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CATALYZING CHANGEThe System Reform Costs of Universal Health Coverage

Fred

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4 ACKNOWLEDGMENTS

5 FOREWORD

7 EXECUTIVE SUMMARY

13 CHAPTER 1Where the World Stands Today: The Feasibility of Universal Health Coverage

19 CHAPTER 2

Framework for Planning the Transition

25 CHAPTER 3

Case Studies: Andhra Pradesh (India), Ghana, Chile, Turkey

61 CHAPTER 4

Conclusions

67 ANNEX

Additional Case Studies: Rwanda, South Korea, Taiwan, Thailand

84 ABBREVIATIONS

85 NOTES

Contents

We would like to thank McKinsey & Company, a global management consultingfirm with deep expertise in health systems, for the preparation of this report.

Our special thanks are also extended to Rony Lenz (University of Santiago) for conducting much of the primary research for the case study on Chile, and to MukeshChawla (World Bank) for his extensive support with the case study on Turkey. Ourthanks to Aydin Sabahattin (Turkish Ministry of Health); Enis Baris (World HealthOrganization); and Tuncay Teksoz (Pfizer) for their assistance with the case study on Turkey.

Our thanks to Sam Adjei and Dan Osei at the Center for Health and SocialServices, Ghana, for undertaking the costing of reforms in Ghana; and to NathanielOtoo (National Health Insurance Authority, Ghana); Chris Atim (World Bank); andPhilip Akanzinge (Ghana Health Service) for their assistance and guidance with theGhana case study. Thanks to Sofi Bergkvist and her colleagues at the Access HealthInitiative in India for doing the costing and interviews for the Aarogyasri Trust inAndhra Pradesh; François Diop (World Bank) for his assistance with the case study of Rwanda; and Laura Morlock (Johns Hopkins School of Public Health) for her assistance with the case study of Taiwan.

Reviewers of the report included Enis Baris (World Health Organization), Cristian Baeza (McKinsey), and Mukesh Chawla (World Bank). We are grateful for the guidance of Dan Kress (Bill and Melinda Gates Foundation); Richard Horton (The Lancet); David Evans (World Health Organization); Laura Morlock (Johns HopkinsSchool of Public Health); Michael Birt (Pacific Health Summit); Anne Mills and Dina Balabanova (London School of Hygiene and Tropical Medicine); Jesse Bump(Harvard University); Dai Hozumi (PATH initiative); Lord Darzi (Faculty ofMedicine, Imperial College London); and Gina Lagomarsino and Robert Hecht(Results for Development Institute).

Our thanks to Rachel Christmas Derrick for her editorial assistance, and to LilyDorment (The Rockefeller Foundation) for overseeing the production of this report.

4

Acknowledgments

Every year health expenses create severe financial hardship for 150 million peopleand force 25 million households into poverty. This is due largely to the fact that

more than three billion people—many of whom are found in the poorest half of theworld’s population—pay out of pocket for health services. They are forced to choosebetween impoverishing fees or foregoing needed services, leaving them at risk of fallinginto a downward spiral of sickness and poverty.

Yet, paradoxically, in most countries around the world, the total amount of domesticresources devoted to health is increasing at an historically unprecedented rate, in paral-lel with growing national economies. While large amounts of time and resources havebeen spent on improving the health of people in low- and middle-income countries,not enough work has been done to help strengthen their health systems and provideaccess for all to appropriate health services at an affordable cost.

Many countries are beginning to embrace universal health coverage (UHC)—defined by the World Health Organization (WHO) as “access to key promotive, pre-ventive, curative and rehabilitative health interventions for all at an affordable cost,thereby achieving equity in access”—as a viable financing mechanism. Although mod-els for UHC vary by country, governments are reorganizing national health systems toshare health costs more equitably across the population and its life cycle, instead of concentrating the burden on the few who face catastrophic illness in any given year.

This timely report addresses a specific question: how much does it cost to shift ahealth system from being predominantly financed out of pocket toward one that isfinanced using schemes of universal coverage? Using examples from four countries thathave made tremendous strides toward achieving universal coverage, the report puts anapproximate price tag on these investments. The conclusions indicate that relativelysmall early investments can set countries on the path toward universal health coverage.This information should be useful to those involved in planning reform, as well as thedevelopment partners that support them.

For nearly a century now, the Rockefeller Foundation has been privileged to collab-orate with leading experts and national and international organizations to tackle someof the world’s most intransigent health problems. We are now working with those samepartners to support the transformation of health systems toward universal health cover-age, as a strategy for improving the health and financial wellbeing of the countries andindividuals in our geographic areas of focus. I trust that this report will inform andtherefore support the champions of health financing reform and their partners.

—ARIEL PABLOS-MÉNDEZ, MDManaging Director, The Rockefeller Foundation

5

Foreword

7

Aglobal movement for universal health coverage (UHC) is under way, as illustratedby an increasing number of nations working toward achieving UHC. Endorsed

by the World Health Assembly through a resolution in 2005, UHC is defined as access for all to appropriate health services at an affordable cost.1 Universal coverage is associated with better health and equity, as well as financial protection. The systemicresilience provided by universal coverage also contributes to poverty alleviation byreducing catastrophic health expenditures.2

This report aims to call health leaders’ attention to the importance and enhancedfeasibility of establishing the systems and institutions needed to pursue UHC. It alsoseeks to quantify the transition costs associated with reforming a health system awayfrom one that relies on out-of-pocket payments and towards one in which healthexpenditures are more evenly distributed.

Although many countries would like to move towards UHC, the discussion is oftenderailed by questions about feasibility and cost. National governments, and the interna-tional institutions that support them, often assume that universal coverage is not afford-able in the near term for lower-income countries. As lower-income countries grapplewith quickly rising total health spending—the result of economic development—theyface a fundamental choice. They can continue on the current path of increasingly ineffi-cient and regressive health systems in which out-of-pocket spending for health accountsfor up to 80 percent of total health expenditures—a scenario that sends 25 million fami-lies into poverty every year.3 Or they can pool health financing through taxation, socialprotection or insurance mechanisms to cover large portions of the population.4 A grow-ing number of lower-income countries have successfully reorganized domestic healthfinancing towards UHC,5 but many more remain trapped in the out-of-pocket paradigm.

The findings described in this report suggest that the cost of transitioning towardsuniversal health coverage may be lower than assumed. This applies both in the expan-sion phase and the subsequent deepening of coverage. The costing framework presentedin this report, as well as the actual dollar amounts, would be useful as a guide both fornational planners exploring health reform as well as for the international donors whosupport them.

The Journey and Costs of Health System Reform

Achieving universal coverage is a journey and cannot be achieved in a single leap.Making progress requires investment in the foundations of universality—the institu-tions, systems and processes that hold health systems together. Typically, countriesundertake two stages of reform toward UHC.6 In the first stage, governments set upthe foundations for broad coverage—that is, coverage that includes a limited benefitspackage but that reaches a large proportion of the population (e.g., recent reforms inGhana). In the second stage, usually undertaken by countries at the middle-incomelevel, governments establish the structures and processes that enable them to deepencoverage so that citizens who are already covered with basic care receive a more robustpackage of services (e.g., recent reforms in Chile).

Executive Summary

UHC is defined as access

for all to appropriate health

services at an affordable cost.

Universal coverage is associated

with better health and equity,

as well as financial protection.

8

There are three major cost components of health system reform towards UHC:

n Health-care delivery costs (i.e., expansion of health services)

n System reform and management capacity costs

n Social and political capital costs

The fiscal costs of expanding the actual delivery of health care services to the popu-lation have dominated discussions of the transition to universal health coverage untilnow. This is logical, since delivery costs dwarf all other costs. Nevertheless, preciselybecause universal coverage is a journey, we affirm in this report that investment in system reform and management capacity—the foundations of universal systems—canfacilitate progress and, therefore, provide a significant return from modest investmentsas compared to the service delivery costs.

This report does not focus on the cost of expanded health services, or the social andpolitical processes necessary to achieve reasonable consensus for reform. Rather, usingcase studies from four countries or provinces that have taken different paths towardUHC—Andhra Pradesh (India), Ghana, Chile and Turkey—this report explores indepth the costs of the transition toward UHC. This includes expenditures such as thecreation of regulatory institutions, legal reforms related to service standards, investmentin information technology systems and continued work on developing precise proto-cols and co-payments.

For each of the four geographical areas studied, system reform and managementcapacity costs from the bottom up were identified and examined, with the assistance of those individuals at the center of reform during the period being reviewed. Thecosts explored included:

Stewardship: The costs of designing the system and planning for its implementation,(which often requires legislation), as well as the costs of building regulatory and pro-gram management capacity to ensure that the system is successfully implemented.

Revenue collection mechanism: Costs such as government administration of tax revenues or proactive enrollment and collection of health insurance fees.

Risk pooling: The costs of the setup, fund management and risk equalization func-tions of the institutions, systems and processes where risk is pooled. This may happenat the national or district level, and often requires the establishment of new institutionsoutside of the ministry of health.

Purchasing: The costs of the institutions, systems and processes that are created forthe purpose of buying health services. These costs may include ensuring minimumquality standards of providers, contracting with providers, monitoring performanceand managing claims.

Key enablers: For instance, information technology (IT) systems, health IT cards that identify who is entitled to a particular benefit and who is not, and buildings andphysical infrastructure. These costs include both one-time expenses (e.g., capital costs)and recurring ones (e.g., labor costs).

Typically, countries undertake

two stages of reform toward

UHC. In the first stage,

governments set up the founda-

tions for broad coverage…In

the second stage…governments

establish the structures and

processes that enable them to

deepen coverage…

9

Relatively small investments

can have a catalytic effect on

health systems…

Turkey2003-2008 0.2

Ghana2004-2009 6.6

Chile1992-2008 0.9

AndhraPradesh2007-2009

5.1

Percent of public healthexpenditure

Total cost US$ millions,2009-adjusted

60.7

492.9

115.6

326.4

Total cost US$ millions,2009-PPP

Average annual cost US$ millions, 2009-PPP

168.9

705.1

243.1

422.8

Percent of total health expenditure

n/a

0.1

0.6

2.4

56.3

41.5

40.5

70.5

16 years

6 years

6 years

3 years

Figure 1a: Costs of System Reform and Management Capacity

Small Investments, Big Returns

The results of the costing exercise outlined in this report demonstrate that relatively smallinvestments can have a catalytic effect on health systems. Furthermore, in the course ofour discussions with health-system leaders, we consistently heard the message that theywished they had devoted greater attention to these investments, precisely because of theinfluence these institutions hold over all other health system expenditures.

As indicated in Figures 1a and 1b (next page), Ghana appears to have investedapproximately 6.6 percent of its public health budget (or 2.4 percent of total healthexpenditure) over the six-year reform period to establish its system; the reform inGhana has achieved a coverage of 45 to 70 percent of the population and was accom-panied by a subsequent decline in out-of-pocket expenditure from 55 to 35 percent oftotal health spending.7 For Andhra Pradesh, the investment was 5.1 percent of thepublic health expenditure over the three-year period of reform. During that time, cov-erage was extended from 10 percent to 85 percent of the population.8

In absolute terms, approximately $20 million per year reformed and built institu-tions and enabled systems for years to come. In both cases, public health expenditurestarted from a very low base: the absolute figures over the period of reform—$115.6million in Ghana and $60.7 million in Andhra Pradesh—can be considered modest.Indeed, at purchasing power parity, they represent an annual investment of $40.5 mil-lion and $56.3 million, respectively, in establishing the systems and entities that consti-tute the foundation of universality.

PPP—purchasing power parity

10

Recent reforms in Chile and Turkey have principally focused on deepening coveragefor their populations. In both, the system reform and management capacity investmentrequired was less than 1 percent of public expenditures on health, and just 0.1 percentto 0.6 percent of total health expenditures. The example of these two middle-incomecountries illustrates that deepening services to the population is a sound investment forcountries at this stage of economic development.

Turkey2003-2008

Ghana2004-2009

Chile1992-2008

AndhraPradesh2007-2009

BreadthPercent of population covered

DepthDepth of services

15 1

2006 2010

2003 2008

2003 2009

1990 2000 2010

n Stronger purchasing improves

n Quality guarantees for 56 priority

n Benefits package created covering most 1° and 2°services

n Benefits packages standardized and deepened during payerconsolidation

n Benefits package covering 2° and 3° services created andexpanded overtime

1

10095 100

94851

64

701

45

85

10

conditions

performance

Figure 1b: Breadth and Depth of Coverage Achieved by Reforms

Universal health coverage is

perhaps more feasible today

than at any point in the past.

1 Health insurance coverage rate estimates differ by source and are shown as ranges where available

11

Investing to Accelerate Progress

Many factors influence the speed and success with which countries can transition toUHC. Pressure from citizens, leadership from heads of state and the availability of adedicated cadre of committed champions in the ministries of finance, health and laborall help determine when a country moves through reform. Once the decision has beenmade, countries have to grapple with implementation issues and may require technicalassistance or other peer-to-peer support, such as that being offered by the new JointLearning Network for Universal Health Coverage, which brings together health-financing practitioners from across the globe to share experiences and solve problems.9

Though resource constraints remain in many low- and middle-income countries,universal health coverage is perhaps more feasible today than at any point in the past.For some, economic development has raised the appetite and ability of emergingeconomies to pursue socially progressive goals; debt forgiveness has strengthened gov-ernment balance sheets; government has greater institutional capacity and capability to meet the technical requirements for transition; and empirical evidence from thosecountries that have achieved universal coverage demonstrates that it is possible.

So how should countries pay for the transition to UHC? As suggested in this report,this additional expenditure will be only a fraction of the growing total spending inhealth (approximately 2.5 percent of total health expenditures over the period ofreform) and will last only a limited period while the reforms are taking place. To theextent GDP is growing, fiscal space may be available for governments to cover thecosts of institutional reform towards UHC. In fact, for many countries the fiscal andpolitical hurdles to reorganize the health system may be lower when health spendingamounts to 5 percent of their GDP than once it has reached 10 percent. Nonetheless,the additional cost of reform may be taxing for already-stretched public budgets andshould not subtract from spending on basic health services.

The international community has a critical role in supporting country efforts. First,it can create awareness of the economic rationale for UHC and this historic opportuni-ty to transform health systems in an effort to improve health and financial wellbeing.Second, agencies such as the World Health Organization, the World Bank, UNICEFand the International Labour Organization can offer policy guidance and technicalassistance—the topic of the 2010 World Health Report, for example, is health systemsfinancing for universal coverage.10 Finally, the international development communitycan assist countries with the direct cost of reform from out-of-pocket expenditures to a new health financing platform of their choice.

