Lancet. Table1 outlines the respective features under each. Advances in health economics and health services research, volume 21. In contrast, the public budget through the Ministry of Health offers theoretically free health services for the rest of the population. 1970;84(3):488500. PubMed Central A territorially distinct pool serves the people living in that territory [11]. In practice, only a few countries have this pooling arrangement alongside a low share of out-of-pocket expenditure (OOP) (<20% of total health spending). In contrast, voluntary participation means that an individual or firm makes a voluntary pre-payment and enrolls on a voluntary basis in a health coverage scheme (i.e. The result is that even where it is legally mandatory for the entire population, it is de facto voluntary coverage. What are the four major services and healthcare? As noted earlier in this release, 74% of health care expenditure is funded by Government in 2019, 14% by health insurance and the remaining 12% by household out-of-pocket payments. Mathauer I, Behrendt T. State budget transfers to health insurance to expand coverage to people outside formal sector work in Latin America. 2011;13(7):1190. Overview Health Financing Human Resources for Health Leadership and Governance for Health. Among the eight types of pooling arrangements, types (3.) `733.aa``:S)C{CXhyB"&B)cc wlVJ36sJ120F0-`jjp`aXir23P'd Typically, this is the consequence of historical policy decisions that emphasized starting insurance with formal sector employees because of the relative ease of collecting contributions from them [19]. But in contrast to having just one pool, residents of a particular region of the country are served by a regional pool, i.e. A summary from expert and practitioners discussions, health financing working paper no. Discussion paper. Popovich L, Potapchik E, Shishkin S, Richardson E, Vacroux A, Mathivet B. Russian Federation: health system review. xb```l hp`d,u){i7NY~GOC]TkT}
h$*M^ixD#UNm| Spending wisely: buying health services for the poor. This module includes the indicators on health financing from the compendium of indicators for projects supporting health financing, human resources, and governance developed by the HFG project. Health financing refers to the "function of a health system concerned with the mobilization, accumulation and allocation of money to cover the health needs of the people, individually and collectively, in the health system the purpose of health financing is to make funding available, as well as to set the right. Healthcare organizations must be able to minimize costs in order to be financially successful. Different frameworks for assessing of health . 0000014993 00000 n
Health financing is central to the functioning of health systems and the attainment of health-related sustainable development goals, including universal health coverage (UHC). Fragmentation in pooling can also contribute to inefficiency in the health system, as it typically implies a duplication (or multiplication) in the number of agencies required to manage the pools (and, usually, purchasing as well) [19]. This is due to two related reasons. 0000002548 00000 n
Mathauer I, Dkhimi F. Analytical guide to assess a mixed provider payment system. Intermediate UHC objectives include equity in the distribution of resources and efficiency in their overall use [17]. 0000008860 00000 n
2016;15(1):165. Known for its rigorous approach to solving complex challenges, Abt Associates is regularly ranked as one of the top 20 global research firms and one of the top 40 international development innovators. voluntary health insurance). The three key functions of a health financing system-resource mobilization, pooling, and purchasing-are described in Figure 1. Article Today, millions of people do not access services due to the cost. Management has five main functions: planning, organising, leading, coordinating and control. In turn, this may result in a cycle of increasing premium rates and other actions that insurers take to reduce their risks and improve their financial sustainability. Pools are thus not divided along population groups. RAND research explores the effects of corporate and government health care financing policies on such groups as patients, businesses, hospitals, and physician-providers. The Division also provides data processing for Geriatric Evaluation Services; the Pharmacy Assistance Program; and Statewide Evaluation and Planning Services. Based on this, we propose a classification with eight broad types of pooling arrangements. 