatives to improve health. Themajor initiatives at present consist of the UNMillennium Development Goals and the WHOprogram to provide antiretroviral therapy tothree million people by 2005. Effective demand,in this context, extends beyond current practicesto include the full range of what is possible withcurrent and expected resources. This approachleads us to recognize inefficiencies and challengesthat impair the effectiveness of HRH and toconsider how improvements can be made. Inmany countries, especially the developingcountries, resources must be augmented andstrengthened in order to provide the levels ofprevention and health care required to meetpresent health goals.

Human resources for health include all personsengaged in promoting and maintaining health,from persons who support those with disease toprofessions that provide care. While all thesepersons help to meet the demand for HRH,we recognize that high level leadership isnecessary in order for HRH workers to be effec-tive. Accordingly, much of our report focuseson what can be done by policy makers andadministrators to improve the efficiency andeffectiveness of HRH.

Labor markets for human resources have notproduced the effective and motivated workforcethat is necessary for the task. Health workforceshave been reduced in many developingcountries. Existing levels of cohesion in somecountries have been fractured by well-inten-tioned experiments to change administrativearrangements, such as decentralization or newvertical programs that recruit workers away from

their existing responsibilities in primary caresystems. The efficiency of HRH is often impededby low pay, low motivation, and conditions ofwork that are inadequate and dangerous

In the global policy arena, financial crises havehad a destabilizing effect during the last twodecades, leading to a deterioration of the abilityof public sector workforces to carry out theirmissions. A number of broad policy measureshave been tried, including public sector reform(which seeks to change the ways in whichgovernments carry out their mandates); decen-tralization of administrative authority to regionaland community levels; and health sector financ-ing reform (which seeks to identify new ways tofund health care). Often these policies have beenimplemented in response to financial crises andwithout adequate preparation of persons whomust assume new responsibilities or oversee asmooth transfer of responsibility. As a result,HRH have had to cope with uncertainty andchange at the same time as they have had to copewith greater workloads and higher demandsresulting from new health threats.

Attempts to reform country administrations,whether initiated from within or recommendedby international players, are inevitable so longas countries operate under financial pressures andtheir populations have unmet needs. Yet thelessons of recent history demonstrate thatgovernments should be explicit about the rolethey wish to play in ensuring health services totheir populations and identifying the implica-tions of their decisions for equity and publichealth. Where reforms are implemented, measuresto preserve the effectiveness of HRH should beidentified and implemented in conjunction withpolicy change.

Executive Summary

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Global trade and international recruitment ofhealth professionals have impacted healthworkforces in developing countries. Global tradehas brought new investment, but it has alsointerrupted patterns of care, often attractinghealth workers from rural to urban locations andfrom the public service to private provision ofhealth care. Negative results have includedincreasing inequity of HRH distribution, tensionbetween ethics and profit, increased litigationand the necessity of new regulatory regimes thatchallenge the institutional capacity of countryadministrations.

International migration can lead to a mutuallybeneficial exchange of information and skillsbetween different cultures. But too often it hasmeant a severe drain of scarce human resourcesfrom developing countries to developed coun-tries. Unattractive working conditions in manydeveloping countries understandably provide anincentive for emigration. But it is less easy toaccept the situation in which some developedcountries resort to international recruitment tohelp resolve demand for health workers thatresults from failures of their own policies. Thesefailures include the failure to plan effectively, toimplement efficient models of primary care, andpoor working conditions that have adverseeffects on retention of domestically trainedprofessions such as nursing.

Challenges to management of HRH includetechnical issues, such as the right mix of skills tomeet responsibilities, and leadership to motivatehealth workers and the communities where theywork. Sound planning is required. Forecastingfuture demand for health workers is a key featureof planning. Basic forecasting and planningskills can be acquired with appropriate assistancefrom international organizations. Due to thecomplexity of all the factors involved, plansshould be formulated in a flexible and partici-patory manner with continuous updates.

Scarce resources can be wasted if they aredeployed without consistent planning andcoordination. Wastage can mean that HRHare not working to potential, either because theskills mix of the workforce is inappropriate orbecause of deficiencies in the availability ofsupplies and logistics necessary to support theirwork. Human potential is also wasted due todeaths and attrition caused by unsafe workingconditions. For countries, potential to improvehealth may be lost or mitigated due to migration

and inappropriate geographical deployment ofhealth workers.

Access to health care frequently shows greatvariation within a country, with residents ofrural areas and inner-cities at a disadvantagerelative to urban residents. Access problems areespecially difficult where lack of transportationand poverty limit mobility. The most promisingapproach to these problems will be to strengthenlocal resources to provide primary care andprevention. Other measures include outreachservices and assistance with patient transportation.

There has been a large migration of health workersfrom public to private sector employment, andmany professionals maintain their public sectorresponsibilities while devoting much of theirtime to private practices. This trend requiresinnovative management with a view to coordi-nating the activities of both sectors in order toachieve health goals. Challenges also exist forquality control and effective regulation.

Motivation of health workers and incentives toincrease productivity and job satisfaction areimportant considerations in management ofhealth workforces. Both financial and non finan-cial incentives are required, with the importanceof each varying according to circumstances.

Two themes recur throughout this report. Oneis that countries need to find solutions to HRHchallenges that are appropriate to their owncircumstances. These circumstances includeeconomic ability and, no less important, theirpolitical will and culture. International interven-tion will be most effective if it is done in a waythat supports and enables countries to moveforward but is not prescriptive of what specificmeasures and strategies are necessary.

The second major theme is that the most effec-tive approach to present challenges will be toimprove community level care. Primary care,training new cadres of para-professionals andcoordinating all existing HRH resources arestrategies that have shown great promise. It isalso necessary to enlist communities themselves,by encouraging contributions of time and energy.

The report has 8 recommendations groupedwithin 3 theme areas. Strategies to implementthe recommendations include knowledgemanagement, enlisting support from socialmovements and creating political and bureau-cratic commitment.

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International Migration5. The international community should strongly

encourage developed countries to resolveperceived HRH shortages in ways that do notweaken developing countries by recruitingtheir scarce health professionals.

6. A global emergency response mechanismshould be established to support countries indealing with severe HRH shortages. Respon-sibilities of the emergency response mecha-nism would include situation analysis, formu-lation of solutions, and, when necessary, helpto mobilize excess HRH from other countriesto temporarily alleviate the situation.

HRH Management7. A national multi-sectoral mechanism should

be set up within countries to strengthen theircapacity in health systems and HRH manage-ment. This mechanism should be part of orclosely related to the national health systemsdevelopment mechanism. Situation analysis,demand projections and evaluation should beused to support the decisions of the nationalmechanism.

8. Establish an international Global KnowledgeManagement Initiative on human resourcesfor health. This initiative will support coun-tries to analyze their own situations andidentify solutions that fit their own require-ments

Recommendations:

Health Policy1. National governments should commit to

strengthening health human resource manage-ment as a primary objective for improvinghealth systems performance.

2. National governments and internationaldonors should protect funding of HRHworkforces in public sector and health reformpolicies.

3. Decentralization should focus on buildingcapacity from the bottom up instead ofdelegating down. Strategies include:• Adopt models of prevention and primary

care that have been shown to be effective,including new models of skills mix.

• Link new community models with theexisting system. Expand these programsquickly when they are successful andreadjust to eliminate problems.

• Complete decentralization of administra-tion or finance should only be implementedwhen sufficient managerial capacity existsto create a reasonable expectation ofsuccess.

4. Health system planners should collaboratewith trade specialists to craft negotiatingpositions that will serve the best interests ofthe health care sector in international tradeand service agreements.

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The paragraphs quoted above illustrate twoof the major problems facing health systems indeveloping countries: (1) a severe brain drain ofqualified HRH personnel in response to demandin developed countries and in the urban areas,and (2) wasted skills when scarce professionalsdie from high-risk diseases, leave training orchoose to work outside their professions. Theseproblems are caused in part by economic factors,which usually dominate discussions of demand,but they also include other considerations suchas working conditions and motivation.

The Working Group on Demand has adopteda broad perspective for its inquiry. This perspec-tive includes the determinants of demand,projections of future requirements and manage-ment of resources. Factors that influence demandfor health workers include the obvious consi-derations, such as the need for a competent and

Chapter 1

IntroductionBetween 1986 and 1995, 61% of doctors who graduated from the Universityof Ghana medical school left the country - 88% of them emigrated to the UK orthe USA.2 70% of doctors trained in Zimbabwe during the 1990s immigratedto another country.3

In 2001/02 over 2,000 nurses trained in South Africa and over 450 trainedin Zimbabwe registered in the UK. Rates of increase over 1998/99 levels ofregistration were 250% and 800% respectively.4

A 1999 report on the risks from HIV/Aids found that 51% of nurses leaving thehealth service in Malawi had died

5. Another study covering the 10 years endingin 2001 found that “death was the largest cause of attrition in the MalawiMinistry of Health and Population.” 6

During the economic boom period in Thailand, 1990-1997, mushroominggrowth of urban private hospitals resulted in massive internal migration ofdoctors from rural public hospitals. In April 1997, at the peak of the economicboom, 21 rural district hospitals went on without a single full time doctor.

