Title: Health financing reforms and their implications for sexual and reproductive health services
1Health financing reforms and their implications
for sexual and reproductive health services
2What is health financing?
- Health financing includes
- Mechanisms for raising funds
- Basis for allocation of resources, i.e.
priority-setting
3 Health financing
- Principal mechanisms through which resources are
raised to meet costs of health care services - - Tax revenue
- - Social health insurance
- - Private (for-profit) health
insurance - - Out-of-pocket payment
- - Prepayment schemes
- - Donor funding
-
4 Public and private in health financing vs. in
service provision
- Classification of financing sources as public and
private is different from the classification of
service provision into pubic and private. - There can be private financing (e.g. user fees)
for public sector health provision, and public
financing (e.g. social insurance) for private
sector health provision.
5Tax Revenue
- Money raised through general taxation of the
population - In some countries, taxes on alcohol and tobacco
are specifically ear-marked for the health sector
- May be used for supply-side or demand-side
financing.
6Insurance
- Broadly defined as a financial mechanism that
exists to provide protection to individuals and
households from expenses incurred as a result of
unexpected illness or injury. - Premium paid regularly entitles payee to a
specific benefit package. - Source Bhat and Reuben. Management of claims and
reimbursements The case of Mediclaim insurance
policy. Vikalpa, 27(4), 2002.
7Social health insurance
- Autonomous public fund set up by government.
Standard pay-roll deduction is made from both
employers and employees. Government also
contributes - Covers all formally employed persons and their
dependents. Some countries permit voluntary
participation of those from the informal sector - In some countries, only government employees are
included and private sector employees are not.
8Private (for-profit) insurance
- Based on voluntary contributions by individuals
or by individuals and their employers jointly. - Premium to be paid depends on
- the insured persons risk of ill-health
- what conditions are covered? What kind of care
is covered? - Meant to cover mainly low-probability, high-cost
events, in order to be profitable
9Out-of-pocket payment
- Payments made by the user of health services to
the health service provider, at the time of
receiving the treatment.
10Pre-payment schemes
- Includes community financing
- Fixed sum of money collected from members of a
community - Payment entitles members to access specific
services or drugs - Is meant to increase access to care by not
requiring people to pay at the time of receiving
treatment
11Donor funding
- Funding by bilateral and multilateral agencies
- May be grants or loans
- Predominantly goes to support government
expenditure (amounts received by NGOs is very
insignificant as a proportion of national
expenditure)
12Exercise
- Look at the table in pages 78-84 in the book.
What are the major financing mechanisms in - South Asian countries Bangladesh, India, Nepal,
Pakistan, Maldives, Sri Lanka - SE Asian countries Myanmar, Thailand, Indonesia,
Cambodia, Malaysia, S.Korea
13 Health financing reforms in the 1990s Rationale
- There is simply not enough resources that
governments can raise through tax revenue to
finance health care for all - Donor funding cannot meet the gap between health
care resource requirements and public funds
available for health care - Public funding for health care is targeted
poorly primary care facilities, and those most
in need receive less.
14 Resource requirements for Basic health and
basic RH services
- According to the CMEH report, providing minimum
essential health care services would require at
least US 34 per person per year in 2007, in LDCs - Providing an essential package of RH services
FP, prevention and treatment of STIs, prenatal
and delivery care was estimated to cost between
US 6.75 and 8.00 in 1994, and probably at least
twice this amount by now.
15 Health financing reforms in the 1990s Broad
directions
- The most widespread financing reform introduced
are - Increase in or introduction of user fees
- Increasing the role of the private sector and
public-private partnerships
16 Health financing reforms in the 1990s Broad
directions -2
- Several countries are experimenting with and
promoting - Pre-payment schemes
- Private health insurance
- Where social insurance schemes are already in
existence for a long time e.g. Latin American
countries, reforms have focused on pooling
multiple funds and cost-containment
17Criteria for evaluating financing mechanisms
- Can this generate enough revenue?