This report shows that progress is desirable, possible and affordable; it is not, how-ever, inevitable. National governments must invest in system reform and managementcapacity to pave the way for universal health coverage, and the international healthcommunity should support them—through open commitment, technical assistance,and financial support. Ten years ago, the World Health Report 2000 showed us howstewardship influences everything. Today, it is clear what investment it requires to reor-ganize domestic financing towards universal health coverage. These are smart invest-ments; this is the time to pay the small price for progress.

National governments must

invest in system reform and

management capacity to pave

the way for universal health

coverage, and the international

health community should

support them

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For every individual and family, health comes first. It isprecisely because of the importance of health that health

system reforms provoke fierce debate over competingapproaches, exposing the breadth of political, philosophicaland practical differences involved in this transition.

CHAPTER ONE

Where the World Stands Today: The Feasibility of Universal Health Coverage

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Universal coverage provokes controversyand debate precisely because it represents anew settlement reached between citizensand government and between individualsand their fellow citizens.16 The two univer-sal coverage reforms that gave rise to healthsystem archetypes, that of Germany in1883 and the United Kingdom in 1948,both emerged as the manifestation of anew social settlement. Under ChancellorOtto von Bismarck, Germany had unifiedand emerged victorious from a war withFrance. Writing in 1942, British reformerWilliam Beveridge recognized that a sec-ond world war just two decades after the“war to end all wars” meant a fundamentalchange in the relationship between citizensand the state in Britain.

Today, as the world struggles to emergefrom the financial crisis with capital mar-kets cowed, rich countries laden withheavy debt burdens, and fresh confidenceburgeoning in emerging economies, it isclear that the zeitgeist has fundamentallychanged. Could this prompt new settle-ments and usher in an age of real progresstoward UHC? At this point, it is impossi-ble to be sure. The full effects that mayappear obvious in years to come cannotbe defined now. What is clear is that theglobal economic downturn has led to anideological renaissance of notions of soli-darity and social protection. There maynot be a consensus on the legitimatebounds of government action, but publicexpectations have been raised, and theconsequences are yet to play out fully.

In the midst of these contests, it is possible to lose sight of common goals.There may be strong disagreements aboutthe path to universal health coverage(UHC), but its attractiveness as a destina-tion remains undiminished among many.The achievability of universal health cov-erage in all countries remains an openquestion, but national governments, theWorld Health Organization (WHO), theWorld Bank and leading health authori-ties such as The Lancet all agree on itsvalidity as an objective of economic devel-opment and social progress.

At its meeting in Geneva in 2005, theWorld Health Assembly (WHA) reaffirmedits commitment to universal health cover-age, which it defined as “access to key pro-motive, preventive, curative and rehabilita-tive health interventions for all at an afford-able cost, thereby achieving equity inaccess.”11 Implicit within this definition arethe related objectives of financial protection(ensuring that health shocks do not lead toimpoverishment) and equity (ensuring thathousehold contributions are based on theability to pay). So the reality of universalcoverage is that both breadth (the amountof the population covered) and depth (thequality of the health benefits package pro-vided by the system in terms of servicesprovided) must be achieved.12 13 14

Since the WHA resolution in 2005, the world’s most populous and powerfulnations have made significant movestoward expanding health coverage.Premier Wen Jiaobao declared that themost important accomplishment of theGovernment of China in 2009 was itsproposal for health care reform. At thestart of the year, China’s State Council hadannounced its plans, including a promiseto provide $120 billion for universalaccess to primary medical care by 2011.15

India continues to see innovation at astate and national level in health cover-age—with a plurality of programs aimedat broadening coverage. The year 2010saw the United States also pass sweepinghealth care reform legislation.

Universal coverage provokes

controversy and debate precisely

because it represents a new

settlement reached between

citizens and government and

between individuals and their

fellow citizens.

15

Health insurance coverage rate estimates differ by source and are shown as ranges where available

Ln total health expenditure per capitaUS$ 2006, PPP 9

8

7

6

4

3

Ghana

South Korea

Rwanda

100

Chile

11 126 7 8 9

Ln GDP per capitaUS$ 2006, PPP

0

5

R2= 0.85

235819

44 437

22

2743

554

37

Government

Private insurance

Out of pocket expenditure

Figure 2: Health Expenditure per Capita and GDP(with illustration of out-of-pocket spending)

Ln—natural logarithm; PPP—purchasing power parity

Source: WHOSIS; World Economic Outlook Database, International Monetary Fund

There are underlying structural shiftsthat improve the feasibility of universalcoverage. According to current estimates,the world currently spends some $7 tril-lion annually on health.17 As we can see in Figure 2, health expenditure per capitais strongly correlated with overall GDPper capita. As countries become morewealthy, they devote greater resources tohealth. The chart also shows how coun-tries with relatively similar GDP per capita and health expenditure per capitahave significantly different spendingmixes. In particular, the level of out-of-pocket expenditures varies dramatically.Thus, as Figure 2 suggests, countries suchas Ghana and Rwanda have similar GDPper capita and health expenditure percapita, yet Ghana has a significantly high-er level of out-of-pocket spending inhealth compared with Rwanda.

Given the strong correlation, as coun-tries face rising expenditures, they have achoice: they can aim to influence the mixof health expenditure (the proportionsthat are out-of-pocket rather than pre-paid) through social protection or insur-ance mechanisms or not.

Countries with relatively

similar GDP per capita and

health expenditure per capita

have significantly different

spending mixes…

The Desirability of Universal Health Coverage

Many countries have achieved universalhealth coverage and many others have setthemselves that aspiration. A simple map-ping of rates of formal health coverage isrevealing. Figure 3 shows the extent ofcoverage globally; coverage rates are highin Europe and North America, with sub-stantial progress having been made inLatin America and parts of Asia. Africa,the Middle East and South Asia continueto face low levels of coverage.

UHC is desirable because it improveshealth outcomes through greater access tohealth services and provides people withfinancial protection against the costs asso-ciated with illness. Health shocks,

16

UHC is desirable because

it improves health outcomes

through greater access to health

services and provides people

with financial protection

against the costs associated

with illness.

Figure 3: Global Formal Health Coverage

95-100%

70-95%

40-70%

10-40%

0-10%

No data

Formal Health Coverage:

Note: International Labour Organization defined coverage as the population formally covered by social health protection (e.g., under legislation, without reference being made to effective access to health services, quality of services or other dimensions of coverage), explaining the depiction of the USA and South Africa

Source: Data compiled by the International Labour Organization, 2008, from multiple sources; mapping by the Results for Development Institute (R4D)

through sickness, accidents or aging,remain leading causes of impoverishmentof households in countries which lackadequate health coverage.18 Where cover-age rates are low or the depth of coverageis inadequate, payments for health careare made out of pocket. Increased spend-ing on health care reduces income avail-able for other purposes, can require adepletion of savings or assets or both, and may shift households below thepoverty line. Universal coverage createsrisk pools that provide households withfinancial protection.

By shifting to risk pooling, countriesmay be able to unlock consumer savingsand provide a boost to domestic consump-tion, unleashing new economic growth.

17

The Feasibility of the Transition

As the World Health Assembly (WHA)definition of universal health coveragemakes clear, UHC requires broad access toan appropriate package of care. In low-and some middle-income countries, thecapacity of the health sector—both capitalassets and human resources—is simply toolow to achieve universal access to essentialservices immediately.19 For most countries,therefore, universal coverage must be ajourney. The experience of those countrieswe have profiled demonstrates that sub-stantial progress can be accomplished rela-tively rapidly by investing in the properinstitutional foundations.

The good news is that transitioningtoward UHC is more feasible today thanit was just 20 years ago. Many countriesthat were once considered “third world”are now emerging markets with greaternational wealth. The economic success ofparts of the Global South—most notablyChina—has transformed both the appetiteand the ability to pursue socially progres-sive goals such as UHC. Furthermore,debt forgiveness has freed up governmentbudgets so money is available for this pur-pose. According to the World Bank andInternational Monetary Fund, debt for-giveness has led to an increase in expendi-tures toward poverty reduction.20

Nevertheless, this should not obscurethe fact that significant resource con-straints still afflict health systems in low-and middle-income countries. The major-ity of such nations face this problem,most notably in the form of a lack ofhuman resources available for health ini-tiatives.21 Many low-income countriesremain severely challenged by communi-cable disease, and middle-income coun-tries face a shifting disease burden towardcostly chronic disease.22

Governments now have greater institu-tional capacity and capability to meet thetechnical requirements necessary for tran-sition. Economic growth and donor-funded capacity-building programs haveprovided greater resources. Advances intechnology are also spurring progress.Information technology (IT) systems, forexample, improve the ability to imple-

To achieve these aims, health systemsshould be able to:

n Direct resources toward appropriate services.This means focusing on areas wherethe greatest health gain is seen for whatis invested. Since universal health sys-tems cover whole populations, theyhave a strong incentive to invest incost-effective primary and secondaryprevention. Not every preventativeintervention is economical, but univer-sal systems have a strong incentive toidentify and implement those that are.

n Capture scale economies. Strategic pur-chasing of health services and procure-ment of pharmaceuticals, medicaldevices and consumables should bemore efficient than sub-scale purchas-ing. Scale also means that managementand administration costs are spreadacross a greater number of beneficiar-ies, keeping these costs low (on a percapita basis).

Some health system leaders have sug-gested that the fact of universality mayindeed strengthen political will and pub-lic support for greater public investmentin the health sector. Above all, it meansthe health sector can reap the fruits ofgeneral economic expansion, as it ensuresthat the mechanisms are in place to takethe proceeds of growth and put themtoward health investments. Having thesesystems and processes in place strengthensthe hands of ministries of health whenthey ask for higher priority and seek agreater share of government spending.

Universal health coverage is not, how-ever, a panacea. The fact of universalitydoes not necessarily imply efficiency oreffectiveness. Specific design choices—such as the level of competition or incen-tives for innovation—can have significantinfluence on system performance. Thereare also risks in the transition itself. Suchlarge-scale change requires the expendi-ture of great stores of social and politicalcapital. The transition must overcomevested interests in the status quo, andmay be plagued by the ever-present riskof great plans but poor implementation.

ment reforms, help to drive down corrup-tion, and thus ensure that resources dedi-cated to health care are actually spent onit. Indeed, some health system leadershave suggested that advances in IT anddecreases in its cost have sped the imple-mentation of UHC.

Empirical evidence from countries thathave successfully made the transition—across the Americas, Asia and Europe—suggests that UHC is feasible. Economicdevelopment alone, however, is no guar-antee that this goal can be achieved.Thailand, for example, has accomplisheduniversal coverage, while some resource-rich countries in the Middle East havenot. Indeed, feasibility and action may berelated, but are not the same.

Financial concerns aside, another factorfueling UHC is international policy con-sensus in favor of this trend. Nationalgovernments from Africa to LatinAmerica to Asia have set UHC as theirgoal. International institutions—such asthe World Health Organization (WHO),the World Bank, the International LabourOrganization (ILO) and the InternationalMonetary Fund (IMF)—support univer-sal coverage as a policy objective.23

Donors, including G8 countries andglobal foundations, are committed tohelping countries achieve universal cover-age.24 Many leaders in the global healthmovement have rallied to the call ofhealth coverage for all.25

Stronger government balance sheets,technological leaps and the power of theexample of others, combined with whatwe have observed from case studies, mighteven suggest that the pace of universalhealth coverage reforms is accelerating.

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When planning the transition to universal health cover-age (UHC), policymakers need to determine their

overall strategy to achieve that goal—and to understand thecosts associated with it.

19

CHAPTER TWO

Framework for Planning the Transition

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n Stage I: Low-Income Countries. Communi-cable and infectious diseases are theleading cause of illness and death.Much of the population lacks access tobasic sanitation. Per capita spending onhealth is low in absolute and relativeterms. The lack of human resources forhealth services is a huge challenge. Theprivate sector plays a significant role inprovision. Out-of-pocket expendituresaccount for around half of all spending.The case studies from this stage includeAndhra Pradesh, Ghana, Rwanda andThailand at the beginning of its transi-tion to UHC.

n Stage II: Lower-Middle Income Countries.Disease burden begins to shift towardchronic disease, though communicableand infectious diseases remain a signifi-cant challenge for much of the popula-tion. Per capita spending on healthremains low in absolute and relativeterms. The availability of humanresources for health is improved, but is still a significant problem. For thisstage, case studies include Thailandtoday and Chile and Taiwan in the initial phases of their transition.

n Stage III: Upper-Middle-Income Countries.The disease burden decisively shifts tochronic disease. Per capita spending onhealth ranges from “modest” to “high,”depending on the design choices of the system. Specific issues exist in the distribution of health professionals, but overall, availability is less of a constraint. Financing and provisionsystems become more distinct. Casestudies for this stage include Turkey,Chile, South Korea and Taiwan duringthe later phases of their transitions.

n Stage IV: Advanced Economies. The diseaseburden is dominated by chronic ail-ments. There are high levels of spendingand a strong focus on cost containment,either leading to rapidly rising spendingor rationing. The supply of health pro-fessionals is not a major issue. Financingand provision systems are typically split,and universal coverage is achieved. Casestudies for advanced economies are notexamined in this report.

Different countries, and provinces withincountries, have pursued various strategiesto achieve UHC in the face of differentchallenges. For those regions that havemoved toward accomplishing universalcoverage, the level of spending on healthvaries enormously, as do the system designchoices and the sources of financing. Fourgeographical areas that illustrate some ofthese distinctive choices and challenges,along with the costs involved, are:

n Andhra Pradesh, India n Ghanan Chile n Turkey

Four other locations whose transition toUHC can be more briefly examined are:

n Rwanda n Taiwann South Korea n Thailand

Lessons can be learned from both suc-cesses and failures, and so the selection ofcase study countries does not imply a spe-cific endorsement of the paths nations tookor the decisions they made. In all thesecases, reform efforts have led to substantialchanges—with varying degrees of success.

Stages of Health SystemDevelopment

The set of countries and regions describedabove illustrates different system designchoices, income levels and financingsources and mechanisms, as well as broadgeographic variety. Case studies are alsospread across the spectrum in terms oftheir stages of health system development.As Hsiao and Heller have noted,26 thesestages are typically linked to countries’income levels. This does not imply thatprogress is either uniform or linear, butthat countries of similar income levelsshare challenges and their systems havecommon characteristics. Furthermore, asincomes change, so too does the diseaseburden and the way health systems adaptto address it. The stages of health systemdevelopment are identified as:

20

Different countries…have

pursued various strategies to

achieve UHC in the face of

different challenges…Lessons

can be learned from both

successes and failures…

The experiences of the countries listedabove illustrate that two unique dimen-sions of UHC—breadth and depth—make different requirements of theirhealth systems, and have different costsassociated with them. Countries typicallypursue one of two general strategies toachieve basic UHC:

n Broad then deep: Extending a broadpackage of health services to much ofthe population, then deepening cover-age to include a greater range of inter-ventions at higher standards over time.Examples of this approach includeAndhra Pradesh, Chile, Ghana,Rwanda and Turkey.

n Deep then broad: Targeting specificgroups with a relatively deep packageof services, then extending to broadergroups step by step over time untiluniversality is achieved. Examples ofthis approach include South Korea,Taiwan and Thailand.

