Developing a WHO Health Financing Policy

1
Developing a WHO Health Financing Policy

• presented
• by
• Guy Carrin Piya Hanvoravongchai
• Asia Pacific Summit on Health Insurance and
  Managed Care
• Djakarta, 22-24 May 2002

2
Contents

• I. Health Financing in the World
• II. Several key policy questions and the
  context of
  countries
• III. Towards a health financing policy
  
  framework for analysis and
  monitoring
• IV. Pooling via social health insurance

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I. Health Financing in the World

• An important amount of funds
• large out-of-pocket payments in many
  countries

4
In 1998, the World Spent I3.1 Trillion on Health
Services
5
Inequality in World Health Spending
100
80
60
Share of World
40
20
0
Africa
OECD
S.Asia
Mid.East
Americas
AsiaPac.
Eur.C.Asia
6
Note The categories Americas and OECD exclude
USA.
7
II. Several key policy questions and
the context of countries
8
Policy questions oriented toward clusters of
countries
5000
USA
CHE
DEU
CAN
NOR
DNK
BEL
FRA
NLD
AUS
2000
AUT
JPN
ITA
SWE
ISR
IRL
FIN
GBR
NZL
SVN
PRT
ESP
GRC
ARG
CZE
URY
850
HUN
SGP
ARE
CHL
SVK
HRV
LBN
KOR
KWT
POL
ZAF
EST
BLR
BRA
SAU
CRI
LTU
MEX
LVA
PAN
COL
TTO
IRN
MKD
OMN
SLV
JOR
NAM
TUR
RUS
TUN
CUB
LBY
VEN
MUS
PRY
Total Health Expenditure Per Capitqa (ppp)
JAM
ZWE
DOM
ROM
YUG
KAZ
IRQ
BIH
BWA
THA
PER
200
GAB
ARM
GEO
TKM
MYS
GTM
BGR
UKR
DZA
MAR
EGY
CHN
PHL
NIC
HND
ALB
MDA
BOL
ECU
VNM
IND
SYR
KEN
KGZ
LKA
UZB
GHA
100
MNG
PNG
LSO
PAK
AGO
SDN
NPL
GIN
IDN
KHM
SEN
YEM
CIV
AZE
LAO
GMB
COG
COD
ERI
ZMB
BGD
RWA
MRT
HTI
TJK
MWI
CMR
MMR
BFA
TGO
PRK
UGA
GNB
ETH
MLI
MOZ
BEN
LBR
SLE
CAF
TZA
MDG
TCD
NGA
NER
AFG
BDI
SOM
10
20.0
40.0
60.0
80.0
100.0
Private Health Expenditure as Share of Total
Health Spending ()
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III. Towards a Health Financing
Policy Framework for analysis and monitoring
10
FRAMEWORK
GOALS / OUTCOMES OF THE SYSTEM
FUNCTIONS THE SYSTEM PERFORMS
Stewardship (oversight)
Mobilizing Funds
Productivity
Equity
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Health financing sub-functions

• Collection
• Pooling
• Purchasing

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Service
Providers
Payment
Mechanisms
Intermediate
Institutions
Forms of
Collection
Population
Resource
Base
and
Individual
Potential
Professionals
Out-of-pocket
Fee for Service
Private Insurance
Partnerships
Companies
By
Copayments
Capitation
GDP
Medical
Income
NGOs
Voluntary
Tax Systems
Cooperatives
Traditional
Prepayment
Region
Public Insurance
Budgeting
Labor Market
Agencies
NGOs
Compulsory
Demographics
External Aid
Prepayment
Salaries
Economic
Central Government
Medical Service
Natural
Activity
Indirect Taxes
Prospective
Resource
Organizations
Local Governments
Revenues
Direct Taxes
Retrospective
Quasi-Public
Agencies
Facilities
Districts
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WHO Health Financing Policy key messages from
World Health Report 2000

• Mobilise sufficient financial resources to
  support adequate health systems
• Reduce, to the extent possible, the risk that
  households will face catastrophic health
  expenditures due to ill health or injury
• Reduce, to the extent possible, any other
  financial obstacles to health service access,
  particularly among the poor
• Provide incentives for effective and efficient
  provision of good quality health services.

