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Public Health Care: Reform and Financing The BIG Picture

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Public Health Care: Reform and Financing The BIG Picture Mara Brain, MPA/MPHc 6 November 2008 GH 511 * * Ideological basis -- e.g., PHC, SAPs, privatization, role of ... – PowerPoint PPT presentation

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Title: Public Health Care: Reform and Financing The BIG Picture


1
Public Health Care Reform and FinancingThe BIG
Picture
  • Mara Brain, MPA/MPHc
  • 6 November 2008
  • GH 511

2
Overview and Objectives
  • 7 weeks of GH 511 Where are we now?
  • A message on health systems strengthening
  • History of health policy, economic policies, and
    aid for health
  • Elements of health care reform
  • 3 health financing functions with specific focus
    on revenue collection
  • Share your perspectives and experiences

3
Your Experiences with Health Care Reform and
Financing
  • What different types are used in the countries
    where you have been?
  • How have they worked?
  • Challenges with implementation?
  • Need MONEY and PEOPLE who know how to LEAD and
    MANAAGE

4
Determinants of Global Health
Underlying
Proximate
Diseases
Intermediate
Interests of rich Status of women Land
tenure Debt-SAPs Weak governments Militarism Imper
ialism
Poverty Disparity Access to education Job
conditions Gender issues Civil strife
Malnutrition Water Sanitation Housing Health care
services Health behaviors
Diarrhea Pneumonia Perinatal conditions HIV Injur
y Malaria Measles
Global and national
National and community
Family
Individual
5
Health Care Systems
  • Complex systems consisting of
  • Health care consumers people in need of health
    care services
  • Health care providers people who deliver health
    care
  • Systematic arrangements for delivering health
    care public and private agencies that organize,
    plan, regulate, finance, coordinate services

Health care can be catastrophically costly and
need can be unpredictable
6
Six Building Blocks of a Health System
System Inputs
Overall Goals/Outcomes
Source Strengthening Health Systems to Improve
Health Outcomes, WHOs Framework for Action WHO
2007
7
5 Fundamental Questions
  • What are the boundaries of health systems?
  • What are health systems for?
  • How do we characterize the architecture of a
    health system?
  • How can we tell when a health system is
    performing well?
  • How do we relate architecture to health system
    performance?

8
Six Building Blocks of a Health System
Purposeful change aimed at improving health
system performance for
System Inputs
Source Strengthening Health Systems to Improve
Health Outcomes, WHOs Framework for Action WHO
2007
9
What do we mean by health systems that are...
  • Equitable?
  • Ability-to-pay determines financing contributions
  • Use of services is based on need for care
  • Efficient?
  • How well a health system achieves the desired
    health outcome given available resources
  • Responsive?
  • Protects ones dignity and autonomy
  • Able to offer social and financial protection?

10
History of Health Care Reform
  • 1970s Primary Health Care as Health Care Reform
  • 1980s Structural Adjustment Programs -
    reduction of public budgets, global concern about
    health care
  • Bamako Initiative
  • USAID Health Care Reform initiatives
  • Privatization
  • 1993 World Bank Investing in Health
  • Whats next?

11
Chronology of Policies
1945
1955
1965
1975
1985
1995
2005
1945
1955
1965
1975
1985
1995
2005
12
Challenges to Scale Up Services
Source WHO expert consultation on Positive
Synergies Between Health Systems and Global
Health Initiatives (GHIs) May 2008
13
Reform Financing Caveats
  • Understand the importance of public PHC systems
  • Assess the implications of specific reform
    packages, especially for the poor
  • Depends on political will and leadership
  • Requires strong institutional and organizational
    capacity
  • No universal solution!
  • Understand ideological basis of most reform
    measures

14
Ideology Based on Market Principles (1990s -
World Bank)
  • Individuals, charities, private organizations
    should be made responsible for health care
  • Public funding of health care should be
    restricted to health promotion and prevention of
    disease
  • Central government role should be restricted to
    policy formulation and technical guidance
    delivery of services should be left to private
    sector and local authorities
  • Private sector and NGOs should be supported to be
    the key providers of health and social services

15
Typical Components of Health Care Reform
  • Regulation
  • Financing
  • Decentralization

16
58th World Health Assembly (2005)
  • Adopted the resolution 58.33 on Sustainable
    health financing, universal coverage and social
    health insurance
  • Urges WHOs member states to
  • Ensure that health financing systems include
    prepayment and risk sharing mechanisms
  • Avoid catastrophic health-care expenditure
  • Work towards universal coverage secure access
    for all to appropriate preventive, curative and
    rehabilitative services at an affordable cost

Source Carrin G, Mathauer I, Xu K, Evans, B.
Universal coverage of health services tailoring
its implementation, Bulletin of the WHO, November
2008, 86(11).
17
What is Health Financing?
  • Provides resources and economic incentives for
    the operation of health systems
  • Involves 3 interrelated functions of
  • Revenue collection
  • Pooling of resources
  • Purchasing of interventions