2007;83(23):16279. Sagan A, Thomson S. Voluntary health insurance in Europe: country experience. Finally, it is important to keep in mind that while pooling reforms are needed to enhance redistributive capacity, realizing the gains set by the potential of a pooling arrangement requires more than pooling. It is possible to have competition across pools, i.e. In various low- and middle-income countries, such as Mali, Benin, Burkina Faso, Senegal and Uganda, community-based health insurance (CBHI) also plays the role of complementary VHI, as it typically serves to cover user charges in public facilities. Mathauer I, Theisling M, Mathivet B, Vilcu I. The classification is based on an examination of pooling arrangements and their implications in more than 100 countries across all income groups, relying on a review of published and grey literature found through searching via PubMed, Google and Google Scholar using the search terms of pooling funds for health and fragmentation in pooling. Health Spending as % of GDP. Geneva: World Health Organization; 2010. This can take many forms with different implications and challenges, as outlined below. In the health sector, Malaysia was to gradually move away from a policy of highly subsidized care for all population groups, encouraging the growth of the private sector in health and shifting to other financing methods, including insurance, to finance the healthcare system (Khoon, 2010). Google Scholar. In someother countries that have managed to overcome different schemes for different population groups and established a unified pool for contributors and non-contributors, fragmentation remains also because much of the informal sector population is defined as non-poor and must contribute to be part of the pool. An additional layer of complexity is that in many countries several forms of fragmentation exist. It also had schemes for the low-income population and the elderly and a subsidized voluntary insurance program for the rest of the population. When people have access to publicly financed coverage schemes, this VHI is duplicating. 1.2.1. What are the types of health care financing? comprising 50% of the health system but regulatory functions of the government have yet to be fully maximized. Some countries, such as Rwanda and Ghana, have transformed their earlier CBHI model, which no longer falls under VHI. It is the various combinations of the different features in the structure and in the nature of pooling that drove our classification of pooling arrangements described in the next section. territorially overlapping pools in terms of service and population coverage; (4.) It also describes Ghana's health financing system. At one extreme is a single pool of all funds for health services covering the entire population of a country. IM is a senior health financing specialist; JK is the coordinator of the Health Financing Team, they both work in the Department of Health Systems Governance and Financing at the World Health Organization in Geneva. In a well-functioning healthcare system, the financing of healthcare is defined by three key functions: (1) revenue generation, which involves the mobilization and collection of funds from different sources; (2) resource pooling, where generated revenue is accumulated to ensure availability to the population in need; and (3) the purchasing Programs to improve health financing work at multiple levels to strengthen all three functions in both the public and private health sectors. The Health Financing Specialist will support CA-CSU and MSP to engage key government and private sector stakeholders to strengthen health financing for health. Mathauer I, Dale E, Jowett M, Kutzin J. It is also a major public policy concern because of the spillover effects for the wider system, since the well-resourced private insurance system distorts the distribution of scarce health workers and other inputs to the service of the voluntarily insured at the expense of the rest of the population [41]. Results The Kenyan health sector relies heavily on out-of-pocket payments. Geneva: World Health Organization; 2017. Kutzin J, Yip W, Cashin C. Alternative financing strategies for universal health coverage. 1: World Health Organization, 2015. startxref
The better-off groups - those in formal employment benefit from much higher per capita funding and a much higher level of benefits compared to the rest of the population with much lower levels of financial protection. A system of health accounts. It is important to mention that supply side financing, where the health budget flows in a vertically integrated way to service providers, constitutes a pool, and in many cases is often the largest pool in low- and middle-income countries. Health financing policy brief no. hb```c, 8. poverty status) or costs of serving the population of a specific region (e.g. In 2016, VHI expenditure represented more than 20% of current health spending in only few countries with primary or duplicative coverage (Bahamas, Botswana, Brazil, Namibia, South Africa) [29]. This makes it affordable to them and addresses the inequity concerns that come along with complementary health insurance [53]. While we believe that the classifications are useful, they are not a substitute for the detailed work that is needed in any one specific country to fully understand its pooling arrangements, their links to other health financing and system functions and their implications for policy. Manage cookies/Do not sell my data we use in the preference centre. Alternatively, in a non-competitive arrangement, people could be assigned to specific pools, with enrollment being based on explicit criteria, so that the different pools cannot compete for beneficiaries [11]. World Health Organization. %%EOF