7

In Mexico, 37.7% of registered physicians in 2000 (excluding those still study-ing) were either unemployed or underemployed in activities other than medicalpractice. The rate of attrition of medical students who entered training in 1997had reached 33.4% by the end of 2001.8

mobile workforce to provide services necessaryto achieve the UN Millennium DevelopmentGoals, and more complex issues such as theinfluence of macroeconomic trends and healthsystems reform on the demand for HRH. Thischapter presents the conceptual framework,definitions and scope of HRH issues consideredby the Working Group.

Conceptual Framework

DefinitionsDemand for HRH

The Working Group has taken a broad perspec-tive on demand for health care and humanresources for health (HRH). This perspectiveincludes public goals for population health and

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the resources required to implement importantnew initiatives to meet the challenge ofinfectious and chronic diseases.

In conventional economic theory, demand forHRH is derived from the demand for healthservices (or, more abstractly, the demand forhealth). An individual’s demand for health careis determined by three influences: (1) healthneeds, (2) predetermining factors such as edu-cation levels and (3) enabling factors such assufficient income to purchase health services.Effective demand means that persons are willingto purchase health care and able to pay itsmarket price. The amount of care persons arewilling to purchase decreases as prices rise, whilethe amount suppliers are willing to provideincreases as prices rise. There is assumed to bean equilibrium price at which amounts demandedand amounts supplied are the same.

At present, health needs are seen as a highpriority. Challenges include a worldwide epi-demic of AIDS, re-emergence of TB, a continu-ing loss of life from malaria, as well as theincreasing burden from chronic non-communi-cable diseases. The growing commitment totackle these major public health problems canbe understood most appropriately as social orpolitical demand. In this perspective, globalcommunities (donors and coalitions of countriesoperating through agencies such as WHO)have established goals for health improvements,and provided new funding to make thempossible. These goals include the United NationsMillennium Development Goals (MDGs) and theWHO initiative to bring anti-retroviral therapyto three million people by 2005.

In many countries - perhaps most of the world -present resources must be augmented andimproved if these goals are to be achieved. Inthe face of these challenges there is often atendency to focus on methods of treatment(science) and financial resources. In the languageof economics, these are the health care productsand the ability to pay the cost of production. Themethods of delivering effective treatment andprevention are often taken for granted. Yet, as moreresources and effective treatments have becomeavailable to meet high priority needs, there hasnot been a concomitant increase in the capacityto deliver care. This lack of capacity is due todeficiencies in the size, skills and infrastructure of

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HRH. Efforts to correct these problems can leaddirectly to efficiency gains and the prospect ofmore health achievements for each healthdollar spent.

Labor markets, demand andworkforce capacity

Labor markets in health care consist of employersand employees, with employers expressingdemand to hire or contract with employees inorder to respond to mandates or opportunities(in the case of the private sector) that arise fromdemand for health care. Health care employersmay be public sector (ministries of health,regional authorities or publicly owned institu-tions) or private sector (privately ownedinstitutions, provider organizations or self-employed professionals, and non-governmentorganizations).

Effective demand for HRH occurs when employersare willing to employ or contract with HRHproviders and are able to pay the going price fortheir services. In developing countries today,ability to pay should be interpreted to meanthat public and private sector employers canprovide competitive remuneration (by countrystandards) and incentives to attract, motivateand retain an effective health labor force. Inmany developing countries today health work-forces are underpaid and have conditions of workthat discourage continued employment. As aresult, there are problems with motivation andperformance. Labor markets have not producedeither the quantity or the quality of health skillsrequired to meet health goals.

Labor markets in health have received insuffi-cient policy attention. One reason has been theeconomic climate of the last two decades, whichhas been characterized by low or negative eco-nomic growth in many developing countries. Inthis climate, much of the policy attention hasfocused on decreasing the size of healthworkforces in order to cope with decliningbudgets. Attempts to reorganize the ways inwhich care is delivered have also been made, withthe expressed intention (or hope) that a moreefficient public sector will result. Private sectorhealth care has grown rapidly, but often thedirection of growth has been to provide diagnosticservices and treatment demanded by affluentclasses, with little attention to primary care or

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public health. Other reasons that have resultedin low priority for strengthening labor marketsinclude a widely held perception among donorsthat public bureaucracies are inefficient andineffective and that new management modelsmust be implemented. In these circumstancesthere is both a reduced financial ability withincountries to revitalize HRH and skepticism inthe international community about the wisdomof doing so within present health delivery systems.

Field training of HRH has often consisted ofshort-term training to meet the needs of specificprograms. The result has been a proliferation ofvertical programs, separated from, rather thanintegrated with, existing delivery models. Verticalprograms often compete with each other, andwith ministries of health, for the services of themost proficient health workers.

While it is not always wise to make sweepingconclusions, there is a strong case to be madethat insofar as external funding sources haveintervened in the labor markets of developingcountries, the interventions have tended tofracture existing workforces, either by promot-ing new organizational forms (such as decen-tralized administration) or by establishing newprograms that bypass existing employer-employeerelationships. The result of these interventions,combined with low institutional capacity inmany countries, usually has been a workforce thatlacks the solidarity, resilience and resourcesnecessary to take on new challenges.

Public health

Public health demand for HRH must also berecognized as vitally important to preserve healthand prevent the spread of diseases such as AIDS,SARS and avian flu. The financial payoff toeffective investments in public health can bemeasured in terms of the costs avoided. Thesecosts, which can be extraordinary, are usuallydifficult to predict in advance and often ignoredwhen preparing budgets. As a result, publichealth workforces may become even moreneglected than direct health care personnel sincethere is little public demand or political demand.Public health workers often require highlyspecialized skills, such as planning and diseasesurveillance. In other cases the same workers canprovide public health services (e.g. immuniza-tions, advice on hygiene) and direct patient care.Effective responses to demand for public health

workers requires the right match of uniqueskills and persistent follow-through to minimizedangers from infectious diseases and theconditions in which they can develop.

Demand challenges

There is now a well-recognized requirementfor more, better-motivated health workers withnew skills and efficient working conditions inorder to deal with present health challenges. Butthere is also a limit to the funds available to pay,train and provide support services for healthworkers, and those who provide funding natu-rally seek assurances that the money will be usedas effectively and efficiently as possible. The corechallenge for health delivery is to accomplish asmuch as possible within existing or increasedlevels of effective demand.

Management of HRH

There are often many options to meet thedemand for health services: there is considerablelatitude to modify the mix of providers, thenumbers of providers and the use of technologyto make providers more efficient. Resourcescan be substituted where scarcities exist orwhere there are large differences in the cost ofdifferent types of provider (e.g. the choice ofauxiliaries or doctors). Effective management ofresources involves some or all of the followingchallenges:• finding optimal solutions for the mix of

providers and technology;• managing HRH personnel, infrastructure and

support services;• providing appropriate services to meet popu

lation needs,

The Working Group on Demand recognizesthe importance of managing both human andmaterial resources in pursuit of effective andefficient health systems. Many of the topicsreviewed in this report have been selectedbecause they are essential to efficiency in deploy-ing available resources. Other topics deal withthe human concerns that often make a criticaldifference in the effectiveness of health work-forces - skills, experience, motivation, coopera-tion and a sense of shared purpose. There is ascience in managing scarce resources, especiallythe people who work in the health sector, so asto meet the demand for health and health carewithin the evolving paradigms in which demandis defined.

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Influences and InteractionsDemand and supply are the two key elementsof economic markets. In the JLI framework, thereare separate working groups for demand andsupply with an agreed division of issues betweenthe two groups. This report deals with demandand management issues, recognizing that therewill inevitably be some overlap with supplyissues. Figure 1 was developed to help clarify

Box 1.1: Definitions

Human resources for health: All individuals engaged in the promotion, protection or improvement ofpopulation health.9

Health workforce: Persons formally employed in providing health care.

Effective demand for health care: The desire and the financial capacity to purchase health care at pricesthat reflect cost of production and a normal return on investment.

Effective demand for health workers: Employers are willing to employ or contract with HRHproviders and are able to provide pay and working conditions that will attract and retain persons withthe desired mix of skills.

Political and social demand: A commitment by governments, or by agencies that represent coalitionsof citizens, to purchase health care or preventive services necessary to achieve specific goals.

Labor markets: A concept that includes diverse employers or purchasers of labor services on the onehand and employees or self-employed providers of service on the other hand.

Efficiency: Producing the maximum amount of health care with a fixed amount of resources; orproducing a fixed amount of health care with the fewest possible resources.

Effectiveness: Producing health care that is effective in preventing or treating disease.

Cost effectiveness: Producing health care in ways that are both effective and efficient.

Equity: Although there is some debate about the full implications of this concept, equity in healthcare normally means that all members of a population have equal access to services that will benefittheir health states.

Productivity: The amount of health care that can be produced by a given number of health workers.Increases in efficiency (e.g. improved skills or technology) lead to increases in productivity.

Population health: The state of health of identifiable populations, and the investigation of factorsthat affect states of health.

Public health: Activities that protect the health of whole populations, such as the prevention ofinfectious disease, the reduction of contamination caused by private or commercial activities andregulation of workplace safety.

Public and private sectors: In health care delivery, public sector normally refers to government oragencies of the state. Private sector refers to non-government ownership or control and includes for-profit and non-profit agencies.

the relationships between demand, supply andmanagement issues in HRH. Major influenceson demand in the HRH labor market include;

• Macroeconomic policies and their effects onresources available for health;

• Globalization & international trade, whichaffect investment and mobility of providers;

• Demographic and epidemiological transitions,which affect the need for health services;

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• Reform policies in social, public and healthsectors, which affect the structure and flexi-bility of health systems.