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IV. Pooling via Social Health Insurance
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1. Key principles

• Social health insurance is not merely a new
  method to collect money to co-finance services
• but, it is a method ...
• That is able to achieve a stable financing for
  a package of health services (health insurance
  benefits)
• while at the same time achieving greater access
  to health care among all population groups

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• Target generally comprises
• compulsory insurance
• thereby ensuring access to health services among
  all population groups based on patients  need
• and financing through contributions that are
  based on
• ability to pay (equity) and not on individual
  risks

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• Social health insurance premiums depend on risks
  in society as a whole (community rating)
• but this does not exclude that private health
  insurers
• (non-profit insurers, mutual health funds,
  private commercial insurers working according to
  regulations etc.)
• are involved in its implememtation

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2. Social health insurance major variants

• 2.1 Universal health protection via a mixed
  system
• A. social health insurance for formal sector
  workers
• B. tax-funded health services for the
  informal sector and vulnerable groups
  

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• 2.2 Extension of social health insurance for
  specific groups (workers, civil servants)
• to other population groups via
• mutual health insurance (organised at the level
  of the community, trade union,
  enterprise etc.)
• other non-profit health insurance schemes (e.g.
  via micro-credit schemes)
• but
• need for governments stewardship

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3. Stewardship function of Government

• Achieving universal financial protection
• setting a time path
• establishment of a National Agency or Board to
  oversee this
• MOH could continue to assume a role in
• health insurance regulation and
  monitoring
• (e.g. accreditation, quality assurance,
  public health activities)

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• Guidance examples
• Precautions against adverse selection, e.g. via
  a qualifying period and minimum membership
• when more people with bad risks insure
  themselves,
• health insurance is likely to be more
  expensive, and may jeopardise the financial
  equilibrium
• Avoiding cream skimming via rule to accept bad
  risks
• refers to health insurance funds preferring
  to insure people with good risks
• From voluntary to compulsory insurance

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• Government can remain a partner
• in the financing of health insurance
• (e.g. to insure membership of the poor)

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4. Some international experience
SourceWorld Health Report 2001, Statistical
Annex 5
24
(No Transcript)
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Case study Social health insurance in Vietnam
(VHI)

• 1. Chronological overview
• 1987 economic reform (Doi Moi)
• August 1992 National health insurance decree
  -- only compulsory for civil servants and the
  salaried (in enterprises with 10)
• 1995 schoolchildren health insurance
• Mid-1996 4,8 million (compulsory insured)
• and 2,2 million (voluntary)

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End of 1997 9,530,000 insured
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2. Contributions

• Compulsory insurance
• contributions based on income ( 2 employer 1
  employee)

• Voluntary insurance
• from a flat premium of 10,000 D to 60,000 D per
  person
• flat premium of
• 15,000-25,000 D (primary/middle school)
• 30,000-40,000 D (secondary)

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3. Challenges

• expansion of the voluntary scheme ?
• Government funding for the premiums of 4 million
  poor ?
• Possibility of introducing compulsory insurance
  in rural areas ?
• insurance on a family basis
• compliance in private enterprise sector
• contracts with private doctors

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Case study social health insurance in Colombia

• 1. Health system in the early 90s
• Positive change in Life expectancy and IMR
• but problems with equity
• poorest have IMR 200
• 1992 4 of poorest deciles do not have access,
• and they spent 18 of their income on OOP for
  care
• Multitude of forms of (unequal) protection

Source J.L.Londoño, Managed competition in the
tropics, 2000, draft
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• 2. Design of health insurance reform (1993)
• Institutional design
• National Health Board regulation
• tasks of management and technical assistance
  MOH
• Superintendencia independent monitoring
• National Health Fund (Fondo de Solidaridad y
  Garantía) collection and allocation of
  contributions
• Empresas Promotoras de Salud-EPS
• health service purchasers

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• Contributions
• members in contributive system
• pay 12 mandatory contribution of salaries
• to the National Health Fund,
• that in turn pays a capitation amount to EPS
• (7 capitation amounts according to gender, age
  and place of residence---average 120 --- to
  reduce cream skimming)

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• establishment of subsidised system, aiming to
  include the poorest 30 of the population
• financed through
• Contributions from Government
• and 1 of the contributions of families of the
  contributive system

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• 3. Lessons
• Institutional transition process as important as
  objectives of the system
• Share of public health expenditure in GDP
  increased from 2.3 of GDP in 1993 to 4.2 in
  1996
• Regulatory power of National Health Board crucial
• Dynamics of institutions
• 25 EPS (6 public, 7 non-profit and 12 for profit)
• 149 health service cooperatives in subsidised
  system

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• Expansion of coverage
• 5 million insured in 1993 to 22.3 million (or
  52.6 of the total population) today
• 13.3 in contributory regime
• 9.0 in subsidised regime

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• 4. Challenges
• Half of the population is uninsured
• unemployed and self-employed find it hard to join
  the system
• remaining poor

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• CONCLUSIONS
• Universal health protection is a goal
• Pre-payment and risk pooling are tools
• Social health insurance
• is surely a major financing mechanism, but not
  the only one
• once it is accepted, the pathway to universal
  health protection needs constant attention, but
  there is certainly not a unique prescription