The actual journey is not as linear asthe description above may suggest.Instead, general strategies—either broad-ening or deepening—tend to dominateover specific periods of time. Accordingly,there are two phases of system reform andcost management under each strategy.

When countries pursue a path of“broad then deep,” the first phase ofbroadening typically requires investmentin the initial setup of the system. InGhana, for example, this included thecosts of creating the National HealthInsurance Authority. In Andhra Pradesh,it entailed the creation of the AarogyasriTrust, while in Turkey and in Chile, itrequired the initial creation of a ministryof health and a national health service. Inthe “broad then deep” scenario, the sec-ond phase of transition typically consistsof creating a more sophisticated set ofinstitutions, including payers and regula-tors, to raise provider performance and tothus deepen the package of services avail-able to the population.

21

For those countries that pursue the“deep then broad” strategy, implementa-tion progresses differently. Institutionsand mechanisms are typically created overtime for each population group that iscovered, which can lead to extensiveduplication. This characterizes the firstperiod, which may last many decades, aswas the case in Taiwan, South Korea andThailand. Thailand subsequently under-took a second period of reform—distinctfrom incremental extension by group—that focused on consolidation to extendcoverage to the remaining uninsured andto expand the size of the risk pool.

In most of the geographic regions thatserve as case studies, the health systemrelies on multiple financing mechanisms.Figure 4 illustrates the four core mecha-nisms that are used for revenue collection.Precisely because no single mechanism islikely to provide adequate financing, low-and middle-income countries appear toraise revenue through a mixture of thesefour approaches.

GENERAL TAXATION/OTHER GOVERNMENT

REVENUES

n Funding comes from the national budget, which consists ofrevenues mainly from general taxation n National Health Services (NHS)

Figure 4: Health Financing Revenue Collection Mechanisms

n Contributions are made usually in the form of payroll taxes,which make the formal workforce eligible for health services n Social security organizations

RISK-RATED ANDFLAT PREMIUMS

n Contributions are paid according to individual health risksand usually rise with age

n Voluntary or mandatory health insurance systems

PERSONAL SAVINGS (E.G.,

OUT-OF-POCKET)

n Payments from own savings made at the point of service,alternatively personal savings are mandated to be eligible forcoverage

n Individual health provision, personal medical savings program

Source: WHO, World Bank, IMF, McKinsey

Type of Collection Description Example

PAYROLL-TAX

The Transition Costs of UniversalHealth Coverage: Three Pillars

Building on work from the World HealthReport 2000 and other research in thefield, it is possible to identify three pillarsof UHC transition costs: health caredelivery costs; system reform and man-agement capacity costs; and social andpolitical capital costs.

n Key health care delivery costs: Service provision costs. These encompassthe capital costs of additional health carefacilities such as clinics or hospitals, andthe operational costs of increased utiliza-tion, such as labor and consumables. Resource generation costs. For manycountries, achieving universal coveragewould also require significant invest-ment in human resources for health:educating and training health care pro-fessionals who range from communityhealth workers to fully qualified doctors.

n Key system reform and management capacity costs: Stewardship costs. These are for boththe system itself (e.g., the building ofregulatory capacity) and the coordina-tion of a reform program. Revenue collection mechanisms costs.These include the cost of building rev-enue collection mechanisms, and varyconsiderably according to systemdesign choices. Risk-pooling costs. These include expensesfor the institutions, systems and process-es where risk is pooled and managed. Purchasing costs. These include theexpenses of the institutions, systemsand processes that are created for thepurchasing of health services. Cost of enablers. Key enablers includeinformation technology (IT) systems;these expenses include both one-timecosts (e.g., capital costs) and recurringones (e.g., labor costs).

n Social and political capital costs: Social capital costs. These are the ex-penses incurred by civil society, healthcare stakeholders and the general pub-lic in pursuing universal coverage.

Political capital costs. This is what itcosts political leaders to advance theuniversal health coverage agenda at theexpense of competing political priori-ties and with the expectation of glean-ing political dividends.

Achieving UHC requires investment in each of these three pillars. Health care delivery costs are by far the largestexpense involved in this transition, dwarf-ing system reform and management costsas governments work to subsidize thosewho are covered by the system but are toopoor to make their full contribution tooverall costs.

It is important to note that investing insystem reform and management capacitydoes not imply that the full cost of anexpanded health care delivery systemmust be incurred immediately. Countriescan progressively expand the proportionof the population that is covered, and thedepth of that coverage, according to theresources that are available.

Furthermore, policymakers have sug-gested that the intrinsic importance ofthese system reform and managementcapacity costs has been underestimated.Many of these expenses are associatedwith stewardship, as they include thecosts of establishing the principal institu-tions within a health system, notably pay-ers and regulators.

The World Health Report of 2000highlights the importance of stewardship,noting that it “affects everything” and hasa “profound influence” on health systems’other primary functions (defined as serv-ice provision, resource generation andfinancing). Other research has also notedthe importance of stewardship.27 In short,these are the foundations of universality,and investment in these institutionsenables progress.

Exploring the Foundational Pillar of UHC Reform: System Reform and Management Capacity Costs

Achieving universal health coverage is asystem reform and management capacityissue in addition to being a challenge interms of financing the expansion in health

22

care delivery costs. In order to understandthese costs, one must understand the com-ponent parts of the system itself—the insti-tutions, mechanisms and processes thathold it together. The framework proposedhere suggests that five core elements ofcost are typically involved in universalhealth coverage systems. Each of the fiveelements is explored below (and summa-rized in Figure 5).

In establishing universal health cover-age, system stewardship takes the leadingrole. This cost category includes essentialtasks such as system design—the process of drawing up the technical design of thesystem and planning its implementa-tion—as well as program management andperformance management to ensure that itis successfully implemented. Stakeholdermanagement is an important elementhere. Many UHC implementers reportthat they paid little attention to this earlyon in the process, especially in the begin-ning design phase, but came to realize its significance later.28 Finally, where amarket system of insurers exists, theremay be the requirement for market regulation of private-sector participantsfor consumer protection.

Health systems require mechanisms tobe in place for revenue collection, whichis our second category of cost. This isessential to ensure that the health systemhas the necessary resources to deliver care.In this particular element, the costs varyconsiderably according to the designchoices that are made. Different systemsrequire very different revenue collectionmechanisms. For example, systems thatfollow Britain’s Beveridge model, such asthat of Andhra Pradesh, finance the healthsystem through general tax revenues. As aconsequence, the only costs are those asso-ciated with government administration, andare therefore marginal. Systems thatrequire proactive enrollment and collectionof fees, such as the system created inGhana, demand a distributed network ofenrollment points and collection agents.These extend the revenue collection costs.

As health systems advance, they are ableto constitute risk pools. The particularsize of the group will vary, even in univer-sal systems. In Ghana, for example, risk is

23

pooled at the district level, while at thenational level, a central fund provides sub-sidies to the local districts. In Taiwan, asthis nation established different payers fordifferent population segments, risk waspooled at each of these segments. As theseexamples illustrate, there are three compo-nents to risk pooling: the initial setup, theongoing fund management and any riskequalization functions (such as the rudi-mentary system created by Ghana).

In some respects, the essence of a systemis for it to collect and redistribute resourcesto actors within it. Consequently, purchas-ing is an essential element, and its costsneed to be evaluated. The first step in pur-chasing is defining which providers areincluded within the system and which arenot. This can be described as networkmanagement. It typically requires the speci-fication of minimum standards thatproviders must meet. It also requiresunderstanding what costs are associatedwith contracting with providers—theprocess of defining what will be purchased,at what volume and for what price.

Once contracting has taken place,there is a requirement for the monitoringof performance by providers against thespecification set within the contracts. Inthose systems that employ activity-basedpayment mechanisms, there is the costassociated with claims management—theprocess by which providers are reim-bursed for their work. Finally, there is aninitial setup and administration cost that isassociated with the creation of purchasinginstitutions (known as payers).

Also vital are the key enablers of healthsystem reforms. The first, and perhapsmost important, is information technology(IT), as systems work on the basis ofintelligible information, generating anddemanding data in order to function effi-ciently and effectively. A second enabler is the use of health cards that allow asystem where enrollment is optional torecognize who has made a contributionand is entitled to a benefit and who isnot. The final elements in the enablerssection are buildings and estates, whichallow the institutions that are created tohave adequate accommodation to func-tion effectively.

SYSTEMSTEWARDSHIP

n System design: Policy and technical investment required to define visionfor system and overall implementation plan

n Program management: Prime Minister’s Office function to coordinateimplementation of system reform vision

n Stakeholder management: Cost of engagement and communicationswith stakeholders to ensure alignment behind transition

n Performance management: Creation of a performance managementfunction to manage relationships with elements of system

n Market regulation: Set up costs of market regulator where private insurance is an element of the overall solution

REVENUECOLLECTION

n Enrollment/Collection networks: Creation of distributed network of enrollment/collection agents to collect contributions

n Government administration: Costs associated with implementation ofnew payroll or other taxes for financing health system

RISK POOLING

n Fund set up and administration: Creation of a new institution to administer health system funds

n Fund Management: Ongoing management of funds (e.g., auditing,accounting)

n Risk equalization: Costs of a risk equalization design, analytics and processes

PURCHASING

n Network management: Specifying minimum standards and determiningwhich providers are included within network

n Contracting: Cost of drawing up and negotiating contracts with healthsystem providers

n Monitoring: Creation of systems and processes to monitor provider per-formance

n Claims management: Costs of defining claims management processesand regulations

n Set up and administration: Administration costs of building new payerinstitution (where applicable)

ENABLERS

n Information technology: Infrastructure costs to support insurance systems

n Health cards: Issuing cards to contributors to determine who is eligiblefor benefits

n Buildings and infrastructure: Investment costs of office facilities

Figure 5: Framework for System Reform and Management Capacity Costs

Source: McKinsey

One critical element of cost is management capabilities on the providerside. These expenses may be specific to a single participant rather than specific tothe system itself. It is certainly the casethat a more sophisticated and demandingsystem places stronger requirements onthe management of the provider side.This does not, however, imply thatprovider management is central to theactual system or its capacity to function.

It is not possible to create a framework

that covers every component of all sys-tems. The framework above is designed toaddress the main elements. For each sys-tem, there will likely be costs that are notin the framework, and not all costs iden-tified by the framework will actually beincurred. Nevertheless, this should serveas a useful tool for policymakers as theyseek to anticipate the system reform andmanagement costs that they are likely to face as they transition to universalhealth coverage.

Chi

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25

CHAPTER THREE

Case Studies

An in-depth study explored the history and systemreform and management capacity costs for four systems

transitioning to universal health coverage (UHC): those ofAndhra Pradesh (in India), Ghana, Chile and Turkey.

Zack

ary

Can

epar

i/Pa

nos

Pict

ures

Case Study

HEALTH SYSTEM REFORMS IN ANDHRA PRADESH

2007–2009

Context

Some 68 percent of the 82 million resi-dents of the Indian state of AndhraPradesh (AP) live in rural areas, reflectingthe country’s overall population. Despiterapid rates of economic growth over thepast decade, more than 80 percent of thepeople in AP live below the poverty line.29

(Andhra Pradesh uses a definition ofpoverty that enables a greater-than-aver-age share of the population, more than 80percent, to access services available tolow-income people.) AP’s economy ranksfourth among Indian states, with a grossdomestic product (GDP) of approximate-ly $66 billion.30

The country of India makes the largestcontribution to the global disease burden,approximately 60 percent of which isfrom communicable diseases. In commonwith India as a whole, Andhra Pradeshfaces considerable supply constraints: toofew health professionals working in toofew facilities. Andhra Pradesh possessesfour government hospital beds per 10,000people, and less than 20 primary healthcenters for every million people.31

Nevertheless, Andhra Pradesh performsmarginally better than average in India on

The aim of this analysis was tounderstand the origins of

reform, the ways in which it pro-ceeded, the changes that were madeto the systems involved and the out-comes that were achieved. A systemreform and management capacitycosting framework was used instudying the first four geographicalregions. The description of costs,however, is only an estimate. Datawas not collected systematically by countries, and has been recon-structed from the bottom up. These estimates were made using severalmethods, including in-depth discus-sions with leaders involved in healthinsurance reform in their respectivecountries, a literature review andanalysis of health budgets over time(i.e., from ministries of health, pay-ers, regulators, etc.). Leaders wereselected based on level of involve-ment in reform, role of involvementin reform and willingness to partici-pate in this study.

These estimates should give anindication of the scale of the costsinvolved. There is no claim toabsolute precision, and some ele-ments will undoubtedly have beenmissed. Nevertheless, as policy-makers consider universal coveragereforms, and as donors reflect on thesupport they can offer, both will beable to do so with a sense of the sig-nificance and scale of system reformand management capacity costs.

Examinations of the histories (butnot the costs) for a further four sys-tems—Rwanda, South Korea, Taiwanand Thailand—are in the annex.

26

key health indicators such as maternalmortality rates, under-five mortality ratesand the percentage of underweight chil-dren. Under India’s constitution, respon-sibility for health services resides withstate governments.

Reform Design and Implementation Process

In 2007, the state government of AndhraPradesh embarked on a wide-ranginghealth reform effort by establishing theAarogyasri Community Health InsuranceScheme. The reform had the goal of pro-viding financial protection to the poor bylowering out-of-pocket payments andcovering tertiary care. The new schemewas designed as a public-private partner-ship to leverage the expertise of privatecompanies in areas in which the state waslimited. Star Health was chosen as theprivate insurance partner to offer capabili-ties in claims processing, risk manage-ment and pricing.32 33

The details of the reform were proposedby several senior bureaucrats, some ofwhom went on to hold leadership positionsin the new system (i.e., of the AarogyasriTrust and Star Health). Other stakeholdersinvolved in the initial discussions includedphysicians, hospital representatives, privateinsurance companies and local politicians.No legislation was required.34 The designprocess proceeded without significant con-troversy due to the backing of the chiefminister and the general sentiment thatchange of some type was necessary. Patientswere supportive of free treatment, hospitalswere willing to accept more patients andthe pharmaceutical and medical deviceindustries welcomed an increase in the useof drugs and consumables.

