. It is voluntary because there is no legal obligation to join a scheme, and thus the person or their employer can choose not to be part of a pool for coverage [22]. 0000013724 00000 n [http://www.nationalplanningcycles.org/sites/default/files/planning_cycle_repository/swaziland/swaziland_nhssp_ii_draft_zero_29_aug_2014.pdf. 2007;83(23):16279. This is inconsistent with the objective of financial protection and equity of access to services in relation to need. Washington DC: World Bank; 2004. Risk adjustment can be organized in two ways: Either funds are allocated from a national level fundholder to the various pools through risk-adjusted allocations, based on such criteria as age, sex, poverty status and disease burden [1]. Book This overlap turns into duplication of service coverage particularly in big cities, with the main policy consequence being large inefficiencies in the form of excess provider capacity [15]. National health expenditures are derived from government and non-government sources and are used to finance a wide array of programs and services. The major health financing mechanisms in Nigeria are namely: (i) government budget using general tax revenue; (ii) direct out-of-pocket payments; (iii) a social insurance scheme known as the Formal Sector Social Health Insurance Programme (FSSHIP) that is implemented by the National health insurance scheme; and (iv) donor funding. World Scientific Handbook of Global Health Economics and Public Policy 2016; 267309. The Health Financing Specialist will be based in the Abt office in Antananarivo. The resources allocated to these different pools may come from a mix of centrally and sub-nationally raised revenues, with allocations often based on a consistent formula applied across the country. There are also some concerns, however. What does health care financing mean? family members). Ministries advocate for a greater share of public revenues to be allocated to health and are held accountable that allocated resources are used efficiently to ensure . Health financing has three key functions: revenue collection, pooling of resources, and purchasing of services. 2019;97:33548. The paper is based on a review of published and grey literature in PubMed, Google and Google Scholar and our information gathered from our professional work in countries on health financing policies. The total health expenditure per capita increased from US$ 12 in 1998/1999 to US$25 in 2005/2006. This is the so-called death spiral of voluntary health insurance [24]. Health financing involves the basic functions of revenue collection, pooling of resources, and purchase of interventions. Bingley: Emerald Group Publishing; 2009. p. 291312. Health nutrition and population discussion paper. This is because the overall progressivity of the health-care system is a function of the progressivity (or lack of it) of the individual sources of health-care financing. Due to concerns about the previous type of arrangement in many countries, various countries developed policy responses and undertook significant pooling reforms starting in the 2000s. WHO. Here the pooling function lies with a sub-national entity, such as a state, province, or district (if managed by a level of public administration) or another entity, such as a health insurance fund, with defined responsibility for the entire population of that territory [14]. As such, this type of pooling arrangement, if and when it has an effective risk adjustment mechanism that deters risk selection efforts, can act as a virtual single pool (due to the flows between the pools). 0000079954 00000 n Raising and channeling funds: Working Group 2 report, 2009. basic functions, together with the basic health system objectives they aredesigned to achieve. BMC Health Serv Res. 0000005327 00000 n 0000080023 00000 n I'.1~)4CQ~u sd1$V0c: B' {09 The Kakwani index has its origins in public finance and so its utility in health-care financing as a policy making tool is easy to demonstrate. As the name suggests, it exists in addition to and along the other main pooling arrangements, as outlined above. Knaul FM, Gonzlez-Pier E, Gmez-Dants O, Garca-Junco D, Arreola-Ornelas H, Barraza-Llorns M, Sandoval R, Caballero F, Hernndez-Avila M, Juan M, Kershenobich D, Nigenda G, Ruelas E, Seplveda J, Tapia R, Sobern G, Chertorivski S, Frenk J. 0000074834 00000 n World Health Organization. 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. State budget transfers to health insurance funds for universal health coverage: institutional design patterns and challenges of covering those outside the formal sector in eastern European high-income countries. the mobilization of resources for the health sector; 2) pooling, i.e. ?2$R@a,/|l*K`I(ij6 'I#b *`&IX0*f*@f0 I,dH4BH>o\v^dqY[GraltAL3,;S/R-{zk37IY[?d-. These tend to reflect particular challenges due to the nature and consequences of fragmentation in each. Mathauer I, Dale E, Meessen B. An appraisal of the health transformation Programme. Such a pool provides compulsory or automatic coverage for the entire population, usually for a defined package of services. Fragmentation also occurs in the few countries (Germany, Netherlands, Chile) that allow certain population groups (e.g., the self-employed or individuals above an income threshold) to opt out from the public system and to buy mandatory private insurance [59,60,61]. 1970;84(3):488500. To develop a health financing structure capable of addressing the challengesof the future. Health Systems in Transition. Health Care Syst Transit. 