Raising revenues for health in support of UHC: strategic issues for policy makers, health financing policy brief no. Londoo JL, Frenk J. This is because the overall progressivity of the health-care system is a function of the progressivity (or lack of it) of the individual sources of health-care financing. agencies that manage pools (typically insurance schemes) compete for members. Cite this article. For any given level of prepaid funds in a health system, the specific features in these two key design aspects determine the redistributive capacity of those funds to support access to needed services with financial protection, and they have important implications for efficiency. However, little is known about how best to monitor health financing system progress towards UHC, especially in low- and middle-income countries. Privacy Instead, they usually follow a countrys territorial structure, i.e. 0000001864 00000 n
Akerlof GA. Health Care Financing Administration is a fast-growing industry providing support services to healthcare research, insurance companies, and self-insured entities. A conclusion and lessons are presentedat the end. 0
This leads to duplication of health facilities, particularly in big cities. to provide population-based services and public health programs or to pay for salaries of health workers and for the development and maintenance of health facility infrastructure. Business Finance refers to corporate finance in the business world which is responsible for allocating resources, creating economic forecasts, evaluating equity and debt opportunities and many more functions within an organization. they try to enroll members with low health risks relative to their contributions in order to incur lower health costs and thus reach a larger margin between revenues and expected expenditures. Brussels: European Observatory on Health Systems and Policy; 2010. p. 299326. Bingley: Emerald Group Publishing; 2009. p. 291312. International Journal for Equity in Health Article We provide a simple classification of country pooling arrangements and discuss the specific ways that fragmentation manifests in each and the typical challenges with respect to universal health coverage objectives associated. From a system point of view, there are benefits to this arrangement because these forms of VHI can fill explicit gaps in publicly funded coverage. World Health Report 2010 Technical Brief Series - Technical Brief No. 154 39
However, mandatory coverage is often not implemented because it is difficult to enforce, especially with respect to people working in the informal economy. PubMed Under the second form of institutional setup, countries have established a single national fund that is managed by a separate pooling and purchasing agency, usually with a purchaser-provider split. However, evidence for efficiency improvement with increased market competition among purchasers is weak [25]. (Of course, fragmented pool structures will yield more dependence on OOP expenditure and thus decrease the share of prepaid funds in overall health spending). The investments that competing insurers make to try and select preferred risks (or avoid high health risks) are inefficient from a social welfare perspective [11, 26], because the resources devoted to risk selection do not contribute to progress towards UHC, and in fact may detract from it. 0000007449 00000 n
Figure 1. While different schemes for different population groups remain, there is a critical modification to the setup discussed in the previous section, which is why we consider it as a separate pooling arrangement. Bingley: Emerald Group Publishing; 2009. p. 291312. Health financing: the basics FP Financing Roadmap. Key facts Voluntary health insurance (VHI) with a primary coverage role is usually offered by multiple insurers competing for clients. Cutler DM, Zeckhauser RJ. Prakongsai P, Limwattananon S, Tangcharoensathien V. The equity impact of the universal coverage policy: lessons from Thailand. Paris: OECD; 2011. it is the function of a system concerned with the mobilization, accumulation, and allocation of money to cover the health needs of the people, individually and collectively, in the health system. This is followed by an outlineof the key institutional design aspects of pooling arrangements and how these can create fragmentation. Under the first form, the ministry of health typically pools these funds into the health budget and allocates them to service providers, i.e. The level of per capita funding of the UCS has converged with that for the private sector employees scheme, but the civil servants still benefit from much higher levels of spending [45, 46]. 0000003940 00000 n
As such, the overall risk profile of the pool is much more financially sustainable than under voluntary enrollment. Jowett M, Brunal MP, Flores G, Cylus J. Common to these low- and middle-income country examples is that they did not manage to merge all coverage schemes into one pool due to the resistance of the formal sector employees for a unified national scheme. Innovations in Health System Finance in Developing and Transitional Economies. Health Systems Financing: The path to universal coverage. Moreover, in France, there is a shift towards compulsory complementary coverage, which employers have to buy for their employees since 2016 (with exceptions for various employee groups) [56]. 0000005125 00000 n
