Health and health system effects on poverty: A narrative review of global evidence

Ill-health causes poverty. The effect runs through multiple mechanisms that span lifetimes and cross generations. Health systems can reduce poverty by improving health and weakening links from ill-health to poverty. This paper maps routes through which ill-health can cause poverty and identifies those that are potentially amenable to health policy. The review confirms that ill-health is an important contributor to poverty and it finds that the effect through health-related loss of earnings is often larger than that through medical expenses. Both effects are smaller in countries that are closer to universal health coverage and have higher social safety nets. The paper also reviews evidence from low- and middle-income countries (LMICs) and the United States (US) on the poverty-reduction effectiveness of public health insurance (PubHI) for low-income households. This reveals that PubHI does not always deliver financial protection to its targeted population in LMICs. Countries that have succeeded in achieving this goal often combine extension of coverage with supply-side interventions to build capacity and avoid perverse provider incentives in response to insurance. In the US, PubHI is effective in reducing poverty by shielding low-income households with children from healthcare costs and, consequently, generating long-run improvements in health that increase lifetime earnings. Poverty reduction is a potentially important co-benefit of health systems.