These influences also affect the supply side ofHRH management, in particular issues of recruit-ment, training and regulation. Issues of deploy-ment, retention, development of capacity andsupport all affect the efficiency and effectivenessof HRH. The decision to group these issueswithin the demand side of the labor market inthe JLI framework is somewhat arbitrary, but itprovides a clear demarcation between HRHdemand and supply.

In the conceptual framework, HRH demand andsupply issues exist in both public and privatemarkets for health care. In addition, there isa challenge to coordinate public and privateproviders in order to achieve the full potentialof both groups (recognizing, too, that the same

Figure 1Conceptual Framework of HRH Demand and Supply and Management Issues

providers often participate in both public andprivate provision).

The problems in the upper half of Figure 1 areoften inter-connected. They affect the efficiencyof the health workforce and they also tend todestabilize the extent to which demand andsupply are near to being balanced. Motivation,productivity and skills affect the ability of indi-viduals in the workforce to work efficiently. Theother three problems are system effects. HRHshortages often coexist with wastage causedby attrition or failure to reach full potential.Migration may lead to mal-distribution in whichHRH are inappropriately distributed to meetdemand. Wastage and mal-distribution alsooccur when HRH are underemployed or inap-propriately employed in view of professionalqualifications, or are providing services that areineffective to meet population health needs.

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Defining the scope ofhuman resourcesfor healthIn the WHO definition HRH includes allpersons who provide health care and preventionservices or who assist persons using health careto do so in appropriate ways. Demand for HRH,in the Working Group perspective, includes allthese persons and the services they perform. Mostresearch studies have concentrated on those for-mally employed in health systems, especially pro-fessional groups such as doctors and nurses. Cur-rent challenges require more widespread recog-nition of the roles of less visible health workers,communities, families and individuals threatenedby ill health. In the example below we illustratethe range of persons encompassed by the HRHdefinition with an example based on existing andplanned models to provide antiretroviral therapy(ART) to persons with AIDS. The examples aretaken from a WHO report prepared as part ofthe effort to implement the goal of three millionpersons receiving ART by 2005.

ART is best conceived, and in many

environments best provided, as part

of a continuum of prevention and

care for sero-positive patients which

embraces testing, behavioral counsel-

ing, psycho-social support, prevention

of vertical transmission, treatment of

opportunistic infections, home based

care, nutrition support, and ART. A

purely clinical approach is not only

wasteful of human resources, but

inadequate as a response to the many

needs of the sero-positive patient.

WHO (2003)10

HRH Providers Services Settings

Persons with AIDS, Counseling, education, Home, community,Lay counselors, monitoring compliance, health centres (including primarySocial workers, psychological support care & ART centres)Psychologists

Traditional Patient recruitment, reinforce Communitypractitioners treatment decision, potential ART

providers in future.

Midwives Prevention, referral for Community,treatment primary care and MCH health centres.

Nurses, Prevention, medical exams, Community, health centres, hospitalsNurse assistants dispense ART, monitor patients’

conditions

Pharmacists, Dispense ART, maintain Community, health centres, hospitals.Pharmacy assistants supplies, monitor dosage

Lab technicians Diagnostic tests Hospital, diagnostic labs,health centres

Physicians, clinical Prescribe ART, treat TB and Community healthofficers, medical opportunistic infections, centres, hospitalsassistants monitor patients’ conditions

Source: adapted from WHO 2003.

Health Human Resources Required for Antiretroviral TherapyWHO 3 x 5 Initiative

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Who should respondto present challenges?

Demand for HRH has a global dimension and acountry dimension. Within each sphere there aremany organizations and individuals that shareresponsibility for maintaining demand or forresponding to it.

Globally, demand is financed by national govern-ments, donor countries & agencies, as well as byinternational financial corporations. Influencesare usually positive, as in the case of fundingthrough direct grants, targeted initiatives or con-tributions to sector-wide approaches to planning(SWAPs). But international agencies can alsohave a negative effect on demand, for examplestructural adjustment programs that requirecountries to limit expenditures on social servicesand health. Non government organizations(NGOs) have traditionally played an active rolein developing countries, encouraging demandthrough education and responding to demandthrough direct provision of services. Interna-tional agencies such as WHO, UNDP andUNICEF play a large role in stimulating andshaping demand for HRH through health aware-ness initiatives and through the disseminationof standards for care.

At country levels, demand for HRH usually origi-nates predominantly from ministries of health,which employ public sector health workforcesand/or approve budgets and number of posts inhealth agencies or decentralized administrations.Privately owned organizations such as hospitalsor large medical practices also exert demandfor HRH. Large industrial firms often employ orcontract with health workers to provide healthservices to their workforces.

Community organizations and individuals arean important source of demand for HRH throughtheir choices among available practitioners.These choices are constrained by ability to pay,which is typically very limited. Choices are alsoconstrained by the availability of differentprovider types. Allopathic medicine is availablein all countries, but often in very limited supply.Traditional practitioners or healers are also usedextensively in most countries, and are often theprimary source of care (e.g. in Indonesia, where54% of the population uses traditional practi-tioners and some hospitals have opened wardsfor traditional practice).11 In other instances

traditional practitioners complement the allopathicsystem and populations use one or the otherdepending on the nature of their ailments.12,13

The question of who should respond to presentchallenges could be answered by saying ‘every-one’, but such a response can be disingenuouswhen we consider the nature of health challengesand the state of health workforces in developingcountries. The health systems of most of thesecountries are under great stress as the result of ahost of factors:• Health-related conditions such as epidemics

(i.e. AIDS, TB, Malaria) and new treatmentrequirements caused by the epidemiologicaltransition (aging populations that have becomeexposed to health threats from chronic con-ditions).

• Health workforces that are often understaffed,poorly paid, ill-equipped, stifled by bureau-cracy, threatened by infection, torn by loyaltyto public and private sectors and under-valued by their employers.

• Financial support that is insufficient to main-tain effective demand at levels that arerequired in order to combat health threatsand meet universal goals such as theMillenium Development Goals (and formerly,Health for All).

These factors suggest that responses to presentchallenges should be led by policy makers at boththe global and national levels. Informed leader-ship is essential if we seek to transform healthsystems so that they can reach their potentialsfor equity and efficiency. Leadership is alsonecessary to tap into the pools of insight andinnovation at community levels and to learnfrom these assets. Accordingly, this report isaddressed primarily to policy makers. Nonetheless,the Working Group also wishes to reach abroader audience, with a view to encouragingopinion leaders and interested citizens toparticipate in the process of developing solutionsto present challenges.

Key messagesCertain messages have emerged from the discussionsof the Working Group and the analysis containedin background papers and literature reviews.These messages can help to condition ourapproach to specific problems. Essentially, wethink a pragmatic approach is called for, yet weshould not be boxed in by conditions that havelimited progress in the past.

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We know a lot about how human resources forhealth should be organized and directed. We alsoknow how to motivate the workforce - in theory.We have a lot of insight into problems that haveoccurred with policies implemented in the past.

The main constraints in getting from where weare at present to where we would like to beinvolve ways to overcome impediments atcountry levels. The first set of constraintsconsists of (I) severe and changing health needsand (2) limited economic and institutionalcapacity. These conditions affect the abilityto improve health systems and HRH. The

Box 1.2: Demand and Challenges for HRH

Challenge: Create and maintain an effective, efficient and motivated HRH workforce to provide preventiveand curative health services within the limits allowed by a country’s scarce resources. This challenge involvesa qualitative dimension (e.g. quality equity and accountability) as well as a quantitative dimension.

Meeting the demand for health workers means finding the right mix of skills with available resources.Successful responses to HRH demand involve management skills, careful planning, incentives tomotivate and retain health workers, appropriate technologies and transportation.

In economic theory, equilibrium occurs when demand and supply are equal. Equilibrium is not anappropriate concept to describe the health systems of developing countries, which have many unmetneeds. The degree of balance between needs, demand and supply that does exist is often destabilized fora number of reasons.

• Demand for health care tends to increase as populations and economies grow.

• Macroeconomic reform, realignment of the roles of public sectors and health systems financing reformshave decreased resources available for the health workforce, impairing their ability to functionefficiently. Yet demand has increased as economies modernize and populations gain more choice intheir consumption of goods and services.

• Unexpected shocks, such as the emergence of SARS and avian flu, have caused large and urgentincreases in demand for effective interventions.

• Demand for health workers increases as the result of global investment in health facilities andnew technologies.

• Increasing demand in developed countries often leads to recruitment of professionals from developingcountries, with severe consequences for fragile health systems.

• Demands for more workers and different skills occur as levels of urbanization and population mobilityincrease, providing larger proportions of the population with the potential to access modern healthcare.

• Growth of private sector health care, which is usually an urban phenomenon, attracts professionalsfrom rural areas and from public health care systems. This presents a challenge for countries to findthe right alignment of public and private providers to meet public health goals.

• Rural areas throughout the world report excess demand for health workers, often due to unattractiveprofessional working environments. HRH migration from rural to urban areas also creates imbalancesbetween demand and supply, usually leading to shortages in rural areas and surpluses in urban areas.

second set of constraints consists of politicaland professional rigidities, which affect thewillingness of governments, bureaucracies andprofessional groups to adopt new models for theprovision of health services.