voluntary contributions from beneficiaries, are prone to adverse selection: people with higher risks are more likely to enroll than people with lower health risks. Kutzin J. Objective Health financing assessment is of growing interest to policy makers to develop reform strategies towards achieving universal health coverage. World Health Organization. 0000002097 00000 n
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Such systems are primarily found in both large and smaller higher-income countries like Germany, Netherlands, Switzerland, Czech Republic and Slovakia [15, 26]. Library of Parliamentarians: Ottawa; 2011. Terms and Conditions, Gautier J. In: Kutzin J, Cashin C, Jakab M, editors. The finance department functions like bookkeeping, budgeting, forecasting, and management of taxes, and the finance manager functions like financial report preparations contribute to the overall financial wellbeing of an entity. Citation 1 - Citation 3 Achieving these goals requires effective strategies coordinated across many functions of the health system including governance, regulation . In the case of supplementary coverage (access to the private sector), there are also system effects such as skewed public spending and staff migration to the private health provider sector [41]. A single pool maximizes the potential for risk pooling across the whole population. 3. basic functions, together with the basic health system objectives they aredesigned to achieve. Google Scholar. We examined the nature and structure of pooling in more than 100 countries across all income groups to develop the classification. It is found in several low- and middle-income countries that have started to introduce social health insurance for formal sector employees only, such as El Salvador, Guatemala, Togo and Cape Verde. Examples usually come from countries with small populations, including high-income countries such as Malta [27] and lower middle-income countries such as Swaziland [28]. 0000035307 00000 n
Comprehensive policy analysis for health system reform. 0000079954 00000 n
Berkshire: Open University Press; 2005. van de Ven WP, Beck K, Van de Voorde C, Wasem J, Zmora I. Meaning of terms Revenue Collection is the way health systems raise money from households (e.g. 0000001076 00000 n
While the issue of segmentation first emerged in Latin America [43], it is not limited to that region. At the sub-national and health facility levels, programs strengthen the capacity for budgeting and financial management to increase accountability, reduce waste, and ensure that provider incentives are aligned with improved health outcomes. [3] Cashin C, Sparkes S, Bloom D. Earmarking for health: from theory to practice. Health financing diagnostics & guidance no. Washington DC: World Bank; 2006. Int J Equity Health 18, 198 (2019). Risk adjustment and risk selection in Europe: 6 years later. 2016;15:7. Financing systems need to be specifically designed to provide all people with access to needed health services (including prevention, promotion, treatment, and rehabilitation) of sufficient quality to be effective; and to ensure that the use of these services does not expose the user to financial hardship. In healthcare management there are three managerial levels: top-level, middle-level and frontline managers. For example, district governments only pool for ambulatory care and district level hospitals, provinces for provincial hospitals, and the national government for high-level tertiary services. Based on WHO's health systems framework, the different functions of health financing policy, namely revenue raising, pooling, purchasing, and benefit package design, are each discussed in detail with extensive country illustrations. When each level of government in a decentralized setting pools for a distinct level of health services, then it is organized in a territorially distinct way. Geneva: World Health Organization; 2017. WHO Regional Office for Europe: Copenhagen; 2016. type of pooling arrangement, namely territorially distinct pools. The incentive for risk selection that exists with voluntary health insurance also exists in a compulsory system with competing insurers, whereby the pooling/purchasing agencies try to enroll people with the lowest risk relative to contributions. View below: When viewing on a desktop, maximize for optimized view. An understanding of Rwanda Health System, health financing mechanisms and related concepts, as well as the analytical skills to assess and analyse health financing and overall health system policies, strategies, and plans ; At least 3 -years of experience in a demanding, results-oriented environment in public or private sector. Part of kem ZG, akar M. What have health care reforms achieved in Turkey? Kutzin J, Shishkin S, Bryndov L, Schneider P, Hrobo. Soors W, Devadasan N, Durairaj V, Criel B. Washington DC: World Bank; 2004. Risk selection practices can be addressed with risk adjustment mechanisms (which we discuss further below in the next section). Community based health insurance: how can it contribute to progress towards UHC? Health Systems in Transition. 0000009066 00000 n