During the design process several ques-tions did arise, including a) how the newgovernment-administered and govern-ment-funded program would be moni-tored without a dedicated regulatoryagency; b) how, if at all, a delay in providerreimbursement would affect provision; andc) how to specify the conditions coveredunder the program. None of these con-cerns proved to be a major obstacle toimplementation. Difficulty in creating a

Summary: Andhra Pradesh is an Indianstate with a population of 82 million. In2007, the state government establishedthe Aarogyasri Community HealthInsurance Scheme to cover all familiesliving below the poverty line (about 80percent of the population). Enrollment isautomatic and the benefits package pro-vides coverage for catastrophic secondaryand tertiary conditions. Today about 85percent of the state population has healthcoverage, increased from 10 to 15 percentin 2006. The cost of health system reformand management capacity was approxi-mately $60.7 million over three years, or5.1 percent of public health expenditures.

27

Approximately 85 percent

of the population has been

enrolled in the program—

a dramatic broadening of

meaningful health coverage…

system to collect premiums led the gov-ernment to choose to fund the program inits entirety.35 Existing ID cards were usedto identify beneficiaries instead of the gov-ernment issuing new cards.36

In 2007, the Aarogyasri CommunityHealth Insurance Scheme was piloted inthree districts, initially covering 173, then330, and finally more than 900 cata-strophic care interventions for below-the-poverty-line families (known asAarogyasri I). Claims expanded dramati-cally, from 1,000 per month during thefirst three months to 1,000 per week aftersix months. The following year, in 2008,the program scaled up to include theentire state (known as Aarogyasri II). Thebenefits package was expanded to cover942 interventions, with a financial cap of$4,300 for services rendered to a familyin any given year.

In the three years since its inception,approximately 85 percent of the popula-tion has been enrolled in the program—adramatic broadening of meaningful healthcoverage—compared to the nominal cov-erage that existed previously. Prior to thisyear, estimate government officials in thestate, 10 percent to 15 percent of thepopulation had some form of health cov-erage, either through government-operat-ed programs for civil servants or throughthe private sector.

The evolution of the health system ofAndhra Pradesh is described in Figure 6.


°

Chief Minister’s Relief Fund begun to coverhospitalization for the very poor

Rajiv Aarogyasri Community Health Insurance Scheme I launched in threedistricts covering 330 procedures covering below poverty line families

Discussions underway to include senior citizens and pink card holders (those who could pay premiums)

AP Urban Slum Health CenterProject establishes 192 health centers to provide basic primary care

National government commits to increasing health spend/GDP from 0.9 percent (1999)to 2-3 percent (2012) in National Rural Health Mission

108 Services begun to provide free emergency hotline access to medicalservices

Aarogyasri II launched to coverremaining 15 districts; covered procedure list expanded to 942 and includes follow-up medicalcare after hospitalization for one year

70 million people (85 percent) covered byAarogyasri Insurance Schemes

Allocation to Chief Minister’s Relief Fund increased

2000

2005

2007

104 Advice helpline launched providing round-the-clock, qualified medical advice

104 Mobile (tech-enabled carefor rural poor) and Telemedicine(virtual medical services)launched

2004

2008

2010

2009

1990

Government hospitals receive technology upgrade (e.g., MRI and CT)

Beginning of economic liberalization in India (with increased funding to the health care sector)

1990

Figure 6: The Evolution of the Health System of Andhra Pradesh

Source: “Health Sector Reforms in Andhra Pradesh,” Sudhakaram; “Andhra Pradesh Health Sector Reform: A Narrative Case Study,” Results forDevelopment Institute; “Health Sector Reforms in India,” Indian Ministry of Health and Family Welfare, Mar 2007; “Health insurance for governmentstaff soon,” The Hindu; “Taking healthcare to the people”; inclusion.skoch.in; projects.dfid.gov.uk; Mohfw.nic.in

28

The Aarogyasri Scheme

appears as a single program

to patients, who have been

enrolled over time as the

program has expanded

throughout the state.

Lessons Learned from Pilot Phase

Lessons from the pilot project informedthe scale-up of the program, especially inoperations, information technology andthe organization of the trust.

n Information technology. As the number ofbeneficiaries and claims increased, themanual process of patient registration,claims filing and reimbursement becameimpossible to sustain. The implementa-tion of sophisticated information tech-nology systems was required forproviders and for the overall AarogyasriScheme. The program provided com-puters and high-speed Internet for everynetwork hospital and built computerkiosks in each of these facilities. TataConsultancy Services was retained tobuild an information technology systemthat could meet the demands of thenew program from beginning to end,managing patient registration, electronicmedical records, claims and billing.37 38 39

n Organization. The state-wide scale-uprequired expanding the trust from ninepeople to an institution with morethan 20 individual departments. Thisincluded a dedicated pharmacy tosecure drugs at competitive prices. ARajiv Aarogyasri Medical Coordinator(RAMCO) was appointed in each hos-pital to be a human link between theproviders and the program. Some hos-pitals also created subunits of the pro-gram in their specialty departments.40 41

n Operations. The Trust and Star Healthstudied the paths of patient cases todetermine how to make the systemmore efficient, decrease costs and pro-vide higher-quality care. From the pilotprogram, they gained an understandingof the cycles of hospital bed flow andits implications for how quickly patientinformation must be transmittedbetween facilities. The benefits packagewas refined to include precise defini-tions and treatment mechanisms, andprocedure prices were adjusted as thenumber of patients and the volume ofmedical consumables being purchasedboth increased.42

Key Features of Reformed SystemThe reformed system has several notewor-thy features:

n Stewardship. The government of AndhraPradesh funds the Aarogyasri Scheme.The Department of Health, Family,and Medical Welfare is responsible forbasic primary care services.

n Payer structure. The Aarogyasri Schemeappears as a single program to patients,who have been enrolled over time asthe program has expanded throughoutthe state. Operationally, the programruns as two entities with similar butparallel claims and billing procedures.43

44 Aarogyasri I administers the higher-cost and higher-risk tertiary proceduresfor which Star Health, the trust’s pri-vate insurer, covers the risk. AarogyasriII administers the less expensive andmore frequent secondary procedures.Here, the state of AP self-insures.

Star Health leverages its administra-tive expertise across both parts of theprogram. Within Aarogyasri I, StarHealth performs overall fraud and costcontrol. It also manages the informa-tion technology system and employsphysicians to authorize procedures andapprove claims. Within Aarogyasri II,physicians are trained to authorize pro-cedures and approve claims by StarHealth but are employed directly bythe Trust.45

n Provision. The private sector plays adominant role in the provision ofhealth services. Today 72 percent ofinpatient admissions and 85 percent of outpatient contacts are made in the private sector. Public provision isoffered at multiple levels, according tothe severity of the medical need. Sub-centers provide primary care servicesincluding free drugs for basic condi-tions, and there is about one center forevery 5,000 people. Primary HealthCenters (PHC) provide integrated cur-ative and preventive health services torural populations. Each center has fourto six beds and serves 20,000 to30,000 people. Patients are referredfrom the PHCs to Community HealthCenters (CHC) for secondary care.CHCs have about 30 beds and serve80,000 to 120,000 people. From there,patients can be referred to district hos-pitals if necessary.51

Patients who suspect they requiresecondary or tertiary medical servicescan access care through several means.52

Most patients procure services through“health fairs” where patients arescreened for conditions requiring hos-pitalization. Each hospital within theAarogyasri network is required to holdat least four health camps per month.A total of approximately 1,000 healthcamps are held every month, and5,000 to 6,000 people attend eachcamp.53 54 Alternatively, patients can bereferred for hospital care through pri-mary health centers, the chief minis-ter’s office or through AP’s technology-enabled mobile health services, 104Mobile and 108 Mobile.

n Enrollment. Enrollment in the AarogyasriScheme is automatic for families livingbelow the poverty line,46 which in AP is less than 60,000 rupees (aboutUS$1,300) per year in rural areas and less than 75,000 rupees (aboutUS$1,600) per year in urban areas (the below-the-poverty-line definition in India as a whole is an annual income below 25,000 rupees or aboutUS$540). In 2009, about 80 percent of AP’s population lived below thepoverty line, and by definition, theywere all enrolled in the program.47

Beneficiaries present their identificationcards (already distributed to those livingbelow the poverty line for public fooddistribution) to receive medical care.

n Benefits package. The benefits packageincludes 942 secondary and tertiarymedical procedures, including cancertreatment, the provision of prosthesesand organ surgeries (e.g., heart, lung,liver and brain). There is a defined list of excluded conditions, includinghip and knee replacements, bone mar-row transplants, heart and liver trans-plants and HIV/AIDS treatments.48

Beneficiaries are also entitled to 121follow-up procedures for one year after hospitalization.49

Each family is allotted two lakh(about $4,300) per year in medical andsurgical expenses. Forty-five percent ofthis expenditure goes directly to patientcare; the unused balance is pooled tocover the cost of other patients exceed-ing their allotment. Thirty-five percentof the expenditure goes to incentivizethe staff providing medical services tothe beneficiaries (of that 35 percent, 75 percent is funneled to the surgicalteam, 10 percent to the investigativeteam, 10 percent to the nursing staff,and 5 percent to class IV staff andoperating-room assistants). Twenty per-cent of the total expenditure is deduct-ed by the Aarogyasri Trust for use in acommon revolving fund.50

29

The private sector plays a

dominant role in the provision

of health services. Today 72

percent of inpatient admissions

and 85 percent of outpatient

contacts are made in the

private sector.

n Enablers. The Aarogyasri scheme relieson a sophisticated information tech-nology system to record and track allaspects of its operations. This method,commissioned by the Aarogyasri Trustand built by Tata Consultancy Services,tracks patients and their electronicmedical records, records hospital bedcapacity and procedures and processesclaims and reimbursements.57 58

This system also limits corruption by placing strict protocols on everymedical transaction.

When a patient enters the hospital,his or her picture is taken and sentelectronically, along with diagnosticinformation, to physicians who pre-authorize the procedures necessary.Pictures are taken again during surgery,before and after suture removal and at discharge. Patients must confirm

n Aarogya Mithras. Aarogya Mithras per-form the functions of case workers andpatient educators, and are stationed atprimary health centers, in health campsand in hospitals. They act as the face ofthe Aarogyasri Scheme for patients andare responsible for many tasks, includ-ing publicizing the program and itshealth camps, guiding referred patientsfrom primary health centers to hospi-tals. They also maintain the Aarogyasrihelp desks at each hospital, verifyingthe benefits and documentation ofeach patient, and facilitating the dis-charge of the patient.55 56

30

Expenditures

Administration andoperational expenses (e.g.,Aarogya Mithra salaries)

Income

Payment of claims to network hospital

Government of Andhra Pradesh

Interest on fund

Star Health and Allied

Aarogyasri Health Care Trust Official Development Assistance

Health camps

Payment of claims to network hospital

Administration andoperational expenses

ICT partner (Tata Consultancy Services)

Insurance

Figure 7: Financial Flows in the Andhra Pradesh Health System

Source: “eHealth India 2009 Award for Government/Policy Initiative of the Year” eHealth Awards; “MoHMFW and Aarogyasri Health CareInsurance Scheme: Norms for billing and guidelines for utilization amounts received by the government hospitals;” aarogyasri.org; “Andhra PradeshCM for nationwide implementation;” thetribuneindia.com

that the service was appropriately deliv-ered before the hospital is reimbursed. Despite this system,instances of corruption exist, including falsified white identificationcards and the performance of unnecessary procedures.59

n Financing. The state government of APcovers the entire cost of the AarogyasriScheme, receiving no direct fundingfrom the government of India for thispurpose.60 61 62 The financial flow isshown in Figure 7.

31

Identified costs

Systemstewardship

Pilot design and program management Continued strengthening ofmanagement systems

Revenuecollection

Not applicable

Risk pooling Not applicable

Enablers

Overall ICT system Computers and Internet for network hospitals Aarogya Mithras and other employees Publicity design

Purchasing Aarogyasri Trust employees

Recurring costs

One-time investments

Total cost of system transition by type

5.1 percent of public health expenditure over 2007-2009


°

11.9

48.4

Figure 8: The Cost of Transition in Andhra PradeshUS$ millions, 2009-adjusted, 2007-09

System Reform and Management Capacity Costs

Best estimates from leaders involved inthe design, pilot and scale-up of theAarogyasri Scheme show that the cost ofAP’s health system reforms between 2007and 2009 totaled $60.7 million, or 5.1percent of public health expenditure inthe state over that time period; this isshown in Figure 8.63

One-time costs of $48.8 millioninclude pilot setup and operations in thefirst year, with operations encompassinghuman resources, publicity design, admin-istration, basic information technologysuch as computers and fax machines, thepurchase of computers and Internet serv-

ices for each network hospital and supportfor overall sector management from theUnited Kingdom’s Department forInternational Development (DFID).64 65 66

Accounting for the majority of recur-ring costs are the salaries of employees ofthe Aarogyasri Trust and AarogyaMithras. Trust employees cost $1.8 mil-lion per year, while Aarogya Mithras run$2.1 million per year and other employ-ees (e.g., the Rajiv Aarogyasri MedicalCoordinator) cost $1 million.Administrative expenses involved in refer-ring patients from primary health centersto hospitals total $100,000 over the peri-od the program has been in place. Finally,there is a recurring information technolo-gy cost of $1 million per year.67

process included stakeholders from acrossthe health system—both public and private—and beyond the health sector,too (e.g., senior officials from other government departments, such as ruraldevelopment, were appointed to theboard of the trust).

There were, however, a number ofdevelopments that enabled the reform to proceed as rapidly as it did. First,advances in information technology sup-ported both enrollment and claims man-agement from providers. The status ofHyderabad, Andhra Pradesh’s capitol, as a technology hub meant that local talentcould be drawn from to provide custom-made, integrated solutions for the entiresystem. Second, the government exploitedprivate sector capabilities in the third-party administration of the system: claimprocessing, risk management and pricing.Third, rapid economic growth in AndhraPradesh meant a stronger fiscal positionfor the state, enabling the program to be introduced.

Where Next?