SCHEIBER, G. "Financing Health Systems" Chapter
12, pp 225-242 in Disease Control Priorities in
Developing Countries, 2nd Edition. New York
Oxford University Press 2006.
18
Health Financing Functions
FBOs
NGOs
SCHEIBER, G. "Financing Health Systems" Chapter
12, pp 225-242 in Disease Control Priorities in
Developing Countries, 2nd Edition. New York
Oxford University Press 2006.
19
3 Health Financing Functions
  • Revenue collection
  • Process by which the health system receives money
  • Pooling of resources
  • Accumulation and management of revenues to share
    financial risk associated with health
    interventions
  • Prepayment allows pool members to pay in advance,
    relieves uncertainty and provides access to
    compensation if a loss occurs
  • Purchasing
  • Mechanisms used to purchase and provide services
    from public and private providers

20
3 Health Financing Functions
  • Raise sufficient and sustainable revenues in an
    efficient and equitable manner to provide
  • Basic package of essential services
  • Financial protection against financial loss due
    to illness or injury
  • Managing revenues to equitably and efficiently
    pool health risks
  • Ensuring the purchase of health services in an
    allocatively and technically efficient manner

SCHEIBER, G. "Financing Health Systems" Chapter
12, pp 225-242 in Disease Control Priorities in
Developing Countries, 2nd Edition. New York
Oxford University Press 2006.
21
Fiscal Sustainability
  • Generally been defined in terms of
    self-sufficiency
  • Over a specific period, the managing entity will
    generate sufficient resources to fund the full
    costs of a particular program, sector, or
    economy, including the incremental service costs
    associated with new investments and the servicing
    and repayment of external debt.

SCHEIBER, G. "Financing Health Systems" Chapter
12, pp 225-242 in Disease Control Priorities in
Developing Countries, 2nd Edition. New York
Oxford University Press 2006.
22
Domestic Resources for Health Care in
Lower-Income Countries (LICs)
Source WHO expert consultation on Positive
Synergies Between Health Systems and Global
Health Initiatives (GHIs) May 2008
23
Health Outcomes and Health Spending
Infant Mortality Rate vs. Total Spending per
Capita
Source World Development Indicators, 2007
24
Public Finance Challenge


Rich
Poor
Pop IV Project
25
Health Care Spending in Ghana
85
26
Selection of Services to be Financed


The poor
The rich
Pop IV Project
27
Sub-Saharan Africa Expenditures on Health
(1997-2000)
Recommended expenditure gt34/capita (CMH)
Source World Bank, World Development Report
(2004)
28
Health Financing Functions
SCHEIBER, G. "Financing Health Systems" Chapter
12, pp 225-242 in Disease Control Priorities in
Developing Countries, 2nd Edition. New York
Oxford University Press 2006.
29
Key Issues of Revenue Collection
  • Mobilize enough resources to finance expenditures
    for basic public and personal health services
    WITHOUT resorting to public sector borrowing
    (Tanzi and Zee 2000)
  • Raise revenues equitably and efficiently
  • Various types of organizations eventually receive
    funds
  • Conform with international standards

SCHEIBER, G. "Financing Health Systems" Chapter
12, pp 225-242 in Disease Control Priorities in
Developing Countries, 2nd Edition. New York
Oxford University Press 2006.
30
Types of Revenue Collection
  • Out-of-pocket payments (ex. user fees)
  • Tax-based financing
  • Social Health Insurance (SHI)
  • Voluntary private insurance
  • Community-based financing

Types of Prepayment
Prepayment makes risk sharing possible
31
User Fees
  • Began in late 1980s as response to decreasing
    health budgets increasing health care needs
  • Increasing gap between supply and demand
  • Perceived need to locally
  • Generate revenue
  • Assure continuity of supplies
  • Improve budget allocations
  • Improve efficiency

32
User Fees
  • Characteristics
  • Pay as you go - no risk pooling
  • Incentive effects
  • More resources directly for health
  • Evidence
  • Can raise significant revenue
  • Frequent misuse of collected funds
  • Frequent poor design and planning
  • Highly political and controversial

Source Lagarde, M and Palmer, N. The impact of
user fees on health service utilization in low-
and middle-income countries how strong is the
evidence? Bulletin of the WHO, November 2008,
86(11).
33
General Taxation
  • Characteristics
  • Usually collected by the Ministry of Finance as
    main source of revenue and serves the general
    population.
  • Mobilizes funds from everyone regardless of their
    health status, income, or occupation
  • Pools health risks across a large contributing
    population
  • Evidence
  • Mildly regressive to progressive
  • Inequitable access for the poor
  • Reducing individual responsibility for one's own
    health?

