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The role of market forces in shaping human resources for health

Is the responsiveness of health professionals to incentives the under-recognised facet of the HRH crises? This article explores this question.
A female health care worker weighs a baby using scales as the baby's mother looks on
© Nossal Institute for Global Health at the University of Melbourne

The behaviours of health professionals and their employers, and their responsiveness to incentives may be an under-recognised origin of human resources for health (HRH) crises.

Forces of:

  • Demand (the willingness and ability to pay for the time of health staff, whether through paying for services in the private sector or employing staff to provide free or subsidised care in the public sector) and

  • Supply (the willingness of health professionals to offer their labour to the health labour force)

interact to determine the availability of staff with specific skills, in specific places to meet the needs of patients. Health systems are not able to ensure that the resulting availability of health staff is consistent with population health needs – at the national or sub-national level, or for overall numbers of health staff or specific categories.

Vujicic and Zurn (2006) illustrate these issues by a case study of Malawi. In 2003 Malawi had an excess demand for health professionals. Unfilled posts in the Ministry of Health indicated that there was a budgeted demand for health professionals, that was not not met by health workers offering their labour to take up the available posts. To address this problem, the government considered increasing the number of health professionals being trained, recruiting from abroad, recruiting from retired or inactive workers and recruiting from those who had switched to other occupations. Increasing training output was limited by the number of high school graduates with the required qualifications to be accepted into clinical training, but also by the unattractiveness of health occupations relative to other careers these high-schoolers might choose, something influenced by the terms and conditions of health sector employment. The other strategies were all highly affected by terms and conditions in other jobs available to individuals with health professional training. Better terms and conditions in the public health sector would be required to attract staff back from each of the choices they had previously made – to work abroad, to leave the workforce or to work in other occupations.

McPake et al. (2013) show how a combination of improving terms and conditions of public sector clinical jobs, and increasing training capacity in the health professional education system, had a significant impact on Malawi’s HRH situation in the years that followed. A 50% increase in training output and a 52% salary top-up led to a significant improvement in health workforce availability. Health worker density rose from 0.87 to 1.44 per 1000 population between 2004 and 2009.

But labour market analysis does not always indicate that improved terms and conditions for health workers are the answer.

Note: The supply curve (S) slopes upward because higher levels of P (price or, in this case, the wages of health professionals) result in a higher quantity (Q) of supply: more health workers ready to offer their services or health workers willing to work more hours. The demand (D) curve slopes downward because, when wages are higher, those that demand health workers’ services reduce the quantity they demand as the wage rate rises. Image source: Fig 1 p.841 in McPake, B., Maeda, A., Araújo, E.C., Lemiere, C., El Maghraby, A. and Cometto, G., 2013. Why do health labour market forces matter?. Bulletin of the World Health Organization, 91, pp.841-846.

As Figure 1 shows, health labour markets can be in situations of excess demand and labour shortage, such as in the case of Malawi in 2003, or there can be unemployment among the health workforce, where effective demand is insufficient to employ trained health workers. This doesn’t mean there are plenty of health workers to meet the population’s health needs, just that there are not enough employment opportunities to support the available health workforce being employed where they are needed. In Kenya, for example, there has been persistent health professional unemployment alongside unmet health needs, particularly in the rural and sparsely populated North of the country.

Where a Kenyan situation arises, an increase in wages will reduce the demand for health professionals: Ministries of Health, hospitals and other employing institutions will be unable to afford to employ as many health workers; so more will become unemployed and even fewer will be available to meet the population’s health needs.

Consequently, deriving strategies to correct health workforce imbalances requires analysis of the current labour market situation. The list below (from McPake et al., 2013, p 844) provides a set of examples.

  • “Where constraints to supply are most important, policies such as expanding training opportunities may be appropriate

  • Where constraints of demand are most important, policies such as increasing the funding available for the health workforce are likely to be appropriate

  • An effective strategy will more often address both supply and demand constraints simultaneously

  • In some cases, solutions may require structural changes to the labour market, such as the reorganisation of the service delivery system and changes in the skills required of health workers (eg greater use of mid-level health workers), which in turn will change the labour market dynamics.”

Task-shifting is a common strategy to address unmet demand for certain health services; if managed well, it can also free up the more qualified cadres to teach and supervise more junior professionals in their field, thus helping to address supply problems. What might be some other effects of task shifting on the supply of, and demand for, health professionals?

McPake, B, Maeda, A, Araújo, EC, Lemiere, C, El Maghraby, A, & Cometto, G, 2013, ‘Why do health labour market forces matter?’, Bulletin of the World Health Organization, vol. 91, pp. 841-846.
Vujicic, M & Zurn, P, 2006, ‘The dynamics of the health labour market’, The International journal of health planning and management, vol. 21, no. 2, pp. 101-115.
© Nossal Institute for Global Health at the University of Melbourne
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