Transcript Owen Smith - World Bank - Health care financing in Georgia

Health care financing in Georgia
Owen Smith –World Bank
Washington DC – February 1st, 2011
Ultimately two main objectives for a
health financing system
 To improve health outcomes:
 Reduce mortality and morbidity – especially for the poor
 To protect against high out-of-pocket payments (OOP):
 People should be not forced into poverty by ill health
 How can Georgia use the health financing system to
improve its performance vis-à-vis these two goals?
Objective #1: Improving health outcomes
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US
Source: UN
2005-2010
2000-2005
1995-2000
1990-1995
1985-1990
1980-1985
1975-1980
Georgia
1970-1975
Life expectancy at birth
Life expectancy gap with US has widened since 1970
How have US & Europe accomplished these
life expectancy gains since 1960s?
 Major factors:
 Decline in smoking rates
 Pharmaceuticals for cardiovascular diseases: ACE-inhibitors,
beta-blockers, statins, etc.
 Cardiac surgery: bypass, angioplasty
 Early detection and treatment of certain types of cancer (e.g.,
breast, colon)
 Neo-natal intensive care units
Very low coverage of these interventions in
Georgia
Health financing to improve health
outcomes: Key messages
 Need for additional funding for health
 Very low budget allocation to health by international standards
 Making progress against non-communicable diseases is typically
more expensive than maternal & child health, infectious diseases
 Aim to extend a larger benefit package to more people
 Since it cannot be afforded all at once, need to prioritize:
 Target expansions to the poorer segment of the population first
(e.g., by expanding Medical Insurance Program (MIP) for poor)
 Offer coverage of most cost-effective services first
 Measure health outcomes – both nationally and within health
facilities – and hold insurers/hospitals/doctors accountable
for their performance
Objective #2:
Prevent poverty due to ill health
 Poverty headcount in Georgia rises by about 3 percentage
points – from about 24% to 27% – due to out-of-pocket
spending on health
 This is one of the largest impacts on poverty due to OOP in
the world (e.g., compare Georgia with Montenegro…)
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900
Pre- and post-OOP monthly consumption
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700
600
500
400
300
200
100
0
1
51
Source: HBS 2008
101 151 201 251 301 351 401 451 501 551 601 651 701 751 801 851 901 951 1001 1051 1101 1151
Households ranked in ascending order of total consumption (per adult equivalent)
Largest share of OOP is for drugs:
Compare Georgia’s retail drug prices to EU
…and most generics
cost less
Brand drugs generally cost
more in Georgia…
150%
150%
100%
100%
50%
50%
0%
0%
-50%
-50%
-100%
-100%
EU price source: OBIG/PPRI
80
Strong relationship between size of
government health budget and level of OOP
60
Tajikistan
Armenia
Georgia
Azerbaijan
Albania
Kyrgyzstan
Uzbekistan
Cyprus
40
Turkmenistan
Moldova
Ukraine
Latvia
Bulgaria
Kazakhstan
Russia
Bosnia
Greece
Serbia
Macedonia Switzerland
0
20
Lithuania
Slovakia
Hungary
Poland
TurkeyEstonia
Montenegro Portugal
MaltaSpain
Belgium
FinlandItaly
Romania Belarus
Sweden
Austria
Norway
Croatia
Slovenia
Czech Rep
Denmark
Germany
United Kingdom
Ireland
Netherlands France
Luxembourg
0
2
4
6
8
Government spending on health as share of GDP
Two major ways to lower OOP in Georgia
Lower OOP without more spending:
-- reforms to promote affordability of drugs
Lower OOP with more spending
-- expand publicly-subsidized insurance programs
Health financing to lower out-of-pocket
payments: Key messages
 Additional government spending will be required
 Almost all countries spend ~4-8% of GDP on health (public +
private), and Georgia is no different (~6%)
 The share that is not covered by budget will be left to OOP
 No low or middle-income country has found a way to finance a
significant share of OOP through private, voluntary insurance
 Expand Medical Insurance Program (MIP) to more people
 Promote lower drug prices
 Recent steps to relax rules for importing
 New measures to oblige doctors to prescribe generic medications
 Use government purchasing power to buy and promote lower-
price generics
Thank you