Source Tax Based Financing for Health Systems
Options and Experiences, Discussion Paper 4,
World Health Organization (2004).
34
Social Health Insurance (SHI)
  • Characteristics
  • Mandatory participation
  • Large risk pools
  • Social solidarity
  • Evidence
  • Covers people primarily in formal sector
  • May increase disparities between income groups

35
Voluntary Private Health Insurance
  • Characteristics
  • Risk pooling
  • Payment based on ability and risk
  • Access based on payment
  • Evidence
  • Generally not pro-poor
  • High-risk subscribers dropped or pay more
  • Rich capture more benefits

36
Community-Based Financing
  • Bamako Initiative (1987) Women and childrens
    health through funding and management of
    essential drugs at the community level
  • Characteristics
  • Start up funds for basic equipment, provision of
    basic drugs, support costs
  • Drug charges to recover expenditures as seed
    capital and for replenishment
  • Community health committees

37
Health Financing Functions
SCHEIBER, G. "Financing Health Systems" Chapter
12, pp 225-242 in Disease Control Priorities in
Developing Countries, 2nd Edition. New York
Oxford University Press 2006.
38
Pooling and Purchasing
  • Purchasing Process to select interventions and
    pay for services and providers
  • Social Health Insurance
  • Community-Based Health Insurance
  • Other examples?

39
Structure of HC Financing Provision
Source World Health Report 2000 Chapter 5 Who
Pays for Health Systems?
40
Structure of HC Financing Provision
Source World Health Report 2000 Chapter 5 Who
Pays for Health Systems?
41
New Health Care Reforms?
  • Changing role, size, spending in public sector
  • Transfer of responsibility to, promote expansion
    of and regulate NGO services
  • Addressing the nearly universal difference
    between policies and actual expenditure
  • Integration of services (IMCI, IMAI, IMPAC)
  • Operations (health systems) research

42
  • THANK YOU!

43
Community-Based Health Insurance (CBHI)
  • Principles
  • Small risk pools
  • Social solidarity on small scale
  • Evidence
  • Can enhance financial access to limited care
  • Primarily curative oriented
  • Geographic inequities (closer is better)
  • Governments re-distributive role important
  • Generally failed to meet expectations

44
CBHI Evidence Base
  • General
  • evidence base is limited in scope and
    questionable in quality
  • the effects are small and schemes serve only a
    limited section of the population
  • Specifics
  • strong evidence CBHI provides some financial
    protection by reducing out-of-pocket spending
  • moderate strength evidence that such schemes
    improve cost-recovery.
  • no evidence that schemes have an effect on the
    quality of care or the efficiency with which care
    is produced
  • these types of community financing arrangements
    are, at best, complementary to other more
    effective systems of health financing.
  • Regarding the costs and the benefits of various
    financing options, the current evidence base is
    mute on this point

Ekman B. Health Policy Plan. 2004
Sep19(5)249-70.
45
Decentralization
  • Transfer of fiscal, administrative, and/or
    political authority for planning, management and
    service delivery to lower levels of government.
  • Most often done for reasons beyond health
  • One pure model does not exist

46
  • IMAGE of DECENTRALIZATION?

47
Fiscal Decentralization
  • Defines the
  • Financial relations between national and
    sub-national units of government.
  • Authority to collect and use revenue
  • Direction and size of inter-governmental resource
    flows
  • Division of power for taxation
  • Means by which national resources are adjusted to
    match local expenditure responsibilities
  • How national resources flow to achieve equity

48
Decentralization - Uganda
  • Decentralized to district level
  • Health competes with other sectors
  • PHC funding through block grants to districts
  • Spillovers affect neighboring district spending
    decisions
  • Overall negative impact of decentralization on
    public good provision.

Source Measure Project Akin, John, Paul
Hutchinson and Koleman Strumpf Decentralization
and Government Provision of Public Goods The
Public Health Sector in Uganda March 2001
49
Your Experiences with Decentralization
  • Do local levels have resources that correspond to
    their increasing authority?
  • What are the impediments to effective management
    at a local level?
  • Has decentralization reduced corruption?

50
Where do CBHI schemes fit


The poor
The rich
Pop IV Project
51
Financing Filling the gaps
Public provision finance


The poor
The rich
Pop IV Project
52
Organizational Forms
  • Ministry of health, usually heading a large
    network of public providers organized as a
  • national health service, relying on general
    taxation collected by the ministry of
  • finance as the main source of revenue, and
    serving the general population.
  • Social security organization (single or multiple,
    competing or not), mostly relying on
  • salary-related contributions, owning provider
    networks or purchasing from external
  • providers, and serving mostly their own members
    (usually formal sector workers).
  • Community or provider based pooling organization,
    usually comprising a small pooling/purchasing
    organization relying mostly on voluntary
    participation.
  • Private health insurance fund (regulated or
    unregulated), mostly relying on voluntary
  • contributions (premiums), which may be
    risk-related but are usually not income related,
    and are often contracted by an employer for all a
    firms employees.

53
Health Care Reform
  • Not enough funds for basic care
  • Misallocation - 80 of resources tend to go
    toward richest 10 of population, urban/rural
    inequities. For example, surgery for cancers
    rather than FP, treatment of TB, STI.
  • Inequity - poor lack basic access to HCare
  • Inefficiency in allocation of health workers,
    purchase of drugs
  • Inadequate recurrent budgets - lack of
    maintenance logistic problems poor quality
    services low productivity, poor access
  • Little control over local resources peripheral
    health facilities often have disproportionately
    low resources for population served

54
Life Expectancy and Health Spending
Source World Development Indicators, 2007
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