- How will this affect demand for services? Supply
of services? - How will this affect access to services for
different groups of people? Who may get left out?
-
18 - What do we know about the achievement of some of
these financing reforms?
19User Fees
- User fees have not been able to raise significant
revenue (WHY?) - They have often resulted in decreased access for
the poor - One study of 39 developing countries found that
the introduction of user fees has increased
revenue only slightly, while significantly
reducing access of low-income people to basic
health services (UNRISD 2000) - User fees in urban China led to
- - increase in non-use of health care among
the poor from 38 in 1992 to 70 in 1997 - - increase in the rate of non-use of
in-patient services from 25 for the lowest
income group and 15 for the highest income group
in 1992 to 44 and 23 respectively in 1997.
20User Fees-2
- In India, a study of Andhra Pradesh Vaidya
Vidhana parishad (APVVP) hospitals showed that
during 2001-04, user fees contributed to between
1.08 to 4.47 per cent of total expenditure of
these hospitals. WB appraisal reports of several
states indicate the same. - That while total utilisation increased (IP 26,
OP 19), share of the poor fell (IP, 92 to 65
and OP 83 to 68 deliveries 74 to 53 - Similar findings of declining utilisation by poor
in Maharashtra. - Waivers and exemptions poorly implemented.
- Source Mahal A in NCMH India report
21 User fees and SRH
- Costs of SRH services may be unaffordable as it
is, no scope for increasing costs. - Highly price elastic demand for many services
- Treating one episode of RTI in a government
facility costs more than the average monthly
income of a Rajasthan (India) household and
abortion costs are 2-3 times the monthly income. - Delivery services could cost 2-8 times the
monthly income of the poorest 25 of the
population in Rajasthan and Dhaka (Bangladesh). -
22 Financing reproductive health in Rajasthan,
India (2000)Source Financing reproductive and
child health care in Rajasthan, IIHMR and Policy
project, 2000. p. 18 (50)
23Issues related to insurance -1
- Moral Hazard tendency of those insured to make
frivolous use of health care services - Adverse selection A higher probability of those
at risk of illness enrolling in insurance schemes
24Issues related to insurance -2
- Insurance schemes are in general fraught with
problems related to cost-escalation and quality
of care. - Where fee-for- service system used for paying
providers, results in unnecessary procedures and
prescriptions. - Where capitation system of payment for providers
used, quality of care tends to be compromised,
and high-cost procedures are often postponed.
25 Social Insurance Schemes
- Social Insurance Schemes great difficulty in
enrolling private sector and informal sector
employees where fee-for- service system used for
paying providers, results in unnecessary
procedures and prescriptions. Where capitation
system of payment for providers used, quality of
care can be compromised, and high-cost procedures
may be postponed. - Social insurance schemes based on payroll
deductions exclude large numbers of women not in
formal employment even for women enrolled in
these, routine contraceptive and delivery care is
often not included. Can lead to unnecessary
c-sections and other surgical procedures.
26 Social Insurance Schemes-2
- ESIS for industrial workers. Coverage beyond
health care, to include wage compensation against
sickness and cash payments for partial disability
and marriages and funerals. Incurring huge
losses.
27Private (for-profit) Insurance
- In India, Mediclaim Insurance and other schemes
offered by GIC was till recently the only set of
private insurance schemes. New private sector
entrants into the insurance market. - Private insurance is designed mostly for
low-probability, high-cost health events, and
would therefore find it economically unviable to
provide routine delivery, abortion and
gynaecological care.
28Pre-payment schemes
- Prepayment schemes appear to work where there is
- - a large number of subscribers
- - possibility for risk pooling through
enrolment of poor and non-poor, high and low risk
populations - - co-financing by government and/or donors
- Scope for including basic SRH services in the
benefit package
29Pre-payment schemes-2
- 52 known CBHI schemes in India, run mostly by
NGOs, covering 5-6 million people from low-income
groups - Small premiums, from Rs 20 to 120 per person per
year - Very limited benefits packages with one or two
exceptions, do not cover SRH conditions, even
delivery - The UIS scheme of GoI (one rupee a day scheme)
has had limited success does not cover
conditions related to pregnancy and delivery.