2015;119(9):115363. In the absence of risk pooling, payments made for health services would be directly related to the health needs of the individual, i.e. Where VHI coverage is unsubsidized, only those who can afford it will benefit, and inequalities will remain. Figure 5.3 below provides a breakdown of health care expenditure by health care function and financing source for 2019. Agency's Mandate and Functions Mandate. %PDF-1.5 % 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]. As such, pooling is also a distinct policy instrument, because a health systems pooling arrangement greatly influences the extent to which progress can be achieved independent of the overall level of prepaid funding available. (Of course, fragmented pool structures will yield more dependence on OOP expenditure and thus decrease the share of prepaid funds in overall health spending). Google Scholar. Paris: OECD; 2011. 1: World Health Organization, 2015. . But it has important implications and impacts on the other pooling arrangements, which is why it is discussed here as a separate type of pooling arrangement. 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. The three roles of health managers are interpersonal, informational and decisional. Correspondence to JK contributed to the interpretation of evidence and the manuscript drafting. type of pooling arrangement, namely territorially distinct pools. PubMed Central Finally, there may be specific coverage schemes for defined population groups, such as the poor [30]. Kutzin J, Jakab M, Shishkin S. From scheme to system: social health insurance funds and the transformation of health financing in Kyrgyzstan and Moldova. Yet, the function of pooling and the different ways that countries organize this is critical for countries progress towards UHC. Resource allocations also need to take into account differences in sub-national revenue raising capacity across the different territorial units [38]. Sagan A, Thomson S. Voluntary health insurance in Europe: role and regulation. This is due to two related reasons. 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. By Jonas May 13, 2021 5min read 4233 views. In some cases, this is limited to civil servants only. The set of performance indicators provided in this article should help policy makers to monitor the development of social health insurance schemes and identify areas for improvement. Article Health financing systems have a key role in achieving universal health coverage (UHC) across the globe. Geneva: World Health Organization; 2017. 0000012547 00000 n The ratio of VHI population coverage against their VHI expenditure share can serve as an indicator of system inequity arising from the fragmentation in place in these countries. Spending wisely: buying health services for the poor. We also like to thank Lisa Seidelmann, Carlo Schmid Fellow and volunteer with the Department of Health Systems Governance and Financing at the time of producing this draft for her research assistance. Advances in health economics and health services research, volume 21. 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. Results The Kenyan health sector relies heavily on out-of-pocket payments. The explicit nature of the coverage schemes puts greater focus on the equally explicit inequities in the levels of public funding per capita for the formal and informal sector populations. Prakongsai P, Limwattananon S, Tangcharoensathien V. The equity impact of the universal coverage policy: lessons from Thailand. 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. Fragmentation in pooling arrangements. . Article Three key health financing system functions Resource Mobilization: Countries need to consider three issues: What are the sources of funding for health? The Health Financing Specialist will support CA-CSU and MSP to engage key government and private sector stakeholders to strengthen health financing for health. there must be a specific contribution made by or on behalf of the covered person. Whereas revenue raising, e.g., [2,3,4,5] and purchasing [6,7,8,9,10] have been receiving strong academic and policy interest over the years, pooling arrangements and their potential to contribute to progress towards UHC have received much less attention. In 1985, the government commissioned the first of a . Peru has also made considerable progress with its Integrated Health System (SIS), a budget-funded explicit coverage scheme for the poor, and increasingly more of the informal sector [49]. Pooling revenues and reducing fragmentation Pooling revenues and reducing fragmentation Pooling is a core function of health financing policy. Geneva: World Health Organization; 2017. Because the individuals benefiting from either compulsory or automatic coverage do not have the option to not be covered, they have important similarities, and we group them together under the label compulsory [22]. Click the card to flip . The purpose of pooling is to spread financial risk across the population so that no individual carries the full burden of paying for health care. The National Health Insurance Program was established to provide health insurance coverage and ensure affordable, acceptable, available and accessible health care services for all citizens of the Philippines. The authors declare they have no competing interests. Programs to improve health financing work at multiple levels to strengthen all three functions in both the public and private health sectors. 