This report seeks to develop sound and realisticrecommendations that can avoid past mistakes;build a knowledge base to assist countries andglobal stakeholders; and provide a roadmapfor policy makers and managers to implementsolutions that are appropriate to their owncircumstances.

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Chapter 2

Influences Externalto Health Sector Control

i This section is based largaly on a presentation by Alex Preker at a 2003 conference in Annecy and a subsequent paper cited asPreker et al, 2004.A number of other sources have been used as well, and they are cited.

The Working Group has identified a numberof topics that have had an important role in shap-ing the evolution and the future prospects ofhealth workforces in developing countries. Thischapter reviews topics that are usually outsidethe control of health administrations. The top-ics include macro economic conditions and poli-cies; restructuring and reform of public sectoradministration and finance; international tradeand international migration. These issues havediverse dimensions but they are linked by animperative for countries to adjust to globaleconomic trends.

The first four topics are presented in what isarguably a natural order: macroeconomic con-ditions have beena major cause of public sectorreform, including decentralization of administra-tion and finance. Health sector reform hasusually been implemented as part of largerpublic sector reform. The last two issues (inter-national trade and migration) are imbedded inrecent trends to globalization of markets, includ-ing markets for health care and health humanresources.

Macro Economic Effectsand Policies

i

A background presentation prepared for WG3made the point that ‘Money is the currency fordemand.’ (Preker, 2003).14 In a macro economicperspective demand for health care refers to

global or country finance of health services.Global health spending is estimated by the WorldBank to be approximately $2.6 trillion. Devel-oping countries, with 90% of the world’s popu-lation, account for only 11% of global healthspending. Inadequate financial capacity oftenlimits the ability of developing countries toemploy the required number and mix of healthworkers to meet health goals. In these circum-stances health care labor markets are under-financed. Predictable consequences includedifficulty recruitingand retaining workers withmarketable skills, poor morale and insufficientinfrastructure.

Macro economic problems in developing coun-tries were exacerbated by global recession com-bined with inflation during the 1980s, anotherrecession in the early 1990s followed by adverseinvestment trends in Asia and steep declinesin stock market values during the early 2000s.Government deficits increased rapidly during the1980s. Real incomes of country populationsdecreased as inflation eroded purchasing power.These conditionsled to a crisis in governmentfinance in many countries.

Policies adopted to cope with financial crisisincluded fiscal stabilization and structural adjust-ment (Table 2.1). These policies were promotedby international financial corporations and wereoften required as conditions of financial aid.Stabilization policies reduced public sectorspending while structural adjustment policies

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encouraged a greater reliance on economicmarkets to encourage economic growth. Thesepolicies anticipate a reduction of inflation,a reduction of wage levels and/or a reductionof employment in the public sector. Labormobility is required so that jobs can move tomore productive sectors, especially the produc-tion of commodities that are exportable on worldmarkets or commodities that compete withimports (Preker et al, 2004).15

In developing countries, reductions in wage rateswere difficult to implement because salaries werealready low. Workers often resist attempts toreduce wage rates, raising the prospect of conflictwithin the public service. In some countries theresponse was to delay wage payments or defaulton them. Two other conditions made fiscalstabilization and structural adjustment pro-blematic in the economic environment of the1980s. The first was high inflation, whichreduced the purchasing power of wages. Thesecond was high unemployment, which meantthat there were few prospects for re-employmentof persons laid off. The 1990s recession was notaccompanied by high inflation, but by then anumber of countries, particularly in Africa, werein a state referred to by the World Bank aslong-term economic stagnation.

Many governments were able to transfer ineffi-cient public enterprises to the private sector, orto implement strategies such as corporatizationto make them more efficient. Health serviceshave several characteristics that distinguish themfrom most other economic commodities, how-

ever, and almost all countries recognize a rolefor government in financing or providing healthservices. Public health and primary care are ex-amples of basic health services that governmentsare expected to ensure for their citizens.

Economic trends did not reduce needs for healthcare and health workers. Poverty often increasedfor large proportions of the population in manycountries, causing health indicators to decline.At the same time, many economies were mod-ernizing and the growth of private markets pro-vided enhanced incomes for subsets of the popu-lation who were able to adapt to entrepreneurialpursuits. Demand for technologically advancedservices increased at the same time as the abilityof governments to sustain an effective healthworkforce decreased. The rise of private provid-ers was a response to new demand and decreasedpublic capacity, but it often occurred without thestandards and accountability normally associatedwith professionalism and regulation.

Most low-income counties have great need foreffective health systems but do not have effec-tive demand due to severe financial constraintsand low income per capita. Solutions to thisdilemma are illusive. In the long term, economicgrowth, adequate revenues for public healthsystems and appropriate HRH management skillswill all be necessary. For now it is necessary tolearn how to get the best from available resources,which will place most of the emphasis onmanagement. Careful analysis and synthesis oflessons from experience will be essential torealize the potential of these approaches.

Table 2.1Macro Economic Adjustment Policies

Policy and definition Economic strategies

Fiscal Stabilization Modification of tax policies.Reduction of national expenditure in Public sector expenditure reduction andorder to balance government budgets. reallocation.

Structural adjustment Trade liberalization.Attempts to increase GDP by shifting Changes in public and private ownershipresources to economic sectors that can of the means of production.compete in international markets.

Source: Adapted from Preker et al. (2004).

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Box 2.1: Macro economic Shocks and ChallengesGDP declined at an average annual rate of 0.7% in the least developed countries duringthe 1980s. Real income per capita decreased by 12.5% in Africa and 9.1% in Latin Americaduring this period.16

In 1999, 23% of the populations of developing countries were living on less than $1 US perday, a decrease of 6 percentage points from 1990. The percentage increased, however, in theregions of Europe and Central Asia, Latin American and Caribbean, and Sub-SaharanAfrica. In Sub-Saharan Africa, 49% of the population lived on less than $1 per day in 1999.17

Africa accounts for only 0.4% of global health spending and Asia accounts for only 3.5%.Developed countries account for 88.9% (Preker, 2003).

Macro economic problems that limit health spending in developing countries include :• Government revenues are low as percentages of GDP.• Tax systems are often regressive, placing a larger relative burden on low-income taxpayers.• Low-income countries have below-average levels of revenue pooling (i.e. cross subsidies

from rich to poor, healthy to unhealthy and productive to unproductive segments of thepopulation).

• The benefits [in a financial sense] of public sector health care in low-income countries tendto accrue mainly to higher income groups.

Consequences of economic shocks - examples from case studies:In Mongolia, the real purchasing power of government budgetary expenditure dropped byover 50% from 1990 to 1993. Health status, unemployment, poverty and nutrition wereadversely affected by economic conditions. Health staff declined during this period, withthe largest decreases among nurses and mid-level workers.18

In Nepal, economic restructuring resulted in the retirement of many professionals at the peakof their ability at a time when the health system was under stress to adapt to new health needs.19

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ii This section is based on a report for the working groupauthored by Jane Lethbridge. Additional sources have alsobeen used and cited.

Public sector reform is a term used to describea number of initiatives that seek to change theway in which the public sector of a country isorganized, financed and/or delivers services.Initial models for public sector reform originatedin developed countries as they sought to adaptto lower financial capacity caused by macroeconomic trends during the 1980s and 1990s.These economic trends, combined with a moreconservative philosophy about the role ofgovernments, tended to encourage market-based strategies in preference to a direct role forgovernments in economic affairs. Donor agen-cies played an extensive role in promotingand funding public sector reform in developingcountries.

Health sector reform is usually one dimensionof public sector reform. The broad policy frame-work adopted as part of health sector reform isusually determined by government departmentsof finance or civil service rather than healthsystem administrators, however. Reform measuresusually incorporate some or all of the policyoptions defined in text box 2.1. The package ofreforms and specific measures within each typeof policy vary widely and even the definitionsoverlap to some extent. Analysts have notedthat these reforms tended to emphasize efficiencyrather than equity.22

Reform measures that affect the HRH workforceoften include decentralization of authority andprivatization (which are discussed in othersections of this report); staff reductions; loss ofsecurity in new financing arrangements anduncertain lines of accountability.

Public Sector Reform and HRH Demand ii

Effective demand for health care and for healthproviders is almost certain to be affected bypublic sector reform measures. Often the effectswere unintended or arose due to conflictsbetween financial and social priorities. User feesand privatization have direct effects on thedemand for health services, with negativeimpacts that are greater for the poor whoseresources are severely stressed trying to maintainother necessities of life. Privatization sometimesresulted in a reorientation of services to providemore technologically advanced services to urbanpopulations with a preference for modern care.Labor markets change as a result, with effectivedemand increasing for the highly-skilled profes-

If efficiency, equity and effectiveness were the goals for health sector reform, then ithas often led to greater inequity. Jane Lethbridge, 2003.20

‘After some years of experience, there are indications that these reforms have notkept all their promises. In many cases privatization has led to lower salaries and joblosses in the public sector and to a deterioration of working conditions for healthworkers in the private sector...a demoralized, insecure, stressed and overworkedworkforce.Standards of care have declined at a time when patient expectations haverisen.’ WHO’ discussion paper, 2002.21

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Box 2.2: Definitions

New Public Management (NPM). Usually involves 23

• The separation of policy and financing from delivery of services, with the latter role contractedto public agencies or private firms.

• Incentives to improve employee performance.

Characteristics of NPM reforms that impact HRH have included conversion of governmentdepartments to independent agencies, privatization, contracting and internal markets.

