How should resources be reallocated between physicians and nurses in Africa and Latin America?

This paper examines ways in which health resources could be reallocated between physicians, nurses and other medical inputs in Africa and Latin America, according to their cost-effectiveness. An underlying question concerns whether countries in Africa and Latin America with decreasing health budgets in the 1980s should reduce the number of highly trained and more expensive workers, i.e. physicians, and redirect resources to less trained and less expensive workers, i.e. nurses. This paper designs a methodology for quantifying the cost-effectiveness of physicians, nurses and government health expenditure in relation to improvements in the population's health status. Direct estimation of the professionals' effectiveness is unsuitable in this 45-country study. Instead, for measuring the unobserved effectiveness of health providers and health expenditures, infant mortality rate has been chosen as the indicator. Infant mortality is an accepted indicator of the health status in a given population. From another viewpoint, neonatal health is dependent on contact with health care services; this means that inappropriate care may increase the likelihood of infant mortality. Therefore, at the same time infant mortality is an indicator of the effectiveness of services. We used a general linear model as a way of estimating the relationship between infant mortality, health manpower and health expenditures. Forty-five countries were examined over three years and 135 observations were included in the final sample. Three scenarios were estimated: (1) African and Latin American countries, or low and middle-income countries, (2) only middle-income and (3) only low-income countries. From the regression model the marginal productivity for each kind of professional was calculated, and then the optimal mix of manpower physicians and nurses was estimated according to low and middle-income country budget constraints. Some countries were selected for illustrating how they differed from the optimal mix. For example, in countries such as Tanzania, where there is close to an optimal mix of personnel, population health status may not be improved with reallocation of resources, but only with new additional resources. The results suggest differences between low-income and middle-income countries. Physicians in low-income countries, primarily African countries, save about three times the number of lives as do nurses, while their salaries are twice as high as nurses' salaries. This finding s