The state of AP has made significantprogress toward universal health coverage,and the system will continue to evolve in the coming years. In the near term, the state will have to overcome financialpressure at the state level. The state’sbudget deficit is increasing, at $2.2 bil-lion in 2008-2009, up from $1.7 billionin 2007-2008, while historically strongeconomic growth in the state has slowedsince 2009.77 78 The Aarogyasri Schememust also address the uneven distributionof health camps, which require some families to travel more than 400 miles to a hospital.79

Leaders within the Aarogyasri Schemedescribe potential future reforms, includ-ing decreasing the role of Star Health,increasing the depth of the benefits pack-age and further tightening the paymentmechanism to decrease costs. They arealso considering expanding enrollment togovernment employees, formal sectorworkers and people whose government-issued pink ID cards entitle them to sub-sidized prices for staples.80 81

Impact of the Health System Reforms

n Financing. AP’s state health budget hasincreased more than 100 percent since2005-2006. This increase can be attrib-uted partially to growth in spending ontertiary care and social protection seenin Figure 9.68

n Breadth and depth of coverage. Thebreadth of health coverage in AndhraPradesh has increased dramaticallysince the introduction and scale-up ofthe Aarogyasri Scheme, growing from10 to15 percent in 2006 to approxi-mately 85 percent today; this can beseen in Figure 10.69- 73 During this time,the definition of being below thepoverty line was changed to includemore families, increasing from 25,000to 60,000 rupees (US$540 to $1,300)per year.74 Coverage is shallow, but pro-vides some financial protection to fam-ilies living below the poverty line. Theprogram has recorded an increase inthe utilization of the secondary andtertiary medical services it covers. For example, between the initiation of the program in 2007 and March2009, 250,000 procedures had beenperformed, with 287,000 procedures performed between March 2009 and 2010 alone.75

Factors Contributing to Successful Reform

The driving force behind the reform wasthe Chief Minister, Dr. Y.S. RajasekharaReddy, a physician by training who, in hisposition, continued to see and treatpatients. His tour of the state showed thatpoor health and inability to pay for treat-ment were among the biggest problemsfacing the population. Health systemleaders in Andhra Pradesh repeatedly citehis vision as being critical to the system’ssuccess. The National Rural HealthMission, started in 2005, also showedthat large-scale programs were possible.76

Furthermore, the health system reformwas placed within a broader narrative of progressive social reform implementedby the state government. The design

32

The breadth of health

coverage in Andhra Pradesh

has increased dramatically…

growing from 10 to 15 percent

in 2006 to approximately

85 percent today.

33


°

Constant US$, millions1

Year

08-09 07-08 06-07 05-06 04-05 03-04 02-03

1 Actual values approximate

2 Best estimateYear

Other

Drugs

Medical/dental education

Tertiary care

Secondary care

Social protection programs

Family welfare

Disease control

Primary care (AYUSH)

Primary care (allopathic)

Administration

08-092

07-08 06-07 05-06 04-05

Distribution expenditure of the Department of Health,Medical, and Family Welfare Constant US$, millions

Expenditure of the Department of Health,Medical, and Family Welfare

Figure 9: Financial Impact of Reforms in Andhra Pradesh

Health insurance coverage rate in Andhra Pradesh Percent

India

China

Mexico

Brazil

Russia

Health insurance coverage rate in peer countries Percent, latest available over 2005-07

20162006

15

106

24

79

85

88

85

Figure 10: Impact on Coverage

Source: Andhra Pradesh Health Sector Reforms: A Narrative Case Study. ACCESS Health Initiative; The Rockefeller Foundation—Initiative on the Roleof the Private Sector in Health Systems in Developing Countries, 2009; McKinsey analysis

Source: aarogyasri.org; AP Department of Health, Family, and Medical Welfare; International Labour Organization, Social health protection: an ILOstrategy toward universal access to health care, Social Security Department, August 2007; Andhra Pradesh Health Sector Reforms: A Narrative CaseStudy; ACCESS Health Initiative; The Rockefeller Foundation—Initiative on the Role of the Private Sector in Health Systems in Developing Countries, 2009

34

Ghana’s ambitions for universal healthcoverage are constrained by the realities ofavailable resources. Human resources forhealth are lower than the average in Sub-Saharan Africa83, and less than half ofwhat is recommended by the WorldHealth Organization (WHO). Ghana has11 health professionals per 10,000 peo-ple, while 23 is the minimum recom-mended for adequate capacity to meethealth-related Millennium DevelopmentGoals (MDGs).84

The human capital constraints are mir-rored by limited hospital bed capacity:Ghana has only nine hospital beds per10,000 people.85 The availability of medi-cines in Ghana is poor, and their cost ishigh. Between 2001 and 2007, commongeneric medicines were available only 17.9percent of the time in the public sectorand 44.6 percent of the time in the privatesector. When available, medicines inGhana cost 240 percent of benchmarkprices in the public sector, and 380 percentof the benchmark in the private sector.86

Total health expenditure accounted for6 percent of Ghana’s gross domestic prod-uct (GDP) in 2007.87 Out-of-pocketspending accounted for about 50 percentof spending, and government for about 36percent. Out-of-pocket spending as a pro-portion of total spending on health washigher than that of Ghana’s peers. Thiscan be seen more clearly in Figure 11.88

Ghana’s Pre-reform Health System

Ghana’s journey toward universal healthcoverage has lasted more than ten yearsand has taken Ghana from covering lessthan 1 percent of its population in 1999(which it did through mutual healthorganization funds) to covering between45 percent and 70 percent in 2009(through a formalized system of district-level health insurance programs).89 90 91 92

Prior to the community health insur-ance reforms in 2004, 1 percent ofGhana’s population had some form ofhealth insurance. Most citizens made out-of-pocket payments for medical services.For most patients, this meant avoidingcare unless it was absolutely necessary,and many were excluded altogether.

Context

Ghana is a low-income country in WestAfrica with a population of approximately24 million. Life expectancy is 59 years formen and 61 years for women, and thepopulation is evenly split between ruraland urban areas. Ghana’s economy hasbeen growing rapidly, and over the past12 years, GDP has more than tripled,from $5 billion to $16 billion. The pover-ty rate has tumbled, too, from more than50 percent in the 1990s to 28.5 percentin 2006.82

Case Study

HEALTH INSURANCEREFORMS IN GHANA

2004–2009

Summary: In 2003, Ghana passed theNational Health Insurance Act, whichestablished a system of community healthinsurance. Risk is pooled at a district level(there are 138 districts nationwide), withbeneficiaries making annual contributionswhich vary by income. The benefits pack-age is comprehensive considering the con-text of Ghana, covering all primary andsecondary care, with a small number ofspecific exclusions. The main source offinancing, however, is a 2.5 percent value-added tax that is dedicated to subsidizingthe community insurance system.

The system was implemented in 2004;today, somewhere between 45 percentand 70 percent of the population isenrolled. Enrollment rates of the wealthi-est quintile are roughly double those ofthe poorest. The jury is still out on howor whether Ghana will enroll its poorestcitizens. Research indicates that Ghanaspent $115.6 million on system reformand management capacity over the peri-od from 2004 to 2009. This number isequivalent to 6.6 percent of public healthexpenditures, and 2.4 percent of totalhealth expenditures.

Ghana’s journey toward

universal health coverage has…

taken Ghana from covering

less than 1 percent of its popu-

lation…to covering between

45 percent and 70 percent…

Financing was mixed, coming frompublic, private and voluntary sources. Theministry of health owned and operatedpublic providers, while mutual healthorganizations paid public and privateproviders on a fee-for-service basis. TheChristian Health Association of Ghanainitially supplied most of the provision forthe members of the mutual health organi-zations. Then, over time, the provider net-work expanded to include public facilitiesand other private providers.100 101

Reform Design and Implementation Process

Throughout the 1990s, there was a risingtide of discontent with the health systemand its high user fees. The public and themedia considered the system little morethan “cash and carry.”102 103 National andlocal media increasingly carried stories ofthose denied access to care.104

35

Government programs provided care forchildren under five, adults over 70, expec-tant mothers and the disabled.93 94 95

Beginning in the mid-1990s, volun-tary, community-led mutual healthorganizations began to form at a locallevel, pooling catastrophic risk for theirmembers. By 2003, more than 250 ofthese local initiatives had been estab-lished,96on average covering 1,000 peopleeach. Most mutual health organizationswere funded by international donors orby premiums collected from their mem-bers, with little formal contribution fromthe government.97 98 99


°

Source of financing by country Percent, 2007

Tanzania 31%4%

Senegal 32%8%

1%

Uganda 39% 0%

Kenya 41% 4%

Ghana50% 4%

Nigeria 64%5%

2%

Government

Other private

Insurance

Out of pocket

1,382

747

830

5,322

624

Total health spending US$ millions, 2007

911

28%

36%

37% 24%

58%

59%6%

7%

10%

48%

Figure 11: Ghana’s Health Expenditure Compared to its Peers

[Before reforms] financing

was mixed, coming from

public, private and voluntary

sources.

36

constraints: first, that the benefits packageshould be comprehensive and cover allbut a small list of specific exclusions (e.g.,cosmetic surgery); second, that payers andproviders should be split, and that thenew system’s form should mirror themutual health organizations that wereperceived to be both popular and success-ful; and third, that additional financingwould need to be directed toward thehealth sector.108

In the summer of 2003, the govern-ment introduced a bill to the final parlia-mentary session of the year, and theNational Health Insurance Act was passed.The act put the design of the technicalcommittee on a statutory footing.109 110

In 2004, Ghana launched its commu-nity health insurance scheme under theNational Health Insurance Authority.

The reform timeline is shown in Figure 12.

In the run-up to the national electionsof 2000, health system reform explodedinto the political debate. A journalist wit-nessed a student injured in a car crash,and wrote about how he was denied careat a public hospital for lack of means.105

Health system reform promptly became“issue one” in the elections, with the NewPatriotic Party (NPP) excoriating the gov-ernment for the system’s failures. NPPleader John Kufuor was sworn into officeas president on January 7, 2001 with afirm mandate to abolish the “cash andcarry” health system.106 107

In 2001, under the direction ofPresident Kufuor, Ghana’s Ministry ofHealth convened a technical committeeto oversee the design of the new healthsystem, with participants from across thehealth sector and political representatives.At a high level, key features of the systemhad been predetermined by political

80 percent of ill-health and earlydeaths attributed to“infectious disease,pregnancy, andchild-relatedproblems andaccidents”(President Kuofor)

MoH task team formed todevelop the National healthinsurance system for Ghana

Plans to network allDHMIS serviceproviders to NHIA toimprove accountabilityfor central fundingreceived and toimprove premiumcollection rates

14.5 million peopleenrolled in NHIS(70 percent1)

Kufuor/NPP wins election having run on aplatform of abolishing the “cash and carrysystem” of health delivery

MoH allocates$2.15 million tosupport extensionof existing districtinsurance schemes

National HealthInsurance Authorityschemes launched

8 million peopleenrolled in NHIS(38 percent)

NHIA proposes changes tothe Ghanaian Cabinet toeliminate district autonomy

Feb 2003

2004

Dec 2006

2008National Health InsuranceAct creates sustainableinsurance fund for eachdistrict drawing heavily froma 2.5 percent addition to VAT

Mar 2001

1 NHIS reports 70 percent, but other sources and interviewees suggest closer to 45-60 percent

World Bank loans $15 million to theNational Health Insurance Councilto strengthen the financial andoperational management of the NHIS

July 2007

1999

Three mutualhealthorganizationsexist

2000

Aug 2003

2009

258 mutual healthorganizations exist

Figure 12: Ghana’s Health Reform Timeline

In the summer of 2003,

the government introduced a

bill to the final parliamentary

session of the year, and the

National Health Insurance

Act was passed.

37

Key Features of Reformed System

n Stewardship. Under the new system,stewardship functions are split betweenthe Ministry of Health (responsible forsetting health sector policy, coordinat-ing donor contributions, and publichealth functions) and the NationalHealth Insurance Council (responsiblefor monitoring all health insuranceprograms).111 112

n Payer structure. Health coverage wasmade mandatory, with three payersthrough which citizens could obtaincoverage: District Wide Mutual HealthInsurance Schemes (DWMHIS);Private Commercial Health InsuranceSchemes (PCHIS); and Private MutualHealth Insurance Schemes.113 114

The National Health InsuranceAuthority administers the largest of thethree payers, the District Wide MutualHealth Insurance Scheme. This isstructured into ten regional offices,which oversee 138 district programsacross 145 districts.115 Each districtscheme is registered as a private com-pany, covers a specific geography and isthe level at which risk is pooled.116 117

n Enrollment and benefits package. Formalsector workers are enrolled into theDistrict Wide Mutual HealthInsurance Scheme automatically, forwhich 2.5 percent of their salary isdeducted through payroll taxes.Informal sector workers are enrolledafter they pay premiums to their localhealth insurance committees, with pre-miums adjusted according to income.Members of the health insurance com-mittees travel house to house to enrollfamilies and describe payment options.

Each adult resident is identifiedthrough his or her residential addressand assigned a receipt booklet with 12tokens. The resident uses these tokensto pay the annual insurance premiumsin 12 installments at the program’soffices or at local banks or pharma-cies.118 119 Health insurance identifica-tion cards are issued six months afterthe first premium payment isreceived.120 121 People who are indigentor more than 70 years old—along withchildren under age 18 who have bothparents enrolled—are exempt frompaying premiums.122

n Reimbursement mechanism. Providersdeliver care to patients and are reim-bursed on an activity basis through theGhana-DRG system. The currentclaims system is a manual one in whichphysicians note claims on a spreadsheetand present the spreadsheet to the localprogram. The program determineswhich claims are valid, and reimbursesthe physician for as much money asthe district program can afford. Theremaining balance must be taken tothe national level to be reimbursed.This process is lengthy and inefficient.Currently, physicians experience anaverage of three to six months of delayin reimbursement.123 124 This paymentmechanism is currently under review.125

n Provision. Provision in Ghana is moni-tored by the Ghana Health Service andGhana Health Service Council.126 127

Patients attend community healthplanning services and head to sub-dis-trict health centers for their primarycare. Referrals are required to visit adistrict hospital, tertiary center or pub-lic or private teaching hospital for sec-ondary or tertiary care. The ChristianHealth Association of Ghana provides42 percent of total health care services,and the private sector accounts for 35 percent.128

People who are indigent

or more than 70 years old—

along with children under

age 18 who have both parents

enrolled —are exempt from

paying premiums.

n Financing. The District Wide MutualHealth Insurance Scheme receivesfunding from multiple financing leversbased on the demographics of those itcovers. This is illustrated in Figure 13.A 2.5 percent value-added tax (VAT)health insurance levy and contributionsfrom the Social Security and NationalTrust (2.5 percent payroll tax for for-mal sector workers) are disbursed fromthe Ministry of Financing andEconomic Planning to the NationalHealth Insurance Fund (NHIF).129 130 131

The NHIF also receives income fromthe interest on the fund itself and fromallocations directly from the GhanaianParliament. At the district level, theprograms receive premiums from infor-mal sector workers and subsidies fromthe NHIF.132

System reform and managementcapacity costs

Best estimates from interviews and pri-mary sources reveal that the cost ofGhana’s health system reforms between2004 and 2009 was $115.6 million,accounting for 6.6 percent of publichealth expenditure and 2.4 percent oftotal health expenditure over that peri-od,133 134 as indicated in Figure 14.