Fiscal Reform. Key features involve:New budget management systems that include financial planning, mechanisms for monitoringoutput and controlling performance.Improved use of resources, which often involves downsizing of the workforce.Improved revenue generation, which often involves user fees for public services.

Market Mechanisms. Forms of implementation include:Privatization of provision and/or finance.Corporatization, which introduces business principles to public sector agencies (e.g. hospitals).Internal markets, which create a purchaser - provider split in the finance and provision of services.

Civil Service ReformsOften includes reducing the number of public employees and changes to compensation packages.May involve transforming government departments into semi-autonomous agencies (e.g. healthservice agencies).

sions or newly trained graduates and decreasingfor older workers and health professions thatprovide primary care.

Negative impacts of public sector reform onHRH demand and the quality of managementfrequently resulted from a failure to properlyimplement reforms. This can happen wherelines of accountability are blurred by changeor where reforms are announced and then onlypartially implemented. In other cases theremay bea conflict between stated intentionsand methods of implementation (e.g. policiesimplemented in the name of efficiency thatsimply reduce to cutting-costs). Specific problemsin HRH management that seem to be widespreadinclude:

• The growth of an unregulated, and sometimesignored, private sector competing withpublic sector providers.

• Defection of underpaid staff to the privatesector and dual public-private practice byphysicians.

• The legal status and accountability of publicemployees has changed with contracting andinternal markets, often leading to confusionand insecurity.

• Loss of institutional memory, organizationalculture, leadership and morale, which haveoften contributed to stability and prestigewithin the public service.

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Diagnosing problemsand finding solutionsUnderstanding the limitations and processes ofpublic sector reforms are important first steps inimplementing or modifying reforms to amelio-rate negative effects on the HRH workforce.Saltman points out the need for governments toidentify methods of health reform that areappropriate to their own circumstances. Heconcludes that market-based mechanisms wererelatively successful in publicly regulated andaccountable health systems. These characteristicsoften are not present in developing countries.30

In a series of studies of NPM reforms in Africa,Asia and South America, Batley and colleaguesconcluded: 31

• Economic crises have driven change whilecreating conditions that increase resistanceto change.

• Externally driven reforms seldom succeed;local ownership and support from the publicare necessary.

• Support for human resource development andimproved public information is essential to thesuccess of reforms.

Box 2.3: Impacts of Public Sector Reforms on HRH

Remuneration policies implemented in Eastern and Southern Africa as part of public sectorreform involved cutting salaries, restricting increases, consolidation of non-wage benefitsinto salaries, salary increases for specific groups, re-grading of jobs, performance assessments.24

In Tanzania and Botswana, health staff were transferred to local government agencies whilesenior staff remained at the MOH. This led to breakdowns in loyalties and managementresponsibilities.25

In Burkina Faso, there was resistance to reforms and a decline in standards of service between1986 and 1997.26

In Eastern and Central Europe, women employees were the most affected by reductions in jobsin the health sector (ILO, 1998) 27

In Bangladesh, employees responsible for implementing technical aspects of reform wereuncertain as to the need for and the benefits of reform.28

In Mexico, financial reforms led to reductions in maintenance of health facilities andreductions in the wages of employees, leading in turn to reductions in the quality of healthcare.29

Source: Examples discussed in Lethbridge (2003).

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iii This section is based on a report for the working group authoredby Jane Lethbridge. Additional sources have also been usedand cited.

• Reforms that avoid creating complex neworganizational arrangements stand the bestchance of success.

• Governments have weak capacity ‘to performmarket-sensitive regulatory and enablingroles; these roles need either to be strengthenedor to be avoided...’

The examples discussed in the two text boxesabove illustrate the importance of adaptingreforms to circumstances that exist in develop-ing countries. As shown in the Chile example,corrective measures can be taken where pastattempts at reform have not been successful.Capacity to implement reforms and acceptanceby affected populations are important conditionsfor success.

The challenges for HRH management in publicsector reform consist of (1) adapting to changeby identifying and building on existing strengths(2) advocating for a strong health system so that

equity and health are not casualties of reform.In view of the very limited financial capacity inmost developing countries, the most promisingapproach will be to identify primary caremodels that are working effectively at presentand build on them. Social movements can alsohelp to build support for community action inthe areas of health education, nutrition, diseaseprevention and compliance with treatment,which is especially important in the case of TBand ART forAIDS.

Decentralization iii

Evidence on decentralization compiled for theWorking Group on Demand demonstrates that:‘long-standing disregard of the human resourcearena has resulted in the emergence of importantand problematic challenges that impede the creationof an appropriately deployed, well-trained, andmotivated workforce’.

Key challenges:1. To define the essential human resource policy,

planning and management skills that nationalhuman resource managers working in decen-tralized countries must possess.

2. To define and implement evidence-based strate-gies to address equity concerns in staffing.

3. Urgent action to improve health worker motiva-tion and performance.R-L Kolehmainen-Aitken (2003).32

Decentralization has been a key feature of manypublic sector reform initiatives. Proponentsargue that decentralization allows more localinput and produces results that are sensitive tolocal values and acceptable to local populations.In terms of resource management, decentraliza-tion can eliminate rigidities caused by excessivebureaucracy and encourage local managers to useinitiative in solving problems. Critics argue thatdecentralization is often code for reducing finan-cial support and downloading problems to locallevels of government. Whatever the motivationfor decentralization at national levels, its affectson health systems have often been profound.

A background paper prepared for the WorkingGroup analyzed the impacts of decentralizationon three key HRH groups in country healthsystems and identified key issues from the

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perspectives of each group. These groups arelocal health managers, who typically face newresponsibilities; health workers, who are requiredto deal with new tasks and lines of authority; andnational health leaders, who must adapt admi-nistrative processes to new national policies. Theconcerns are listed in Table 1. The priority andurgency of the concerns listed will need to beconsidered in a context that recognizes theinstitutional and managerial capacity ofeach country seeking to implement policies ofdecentralization.

An important caveat when identifying policyoptions to deal with decentralization is that theextent to which responsibility is devolved andthe form of decentralized administrations are al-ways important considerations.

• Options for decentralization follow agradient of responsibility transfer, fromdeconcentration within a national ministryto privatization or contracting with NGOsand non-profit organizations.

• Workers might remain in a national civilservice but be accountable to local adminis-trations. Alternatively, they might be trans-ferred to local levels of government or toautonomous health service agencies.

• Local managers and employees may find itdifficult to understand how much authorityhas really been transferred. They may findit difficult to navigate the bureaucraticcomplexities that often accompany transfersof power, especially in the initial stages ofimplementation.

Box 2.4: Reform in Chile - Reversing course to correct mistakes

In Chile, health care reforms prior to 1990 resulted in underfunding of the public healthcare sector, transfer of resources from public to private sectors and private insurance thatwas effectively limited to young adults. Health budgets declined. Labor relations in the healthworkforce worsened. There was widespread dissatisfaction among the population with healthservices.

A new government elected in 1990 has instituted a number of changes to reverse the negativeeffects of previous policies. These changes include modern management techniques anddecentralized personnel management in HRH. Career paths have been established in thepublic service. Additional measures include dialogue with the civil service about furtherreforms and policies to link pay to performance.

Source: Case study in Lethbridge (2003)

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Impacts of Decentralizationin Low and middle incomecountriesA literature review in the background paperfound the following results:• Little evidence of new job posts, job re-profil-

ing or improved staff mix.• Local managers’ ability to create new jobs may

be constrained by a centrally controlled civilservice or limited budgets.

• Planning and human resource managementskills are generally weak at local levels.

• Political interference and nepotism oftenhamper personnel management.

• Human resources databases often deteriorateas aresult of decentralization.

• Effective performance management is rare indeveloping countries (even before decentrali-zation) due to the lack of key prerequisitessuch as a living wage, supplies and transport.

• In some countries the complexity of procure-ment systems and reduced budgets after decen-tralization have compromised the levels ofaccess to supplies and transport that existedbefore decentralization.

• Equity suffers when workers are paid unequallyfor the same work in different localities oradministrative units. Inequalities arise through

salary levels, pension arrangements, theexistence (or non-existence) of bonuses andbenefits, working conditions and access to ashare of user fees or informal payments.

• Delayed payment or non-payment of wagesmay occur more frequently for decentralizedworkers than for centralized workforces inpoor countries.

• Opportunities for professional developmentand career mobility have suffered as theresult of decentralization in some poorcountries. Causes include reduced trainingbudgets, isolation from national trainingprograms and reluctance to release stafffor training programs due to shortages ofpersonnel.

A recent ILO report on decentralization notedthat traditional bargaining systems havechanged, with more negotiation at the decen-tralized unit level, and more individualized pat-terns of remuneration (ILO, 1998). The reportnoted negative effects on the workforce, forexample increases in overtime and unsociableworking conditions as a result of reform processesand cost-containment measures in countries suchas France, Germany, Sweden and the UnitedKingdom. In addition, the intensity of work hasincreased greatly, even if the actual hours of workhave not changed much.

Table 2.2Concerns of Key Actors in Decentralization

Groups affected Concerns

Local health managers • Improved staffing arrangements• Improved performance and productivity• Improved personnel management

Health workers • Stability of employment• Salaries, benefits, working conditions• Equitable treatment• Professional development• Career development & mobility

National leaders • Strategic planning for HRH• Regulation of training & practice• Oversight to ensure equity• Legal protection of staff

Source: Adapted from R-L Kolehmainen-Aitken (2003).

