Social health insurance implementation function governance

Social Health Insurance Implementation Function Governance

Najibullah Safi, WHO – Afghanistan

Health Care Financing Training, 27th Nov 2014

Outline of the presentation

• Definition of governance

• Governance function in Social Health Insurance

• Example of other countries

• Key messages

What is governance?

• Governance is the exercise of political, economic and administrativeauthority to manage a nation's affairs

• It is the complex mechanisms, processes and institutions throughwhich citizens and groups articulate their interests, exercise their legalrights and obligations, and mediate their differences

• Structural setup of decision-making processes and the exercise ofpolitical, economic and administrative authority (UNDP in Siddiqui et al. 2012)

What is governance? World Bank Definition

• The traditions and institutions by which authority in a country is exercised” – Kaufman et al

The way “ … power is exercised through a country’s economic, political, and social institutions.”

Principles of SHI Governance

• Transparency and Rule of Law:• Regulatory rules clear, known to stakeholders and limited discretionary actions

• Consistency: • Predictability of regulation and actions (regulations enforced across time, no

change with change of government)

• Accountability and responsiveness: • Holding decisions makers accountable and controlling corruption

• Inclusiveness, participation and consensus oriented:• Rules and regulations generated openly, with participation of stakeholders,

generating consensus. Appropriate appeals protecting the rights of all stakeholders

• Efficiency and effectiveness:• Governance arrangements enforceable (effective) at a reasonable cost (not

impose a heavy burden on the regulated)

Governance Indicators • Stewardship: who, how and through which regulation are defined:• Coverage • Benefit package• Consumer protection: risk selection, renewability clauses, transferability of

rights, complaints and sanctions• Financing: contribution rate, co-payments, subsidies• Provision: provider selection, provider payment mechanism, provider

accreditation and registration• Prudential: entry requirements, exit mechanisms, sanctions and appeals,

external and internal audit requirements• Oversight: who is responsible and what is the capacity for enforcement• Institutional arrangements for:

• Oversight body, Board of Directors, CEO/President/Director General, Auditing

Planning Issues

• Covered population/eligibility

• Enrollment/premium collection

• Benefit package: depth of coverage. One or several tiers (voluntary supplementary?

• Costing/financing (contribution, subsidies, co-payments)

• Macro organization - Public, Semi-public, Private non-profit, for-profit- Monopoly or competition (single or multiple funds)- Separate risk pooling for different population groups?

• Provision: Direct? Contracted from providers public/private/both?

• Payment/contracting systems

• Governance arrangements

Experience of other Countries

Governance in Health Insurance - Legal BasisGermany Indonesia Bangladesh

• Since 1883 (Bismarckand even before)

• 1914: Imperial Insurance Code covering pension, health and accident insurance

• 1951: Law on Self-Governance

• 1989: Social Code Book 5 on SHI

• 1960’s: Government established civil servant, Employees, Military Health Insurance Schemes

• 2004: National Social Security Law enacted

• 2011: Establishment of National Social Health Insurance Agency (BPJS –Kesehatan)

• Only for commercial HI

• No law for SHI (first draft)

Governance in Health Insurance – Role of the Government

Germany Indonesia Bangladesh

Regulator

• Sets legal frame

• Not a member of SHI agencies

• Sets upper limits forcontribution rates

• Risk equalization

• Performance and continued development of HI system

• Mediator between stakeholders

Regulator

• Sets legal frame• Part of supervisory body• Sets upper limits for

contribution rates• Sets prices for capitation

(PHC) and DRG (hospitals)• Financier (pro poor scheme)• Risk equalization• Mediator between

stakeholders

Government wants to be all (ultimately):

• Regulator HI• Health service provider• Main health insurance

provider

In pilots (there is not yet government institution)

Governance in Health Insurance – Level of Autonomy

Germany Indonesia Bangladesh

Self-Governance: No direct Government involvement

• Guaranteed by law

• Collective negotiation and contracting by payor and provider umbrella associations

• Financial supervision byFederal Institute for Statutory Health Insurance

• SHI Agency (based on Law 24/2011)

• Not-for-profit parastatalinstitution

• Concept as a parastatalinstitution

Governance in Health Insurance – Regulatory Framework

Germany Indonesia Bangladesh

• Federal Joint Committee as the highest board in the hierarchy of self-governing structures establishes guidelines for the SHI and assures quality in health care

• Decisions are made on including new treatments and procedures in the SHI benefit catalogue

• These form the legal basis for all health insurance companies and medical providers

• MoH develops regulations, especially related to providers, setting the hospital payment rate and capitation rate, benefit, etc.

• MoF to approve the procurement of assets, approval to the government contribution for the poor, financial accountability

• To be developed

Governance in Health Insurance – Composition of Supervisory Board

Germany Indonesia Bangladesh

Composition of the Federal Joint Committee:13 voting members:• Chairperson and 2 impartial

members• Central association of SHI• German Hospital Federation• National Association of

Statutory Health Insurance Physicians

• German Federal Association ofStatutory Insurance Dentists

• Max. 5 patient representatives

By law it (BPJS) consists of 7 professionals:

• 2 from the government, • 2 from employers, • 2 from employees, and • 1 from community

leader/representative.

• The supervisory board answers to the President and also reports to the Council of National Social Security (DJSN)

Governance in Health Insurance – Financial Structure

Germany Indonesia Bangladesh

• SHI: contribution based –compulsory

• PHI: premium based -voluntary

• MoH develops regulations, especially related to providers, setting the hospital payment rate and capitation rate, benefit, etc.

• MoF to approve the procurement of assets, approval to the government contribution for the poor, financial accountability

To be developed

Governance in Health Insurance – Organizational Set-up

Germany Indonesia Bangladesh

Many different schemes (109), • targeting different groups,

• different modes

• different market shares (competition)

Monopolistic: BPJS provides the basic health benefit for every member.• Membership is compulsory

• Target 100% coverage by 2019

• Other health insurance can provide ‘on-top-benefit’ although the current BPJS schemes is relatively generous

SHI: N/A

Idea to establish as National Health Fund

Governance in Health Insurance – Freedom of Choice

Germany Indonesia Bangladesh

• Choose provider

• Funds have to accept everyone (few exceptions)

• Conceptually member can choose primary care provider

• However currently the most available primary providers are government health centers

• Private primary providers are reluctant due to low capitation rate – potentially it will grow in the future as more experience occurs and payment rates improve

• Referral system will be enforced

Pilot schemes:

• Only Public Providers (pro poor scheme)

• Micro health insurance schemes: predominantly NGO services

Key Messages

• Countries choose their own arrangements and the speed they want to develop SHI

• There is a value to have a clear separation between purchaser and providers

• Having multiple providers encourage competition and improve quality

• Historically, most countries start with several schemes. This depends on the political situation in a country

• No system evolved in one day

• Every system took several steps to develop and improve over time - and it will continue to be changed and adapt to new challenges

Acknowledgement

• Dr. Awad Mataria, Health Economist, EMRO

• Abdi Momin Ahmed, RA Policy and Health planning

• Armin Fidler, Health Sector Manager, Pablo Gottret, Lead Economist, The World Bank

• Dr. Paul Rueckert, GIZ