System stewardship totaled $17.6 mil-lion, and included program management,stakeholder management, operationalexpenses for the National HealthInsurance Authority (NHIA), consultantsand technical support for the DistrictWide Mutual Health Insurance Scheme(DWMHIS), and a World Bank loan tothe National Health Insurance Fund(NHIF) for strengthening the financialand operational management of thefund.135 Purchasing and revenue collectioncost $67.3 million and included register-ing district-level programs and adminis-trative support.136

38

Expenditures

Administration and general expenses of NHIA

Payment of claims to health care providers

Income

Administration and logistical support to DMHIS

Health insurance levy (2.5 percent of VAT)

Social Security and National Trust contributions (2.5 percent of payroll from formal sector)

Interest on fund

Other income (e.g., funds allocated from Ghanaian Parliament)

Premium and registration fees

National Health Insurance Fund (NHIF)

Ministry of Finance and Economic Planning

District Mutual Health Insurance Schemes (DMHIS)

Subsidies Reinsurance

41.6

149.5

14.6

0.03

33.9

Figure 13: Financial Flows in the Ghanaian Health System US$ millions, 2009

Finally, $30.7 million was spent bythe government on identification cards,regional offices, DWMHIS offices, rentfor NHIA headquarters and the setup and operations of the information tech-nology program.137

Impact of Reforms

Ghana’s health sector has been markedlytransformed since the 2004 reforms.

n Health coverage. Estimates vary for theshare of the population with healthcoverage. As shown in Figure 15, theNational Health Insurance Scheme(NHIS) assessment is that 70 percentof the population is enrolled.138 Othersources peg that number as fallingbetween 45 percent and 61 percent ofthe population.139 140 141 142 The numberof health insurance identification cardholders was 45 percent in 2008.143

39

Identified costs Example components Total cost over 2004-2009US$ millions, 2009-adjusted

System stewardship

Consultants and design of DWMHIS Stakeholder management Program management NHIA operational expenses

17.6

Enablers

Identification cards ICT platform setup and operations Rent for NHIA and DWMHIS offices NHIA headquarters/regional offices

30.7

Purchasing, revenue collectionand risk pooling

Creation of regional schemes Registration of beneficiaries

Administrative support 67.3

TOTAL: 115.6

6.6 percent of public health expenditure 2.4 percent of total health expenditure

Figure 14: Cost of Health System Reform and Management Capacity in Ghana

Health insurance coverage rate in Ghana Percent

Senegal

Tanzania

Cote d’Ivoire

Kenya

Namibia

Health insurance coverage rate in select countries in Sub-Saharan Africa Percent, latest available over 2005-07

2009

701

20062003


1 National Health Insurance Scheme estimates coverage at 70 percent of the population, but interviewees and other sources suggest coverage is between 45-60 percent

Source: International Labour Organization, Social health protection: an ILO strategy towards universal access to health care, Social SecurityDepartment, August 2007; Results for Development, Joint Learning Workshop: Moving Toward Universal Health Coverage, Country Case Studies,2010; Ghana Ministry of Health, Independent Review, Health Sector Programme of Work, April 2009; National Health Insurance Scheme, “The road to Ghana’s Healthcare Financing,” 2010; Interviews

40

n Utilization. Service utilization has in-creased in line with the uptick of identi-fication card holders. Births assisted bya medical professional have increased to57 percent of births in 2008, up from47 percent in 2003, and under-fivemortality has dropped from 111 out ofevery 1,000 live births to 80 out of thatfigure over the same period of time.144

n Health sector financing. Total expenditureon health has remained fairly constantas a share of GDP (fluctuating between6 percent and 7 percent) over the pastdecade.145 This has been in the contextof a rapidly expanding economy. Ascan be seen in Figure 16, Ghana’scompounded annual growth rate overthe past decade has been 16 percent.146

It is noteworthy that the 2.5 percentVAT hypothecated to the health systemdoes not appear to have been reflectedin total health expenditure.147 148 Thereasons for this are unclear. On a percapita basis, total health expenditurehas increased from $19 in 2002 to $39in 2007. Meanwhile, governmentspending has doubled, growing from$7 per person in 2002 to $14 personin 2007.149

Total health expenditures as a percentage of GDP Percent

Ghana GDP Constant US$, billion

20072006200420022000

+16% per annum

0504 080302012000 0706

Figure 16: Total Health Expenditure and GDP in Ghana

n Sources of financing. The composition ofGhana’s total health expenditure haschanged significantly over the course ofreform, with a significant decline inout-of-pocket expenditures. In 2004,just before the establishment of theNational Health Insurance Authority,more than 50 percent of Ghana’s totalhealth expenditure was out of pocket.That percentage had dropped to lessthan 40 percent by 2007.150

Where Next?

Ghana’s health system faces several chal-lenges. First, inequality in access to cover-age and health services remains a formida-ble obstacle to universal health coverage.Sixty-four percent of the wealthiest quin-tile is enrolled in the program, comparedto 29 percent of the poorest quintile.151 152

Questions remain about how or whethermore poor people will be enrolled.

A second challenge is an inadequateinformation technology system, whichhas the dual consequence of delayingclaims reimbursement and enabling cor-ruption within the system. The manualclaims system causes prolonged delays inreimbursement,153 154 deterring physiciansfrom providing the highest quality care.

Further, physicians can choose the mostexpensive procedure and diagnosis-relatedgroup (DRG) for reimbursement regard-less of actual diagnosis, and district-levelprograms have little accountability forhow the funds received are spent.155 156

Several issues are currently under debatethat will determine Ghana’s path forward.First, the government is considering consol-idating the management of district-levelprograms into a national-level structure tofoster higher transparency and greateraccountability.157 Second, the current WorldBank project on financial and operatingmanagement within the fund has recentlycompleted a technology needs assessment,the results of which will inform how a newIT system might be built.158 Third, a poten-tial move away from the Ghana-DRG sys-tem toward one of capitation is being con-sidered, leaving economic management toindividual health facilities to curb corrup-tion and limit system-wide financial risk.Fourth, discussion is underway to exemptchildren under 18 years old from premi-ums payment even if both parents are notenrolled. Finally, authorities are also recon-sidering the financial sustainability of thesystem, as it relies on a relatively fixed VATfor funding even as enrollment increasesand the benefits packages get deeper.159 160

41

Case Study

HEALTH SYSTEM REFORMS IN CHILE

1992–2008

In 1952, Chile created its Ministry ofHealth, and through a network of publicproviders declared there would be formalhealth coverage for all. By 1975, the sys-tem had, in essence, achieved universality.Between 1979 and 1991, the public payerFondo Nacional de Salud (FONASA)and a network of primary care providerswere created. Since 1992, three waves ofreform have served to deepen the benefitspackage available to Chileans.

The first wave, from 1992 to 1999,saw the restructuring and strengthening ofthe public payer, FONASA, to enhance itspurchasing functions. This period also sawthe creation of specific catastrophic cover-age products for selected conditions in thepublic and private sectors. During the sec-ond wave, Chile’s Health ReformCommission developed proposals tostrengthen the system. The third wave ofreform created explicit, enforceable guar-antees on access and quality for 56 condi-tions that were defined as high priority.The system reform and managementcapacity costs of these reforms were$492.9 million, or 0.9 percent of publichealth expenditure and 0.6 percent oftotal health expenditure.

Chile’s journey toward

universal health coverage has

spanned six decades and has

occurred in several steps. Context

Chile is a middle-income country inSouth America with a population of 16.6million.161 Life expectancy is 74 years formen and 81 years for women, and 88percent of the population lives in urbanareas.162 Chile’s economy has grown rapid-ly over the past 25 years. Gross domesticproduct (GDP) has increased nearly ten-fold from $17 billion in 1985 to $169billion in 2008. 163 The percent of thepopulation living on less than $1 a dayhas dropped from 6.2 percent in 1990 to1 percent in 2000.164

Chile has undergone an epidemiologi-cal transition and now has a disease bur-den profile dominated by non-communi-cable disease, similar to most developedcountries.165 166 Chile’s performance oninfant, child and maternal mortality indi-cators is dramatically better than that ofits peers.167

As seen in Figure 17, total healthexpenditure was $9.1 billion (5.6 percentof GDP) in 2007. Of this, 54 percent wasspent by the government, 22 percent wasassociated with insurance, and 25 percentwas from patients’ out-of-pocket spend-ing, putting Chile in line with otherSouth American countries and with itsglobal peers with respect to sources ofhealth financing.168 Overseas developmentassistance for health was $4.9 million in2007, the majority of which went towardHIV/AIDS programs.169

Percent of health financing by source Percent, 2007

Sout

hA

mer

ica

Turkey

Russian Federation

0%3%46%Mexico

3%3%64%

69% 4%4%

66%Bolivia 4%

Argentina

0%54%Chile

3%48%

3%

58.3

69.9

32.7

0.90

9.1

25.5

Total health spend US$, billions*

Peer

grou

p1

Insurance

Out of Pocket

Other

Government

Figure 17: Chile’s Health Financing Compared to Peers

* Average 2007 exchange rate from National Health Accounts1 Peer countries selected based on similarities in GDP per capita

Source: WHO National Health Accounts

42

In the years before 1979 the public sec-tor dominated provision, performing 90percent of hospital services and more than85 percent of outpatient treatments. Theupper class largely paid out of pocket forprivate medical services, but the majorityof blue-collar workers and poor residentshad to visit public facilities where serviceswere often slow except for those thataddressed life-threatening conditions.177

Chile’s Health System from 1952 to 1978

Chile’s road to universal health coveragebegan in 1924 with the creation of socialsecurity for formal sector workers.174 In1952, the National Health Service(Servicio Nacional de Salud or SNS) wasestablished to provide medical servicesand drugs free of charge to blue-collarworkers and indigent people, who com-prised about 60 percent of the popula-tion. In 1969, the National MedicalService for Employees (Servicio Médicopara Empleados or SERMENA) was cre-ated for white-collar workers, whoaccounted for about 25 percent of thepopulation. These institutions were fund-ed via tax revenues, payroll contributionsand out-of-pocket payments. An addi-tional 5 percent of the population wascovered by military health services and 10percent by the private medical sector.175 176

Chile’s Journey to Universal Health Coverage

Chile’s journey toward universal healthcoverage has spanned six decades and hasoccurred in several steps. Each step hasbroadened coverage to a greater portionof the population and deepened the bene-fits package, taking Chile from minimalcoverage in 1950 (achieved through socialsecurity funds) to 95 to 100 percent cov-erage in 2008 (achieved through a regu-lated system of public and private payersguaranteeing quality services).

This case study briefly describes thehealth system reforms between 1952 and1991 and examines the period from 1992 to 2008 in depth. During this time,the health financing system was reformedand the benefits package was deepened. The reform timeline is shown in Figure 18.170 171 172 173

Plan for Universal Access with ExplicitGuarantees (AUGE)guarantees improved quality of care for defined priority health problems

Pinochet defeated by the ChristianDemocrats and President Alywin

National Health Service eliminated; replaced by 28 regional services

Legal limit placed on OOP spending

MoH established

NationalHealthService established

1952

1979

Administration of primarycare switches from SNSS to municipalities

Employees/retireesrequired to contribute 4 percent of taxable income by law (changedto 7 percent in 1986)

Legalization of ISAPREs, private payers

1981

ISAPREs Superintendency to regulate ISAPREs

1990

Purchasing activitiesmove from MoH to FONASA

1994

2005

1989

ISAPREs Superintendence becomes Health Superintendency and functions extended to cover all payers and providers

Creationof Social Security for formal workers

1924Creation of Social insurance for whitecollar workers(SERMENA)

1969

FONASA (national fund) created for financingand accounting of public health system

FONASA creates guarantees for catastophic conditions

ISAPREs creates guarantees for catastophic conditions

1999

1998

Figure 18: Timeline of Health System Reform in Chile

Source: “How health coverage is provided in Chile,” Kevin Hagen; “The Chilean Health System: 20 Years of Reform,” Annick Manuel, Salud Publicade Mexico; expert interviews; “Chile’s Neoliberal Health Reform: An Assessment and a Critique,” Jean-Pierre Unger, PLoS Medicine; “The Politics ofthe AUGE Health Reform in Chile,” Bitran y Asociados; May 2008; interviews

43

n Enrollment. All patients were identifiedusing Chile’s preexisting tax identifica-tion system. Patients could choosebetween insurance types (though foreconomic reasons, low-income andhigh-risk populations were compelledto choose FONASA) and were enrolledinto either insurance option through amandatory 7 percent payroll tax.182 183

Patients enrolled in ISAPREs couldchoose to pay an additional premiumto upgrade the baseline benefits pack-age. Indigent people were exempt fromall payments.184

n Reimbursement mechanism. Publicproviders were paid on a global budgetbasis by FONASA and the Ministry ofHealth. FONASA and ISAPREs pur-chased services from private providersthrough a fee-for-service system.185 186

n Provision. Provision, like the payermechanism, was divided between thepublic and private sectors. In 1979, theNational Health Service and SERME-NA were combined into one entity, theSistema Nacional de Servicios de Salud(SNSS). Secondary and tertiary healthservice delivery was decentralized into26 regional health departments (thenumber of regional health services hassince expanded to 28).187 In 1981, pri-mary care was decentralized from theSNSS to the country’s 341 municipali-ties (now 353), and these were requiredto operate according to the direction of the ministry of health. The SNSSprovided technical assistance to themunicipalities. Referral from primarycare was required to visit a SNSS hos-pital. Private provision was available atprimary, secondary and tertiary levelsof care.188 189

The major building blocks of thehealth system described above still existtoday, but beginning in 1992, significantreforms were undertaken to deepen theservices available to Chileans and toensure sustainable financing.

Chile’s Health System from 1979 to 1991

Chile’s military dictatorship in the 1980sbrought a period of significant change tothe country’s health system, with a strongideological focus on expanding the role of the private sector. During this period,expenditure per member at FONASA,the public sector payer for people whowere less well off, remained relativelyflat—a development that some observersregarded as a deliberate attempt to rundown public institutions for ideologicalreasons.178

n Payer structure. The payer system reliedon the public and private sectors. In1979, the public payer Fondo Nacionalde Salud (FONASA ) was created tocover the lower-income quintiles andretirees. FONASA had accountingfunctions, but was not responsible forsetting prices or signing contracts withproviders. These functions remainedwithin the Ministry of Health.

In 1981, legislation was passed tolegalize and define the status of theexisting private payers, Instituciones de Salud Previsionales (ISAPREs ).ISAPREs provided coverage to themiddle- and upper-income quintiles.179

n Stewardship. The Ministry of Healthwas responsible for health-sector policy,administering the national payer andcoordinating the interaction of theinstitutions within the health sector.The ministry functioned as the pur-chaser within the public system, defin-ing service requirements and settingprices.180 With respect to public provi-sion, the ministry supervised, moni-tored and evaluated the health pro-grams and allocated the budget.

In 1990, the government created thesuperintendency of ISAPREs to regu-late coverage across the private sectorand to determine which benefits couldbe excluded from coverage (and forhow long).181

Health System Reforms from 1992 to 2008

The health system reforms in Chilebetween 1992 and 2008 occurred in threewaves, all serving to deepen the benefitspackage. The first wave (1992 to 1999)saw the restructuring of the public payer,FONASA, to enhance its purchasingfunction. This period also saw the cre-ation of specific catastrophic coverageproducts for select conditions. The sec-ond wave (2000 to 2004) was a planningperiod marked by the Health ReformCommission, which developed proposalsto strengthen the system. The third wave(2005 to 2008) created explicit, legallybinding guarantees on access and qualityfor 56 high-priority health conditions.

