Healthcare Financing – Where are we no · 2016. 12. 5. · •End epidemics of AIDS, TB, malaria and NTDs and combat hepatitis, water-borne diseases and other communicable diseases

Healthcare Financing –Where are we now

Dr. Zafar Ahmed

3rd UNIMAS Public Health Seminar 2016

My Background…

Dr. Zafar AhmedMBBS, MBA, M Econ, PhD

Associate Professor Department of Community Medicine and Public HealthFaculty of Medicine, University Malaysia Sarawak (UNIMAS)

Presentation Overview

• Healthcare Financing in bigger context – Societal goals

• Healthcare Financing • Where are we now• Where we would like to go• How do we go there

First Part

• Role of Governments – Welfare • Millennium Development Goals• MDG & Health • Sustainable Development Goals – SDG • Universal Health Coverage – UHC • Healthcare Financing

Second Part • Universal Coverage – Barriers • Universal Coverage – Solutions• Where are we now in Malaysia• Core ideas for reducing financial barriers – Where we would like to go• Financing for universal health coverage - How do we go there • Social Health Insurance• Conclusion

Governments & their roles• Throughout history, every organized society had some form of

government.

• In free societies, the goals of government have been;

• to protect individual freedoms and

• to promote the well-being of society as a whole.

To meet their expenses, government need income, called “Revenue," which it raises through Taxes

Tax Revenue

• Tax Revenue flows upward from people to the government.

• Government must concede powers downwards to the people in exchange

• This established accountability

• Leads to Welfare for the general population

What does Government spends on

• security & Defence

• Subsidies

• Production

• Regulation

Millennium Development Goals (MDGs)• Millennium Summit in September 2000 adopted the United Nations

Millennium Declaration – Millennium Development Goals (MDGs)• Welfare related – focusing on Poverty or the underlying causes of

poverty• Call to develop a global partnership for development, and focuses on

how the industrialized countries can work with the poorer countries to enhance the latter’s standard of living.

• 08 Goals • Deadline of 2015

Millennium Development Goals (MDGs)

MDGs and Health

• Goal 1 : Eradicate extreme poverty and hunger • Goal 4 : Reduce child mortality • Goal 5 : Improve maternal health • Goal 6 : Combat HIV/AIDS and other diseases • Goal 7 : Ensure environmental sustainability • Goal 8 : Develop a global partnership for development

As 2015 comes to an end, and with it the 15-year cycle of the anti-poverty

Millennium Development Goals (MDGs)

From the 1 January 2016 United Nations officially ushered into an even more

ambitious set of goals to banish a whole host of social ills by 2030 –

Sustainable Development Goals (SDG)

Sustainable Development Goals (SDG)

• The Sustainable Development Goals (SDG) follow and expand on the millennium development goals (MDGs)

• The SDGs were officially adopted at a UN summit in New York in September, and become applicable from January 2016.

• The deadline for the SDGS is 2030

Sustainable Development Goals (SDG)

• The Sustainable Development Goals (SDGs) are intended to be universal in the sense of embodying a universally shared common global vision of progress towards a;

• safe, • just and • sustainable space

• for all human beings to thrive on the planet.

Sustainable Development Goals (SDG)

Sustainable Development Goals (SDG) - Health

Sustainable Development Goals (SDG)

SDG3: Ensure healthy lives and promote well-being for all at all ages• Reduce maternal mortality• End preventable deaths of newborns and

children under 5 years of age• End epidemics of AIDS, TB, malaria and NTDs

and combat hepatitis, water-borne diseases and other communicable diseases

• Reduce by one third premature mortality from NCDs and promote mental health

• Strengthen prevention and treatment of substance abuse

• Halve deaths and injuries from road traffic accidents; ensure universal access to sexual and reproductive health

• Achieve universal health coverage, access to quality essential health-care services and access to medicines and vaccines

• Substantially reduce deaths and illnesses from hazardous chemicals, pollutants and contaminants

• Strengthen implementation of the WHO FCTC, as appropriate

• Support R&D of vaccines and medicines in accordance with the Doha Declaration on the TRIPS Agreement and Public Health

• Substantially increase health financing and development of the health workforce in developing countries

• Strengthen country capacities for early warning, risk reduction and management of national and global health risks

Universal Health Coverage – UHC • The full spectrum of essential, quality health services should be

covered including health promotion, prevention and treatment, rehabilitation and palliative care.

• UHC means that all people receive the health services they need without suffering financial hardship when paying for them

• It aims to achieve better health and development outcomes, help prevent people from falling into poverty due to illness, and give people the opportunity to lead healthier, more productive lives.

Universal Health Coverage – UHC

Universal health coverage has two important components.

• The first is the EXTENT to which people are covered by the health services that they need.

• The second is the DEGREE of financial risk protection they have in using services - e.g.

• do they suffer financially as a result of having to pay for the services they need.

Universal Health Coverage – UHC

Universal Health Coverage – UHC

Universal Health Coverage – UHC

Universal Coverage

Universal Health Coverage – UHC

• The global health policy agenda is dominated by discussions about the need for health systems to achieve universal coverage.

• Ensuring access to needed health services for all, and

• Providing financial protection from the costs of healthcare to everyone

World Health Report – 2010

• How is such a health system to be financed?

• How can they protect people from the financial consequences of ill-health and paying for health services?

• How can they encourage the optimum use of available resources?

