by Adam Wagstaff (World Bank)
description
Transcript of by Adam Wagstaff (World Bank)
Financing Social Health Insurance in Developing Countries: Impacts on Fiscal & Labor Market Outcomes
by
Adam Wagstaff (World Bank) IDB/PAHO Regional Workshop on “Fiscal Space and the Financing of Universal Health Care in the Americas”
Washington DC, 29 - 30 November 2007
Introduction 90% of OECD countries finance majority of health
expenditures publicly Half use general revenues. Other half have SHI
systems, dedicated earnings-related contributions for formal-sector workers
Among the non-OECD countries, 56% finance a majority of health spending publicly, and only 20% have SHI
Many countries are embracing SHI, often with the blessing—if not the encouragement—of donors
Yet this is happening at a time when Germany et al. trying to reduce their reliance on payroll
financing of health care LAC advised to follow suit by Baeza & Packard in their
Beyond Survival
Evidence is clear on some issues Revenues:
Revenues fall short of “theoretical” levels due to evasion and underreporting of earnings
MOF sometimes reduces govt. spending on health in line with theoretical SHI revenues
SHI financing less equitable than taxes in general Contribution ceilings limit progressivity Horizontal inequity: contrib. schedules vary by
scheme Coverage:
Gaps in coverage until countries reach high per capita income
Financing less progressive under SHI
TaiwanKorea
Japan
Hong Kong
Denmark
Finland France
Germany
Ireland
I taly
Netherlands
Portugal
Spain
SwedenSwitzerland
UKUSA
-0.2
-0.1
0.0
0.1
0.2
0.3
0.4
0% 20% 40% 60% 80% 100%SHI share of general govt. health financing
Prog
ress
ivity
of g
ener
al
govt
. hea
lth fi
nanc
ing
Gaps in coverage under SHIVietnam, 2004
0%10%20%30%40%50%60%70%80%90%
100%
1 2 3 4 5I ncome quintile
% in
sure
d
Volunt.
Student
Compuls.
Pers ofmeritFree
Colombia, 2005
0%10%20%30%40%50%60%70%80%90%
100%
1 2 3 4 5I ncome quintile
% in
sure
d
Contrib. Subs.
Argentina, 1996/7
0%10%20%30%40%50%60%70%80%90%
100%
1 2 3 4 5I ncome quintile
% in
sure
d OS+priv.
Private
Obrassociales
Chile, 1998
0%10%20%30%40%50%60%70%80%90%
100%
1 2 3 4 5I ncome quintile
% in
sure
d
FONASAOther ins.ISAPREs
Evidence is less clear on other issues—i
Do SHI systems spend more on health care? On the one hand:
People more willing to pay SHI contributions than taxes?
Guaranteed revenue stream? On the other hand:
Actual and theoretical revenues often diverge SHI revenues grow more slowly than tax revenues
due to ceilings
Evidence is less clear on other issues—ii
What are the impacts of SHI on health outcomes? On the plus side, SHI may:
Bring in additional resources to the health sector Stimulate efficiency in the delivery system, through
separation of purchasing and provision, and provider payment reform
On the negative side, SHI may result in: Gaps in effective coverage Focus on inpatient care, neglect of prevention,
early detection, etc. Higher wages in health sector, not necessarily
higher quality Purchaser-provider splits and payment reform
happen also in non-SHI countries, not always in SHI ones!
Evidence is less clear on other issues—iii
What’s the impact of SHI on employment? Argued that payroll financing reduces employment,
by raising cost of labor. But… Labor supply curve (for formal sector) shifts
rightwards because workers value SHI benefits—so, smaller disemployment effect and a larger reduction in the post-tax wage than in standard case
Relevant question is whether a health system financed through payroll taxes leads to lower employment than one financed through general revenues
Does SHI encourage informalization of the economy? Depends on incentives people face—ECA different
from LAC?
Europe & Central Asia’s SHI ‘experiment’—learning opportunities
Staggered and incomplete adoption of SHI in ECA countries during 1990s provides an opportunity to assess some of the aggregate effects of SHI adoption
Study design similar to multiple U.S. studies in many fields that exploit staggered and incomplete policy roll-out across the 50 states
Country-level analysis permits aggregate effects to be estimated. So, capture effects on all the relevant actors in the
health system, including new ones (e.g. new SHI agency, new entrants into provider market, etc.)