1). Therefore, maximizing the potential to redistribute from lower-need to higher-need individuals by de-linking contributions (of whatever form, such as taxes or insurance premiums) from their health risk is the central objective for pooling. 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). Overview In: Kutzin J, Cashin C, Jakab M, editors. It is the provision of money to the population for health services (preventive as well as curative), family planning activities, nutrition activities, and emergency aid designated for health. On the other hand, competition among insurance pools creates an incentive for pool managers to cream skim, i.e. Mathauer I, Behrendt T. State budget transfers to health insurance to expand coverage to people outside formal sector work in Latin America. The Creative Commons Public Domain Dedication waiver (http://creativecommons.org/publicdomain/zero/1.0/) applies to the data made available in this article, unless otherwise stated. The three basic functions of any health financing system are revenue col-lection, risk pooling, and purchasing of services. But where territorially distinct pools are too small in terms of the number of people, their risk profile can be financially precarious and there could be efficiency and capacity concerns. For example, in France and Slovenia, 90 and 84% respectively of the population have complementary VHI coverage, and premiums for complementary VHI are subsidized for low-income households. World Health Organization. Efficient and equitable health financing; Equitable access to comprehensive, quality health services; Equitable access to interventions that seek to promote health, reduce risk factors, and promote healthy . In: Kutzin J, Cashin C, Jakab M, editors. there are different funds for different population groups, with the affiliation being based on socio-economic or (socio-) demographic criteria. Health financing diagnostics & guidance no. Springer Nature. Health Policy. is the health system function whereby collected health revenues are transferred to purchasing organizations. Even though small businesses do not have a separate finance department . Mathauer I, Kutzin J. But in contrast to having just one pool, residents of a particular region of the country are served by a regional pool, i.e. Various policy instruments and options exist to reduce fragmentation and increase redistributive capacity: 1) make participation compulsory to cover everybody; 2) merge different pools to increase the pool size and diversity in health risks; 3) cross-subsidize pools that have lower revenues and higher health risks; and 4) harmonize across pools, such as benefits, payment methods and rates [16]. Health financing policy is key to the health system, as it determines: i) the sources of fund, and therefore how much is available to the sector; ii) how health risks are pooled; iii) who controls the funds and how they are allocated; iv) The equity of the sector funding, and hence indirectly, how many people will fall into poverty (or not) as a 0000012340 00000 n European Observatory on Health Systems and Policies; 2014. Some countries, such as Rwanda and Ghana, have transformed their earlier CBHI model, which no longer falls under VHI. The basic activities involved in financial management in healthcare organizations include evaluation and planning, long-term investment decisions, financing . Geneva: World Health Organization; 2017. The function of pooling and the ways that countries organize this is critical for countries progress towards universal health coverage, but its potential as a policy instrument has not received much attention. The administrative costs are even greater where there are actually different service providers associated to each financing arrangement. Alhassan RK, Nketiah-Amponsah E, Arhinful DK. Geneva: World Health Organization; 2010. Kutzin J, Shishkin S, Bryndov L, Schneider P, Hrobo. The on behalf may come from public budgets for specific groups of individuals whose participation is fully or partially subsidized, or it may come from traditional insurance contributions that cover individuals beyond the contributor (e.g. Provided by the Springer Nature SharedIt content-sharing initiative. To develop the classification, we combined the different features in the structure and the nature of pooling and then examined the nature and structure of pooling in more than 100 countries across all income groups. Google Scholar. An additional layer of complexity is that in many countries several forms of fragmentation exist. While the issue of segmentation first emerged in Latin America [43], it is not limited to that region. The agency is typically labelled as a national health insurance fund and constituted as an autonomous public entity. <]>> Risk selection practices can be addressed with risk adjustment mechanisms (which we discuss further below in the next section). https://doi.org/10.1186/s12939-019-1088-x, DOI: https://doi.org/10.1186/s12939-019-1088-x. 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. Indeed, these arrangements put in place for health financing further exacerbated existing inequalities in these countries rather than compensating for them. Berkshire: Open University Press; 2005. van de Ven WP, Beck K, Van de Voorde C, Wasem J, Zmora I. 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