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Box 2.5: Problems in health sector decentralization

In Nicaragua, decentralization was characterized by budget cuts, reduction in resources forprimary care, user fees and privatization.33

In Indonesia, power to hire, train, transfer and fire personnel was transferred to regions. Allegedresults include favoritism and an unequal distribution of staff. Plans for and funding of trainingprograms are uncertain. Health staff are concerned about removal from career paths.34

Mexico decentralized health sector authority from federal to state governments. State govern-ments have concentrated available personnel in state capitals. Municipalities claim the resulthas been to create new centralized authorities at state levels.35

State governments in Mexico have been unsuccessful in having local universities and healthinstitutes provide post-graduate training and continuing education for public health managers.

In Uganda, resources at the local level were diverted away from primary health care followingdecentralization and cancellation of a central government block grant. Other negative impactsincluded problems of financial management, corruption and concerns over quality of services.36

iv Both of these situations were experienced in Bangladesh during preparation for the Fifth Health and Pupulation Plan in 1996& 1997.

Health sector financingreformHealth sector financing reform is closely linkedto public sector reform and decentralization.Health sector financing reform usually resultsfrom national policies, yet there is often scopeto adopt or modify specific initiatives inthehealth sector in order to conform to public policyimperatives.

One of the most studied initiatives in healthsector financing reform has been the impositionof user fees in publicly owned health centers andhospitals. Evidence indicates that user fees paidthrough fee-for-service charges are damaging toobjectives of equity and access by the poor,37,38

and have not served to increase efficiency.39

Other measures in health financing reform haveincluded the introduction of insurance, commu-nity financing schemes, contracting-out andprivatization of some services.

New initiatives in service delivery includepackages of essential services, introduced by theWorld Bank in 1993.40 Concerns in implement-ing essential packages include targeting servicesto key populations such as the poor and ruralunderserviced areas. Cost estimates used inplanning need to take into account local

patterns of delivery and cost structures. There isalso a concern that the definition of essentialservices may become unwieldy as numerousgroups advocate for inclusion of the programsthey support in the package.iv One potentialapproach to deal with the latter circumstance isto allocate most government funding to aservice milieu structured so as to include essentialservices (e.g. primary care programs and ruralhealth facilities that incorporate health educa-tion, immunization and preventive services).

The working environments and responsibilitiesof HRH can be affected in many ways by healthsector financing reform.

• Contracting or privatization may shift employ-ment from public agencies to autonomousagencies or private businesses, resulting in lesssecurity.

• Providers may voluntarily move from publicemployment to private practice or engage indual public and private practice.

• Public sector managers often face new respon-sibilities in planning and coordinating serviceswhere new actors either compete or (should)cooperate. Managers of hospitals and otherinstitutions, many of whom were trained asmedical professionals, are often required toadopt business principles without adequatetraining in management skills.

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Box 2.6: Health Workers and the Reform Process

‘The importance given to the human resources factor cannot be disregarded in the strategic planningand implementation of the reform process ... In one way or another, the reactions of workerswill influence the process and affect the plans.’

‘A high degree of coherence between the institutional culture and values, the objectives of thereform instruments, and the tools and timetable of the implementation process facilitates thecommitment of workers to the reform process...people who work in health services easily perceivethe non-alignment between these components of the reforms.’

‘Many well-planned transformations failed because the managerial or financial tools were notadapted to the proposed changes, creating labor turmoil and opposition from workers.’

Source: Quotes from Rigoli and Dussault (2003).

• Employees and their unions are key playersin determining whether reform initiativeswill succeed or fail, yet they frequently areleft out of planning processes.

Health care financial reforms lead to changes inmarket characteristics that impact the demandfor health services and the skills required toprovide them. Developing countries usuallydiffer from developed countries in health caremarket characteristics.41 Key differences includelimited risk-sharing and fragmented systems offinance. Provider behavior is less predictable dueto weak regulation, absence of a tradition ofprofessionalism, blurred boundaries for scopeof practice and poorly organized systems forreferral of patients. As a result, markets lack thestability associated with countervailing power inmarket theory or regulation in controlledmarkets. Results include opportunistic behavior,informal payments to obtain access anddiversion of patients from public to privatepractice by physicians who practice in bothvenues.

Within public sector health centers and hospitals,competition for reduced resources may have

undesired results for patterns of care. Wherepublic facilities depend on private finance, asin China, preference may be given to servicesthat have low price elasticity of demand (e.g.inpatient diagnostic tests). Preferred access mayalso be given to higher income persons withinfluence42 or to persons who make unofficial payments to physicians and other staff. Preferredaccess or discounts for privileged classes have alsobeen reported in private facilities.43

Health workers are important stakeholders in thesuccess of reform. Rigoli and Dussault (2003)44

point out that changes in working conditionsthat reduce security (such as flexible workarrangements, layoffs and performance measure-ment) also change the dynamics of employer andemployee relationships, with self-interest replac-ing a shared work ethos and permanence ofemployment. Health sector financial reformmeasures should be sensitive to impacts on HRHand to the reactions of the health labor force.Important issues when managing change includesecurity, retraining, understanding the needfor reforms and, as far as possible, a sense thatworkers can influence the nature of reforms (seetext box).

A key issue in health sector financing reformis the importance of preserving primary care.Primary care systems that use local workers toprovide prevention and basic care are vital tohealth systems in poor countries and seem to beresilient in the face of change. Yet they areunlikely to have strong voices to compete forsupport during financial restructuring andreduced funding.

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Box 2.7: Primary Care Systems and Health Sector Reform

In rural areas of Iran, village facilities known as Health Houses are staffed by a trained residentof the village who is normally able to provide preventive health leadership, health education,simple curative care and referral to higher levels. This health care model has existed since the1970s and has retained its ability to function in a changing social and economic environment.

In Mongolia the rural health delivery system consists of Soum health centers that serve apopulation base of approximately 2,500; and mid-level health professionals, known asFeldshers, who serve an average population of 50 to 100 families. Despite the success ofthis model in areas of low population density, health reforms proposed in 1997 envisionedconverting the Soum health centers to private ownership.

Sources: Abolhassan Nadim (Iran) and T. Sodnompil (Mongolia). Authors of country case studiesin Hicks and Adams (1998).

In China, ‘barefoot doctors’ (rural village residents with training in basic primary healthcare) became a model for rural health care in the 1970s. During the past two decades mostbarefoot doctors have upgraded their skills or have been replaced by persons with civil ormilitary health care training. They are now referred to as village doctors. After major changesin health finance introduced as part of the socialist market economy, the medical incomesof village doctors in poor rural areas consist mainly of revenue from drug sales. Many alsoreceive financial subsidies and in-kind income (e.g. housing) from villages in which theypractice. They continue to be the main source of care for significant proportions of the ruralpopulation who cannot afford treatment in public health centers and hospitals that operateon a fee-for-service basis.45

The above quotes from a background paperprepared for the Working Group on Demandillustrate that international trade can have bothnegative and positive effects on HRH supplyand management.

Direct effects occur through international mi-gration of health workers and capital investments

in the health sector. (The issue of internationalmigration is discussed in more detail in asubsequent section of this report.) Indirecteffects include incentives to internal migrationof professionals, competition for scarce nationalresources from new facilities, such as privatehospitals, and foreign patients who travel toseek treatment.

International Trade and Service Agreementsv

v This section is based on a report for the working group authored Suwit Wibulpolprasert and colleagues, Additional sources havealso been used and cited.

‘International service trade can have significant negative implications on healthcare systems, particularly HRH. The main implications include internal andexternal migration of HRH, inequitable tiered health care systems, and runningdown of professional ethics.’

‘Positive implications include influx of foreign currencies and capital, betteropportunity for professional training, improving quality of care and access to hightechnology equipment. The benefits are mainly restricted to a small fraction ofthe society, however.’S. Wibulpolprasert et al (2003)

46

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International trade agreements seek to createstandard rules for trade. The General Agreementon Trade in Services (GATS) of the World TradeOrganization covers 12 service sectors, at least5 of which are related to health care systems(Business, Distribution, Education, Finance, aswell as Health & Social Services). It also covers4 modes of service trade, i.e., cross-border trade,consumption abroad, commercial presence, andtemporary movement of natural persons. WTOmembers have the option of committing toGATS rules in specific sectors and the healthand education sectors have attracted the fewestcommitments. Nonetheless, the direct effectsor the fallout from international trade thatoccur outside international trade agreementshave been significant in many countries.

Experience in Thailand found that investmentsin tele-surgery and telemedicine using satellitetechnology were not cost-effective. In additionthere are unresolved issues of medical ethicsand gatekeeper responsibility where physiciansin different venues share responsibility for treat-ment. Commitments to trade in the financialsector led to an influx of low interest foreignloans. Increased investment in urban privatehospitals resulted in internal migration ofhealth personnel. The migration was cyclical,with greater concentration in urban areaswhile investments were increasing (1992-1997)followed by decreasing concentration afteran economic collapse in 1997 in which somehospitals went bankrupt.

