Transcript Health Care Financing - The Dian Kusuma Initiatives

Health Economic Course Series
Health Care Financing
www.diankusuma.wordpress.com
What is a financing mechanism?
Aimed at:
• Raising funds
– User fees, insurance premiums, donor aid, direct
payments to private providers…
• Allocating funds (equity)
– Governments, agencies, insurance organizations,
private sector, non-profit sector, beneficiaries…
• Providing services in an efficient way
(incentives)
– Hospitals, clinics, other health facilities…
Key financing mechanisms
• Direct out-of-pocket payments
• Private /voluntary insurance
Individuals /
households
• General taxation
• Public/social insurance
Government
• External financing
Donors
Country/region specific mixture, changing
overtime and with income.
Analysis finances for health: NHA
National Health Accounts =
Standard set of tables that track the flow of funds
– How much does the nation pay?
– Who pays?
– How are the funds spent?
– How are they distributed across different
health services?
Simple Model
Premiums, taxes,
direct payments
FINANCING
Population
and
Enterprises
CONSUMPTION
Patients
PURCHASING/FUNDING
Insurance
Public funding agency
Capitation
fee for service
budget
direct payments
PROVISION
Hospitals/Clinics
Private practitioners
Example
Funders
Households
Public
Hospitals
Public
clinics
Private
clinic
Total
50.000
0
250.000
300.000
Ministry of Health
200.000
200.000
0
400.000
Ministry of Education
200.000
0
0
200.000
Community Insurance
50.000
0
0
50.000
0
0
150.000
150.000
500.000
200.000
400.000
1.100.000
Private insurance
Total
Policy Purpose of NHA
• Consistency / international comparisons / public good
• If implemented regularly could be used to monitor and
evaluate financing reforms/sector plans
• Country specific questions:
– How much is spent on HIV/AIDS?
– How equitably is health expenditure distributed?
– What is the size of the private sector?
• Current push to expand widely in Africa/Asia, already
established in Middle East/Latin America (WHO/WB)
NHA Methods / Processes
• Extensive data collection
• Government / HIS / Provider records / Surveys
• Expenditures to be determined and categorized
• Needs to be institutionalized:
– Meet demands of national policy makers
– Capacity development
– Fit in with routine accounting systems/expenditure reviews?
• Guide available WB website
Discussion 1: Financing mechanisms…
1. What are the principle ways of financing health
care in the country?
2. How do these mechanisms performs with
regards to the key aims of financing
mechanisms?
a. Succeeded in raising sufficient revenue
b. Improved the fairness of financing
c. Improved efficiency and contained costs
3. What are the key challenges?
First Challenge: Raising Revenues
1. Increase public and private resources for
health (domestic and external sources)
2. Ensure stable financing, with sustainable
and predictable revenues.
3. Determine resource needed:
1. Essential package?
2. Reasonable % of GDP given other
development needs
What is available?
• How much do you think it costs to provide
a package of basic primary level services?
• How many dollars per capita are available
for health in Ethiopia?
• How many dollars per capita are available
for health care in an average high income
country?
Some examples
Second challenge:
Allocation of resources
• Financing systems should provide incentives for
and encourage:
– Use and provision interventions that have a high
health and economic impact (allocative efficiency)
• Cost effectiveness of PHC and prevention, while still
underprovided
– Equity in the allocation of resources for health
(system-wide)
• Rural/urban, age, gender, population groups
– Responsive and high quality services, produced
efficiently (technical efficiency)
Third challenge:
Prevent Catastrophic Expenditure
• High levels of direct out-of-pocket expenditure
– Large private sector, informal payments to public sector, user
fees
• Low level of access to risk pooling or prepayment plans
(e.g. insurance) in lower income countries
• Low income levels mean high levels of health
expenditure places vulnerable families into desperate
situations
– Economic burden of death or illness
– Cost of health care
High level of pocket expenditure
The aims of financing reforms
1. Improve the amount of resources available
(including stability/sustainability)
2. Improve the efficiency and equity of the
allocation of resources (and thus eventually
health outcomes)
3. Reduce catastrophic expenditure (risk-sharing
/ pooling, prepayment)
4. Support broader health sector aims such as
responsiveness/quality improvement
Different types of reforms
• Key Reforms to Financing (raising fund):
– Macro-level reforms
– Increases / changes to external assistance to health
sector
– Introduction or reform of user fees
– Introduction or expansion of community health
insurance
– Introduction or expansion of social insurance
– Reforming private sector
– Reforming public sector (PP mix)
– Reforms to funding / purchasing (efficiency)
Macro-level reforms (the context)
• Most of domestic health expenditure funded by
(non-health sector) revenues:
– Tax-based revenues (income, VAT, contributions)
– Other govt revenues: customs, public enterprises,…
• Increased through:
–
–
–
–
Macro-economic growth (GDP)
Expansion of the tax-based
Reduction debt repayments
Allocation to health expenditure
• Constrained by low incomes and by other
development needs
External financing
• Increased external assistance for health in last
decade (around 7%)
• Disease specific: e.g. TB
– $16 million in 1990
– $190 million in 2000 (includes % of loans)
– Needs estimated at $400 million
• New ways of working:
– SWAps, Budget support, Program Support, Global
Fund for AIDS, TB, Malaria, Project Support
External resources
Thank you