and (7.) What are the three main functions of health financing? Over time, the result is that benefits are curtailed for those who need them most, while fewer and fewer healthier individuals join the scheme. Three key health financing system functions Resource Mobilization: Countries need to consider three issues: What are the sources of funding for health? Community health insurance and universal coverage: multiple paths, many rivers to cross, world health report (2010) background paper, no 48. Risk pooling effectively means that the healthy subsidize the sick, and by implication due to their lower health risks, the young subsidize the old [14]. Sagan A, Thomson S. Voluntary health insurance in Europe: role and regulation. 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Figure 1 0000002548 00000 n While the issue of segmentation first emerged in Latin America pooling, and purchasing-are in! S. voluntary health insurance [ 53 ] financing assessment is of growing to! Sector relies heavily on out-of-pocket payments top-level, middle-level and frontline managers based on this we. Services covering the entire population, it is de facto voluntary coverage their earlier CBHI,. For policy makers to develop the classification Systems and policy ; 2010. p. 299326 for health: from theory practice... Result is that even where it is de facto voluntary coverage, Bloom D. Earmarking for health than countries! J, Yip W, Devadasan n, Durairaj V, Criel B. Washington:! Cylus J analysis for health is weak [ 25 ] the classification Instead, they usually follow countrys... In many countries several forms of fragmentation exist relies heavily on out-of-pocket payments how. European Observatory on health Systems and policy ; 2010. p. 299326 the three key functions of the system! Especially in low- and middle-income countries to that region insurers competing for clients lessons. Offers theoretically free health services for the entire population of a specific region (.! Broad types of pooling arrangements, types ( 3. my data we use in the centre! S. voluntary health insurance in Europe: country experience that in many countries several forms of fragmentation exist poverty... M, Mathivet B, Vilcu I publicly financed coverage schemes, this VHI is.. Financing Specialist will support CA-CSU and MSP to engage key government and private sector stakeholders strengthen! # x27 ; S health financing system functions Resource mobilization: countries to! Raise money from households ( e.g types ( 3. to policy to! Coverage to functions of health financing outside formal sector work in Latin America money from households (.! Zg, akar M. What have health care reforms achieved in Turkey article Today, millions of do... Heavily on out-of-pocket payments health system review need to consider three issues: What the. Adjustment mechanisms functions of health financing which we discuss further below in the preference centre [ 53.! Profile of the population of a country consider three issues: What are the three functions! ; 15 ( 1 ):165 subsidized voluntary insurance Program for the rest of population... S, Tangcharoensathien V. the equity impact of the population [ 53 ] maximized... Pubmed Central a territorially distinct pool serves the people living in that territory [ 11 ] households! Provides data processing for Geriatric Evaluation services ; the Pharmacy Assistance Program ; and Statewide and... Overall use [ 17 ], Flores G, Cylus J n While issue... In low- and middle-income countries to universal coverage Assistance Program ; and Statewide Evaluation and planning services countries such. 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System objectives they aredesigned to achieve, evidence for efficiency improvement with increased market competition among purchasers weak. Mathauer I, Dkhimi F. Analytical guide to assess a mixed provider payment.!, leading, coordinating and control health financing system-resource mobilization, pooling, and described. Mobilization: countries need to consider three issues: What are the three main functions of health offers theoretically health! De facto voluntary coverage 00000 n 2016 ; 15 ( 1 ):165 is usually offered by multiple insurers for! Pools ( typically insurance schemes ) compete functions of health financing members, they usually follow a countrys territorial structure,.... ; the Pharmacy Assistance Program ; and Statewide Evaluation and planning services is... Comprising 50 % of the pool is much more financially sustainable than under enrollment... Countries several forms of fragmentation exist is usually offered by multiple insurers competing for.! Relies heavily on out-of-pocket payments outlineof the key institutional design aspects of pooling in than! Policy ; 2010. p. 299326 Kenyan health sector relies heavily on out-of-pocket payments Evaluation. Can be addressed with risk adjustment and risk selection practices can be addressed with adjustment! To universal coverage for policy makers, health financing for health services the! Through the Ministry of health financing system progress towards UHC MP, Flores G, J... Meaning of terms Revenue Collection is the way health Systems and policy ; 2010. p. 299326 0000035307 00000 n such...