First Wave of Reform (1992 to1999): Restructuring FONASA andCreating Catastrophic Coverage

Three primary sparks ignited the begin-ning of health sector reform in Chile inthe early 1990s. First, the return todemocracy created a renewed sense ofcivic obligation, with citizens ready torestore public institutions.190 Secondly, anumber of persistent problems, includingthe poor quality of public sector healthfacilities, an inadequate availability ofphysicians, and low public-sector wagesgalvanized public support for reform.191 Inaddition, a significant absence of perform-ance transparency (e.g., problems peggingcosts or quality) in the private sectorcaused concern to ISAPREs beneficiariesand those using private medical services.

Five activities were required to reformthe health financing system and to devel-op the necessary functions withinFONASA.192

n Restructuring FONASA to includespecific collection, enrollment, pur-chasing, risk management and moni-toring functions (begun in 1994)

n Decentralizing some parts of FONASAinto five geographic areas (done from1997 onwards)

44

Health system reforms in the 1990sfaced several challenges. As is normal inany reorganization, there were tensions.Tensions existed between the ministry ofhealth and FONASA over the reassign-ment of purchasing functions to the lat-ter. Second, some hospitals were chal-lenged by the stringent, DRG-like pay-ment system that imposed greater trans-parency and performance accountabilityon them.201

Second Wave of Reform (2000 to 2004): Planning for the Future

An inter-ministerial Health ReformCommission mandated by President Lagoswas charged with determining the nextsteps for health system reform in Chile.The commission was led by Dr. HermanSandoval and included representativesfrom the Medical Doctors ProfessionalAssociation, health workers unions, private health providers, the Party forDemocracy and the Socialist Party.202 203

The commission concluded that thethree primary challenges it identified (anaging population, the cost escalation ofhealth services and socioeconomicinequalities in health) could only besolved by a legislated, explicit guaranteeto basic services across the public and pri-vate sectors.204 This was a formalizationand expansion of the catastrophic cover-age instituted by FONASA and ISAPREsin 1998 and 1999.205

In addition, a National Health Poll(called the Encuesta Nacional de Calidadde Vida y Salud) was conducted to codifythe major health problems facing thenation and to validate the conditions chosen for quality guarantees in thefuture.206The Ministry of Health wasdivided into two undersecretaries: theUndersecretary of Public Health and theUndersecretary of Health Networks.207 208

n Upgrading the IT system (begun in 1994)

n Modifying the legal framework toreflect FONASA’s new responsibilities(started in 1994)193

n Developing specific insurance plans toassure fast access to quality catastrophicservices (done from 1998 onwards)194

The reforms were designed by officialsat the ministry of health and FONASA,who were supported in these tasks by theWorld Bank. These were recognized asthe objectives in a World Bank loan toChile that covered the period 1992 to1999.195 196

The main focus of the reform periodwas the redistribution of purchasing func-tions from the ministry of health toFONASA, and the strengthening of capa-bilities at FONASA to accomplish its newrole as a proactive payer for services. Thesechanges were codified into an updatedlegal framework for FONASA.197 198

In 1994, FONASA issued a request forproposals for the creation of a new systemto cover collection, enrollment, monitor-ing and purchasing. The successful bidderbegan constructing the new system inJanuary 1995, working with a cross-func-tional team of experts from the privatesector and from FONASA. This teamallowed the end users of the system toparticipate in the design.199

In 1998, FONASA began to developspecific plans to cover catastrophic acci-dents or illness (previously, all catastroph-ic coverage was achieved through publicprovision with no performance pressure).FONASA had the ambition to move topayment systems of the diagnosis-relatedgroup (DRG) type, and began by pilotinga program in cardiac surgery. A presti-gious academic clinician was enlisted to prepare the clinical protocols. Onceagreement on these standards had beenreached, FONASA began to set its serviceprices and billing procedures. Over time,this “Payment Associated with Diagnosis”(PAD) system has been extended to manymore specialties.200

45

Army

Army

Ministry of Health Steward

Payer

Patients Army

workers 1st and 2nd quintiles

and retirees (60+ yrs)

Armyproviders

3rd and 4th quintiles Upper quintile

Public sector Private sector

Municipal primary care facilities

2°/3°care

1°care Private providers

SNSS hospitals Private hospitals

Superintendency of Health

FONASA ISAPREs

Globalbudget

PAD Fee forservice

Fee for service(PAD for AUGE)

Figure 19: Reformed Chilean Health System Structure

Source: The Chilean Health System: 20 years of reforms, Annick Manuel, Salud Publica de México; Country health profile Chile, PAHO; Chile’sNeoliberal Health Reform: An Assessment and a Critique, Jean-Pierre Unger, PLoS Medicine; Health care reform in Chile, Gabriel Bastias, CMAJ; Chile:Regime of Explicit Health Guarantees (Plan AUGE), worldbank.org; The Politics of the AUGE Health Reform in Chile, Bitran y Asociados, May 2008

Third Wave of Reform (2005 to 2008): Deepening the Benefits Package

There were two sparks for reform in Chileleading up to 2005. First, the reforms ofthe 1990s, including the establishment ofcatastrophic coverage, had proven thatmajor health system reform was possible.Second, health reform had become a polit-ical issue with public commitment fromthe president and the public. PresidentLagos assumed personal responsibility forchange, stating “One of the main tasks ofmy administration will be to carry out adeep health care reform, focused on therights and guarantees of the people and asolidarity-based financial system.” 209 210

The Health Reform Commission workfrom 2000 to 2004 suggested the need forexplicit and binding health-service guaran-tees.211 In 2005, the Plan de AccesoUniversal con Garantias Explicitas

(AUGE) was passed, detailing clinical pro-tocols, maximum wait times and maxi-mum co-payments for 41 priority healthconditions.212 213 214 These conditions includ-ed catastrophic guarantees and drug-inten-sive conditions (e.g., diabetes, HIV/AIDS).

Since 2005, the list of guaranteed con-ditions has grown to 56. The 56 condi-tions range from chronic diseases (e.g.,mental health conditions, diabetes,HIV/AIDS and epilepsy) to acute condi-tions (e.g., cancer, acute myocardialinfarction and premature births).215 216 Forexample, a diagnosis of hypertensionmust occur within 45 days of the firstobservation that blood pressure is greaterthan 140/90 mmHg. Treatment mustbegin within 24 hours of diagnosis, andthe patient is entitled to see a specialistwithin 90 days of diagnosis. No co-pay-ment is required.217 PAD reimbursementis used in the public and private sectorsfor all AUGE conditions.218

The main challenge associated with thepassing of the AUGE reform was how tofinance the explicit guarantees that werecommon across private and public payers.There were discussions of cross-subsidiza-tion from ISAPREs to FONASA, but thisnever came to pass.219 The law specifiesthat funding will come from the tobaccotax, customs revenues, the sale of thestate’s minority shares in public healthcompanies and a temporary increase in consumer taxes from 18 percent to 19 percent.220 221

In 2005, the Superintendency ofISAPREs expanded to become theSuperintendency of Health, encompassingnot only the private payers but alsoFONASA.222

The reforms of the past 20 years haveresulted in the health system and financ-ing flow Chile relies on today; this can beseen in Figure 19.223-228

46

Impact of the Health SystemReforms

The health system reforms have had sig-nificant impact in several specific areas:

n Financing. Over the period of reformsexamined in this case study, totalhealth expenditure increased from $2.5 billion in 1992 to $10.4 billion in 2008, maintaining a consistent rela-tionship with GDP except during thefinancial crisis.229 230 Per capita spendingon health more than doubled from$250 in 1995 to $547 in 2007. Out-of-pocket expenditure as a portion oftotal health spending has decreasedslightly, from 29 percent in 1995 to 25 percent in 2007.231

Expenditures

Administration and operational expenses

Income

Funding for municipal primary care facilities

General taxation

Co-payments (OOP)

Municipalities

FONASA Mandatory contributions (7 percent of taxable revenue)

Payment of claims to SNSS hospitals

Payment to private providers (when FONASA patients visit privateproviders)


Payment of claims to private providers

ISAPREs

Mandatory (7 percent of taxable revenue) and additional contributions (risk-based premiums)

Co-payments (OOP)

SNSS Administration and operational expenses

General taxation


Payment to pubic providers (when ISAPREs patients visit public providers)

Municipal budget

Regional health authorities

Ministry of Health Ministry of Finance

Figure 20: Financial Flows in the Chilean Health System

Source: The Chilean Health System: 20 years of reforms, Annick Manuel, Salud Publica de México; Chile: 20 años de esquemas liberales en protección social, UN Development Programme, 2003; The Politics of the AUGE Health Reform in Chile, Bitran y Asociados, May 2008

The mix of public and privatefinancing has shifted over time andreflects changing priorities within thehealth system. Between 1980 and1992, public financing for health andtotal expenditure on health as percent-ages of GDP declined, while privatespending remained constant. Publicspending as a portion of total healthexpenditure decreased from 50 percentin 1980 to 40 percent in 1990.Following the return of democracy,public and total health expenditurebegan to increase.232 233 Expenditure permember in FONASA and ISAPREsfollows the same trend as seen inFigure 20.234

47

Health expenditure in Chile as a percentage of GDP Percent

04200096928884807672 02

206

20009896949290

72

88861984

Expenditure per member by insurance plan US$

Total

Private

Public

ISAPREs

FONASA

Figure 21: Health Financing in Chile

Source: Unger J-P, De Paepe P, Cantuarias GS, Herrera OA (2008) Chile’s neoliberal health reform: An assessment and a critique. PLoS Med 5(4):e79; Barrientos and Lloyd-Sherlock, “Reforming health insurance in Argentina and Chile,” Health Policy and Planning, 2000

The mix of public and

private financing has shifted

over time and reflects changing

priorities within the health

system.

n Breadth and depth of coverage. Chile hasnearly achieved universal health carewith respect to breadth of coverage.Prior to the creation of SERMENA in1969, social security was the mainsource of coverage. By 1998, 95 to 98percent of the population was coveredby either FONASA, ISAPREs, or themilitary as seen in Figure 21.235 236 Thereforms of the past 20 years haveserved to deepen the benefits packageand ensure quality services, thoughchallenges remain in enforcing theAUGE guarantees. In an inspection ofpublic hospitals in 2009, 10 out of 16hospitals did not meet the guaranteesfor the conditions examined.237

As of November 2009, 92 percent ofChileans thought the AUGE plan wasequal to or better than the pre-2005health system, and 79 percent of thosewho had directly benefited from theAUGE plan were satisfied. Among themost important variables cited as rea-sons for this satisfaction were protec-tion (47.1 percent), defined protocolsand quality (18.6 percent), clarity ofinformation (12.6 percent) and accessto treatment (12.2 percent).238

48

the new financing program, and support-ing provider-side training and IT. Duringthis period, the World Bank devoted$66.1 million to these efforts as part ofthe larger Health Sector Reform Program,with funding going primarily to fivehealth service areas.241 242 The FONASAadministrative budget also increased sig-nificantly during this time incrementallyby $96.4 million total over the period(rising from $16.1 million in 1992 to$32.8 million in 1999) above the 1990baseline administrative spend.243 Duringthis period of reform, the cost of reformas a percent of public health expenditurevaried from 0.7 percent to 1.2 percent.

In the planning period between 2000 and 2004, the Health ReformCommission cost $720,000 to operateannually, for a total of $3.6 million overthe period.244 FONASA’s administrativebudget increased by $156.4 million duringthis reform period.245 The cost of reform asa percent of public health expenditure peryear during this period varied between 0.6percent and 1.2 percent.

System Reform and ManagementCapacity Costs

Best estimates reveal that the cost ofChile’s health system reforms between1992 and 2008 totaled $492.9 million(2009-adjusted), or 0.9 percent of publichealth expenditure and 0.6 percent oftotal health expenditure over the periodas seen in Figure 23.

The system reform and managementcapacity costs can be examined in eachperiod of reform previously described:health financing reform (from 1992 to1999); the planning period (between2000 and 2004); and the AUGE reformbeginning in 2005. Across all periods,leaders estimate that $150,000 was spentper year on press and communicationsand $600,200 was spent per year onhealth economics and policy training.240

Between 1992 and 1999, the biggestcost components stemmed from restruc-turing the ministry of health andFONASA, creating IT systems to support

n Health outcomes. Chile has seen a dra-matic improvement in key health indi-cators since the 1950s, coinciding withits increasing wealth and its advance-ments in health system reform as seenin Figure 22. Infant mortality hasdropped from 136 per 1,000 live birthsin 1950 to 9 per 1,000 live births in2000, while life expectancy hasincreased by 20 years since 1960.239

Health insurance coverage rate in Chile Percent

Bolivia

Turkey

Mexico

Russia

Argentina


2010

100

2000

100

1990

98

198019701960

3

Unknown (minimal)

5 5


Note: Health insurance coverage rate estimates differ by source and are shown as ranges where available

Source: Barrientos and Lloyd-Sherlock, “Reforming health insurance in Argentina and Chile,” Health Policy and Planning, 2000

49

Cost of system reform and management capacity as percent public health expenditure (PHE)Percent

9998979695949392 08070605040302012000

9392 040302012000999897969594 08070605

Total public health expenditure (THE) US$ billions, 2009-adjusted

0807060504030298979695949392 01200099

Cost of system reform and management capacity US$ millions, 2009-adjusted

$492.9million over

reform period

0.9 percent PHE over

reform period

0.6 percent THE over

reform period

Figure 23: Costs of Reform in Chile

Source: WHO National Health Accounts (http://www.who.int/nha/country/chl/en/); World Bank, “Staff Appraisal Report, Chile, Health SectorReform Project,” October 1992; Lenz, R. and de la Maza, M., “Financial Reform and Information Systems: The Chilean Experience of FONASA inthe 90s, Information Systems of the Public Health Insurance,” 1997; FONASA budgets 1995-2008, fonasa.cl; Superintendencia de Salud budgets2005-2010, dipres.cl; “MIF approves $1.7 million to Chile to foster productivity and management tools in hospitals,” Dec 2005, Inter-AmericanDevelopment Bank; Interviews

50

Where Next?

Chile’s health system has made greatstrides since its inception, but faces sever-al challenges, including cost containment;managing hospital autonomy; enforcingthe access and quality guarantees legislat-ed in the AUGE reforms; and the contin-ued implementation of the PAD systemof reimbursement.

