1 | Designing health financing systems for universal coverage 03 November 2014 Benoit Mathivet Department of Health Systems Governance and Financing World.

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Designing health financing systems for universal coverage

03 November 2014

Benoit MathivetDepartment of Health Systems Governance and Financing

World Health Organization

Designing health financing systems for universal coverage

03 November 2014

Benoit MathivetDepartment of Health Systems Governance and Financing

World Health Organization

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OutlineOutline

I. What is at stake

II. What are the challenges

III. How can health financing policy contribute?

(with links to EMP)

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I. What is at stake?I. What is at stake?

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Widespread issues of physical access to care…Widespread issues of physical access to care…

Globally, there is a widespread lack of access to healthcare services due to:- Lack of physical availability of services, - Geographical constraints, - Cultural constraints etc.

When care is available there are: - quality issues, - lack of adequate inputs (trained staff, medicines, equipment)

People can actually lose trust in the system and stop seeking care because of the above.

I.

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Worsened by financial risk…Worsened by financial risk…

And when people do contact health services:

– Globally around 150 million suffer severe financial hardship each year.

– 100 million are pushed into poverty because they must pay out-of-pocket at the time they receive them.

– Medicine often represent an important share of the OoPs

….which may in turn represent a strong desincentive to seek treatment.

I.

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II. UHC and its challengesII. UHC and its challenges

Ensuring that all have access to the care they need, of good quality, without suffering financial hardship.

Ensuring that all have access to the care they need, of good quality, without suffering financial hardship.

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Linkages and trade-offsLinkages and trade-offs

The 3 dimensions are closely interrelated

Extending the 3 dimensions of coverage at the same time may be difficult for poor countries:

– Financial resource are scarce.– Managerial capacity may be weak.– There are numerous political and cultural challenges to

overcome.

II.

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III. How can Health Financing Policy contribute to progresses toward UHC?

III. How can Health Financing Policy contribute to progresses toward UHC?

Quality

UtilizationNeed

Universal financial protection

Final UHC goalsHealth financing within the

overall health system

Revenue collection

Pooling

Purchasing

Benefits

UHC intermediate objectives

Equity in resource

distribution

Efficiency

Rest of health system

Transparency and

accountability

Wider context/ extra-sectoral factors (SDH)

How health financing arrangements can influence progress towards UHC

Source: Joe Kutzin

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Revenue collection: how to bring more domestic money to the health sector?Revenue collection: how to bring more domestic money to the health sector?

Increase the priority given to health in national budget, for instance following the Abuja (2001) objectives (15% of state budget deicated to health). If all signatory countries reached Abuja objectives domestic funding would by far exceed external funding for health.

Explore the potential for new domestic revenue sources: sin taxes (alcohol, tabacco), taxes on money transfers, on communication, on air tickets etc…

Improve the efficiency of tax collection.

This sounds obvious… but for instance many free healthcare schemes remain incomplete promises (with often a lack of

adequate medical workforce/ medicines & equipment) until they are properly planned and receive appropriate funding.

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Function 1- Revenue collection: how to bring more domestic money for health?Function 1- Revenue collection: how to bring more domestic money for health?

Budget

AutresSanté

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Pooling: fight against fragmentation/duplication Pooling: fight against fragmentation/duplication

Pooling implies prepayment, before the illness occurs, as opposed to direct payment at the point of delivery when illness occurs.

The main purpose of having a pool is to spread the financial risk associated with the need to use health services. It is also meant to disconnect the amount and quality of benefits received by the sick from their level of financial contribution.

A note on CBHI: there is increasing evidence that small, separate pools gather little resources, on a voluntary basis, with no subsidization from the state. They therefore give access to a very limited package of care, different for each pool, and leave the most vulnerable behind (solutions exist, through subsidization and (near) mandatory enrollment, e.g. Rwanda).

Having a multitude of separate pools, small or big (the later being often related to vertical interventions), also duplicate costly administrative processes instead of paying for health services.

Source: cited/adapted from WHR 2010

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Purchasing: providing the right incentivesPurchasing: providing the right incentives

Purchasing mechanisms all have edges and flaws, they can be combined to cumulate the former and compensate the later.

– Fee-for-service: can be an incentive for increasing provision, but may favor provider-induced demand (medicines are concerned) and increases financial risk for the payer.

– Per-capita funding: brings money were patients are, but requires proper, autonomous management.

– Case-based funding: strong incentive for efficiency, can trigger the adoption of generic medicines, favor cheaper medicines providers, and overall incentivize more rational utilization of all physical resources.

– Performance based funding: aims at increasing provision/utilization of essential services (including immunization etc.) and quality.

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Benefits policy: being clear about what is covered.

Benefits policy: being clear about what is covered.

Health financing mechanisms can incentivise certain behaviors among the population when they access parts of this benefit package (for instance a degree of cost-sharing to avoid over consumption of some services or medicines).

Clarity and proper knowledge of the benefit package and of conditions of access are key to empower people, improve utilization and enhance financial risk protection (example of inpatient drugs and equipment).

Sequencing of HF reforms

1.Pooling

3a.Rationalization3b. Increased Benefits & pop. coverage3c. SD quality gains

Prov

ide an

ince

ntive

for

better distribute & manage funds for

Frees-up resources for

Enables risk protection

4. 1 + 2 + 3a,b,c : solid ground for increased State (and donors) spending in health

2.Purchasing mechanisms

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The role of institutional design & organizational practiceThe role of institutional design & organizational practice

Resource collection

and related tasks

Purchasing and related tasks

Health Financing functions

Stewardship

Pooling and related tasks

Institutional design

Organizational practice

Institutional design

Organizational practice

Institutional design

Organizational practice

Financial accessibility

Organizational practices are organizational activities, e.g. rule implementation and compliance

and capacity to do so.

The institutional design defines the HF system architecture and is the sum of all formal rules (laws,

regulations) relating to the health financing system.

Source: Inke Mathauer

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Thank you very much for your attention!

For further information:

http://who.int/health_financing