Foreign investment also brought an influx offoreign patients. While this is a positive factorfor a country’s balance of trade, it usually

Table 2.3Advantages and Disadvantages of Foreign Investment in Hospitals

and Influx of Foreign Patients

Advantages Disadvantages

• Increased access to modern technology. • Diversion of human resources from rural• Increased opportunities for training. public to urban private health services.• Influx of foreign patient equivalent to • More Thai patients could be served with

increased employment and earnings the resources required for one foreigner.from services exports. • Tends to increase inequities resulting

from tiered health care system.• Profits earned by foreign owned hospitals

are remitted back to investors’ countries.

Source: adapted from Wibulpolprasert et al (2003).

benefits a small fraction of the society and canalso constitute a severe drain on scarce pro-fessionals. Estimates in Thailand suggest foreignpatients could account for 12% of total healthsystems workload in 2006, and that the demandfor physicians could increase by 4,000 full-timeequivalents as a result. This increased demandcould mean another period of severe brain drainfrom rural areas. A local expert has termed thiseffect, “virtual external brain drain”, as humanresources stay in the country, but mainly serveforeigners. Effects of this magnitude create diffi-culties in managing resources and in planningto meet future demand throughout the country.Additional concerns include loss of domesticcontrol as foreign investors gain control ofmajor health systems infrastructure. In the Thaicase study, investors used local nomineestocircumvent limitations on the degree of foreignownership.

The spread of multinational insurance firms, andtheir ability to institute new value systems basedon profit-oriented principles, has led to concernsin Latin America, where multinational firms arereplacing locally operated social insurance funds.Concerns for HRH include the introduction ofmanaged care principles that require physiciansto assume financial risk and/or limit patientaccess to care.47,48 Critics argue that thesechanges to insurance systems have beenintroduced without adequate public consultationor debate.49

The mutual recognition of health professionals’degrees and licenses among the EU memberssince 1998, as well as the right to receiveservices in other EU members paid by national

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health insurance systems, may increase inter-country flows of patients and personnel andaffect national health care systems. Extensivestudies are needed. The lessons learned can bebeneficial to other trade blocks that are movingin the same direction.

Policy IssuesA balanced approach to international trade inhealth services should allow a country to benefitfrom new investment but not suffer the loss ofHRH in key sectors such as rural public healthservices. Countries with a surplus of HRH maybe in the best position to benefit from inflows

of foreign patients, and outflows of healthpersonnel. These countries, like Cuba, Indiaand Philippines, are promoting them seriously.

Foreign investment should not compromise theability of a country to set objectives for healthcare and provider modes of practice that areconsistent with its social goals and culture. Thereis a danger that market based objectives offoreign controlled for-profit enterprises may leadto negative effects in some countries. Potentialnegative effects include conflict between ethicsand profit motives, an increase in litigation anda need for complex regulatory regimes that taxthe institutional capacity of governments.

vi This section draws on a presentation at Annecy by B Stilwell, A Eltom & C Wiscow. Other sources include a recent studyof migration by WHO AFRO region: other work by WHO, both published and in press: papers prepared for the Working Groupby D Dovlo (HRH Wastage), S Wibulpolprasert et al (International Trade): and other sources.

International Migrationvi

‘Data...suggest that the 1999 guidelines [for ethical recruitment of nurses] may have hadsome effect in reducing [UK] recruitment from South Africa and the West Indies, but thatthis recruitment activity may then have been displaced to other developing countries.’B. Stillwell et al. 2003.50

[migration statistics] ‘hide serious qualitative consequences...lost tutors and specialists, evenin small numbers, may have a much wider effect on supply and quality of health workers.In some key specialties loss of 2 or 3 practitioners from a country may mean a completeclosure of services.’‘Critically, most health worker education in sub-Saharan Africa is entirely at public expenseand much of this investment is wasted [when health workers immigrate].’ D. Dovlo, 2003

“Targeted recruiting of this nature by regional health authorities in some Canadian prov-inces in the recent past has already affected South Africa’s ability to reform the poor healthinfrastructure inherited from our apartheid past, and this leaves us even less able to grapplewith the serious HIV AIDS pandemic...Could I appeal to you and to your healthadministrators to take these concerns into account as you prepare your plans for the comingyears.” André Jaquet, South Africa’s High Commissioner to Canada, in a letter to allfederal and provincial ministers of health, 2001.

“I don’t care where we’re stealing doctors from - we need a doctor to keep this town vi-brant.” Pharmacist in rural Saskatchewan, Canada.Both quotes from CMAJ (2001).51

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International migration of health workers is,arguably, one of the most pressing policy issuesin HRH management. The issue is beingstudied extensively and there seems to be a con-sensus among both developing and developedcountries that ‘rules of the game’ need to beimplemented to protect poor countries that haveacute shortages of skilled professionals.A resolution passed at the WHO Fifty-FifthWorld Health Assembly requested WHO : ‘toaccelerate development of an action plan toaddress the ethical recruitment and distributionof skilled health care personnel...’ 52

While information about health worker migra-tion is increasing, there are still serious gaps anddeficiencies in databases presently available(Stillwell, 2003). Consequently the extent andcomplexity of health worker flows are not fullyappreciated. As an example, it is difficult tointerpret statistics on in- and out-migration indeveloped countries without knowing howmuch of the latter results from workers follow-ing a ‘migration path’ from one countryto another. But there is no doubt that poorcountries are net losers in the process. Africancountries have been affected in particular, withannual immigration to the UK equivalent to2.6% of nurses in Zimbabwe and 2.0% ofdoctors in South Africa (WHO, Annecy, 2003).

The majority of physicians trained in GuineaBissau, Sao Tom’ and Cape Verde, and 46%of those trained in Angola now practice inPortugal.53

International migration is subject to both ‘push’and ‘pull’ factors (see text box). A recent analysis(Buchan et al, 2003)54 concluded that the pullfactors were the most decisive factor in migra-tion of nurses. Considerable attention has beengiven to the push factors, but there seems to beless information about the origins of demandfor foreign-trained professionals in developedcountries. Analysts tend to assume thatshortages drive foreign recruitment, which maybe true in many cases. But often the shortagesresult from conditions that could be resolvedin the recruiting country - such as workingconditions that make it difficult to retaindomestically trained nurses. The AmericanNursing Association (2003) maintains thatforeign trained nurses tend to be recruitedfor jobs that have unsatisfactory workingconditions.55

Primary care reform has been slow to develop insome countries, potentially creating imbalancesin skills that affect the demand for foreignprofessionals. In many developed countries, forexample, physicians are the first line of contact

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in patient care, with the roles of nurse practi-tioners limited to practicing as assistants inphysician-managed, fee-for-service practices.Nurses complain that their duties in health careinstitutions do not recognize their levels oftraining and that they are unable to assume thelevels of responsibility for patient care that theyare capable of assuming.

There is a lack of research about the factors atwork in developed countries that lead them torecruit foreign professionals. A notable excep-tion is the Thailand experience, in whichemigration of doctors increased rapidly duringa three year period in the 1960s, from 24% ofmedical school graduates in 1963 to 52% in 1965.Much of the outflow resulted from increaseddemand for doctors in the USA, due in part tothe Vietnam War and in part to the introduc-tion of the Medicare and Medicaid plans, whichincreased effective demand for physicians’services (Wibulpolprasert, 2003). This case studyillustrates that temporary shortages in HRHcan arise as countries adjust to sudden shocksthat increase needs or an infusion of financialresources for health care. It also illustrates thatdeveloped countries prefer not to commit to theinternational service trade agreement on theflows of personnel, but rather to open or closetheir labor markets according to their internaldemand. Another example is the UK, whereinternational recruitment has been an explicitpolicy solution by government to rapidly expandthe numbers of physicians and nurses. The needto expand the workforce was a legacy of poorworkforce planning and low levels of training inthe 1990’s, and is being enabled by significant

increase in National Health Service funding(Buchan and Dovlo, 2004) 56

There is also a potential that developed coun-tries will recruit professionals as a strategy to keepwage rates as low as possible. This proposition isintuitively reasonable and consistent with labormarket theory. But the strategy would be resistedby unions and unionization is widespread among

Table 2.4Supply of Physicians and Nurses in African Countries and

In Importing Countries Discussed in This Section

Countries Number per 10,000 population

Physicians Nurses

WHO Afro Region (46 countries) 1.7 7.6United Kingdom 16.4 49.7Portugal 31.8 36.7United States 27.9 93.9Canada 18.7 74.8

Source: WHO HRH database.

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public sector agencies. In the case of fee-for-service professionals such as doctors, professionalassociations behave similar to unions when itcomes to fee-bargaining with governments andinsurers. These facts suggest that wage ratestrategies might not play a large role in foreignrecruitment. There could be notable exceptionsamong private sector employers that are notunionized, however, and the question deservesempirical exploration.

At present ‘shortages’ of physicians are perceivedto exist in developed countries even thoughratios of physicians to population in thesecountries are many times the global average.Physicians are the highest income profession inmany of these countries and there are surplusesof persons attempting to enter the profession (asmeasured by the number of applicants to medi-cal school positions relative to the number ofplaces available). Clearly, higher incomes (or feesfor service) will not clear the domestic labormarkets in these circumstances (see economicstext box). A phenomenon that may be closelyrelated to the perceptions of shortage is thewidespread use of threats to leave as a strategyfor physician groups negotiating fees or lobby-ing for legislative changes (e.g. relief from

excessive malpractice litigation or interferencewith practice autonomy under managed care).Threats to leave are only effective if peoplebelieve there is a general shortage that makesreplacement difficult.