30Donor spending not on country needsSri Lanka
1990 (Rannan Eliya et al 2000)
31Positive models
- There are a few examples of prepayment schemes
which include RH services in their benefits
package - - Health card schemes in China and Thailand
- - Tax revenue funding for Emergency Obstetric
- Care in Indonesia
- - Tax revenue funding for Basic Health
Insurance package in Bolivia for the poor
32Health Cards in China -1
- China Currently experiencing third wave of
health sector reforms. First during cultural
revolution, and the second- to counter the
negative impact of transition to market economy. - Since the 1980s, user fees and revenue from drug
sales were to be used for covering running costs
of village health stations. Dire consequences in
1993, 60 of non-compliance was because of
inability to pay for services, and 30-50 of
rural hhs BPL had become impoverished due to
illness and its treatment. Low-income women could
no longer afford trained attendance at delivery. - In 1994-95, 74 of rural women in one province
with complications related to pregnancy/delivery
did not seek medical care.
33Health Cards in China -2
- Currently, World Bank Assistance for reviving the
Co-operative Medical Scheme. - Introduced in 71 poorest counties
- A package of priority health interventions
available at subsidised cost to all residents in
these counties. Coverage includes maternal care,
including standard prenatal visits, hygienic
delivery and postnatal care. A fixed amount
collected from each household, and co-financed by
government. - The poorest 5 of households covered by the
Medical Financial Assistance Program funded by
the government which reimburses providers. No CMS
premiums for this group.
34Health Cards in Thailand- 1
- Introduced a series of pre-payment and public
insurance schemes since the late 1970s. - 1976- free health card schemes for poor
households, financed by tax revenue. Free care in
government institutions - 1984 500 baht health card scheme for rural
non-poor hhs, matching subsidy by government.
Free care in government institutions. - All government workers and their dependents, and
all private firms with 20 or more employees
compulsorily enrolled in social insurance
35Health Cards in Thailand- 2
- 30 Baht health policy (2001) being piloted in
six provinces. - Covers anyone who is not in any other insurance
scheme. - Covers all reproductive health services except
obstetric services beyond the second pregnancy
and infertility treatment. - Subsidised fee of only 30 Baht per episode of
illness, provided they use public facilities and
follow the referral system. - For emergencies, any government health service
can be accessed - Clinical Practice Guidelines is also developed to
assure the same quality of services.
36Paying for EmOC
- Indonesia 1997 Safe Motherhood Project
- Hospitals and other health care facilities were
to be reimbursed for providing EmOC, for needy
patients referred by the village midwife BDD. - Funds to be available to public as well as
private providers. - Clear definitions of type of conditions to be
covered, target group, prices and eligible
providers were set out, while poor and needy
were defined as per definitions used in family
enumeration data. - Expected to cost less than 0.50 per capita,
including administrative costs.
37Overall
- Financing reforms appear not to have achieved the
objective of meeting the resource crunch in
paying for health services. - No resources have been freed up because of
private sector involvement, for channelling
towards essential care for the poor. Rather, the
scenario is one of shrinking resources, and
diminishing access especially for the poorer
sections of the population. Health care costs
appear as an important contributor to
impoverishment in many countries where all health
services have to be paid for. - Some positive initiatives offer hope for the
future.
38Overall
- No to user-fees for priority SRH services.
Priority SRH services (e.g. delivery and abortion
services, inpatient gynaecological care) should
be publicly financed through tax revenue at least
for low-income groups. Especially inpatient care - Examine the feasibility and equity implications
of demand-side financing mechanisms - Donor funding to be channelled to under-resourced
SRH services of high priority - Social Health Insurance to include coverage of
priority SRH services (including for e.g. cancer
care) - Introduction/expansion of prepayment schemes
which include priority SRH services(e.g. delivery
and abortion services, inpatient gynaecological
care) in the benefit package