Money is the Mother’s Milk of Health Care

Health Financing – WHO Definition

Health financing involves the basic functions of collecting revenue, pooling resources, and

purchasing goods and services.(WHO 2000)

A Short Pause for…

Second Part • Universal Coverage – Barriers • Universal Coverage – Solutions• Where are we now in Malaysia• Core ideas for reducing financial barriers – Where we would like to go• Financing for universal health coverage - How do we go there • Social Health Insurance• Conclusion

Universal Health Coverage – Barriers

3 issues;

• Availability of resources

• Overreliance on direct payments at the time people need care

• Inefficient and inequitable use of resources• 20–40% of health resources are being wasted

Universal Health Coverage – Solutions

Simple

• Countries must raise sufficient funds,

• Reduce the reliance on direct payments to finance services (Financial Protection), and

• Improve efficiency and equity.

What kind of healthcare financing system should we pursue if we are to

achieve universal coverage?

Where are we now in Malaysia

• How do we establish “Where we are?”

• The WHO Health Financing Strategy for the Asia Pacific Region (2010-2015)

• It is used to evaluate the Malaysian healthcare financing system in terms of the provision of universal coverage to the population

WHO Health Financing Strategy for the Asia Pacific Region 4 indicator targets • Total health expenditure should be at least 4%-5% of the gross

domestic product; • Out-of–pocket spending should not exceed 30-40 % of total health

expenditure; • Over 90% of the population is covered by prepayment and risk

pooling schemes; and • Close to 100 % coverage of vulnerable populations with social

assistance and safety-net programmes.

Population coverage – Risk pooling

• In 2010, there were about 2.3 million admissions in public hospitals which accounted for about 73.2 % of the total number of admissions.

• Public health facilities registered about 19.2 million outpatient attendances or 87 % of the total attendances

100 % coverage of vulnerable populations

• Malaysia’s public healthcare system provides access to all Malaysians at a highly subsidized rate as well as geographical access to a health facility within an average 5 kilometre radius

• Social security • Welfare department • NGOs

Universal Health Coverage

• It look like Malaysia is doing very well in achieving the target set by the WHO Health Financing Strategy for the Asia Pacific Region

• So what can be the potential problem – reason to change?

Financing for universal health coverage

• Provide all people with access to needed health services (including prevention, promotion, treatment and rehabilitation) of sufficient quality to be effective;

• Ensure that the use of these services does not expose the user to financial hardship

Out-of-Pocket (OOP) payments – Financial Barriers

• Individuals are required to contribute the cost of healthcare

• The payments are made by patients to providers at the time a service is rendered

• User fees refer to fees the patients have to pay to public hospitals, clinics, and health posts not to private sector providers

Out of pocket payment – Policy concern

• Households may be pushed into poverty or into deeper poverty as a result of paying directly for health services.

• Households facing these health expenses may cut back on other essential household spending such as food and clothing.

• Households may, in fact, choose to forgo necessary health care services rather than face the steep financial consequences - creating a vicious cycle of ill health, disability, and poverty

Catastrophic Health Expenditure

• When the medical bills of one or more of their members are high in relation to their capacity to pay, households must reduce their expenditure on other necessities for a period of time. This is catastrophic expenditure.

• The improvement of physical access could contribute to problem of catastrophic expenditure unless accompanied by financial protection mechanisms.

Core ideas for reducing financial barriers

• Pooling • Combine tax and social health insurance• Compulsory contribution helps• Voluntary schemes are a useful first step• Consolidate or compensate• Drop direct payment

Financing for universal health coverage –should cover…• Prioritize coverage to certain groups, e.g., extend insurance schemes

to cover the formal sector workers first

• Cover everyone but limit the range of health interventions initially covered, e.g., cover outpatient services or maternal and child health care first

• Cover most medical treatments so that nobody is denied needed care, but skimp on non-clinical aspects, such as allowing patients to have their own rooms or the convenience of when patients can see a doctor

Social Health Insurance (Community Insurance)(Mandatory Community Insurance)

Mandatory Social Insurance

• This model introduces a fourth party in addition to the consumer, theprovider and the state – the financing organization which mobilizesand manages the fund and pays the providers.

• Funds are obtained from mandatory income related contributionsfrom all income earners and their employers and governmentsubsidies from general taxation for those who have no income.

• The major function of the state in this model is to enact and implement appropriate legislation to regulate the financing organization and the providers.

Social Health Insurance

Customers ProvidersServices

State/MOH Financing Organizations

Copayments

Regulations

Social Health Insurance - SHI 1. What do we mean by social health insurance?2. How will SHI contribute to our health system objectives?3. Will SHI raise additional funding for health?4. Are all stakeholders in support of SHI?5. Is there a legal framework for SHI to operate within?6. Are revenue collection procedures technically feasible?7. Are the physical and intellectual resources available to setup a SHI

organization?8. What benefits will SHI members be entitled to?9. How should the SHI purchase or provide health services?10. Can SHI operate at a financial equilibrium?

Conclusion • We need a paradigm shift in the way we look at the health system in

order to achieve UHC

• It may need redefining/realigning the Health system Objectives

• Identify the right finance mix to the health system & reduce the financial risk

• Health Financing is considered a very powerful tool to manage the Financial risk & reduce the Catastrophic health expenditure

QUESTIONS?

zafar.he@gmail.com+6019 254 2482