A thorough understanding of both the pushand pull factors is necessary to develop feasiblepolicies to deal with the migration of healthprofessionals. Approaches to solving theproblem of international migration will needto address the causes in both contributing andreceiving countries. Nations, just as individuals,tend to act in their own perceived interests. It isnot clear if international agreements or codesof ethics will be able to restrain countries oremploying institutions from seeking to obtainskilled health workers at the lowest possible cost.

The international immigration picture is notall negative for developing countries. A recentsurvey by WHO AFRO found that total healthprofessionals had increased in the six countriessurveyed, although the results were not consis-tent across professions-notably there weredecreases in nursing. The number of physiciansincreased in Cameroon, Senegal and Ugandaalthough public sector doctors decreased inGhana, South Africa and Zim-babwe.57

International migration can benefit the econo-mies of both contributing and receiving coun-tries. India and the Philippines produce surplusphysicians and encourage migration to foreigncountries. Remittances to families who staybehind are an important component of foreignincome in these countries. Adverse effects onhealth care systems are becoming evident,however. In the Philippines, health systemadministrators are concerned that the mostexperienced nurses are emigrating, oftenleaving hospitals to rely on novice nurses, whomust be trained on the job in specialty areas suchas surgery. 58

Contacts between people trained in differentsystems and cultures can be mutually beneficial.International organizations should explore waysto encourage a two-way temporary exchange ofprofessionals between developed and develop-ing countries. Countries that benefit fromimmigration of professionals from developingcountries should be asked to finance exchangeprograms. The challenge will be to gain from thebeneficial side ofmigration and to minimizeactions and effects that damage vulnerablehealth systems.

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DiscussionThe issues discussed in this chapter are predomi-nantly economic. There is a cause and effectrelationship between macro economic conditionsand public sector responses. During the last twodecades macro economic trends have createdgreat problems for developing countries, leadingto fiscal destabilization and attempts to restruc-ture government finances. ‘Reform’ usuallyrefers to attempts to streamline public sectorinstitutions so that they are more efficient andresponsive to populations. Yet most reforminitiatives in developing countries have beendriven by economic imperatives and sometimesimposed as conditions of aid by internationalfinancial organizations. Contradictions betweenstated policy and actual effects have resulted,such as increasing disparities in income andreduction in access by the poor to health careand education.

New methods of administration, such as decen-tralization, have been advocated or enactedwithout adequate preparation of either centralbureaucracies or local administrators, and oftenin countries where institutional and managerialcapacity are weak. Health budgets have notkept pace with inflation and increasing needscaused by epidemics and epidemiological trends.

Workforces have been reduced. Salary paymentshave been delayed or defaulted. User fees, orinformal payments sought by health workers,have had a negative impact on populationaccess to health care.

What we can do - macro economicsand reform policies

Reforms or attempts to implement reformsare inevitable so long as countries are underfinancial pressure. This reality is especiallypressing when there is a perception of ineffi-ciency in the public service. While experienceto date with public sector reforms in developingcountries has revealed mostly negative impactson the HRH workforce (and those providingother government services), it is important tonote that most of these experiences were drivenby financial crises.

Governments have a universally recognizedrole in ensuring health care for their populations.One of the most problematic questions forgovernments is how to fulfill that role in the faceof severe economic constraints. One approachis to define basic values and understand theirimplications for health systems. For examples,equity in the use of health services is usually animportant societal value. Preservation of equity

Box 2.8: Determinants of Migration

Push Factors• Insecurity, including risks from combat and infectious disease.• Insufficient income.• High unemployment rates• Unsatisfactory working conditions.• Lack of leadership and vision in health system bureaucracies.• Lack of professional freedom.

Pull Factors• Higher incomes in recipient countries• Improved working conditions• Increased intellectual and cultural opportunities

Enabling Factors• International standards for education• International agreements (e.g. GATS Mode 4 agreements to allow for the temporary

presence of persons from other countries.)• International recruitment agencies

Sources: Stilwell et al (2003). WHO AFRO (2003). Dovlo (2003).

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means that reform measures should not impedethe goal of allocating care according to thepotential for cure, or prevention of deteriorationof health states. The relative importance ofpublic health, acute care and activities tocombat threats such as AIDS are other questionsthat should be dealt with explicitly in publicpolicy.

There are strategies that can be used to developmore promising reform policies. A key require-ment for these strategies is that they must besensitive to country financial, institutional andmanagerial capacity. They must respect localculture. They will require skilled leadership andeffective communications.

The challenge for health care labor markets iscentered in the question of how to attract andretain health workers with appropriate skills ineconomies that have severely constrainedresources. There is no single answer to thisdilemma. Countries, assisted by internationaldonors, need to develop a series of solutions toaddress demand at several levels, includingvillage health workers and staff in regional and

tertiary facilities. Innovative thinking is requiredin order to use available funds to maximumadvantage. The following recommendationswill support these objectives:

Health Policy Recommendations1. National governments should commit to

strengthening health human resourcemanagement as a primary objective forimproving health systems performance.

2. National governments and internationaldonors should protect funding of HRHworkforces in public sector and healthreform policies.

3. Decentralization should focus on buildingcapacity from the bottom up instead ofdelegating down. Strategies include:• Adopt models of prevention and primary

care that have been shown to be effective,including new models of skills mix.

• Link new community models with theexisting system. Expand these programsquickly when they are successful andreadjust to eliminate problems.

• Complete decentralization of admini-stration or finance should only be imple

Box 2.9: Economic theory and physician incomes

Economists point out that significant barriers to entry in the profession are an importantreason why physician incomes are high in developed economies. These barriers include limitedenrollment in medical schools, lengthy training periods and licensing bodies that are largelycontrolled by the medical profession. In the absence of barriers to entry there are examplesof countries with a relatively large supply of physicians earning relatively low incomes (e.g.Eastern European countries of the former USSR).

Within a country health system, shortages of physicians may lead to higher offers of remune-ration as communities compete for a share of the existing physician supply. This process bids upphysician incomes but may not increase the total supply of physicians available to the countryhealth system so long as barriers to entry exist. In effect, it is a zero sum game with winners,losers and higher costs of care overall.

Economic theories of physician response to increasing incomes cover a range of possibilities:• The prospect of higher incomes may lead to greater supply as physicians choose work

over leisure.• Some studies of physician responses to higher incomes have found evidence of a backward

bending supply curve - a term used to explain the tendency of some physicians to workfewer hours once income passes certain thresholds.

• Theories of demand and supply for physicians’ services also include the ‘target incomehypothesis’ and ‘supplier induced demand.’ These theories hold that fee-for-servicephysicians aspire to certain levels of income and will modify their advice to patients inorder to achieve service levels sufficient to maintain target incomes. Refinements ofthis theory refer to ‘physician enhanced demand,’ recognizing that demand inducingbehavior is constrained by professional ethics and concern for patients’ well being.

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mented when sufficient managerialcapacity exists to create a reasonableexpectation of success.

4. Health system planners should collaboratewith trade specialists to craft negotiatingpositions that will serve the best interestsof the health care sector in internationaltrade and service agreements.

What we can do - Globalizationand international migration

Global trade and international recruitment ofprofessionals have had mixed effects on countryhealth systems. In some cases globalization hashastened the introduction of new skills andnew technologies. In most cases there havebeen negative effects, such as loss of skilledworkers or mentors from developing todeveloped countries, and repatriation of profitsto foreign owners. A balanced approach tointernational trade in health services shouldallow a country to benefit from new investmentbut not suffer the loss of HRH in key sectors.

Many countries have legitimate concerns abouttheir right to choose models of health care thatare appropriate to their own social and politicalsystems. Foreign investment should not interferewith these choices. There is a danger thatmarket based objectives of foreign controlledfor-profit enterprises may lead to negative effectsin some countries. Potential negative effectsinclude conflict between ethics and profitmotives, an increase in litigation and a needfor complex regulatory regimes that tax theinstitutional capacity of governments.

International migration needs to be consideredin an international context. Countries thatinvoluntarily contribute health professionals tointernational migration flows will continue todo so unless there are fundamental changes inworking conditions and remuneration for their

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health workers. Yet the scale of the changes thatmay be necessary is such that strong supportfrom developed countries and internationalagencies will be essential. In the end, willing-ness to stay at home might depend on safeworking conditions and modernization of healthsystems in developing countries.

Countries that benefit from internationalmigration should confront the weaknesses intheir own health systems that lead to insufficientnumbers of professionals to meet present andfuture levels of demand. This may mean changesto their policies for servicing rural areas, andworking conditions that will encourageprofessions such as nurses to pursue long termcareers in the health sector.

Countries around the world can benefit fromcontact with persons from other cultures andfrom sharing experiences. Realistic measuresshould be taken to ensure two-way flows. Optionsinclude (1) more training spots in developedcountries conditional on trainees returning totheir home countries for designated periodsafter graduation; (2) financial support for orga-nizations that facilitate short term experiencesfor professionals from developed countriesin developing countries (e.g. medicines sansfrontiers).

The following recommendations will supportthese objectives:

International Migration Recommendations

5. The international community should stronglyencourage developed countries to resolveperceived HRH shortages in ways that donot weaken developing countries by recruit-ing their scarce health professionals.

6. A global emergency response mechanismshould be established to support countries indealing with severe HRH shortages. Responsi-bilities of the emergency response mechanismwould include situation analysis, formula-tion of solutions, and, when necessary, helpto mobilize excess HRH from other countriesto temporarily alleviate the situation.