1. Financial aspects of risk reduction in health facilities Vulnerability reduction of health facilities Session 4.2 World Conference on Disaster Reduction 18-22 January, Kobe, Hyogo, Japan Thursday 20 January (Nunobiki Room, 15-17 hours)

2. R. Zapata - UN ECLAC2 General considerations Cost-benefit analysisCost-benefit analysis –The Latin American experience in promoting safer hospitals (ECLAC’s contribution) –Loss of valuable assets and need to reinvest instead of expand deficient coverage of social services –Loss of productivity and competitiveness due to the human toll and insufficient medical attention (DALYs analysis)

3. R. Zapata - UN ECLAC3 Need to expand research The work of CREDThe work of CRED –Documenting disasters: lives lost or affected population tend to be well established vs. Insufficient comparable data of economic impact of risk in health facilities Compare budget of health services vs. economic and social cost of their lack or insufficiencyCompare budget of health services vs. economic and social cost of their lack or insufficiency

4. R. Zapata - UN ECLAC4 The risk formula Hazards (measurable in absolute terms, classifiable by type, statistically determined recurrence)Hazards (measurable in absolute terms, classifiable by type, statistically determined recurrence) Complex hazards and their exponential damage impactComplex hazards and their exponential damage impact Vulnerability (as emerging from socioeconomic, political, and physical conditions)Vulnerability (as emerging from socioeconomic, political, and physical conditions) Risk as the function of both hazard and vulnerabilitiesRisk as the function of both hazard and vulnerabilities

5. R. Zapata - UN ECLAC5 The materialization of risk and the need for physical and financial protection Save livelihoods and protecting infrastructureSave livelihoods and protecting infrastructure Profiles of human toll, damage and losses point to need for new, diverse forms of financing disaster riskProfiles of human toll, damage and losses point to need for new, diverse forms of financing disaster risk Face vulnerability of small, less diversified economiesFace vulnerability of small, less diversified economies

6. R. Zapata - UN ECLAC6 As affected in Aceh and North Sumatra (Indonesia, Dec. 26, 2004)

7. R. Zapata - UN ECLAC7 Summary table of damages and losses (Billion Rupiah) TotalDamagesLossesPrivatePublic Housing13,36513,00436113,6172,572 Education1,1941,11084 1,110 Health85476787216638 Culture and religion776 0219557 Transport4,9843,6321,3521,5423,442 Communications2031762780123 Energy632631110622 Water and sanitation27724730170106 Flood control, irrigation and sea protection works2,0581,2298291,229829 Agriculture and livestock2,0907801,3101,811278 Fisheries4,7519443,8074,72923 Industry and trade4,1531,5492,6043,988163 Environment5,1051,4373,6685,1050 Governance and administration829779500829 Bank and Finance130 0 0 TOTAL IMPACT41,40127,19114,21032,93011,292

8. R. Zapata - UN ECLAC8

9. 9 Impact of 2005 Hurricane season in the Caribbean

10. R. Zapata - UN ECLAC10 Damage profile in the Caribbean Hurricane 2004 season

11. R. Zapata - UN ECLAC11 Damage and losses in the health sector as percentage of totalDamage and losses in the health sector as percentage of total Grenada0.46% Jamaica2.06% Dominican Republic 0.97% Haiti1.62% Cayman Islands 0.66% Bahamas1.27%

12. R. Zapata - UN ECLAC12 Make actual health costs visible Normally assessments show only assets lost in health infrastructureNormally assessments show only assets lost in health infrastructure Actual loss of servicies is insufficiently reflectedActual loss of servicies is insufficiently reflected Social costs of lack of health services on the population, on production, on the community, are not quantified explicitly but reflected in losses in all other activitiesSocial costs of lack of health services on the population, on production, on the community, are not quantified explicitly but reflected in losses in all other activities

13. R. Zapata - UN ECLAC13 Risk management Risk reduction, risk mitigation, risk spread and risk transferRisk reduction, risk mitigation, risk spread and risk transfer –Physical implications: stronger requirements in new installations, reinforcement of crucial services providing infrastructure –Social implications: lack of health facilities reduces productivity, competitiveness, employment and income and the social fabric –Economic implications: insurance and other mechanisms of risk spreading and transferring

14. R. Zapata - UN ECLAC14 Financial Catastrophic instruments CAT bondsCAT bonds Disaster contingency fundsDisaster contingency funds InsuranceInsurance Are they applicable to the health sector? Generate financial leverageGenerate financial leverage Reduce dependency on central budgetReduce dependency on central budget

15. Thank you www.eclac.cl www.eclac.cl/mexico www.cepal.org ricardo.zapata@cepal.org