SHI adoption in ECA: A quick history—i 1945-1990, most ECA countries financed
health care through general revenues and delivered it though centrally-planned Semashko model
In early 1990s, as they shifted from Communism, many countries looked to SHI to help solve several emerging problems: Dramatic decline of govt. revenues as share of
GDP and falling GDP SHI thought likely to lead to better health delivery
system. SHI agency would sit at arms’ length from MOH and MOF, would develop purchasing capacity, promote competition within public sector and between it and private sector
Who adopted SHI when? And what share of spending was financed through SHI?
Source: HiTs and World Health Reports, various years
SHI adoption in ECA:A quick history—ii
SHI makes up a bigger share of revenues in E European countries, where contribution rates are high
Most countries do have a SHI agency, but so too do Poland and Latvia which use income taxes or general revenues
Often MOH still transfers some funds to providers, and SHI agency contracts have taken time to emerge, are often not competitive, and often do not involve private sector
SHI has often but not always led to switch from budgets to FFS or patient-based payments (e.g. DRGs). Some non-SHI countries also switched
Methods
Generalization of differences-in-differences (DID) estimator: includes zit and git
Also estimate eqn below using IV where have evidence that above eqn doesn’t address endogeneity of SHI adequately
itiiitittit utgSHIzy
itititit eSHIzy
Health sector outcome variablesVariables Sources
Health spending & resources
Total health spending per capita; salaries as % spending; physician numbers
WDI; WHO-Health-for-All
Hospital throughput & capacity
LOS; bed occupancy rate; # beds; inpatient admissions WHO-Health-for-All
Hospital discharges By diagnosis WHO-Health-for-AllImmunization By type WHO-Health-for-All
MortalityLife expectancy; U5MR & IMR; MMR; standardized death rates
WHO-Health-for-All; UNICEF TransMONEE
Avoidable deaths (quality proxy)
Deaths from appendicitis, hernia, surgery infections WHO-Health-for-All
Disease incidence By diagnosis WHO-Health-for-All
Health outcomes dataset is 77% non-missing. (69 outcome variables. 28 countries. 16 years. Maximum # observations = 30912. Actual # observations on health outcomes = 23680.)
Labor market outcome variables
Variables Sources
Wage rateTotal annual wages and salaries in constant PPP averages for the employed population aged 15-59
Own calculations based on data from WDI and UNICEF TransMONEE
Unemployment Unemployment rate; registered unemployed; long-term unemployed ILO
Employment % working-age population and population aged 15-59 employed ILO; UNICEF TransMONEE
Informal economy
Based on discrepancy between growth of GDP and electricity demand
Own calculations, based on Johnston et al. method
Informal employment
Self-employment; agricultural employment ILO
Labor force participation Whole population; women only ILO
Labor market outcomes dataset is only 55% non-missing. (8 outcome variables. 28 countries. 16 years. Maximum # observations = 3584. Actual # observations on health outcomes = 1987.)
z variables
Variables Sources
GDP GDP per capita, PPP (constant 2000 international US$) WDI
Public share of health spending
Health expenditure, public (% of total health expenditure) WDI
Elderly population* Population ages 65 and above (% of total) WDI
Urban population* Urban population (% of total) WDIHealth spending$ Total health spending per capita WDIHospital payment method*** EXCLUDED FROM BASIC MODEL ***
FFS, patient-based method (e.g. DRG). Budget is omitted category HiTs
* Excluded from labor models. $ Excluded from health models.
Basic model: SHI impacts on spending and hospitals
Basic model: SHI impacts on life expectancy and mortality
Basic model: SHI impacts on cause-specific mortality
Basic model: SHI impacts on disease incidence & immunization
Effects on SHI impacts of including provider-payment reforms variables
SHI impacts on labor market outcomes
Conclusions
Already known Coverage
Gaps often occur under SHI—often among poor, near-poor Less generous coverage translates into lower utilization but
not necessarily inferior financial protection Raising revenues: SHI vs. taxes
SHI revenues may be lower than expected due to evasion etc., are they more/less predictable?
SHI less progressive than tax finance New from ECA study
Health care delivery SHI neither necessary nor sufficient for separation of
purchasing & provision SHI systems more expensive but do not apparently achieve
better health outcomes despite higher spending SHI and the labor market
SHI raises (gross) wages, decreases employment Impacts on size of formal sector unclear