In the third period, falling between2005 and 2008 and marked by theAUGE reforms, FONASA’s administra-tive budget increased by $135.3 millionin total.246 Comparing the budget of theSuperintendency of ISAPREs to the newSuperintendency of Health shows anincremental cost of $34 million over fiveyears.247 248 Finally, the Inter-AmericanDevelopment Bank loaned $1.9 millionto the cause of fostering productivity andmanagement tools in hospitals.249 Thecost components of reform are shown inFigure 24. The total cost of reform peryear as a percent of public health expen-diture varied between 0.7 percent and 0.9 percent.

1990 2010200520001995

1992-1999 Purchasing responsibilities moved to FONASA IT systems for collection, enrollment, purchasing, and beneficiary/claims monitoring Institutional training and IT for hospitals Catastrophic coverage guarantees for select conditions

2005-2008 AUGE reforms codify catastrophic coverage guarantees and additionalconditions and impose maximum wait timesSuperintendency expanded

World Bank Health Sector Reform Program Total: $66.16 million over 7 years (1992-99)

Increase in FONASA administrative budget Total: $389.5 million over 16 years (1992-2008)

Increase in Superintendency ofHealth budgetTotal: $20.3 million over 3 years (2005-08)

2000-2004 Planning period for future reforms National Health Poll MoH reorganized into two sub-secretaries Health Authority and Management Law

Cost of the Health Reform CommissionTotal: $3.6 million over 5 years (2000-04)

Cost of communications and press Total: $150,000 per year

Health economics and policy training and education Total: $600,200 per year

Inter-American Development Bank loanTotal: $1.9 million in 2005

Refo

rms

Com

poen

ents

ofhe

lath

syst

emre

form

cost

Source: World Bank, “Staff Appraisal Report, Chile, Health Sector Reform Project,” October 1992; Lenz, R. and de la Maza, M., “Financial Reformand Information Systems: The Chilean Experience of FONASA in the 90s, Information Systems of the Public Health Insurance,” 1997; FONASAbudgets 1995-2008, fonasa.cl; Superintendencia de Salud budgets 2005-2010, dipres.cl; Interviews

Figure 24: Chilean Health System Reform and Component Costs

US$, 2009-adjusted

51

The economic crisis of 2001

brought the inadequacies of the

existing system into sharp relief.

Case Study

DEEPENING COVERAGETHROUGH THE HEALTH

TRANSFORMATIONPROGRAM IN TURKEY

2003–2009

Summary: In 2003, the newly-electedgovernment of Turkey launched theHealth Transformation Program, whichachieved sweeping aims: reforming thefragmented system from multiple parallel public payers to a single payer;increasing financing to the health sector;and extending patients’ access to a deeper package of services.

Prior to 2003, 85 percent of the population was covered by a series ofparallel public and private payers, witheach of these covering defined popula-tion segments and operating its owninfrastructure, purchasing practices, andaccredited providers. By 2008 all formerpublic payers were consolidated into thenational payer Sosyal Güvenlik Kurumu(SGK), and all citizens were entitled tothe same benefits package. In additionto system reforms, Turkey has investedheavily in primary medical care for its population.

Since 2000, impoverishment due tocatastrophic health expenses has been cut in half, and patient satisfaction hasrisen from 40 percent to 67 percent.Nevertheless, Turkey faces considerablefiscal challenges. Cost escalation in boththe public and private sectors left SGKwith a deficit of $2.5 billion in 2008.Interviews indicate that Turkey mayhave spent $80 million to $440 millionon system reform and managementcapacity from 2003 to 2009. That is theequivalent of 0.2 percent of publichealth expenditure and 0.1 percent oftotal health expenditure.

Context

Turkey is a middle-income country locat-ed at the intersection of SoutheasternEurope and Southwestern Asia. It has apopulation of almost 74 million. Lifeexpectancy at birth is 70 years for menand 74 years for women. The rural popu-lation comprises 31 percent of the totalpopulation, and 20 percent of the nationlives below the poverty line.

Turkey’s disease burden is split bygeography. Non-communicable diseasesdominate overall, accounting for 79 per-cent of total deaths. Even so, communica-ble diseases, prenatal conditions andnutritional deficiencies present a notice-able burden in the Eastern regions of thecountry. Turkey has made sustainedprogress in improving its health outcomesover the past two decades, but the coun-try still faces considerable challenges.Infant mortality has improved from 67deaths per 1,000 live births in 1990 to 24per 1,000 live births in 2006, thoughTurkey still lags behind its peers overalland there remains significant variability inhealth outcomes among different regionswithin the country.

Compared to other middle-incomecountries, Turkey has good availability ofhuman resources for health services,though in this respect it lags behind othercountries in the Organisation forEconomic Co-operation andDevelopment (OECD). The availabilityof health workers in Turkey is below theOECD average, with 1.6 practicingphysicians and 3 practicing nurses per1,000 lives (the OECD averages are 3and 10, respectively). In 2006, 83 percentof births were attended by a skilled healthprofessional, compared to 100 percent inRussia, Germany and Poland. The utiliza-tion of available acute care beds was 65percent in 2006, compared to 82 percentin the UK and 77 percent in Poland.

52

was the largest public insurer, coveringwhite- and blue-collar workers, whomade up 46 percent of the population.Emekli-Sandigi (the GovernmentRetirement Fund or ES) provided cov-erage for retired public servants, andthe Bag-Kur (occupational pensionfund) provided coverage for artisansand the self-employed. Together, the ESand Bag-Kur covered 38 percent of thepopulation. Yesilkart (the Green Cardprogram or YK) covered inpatient serv-ices for families making less than athird of minimum wage.

n Coverage. In total, 64 percent to 85 per-cent of the population had some formof health insurance. However, the ben-efits package varied considerably bypayer (e.g., Green Card services cov-ered only catastrophic conditions).

Total health expenditure as a percent ofGDP has increased from 4.9 percent in2000 to 6.4 percent in 2008, and totalhealth expenditure in absolute terms hasnearly doubled from 36 billion Turkishliras (about US$25.5 billion) to 61 billionliras (US$43.2) over the same time peri-od. This increase is in line with expecta-tions of the correlation between GDP percapita and total health expenditure percapita as seen in Figure 25. Out-of-pock-et expenditures accounted for 23 percentof total health spending in 2007, a valuelower than that of most of Turkey’s peers(in Poland, that number was 26 percent,while in Mexico it was 30 percent and inRussia it was 50 percent). Donor fundingdoes not play a significant role in healthfinancing, and consists mainly ofEuropean Union support for reproductivehealth programs.250

Key Features of Turkey’s Prior System

n Stewardship. The Turkish Ministry of Health was responsible for healthservice delivery and health policy, aswell as health insurance for the poor.The Ministry of Labor and SocialSecurity administered the remainingpublic payers.

n Payer structure. Prior to 2003, the systemconsisted of a series of parallel payerseach with its own governance, benefitspackage and purchasing standards.Each of the four public payers covereda different population segment anddependents, while private payers cov-ered the wealthy. Of the four govern-ment schemes, the Sigortalar Kurumu(the Social Security Association or SSK)

0

USA

UK

Turkey

Poland

Argentina2,500

3,500

7,000

4,000

60,000

6,500

4,500

1,000500

1,500

80,000

GDP per capitaUS$ (PPP adjusted)

0

5,000

6,000

2,000

5,500

40,000

3,000

20,000

Italy

FranceGermany

Luxembourg

Netherlands

Per capita total health expenditures in selectedcountries, as a function of GDP per capita US$ (PPP adjusted), 2006

Total health expenditures Billion real Turkish lira, 2008 adjusted


1 Based on the following hypotheses: (a) OOP expenditures stable at the 06 value of 19 percent of THE; (b) private financing excluding OOP growing at the 03-06 rate of 6 percent a year in real terms

2008120032000 2006

Total health expenditures as a percentage of GDPPercent

R 2= 0.82

Figure 25: Total Health Expenditure in Turkey

Source: School of Public Health; TURKSTAT; Health at a Glance—Turkey, 2007; McKinsey analysis

the risk of impoverishment due to cata-strophic expenditures was more apparent.To many, the safety net of the state wasnot providing sufficient security.Anecdotal evidence of widespread dissat-isfaction with the health system was con-firmed by surveys that reported morethan 60 percent of the population wasdissatisfied with problems such as limitedaccess for some, unequal benefits acrossprograms and a low quality of services.

The elections of 2002 were decisive.The AK Party swept into power, usheringin Turkey’s first single-party governmentsince 1987. The party had stood on aplatform of fundamental democratic and economic reform. In the health sector, that was realized as the HealthTransformation Program, which waslaunched in 2003.

53

Steward

Payer Private payers

Patients Active public servants

Public sector

MoH hospitals Private

Public/private sector

employees Self-employedand artisans

Poor families

Private sector

University NGO/Other

Retiredpublic

servants Wealthy

SSK

Budget transfer

SSK (Social Security

Association)

YK(Green Card)

ES(Govern-

ment Retirement

Fund)

BK(Bag-Kur)

Ministry of Labor and Social Security (MoLSS) Ministry of Health

2°/3°care

1°care Public health centers and posts Private

providersPhilanthropic

providers

Fee for service Fee for service

Payment

Figure 26: Pre-2003 Turkish Health System

Source: OECD Reviews of Health Systems—Turkey, 2008; WHOSIS database; Health Transformation Program in Turkey—Progress report, August 2008; press clipping

The Health Transformation Program,therefore, was focused on deepeningthe package of services, as well asbroadening coverage to those outsidethe existing system.

n Reimbursement and payment mechanisms.The Government Retirement Fund,Green Card program, Bag-Kur and pri-vate payers all relied on fee-for-servicemodels to purchase medical services,albeit with unique pricing and billingsystems. The SSK funded its own hos-pitals via direct budget transfer.

n Provision. Secondary and tertiary careprovision was dominated by the publicsector, which administered 92 percentof all hospital beds. The ministry ofhealth administered 60 percent of hos-pitals and multiple other public entities

(universities, SSK). Meanwhile, govern-ment bodies ran their own facilities(e.g., the postal and rail services).Public hospitals were financed directlyby the government. Private hospitalsplayed a relatively small role, and wereconcentrated heavily in the large cities(such as Ankara, Istanbul and Izmir).These hospitals were primarily financedby patients, but the SSK and Bag-Kuralso had contracts with a targeted groupthat provided specialist care.

The major components of Turkey’s pre-vious system are illustrated in Figure 26.

Origins of Reform

The economic crisis of 2001 brought theinadequacies of the existing system intosharp relief. With rising unemployment,

54

Turkey’s health system had evolvedover six decades, developing parallel sys-tems for different population segments:from the civil service, to the army, toblue-collar workers, to the poor. Inessence, the principal accomplishmenthad been a broadening of coverage toinclude around 64-85 percent of the pop-ulation. Nevertheless, the benefits pack-age varied considerably, with some receiv-ing a significantly more generous packagethan others. This in itself presented agreat political challenge. Some groups,such as civil servants, feared that reformwould mean a leveling down rather thana leveling up in their cases. The evolutionof the system is described in Figure 27.

Proposals for reform had been devel-oped throughout the 1990s by seniorofficials within the Turkish government.By the time the AK Party was elected,much of the technical effort had beenunderway for a considerable period oftime. The final reform proposals were

changes have been required for the inte-gration of payers, the creation of the fam-ily medicine program, reimbursementand claims and system financing. Theprocess has been a rollercoaster ride:major legislation on health insurance wasthrown out by the constitutional court onthe grounds of its inequity, forcing thegovernment to return to the legislativedrawing board. The legislative process ofrefining health reform continues to thisday. The key features of Turkey’s reformedhealth system are outlined in Figure 28.

The Key Features of Reformed System

n Stewardship. The ministry of healthremains the system steward, responsiblefor the overall system design, and forarbitrating interactions between eachpart of the system. Today the ministrycontinues to retain a strong role in pro-vision, managing public hospitals andthe family medicine program through its

developed by a small team of senior offi-cials, academics and representatives frominternational institutions (e.g., WorldBank), under the leadership of the newlyappointed minister of health (himself anacademic with deep knowledge of healthpolicy). The proposals of the HealthTransformation Program received strongpolitical support from the prime minister.

Indeed, throughout the design and ini-tial implementation process, a small groupof senior stakeholders from five govern-ment ministries (Turkey’s prime minister’soffice and the ministries of health, finance,the treasury and labor and social security)met regularly to ensure cross-governmentalignment in the form of a steering com-mittee. Furthermore, success was spurredby continuing stakeholder and politicalmanagement along with a design processthat was so broad it reached the govern-ment, academia, trade unions, the mediaand the public.

The reform process has demandedextensive legislative changes. Legal

New Health Budget Lawadopted (SUT) with multiple reforms including introduction of MEDULA, a single claims andutilization management system

Primary care freeof charge to all

HealthTransformationProgram begunby the MoH

Green card holderscovered for out- patientservices

Reimbursement Commission established

SSK hospitals transferred to MoH

Global budget implementation for MoH

SSK (Social Insurance Institution) founded to provide social insuranceto manual laborers

Law on the Nationalization ofHealth Care delivery attempted to provide health care free orsubsidized to citizens

YK (Green Card) system introduced to cover familieswhose per capita income is < 1/3 of minimum wage

Military coups

Family medicine implementation and pilot law passed

AK Party wins and forms single-party government

85 percent of the population has some form of health coverage, though each payer has a different package

Social security schemes unified into the SGK

MoH gains authority to certify private providers

Implementation ofUniversal Health Insurance begun andGreen Card schemebrought under SGK

All programs under SGK have same benefits package

2008

2007

1961

19921970and1980

2003

2004

20052006

MoH created

19201945

Military coup

1960

E-identity (Smart Card) system piloted providing patient and physician access to electronic medicalrecords

Figure 27: Turkish Health System Reform Timeline

Source: “Health Care Systems in Transition: Turkey,” European Observatory on Health Care Systems, 2002; “The Ongoing Reform in Turkish PublicHealth Sector: Experiences and Future Prospects,” Acar, C. Taylan, 2007; OECD Reviews of Health Systems—Turkey, 2008; “Health TransformationProgram in Turkey—Progress Report,” Turkish MoH, 2009

regional offices. Doctors in publicproviders remain salaried governmentemployees of the ministry of health. Theministry of labor and social security hasoversight of the national payer, SGK.

n Payer structure. Turkey has created a sin-gle-payer system. The Sosyal GüvenlikKurumu (Social Security Institute orSGK) combined the SSK, Green Cardprogram, Bag-Kur and GovernmentRetirement Fund into a single entity.According to interviews, this was thecore purpose of the reform: to create apayer with monopoly purchasingpower to raise productivity on theprovider side and to use these efficien-cy gains to expand health care access.251

n Enrollment and benefits package. Enroll-ment in SGK is mandatory, except forthose who elect to buy private insurance.All beneficiaries are entitled to the samecomprehensive benefits package. Theintegration of benefits packages across

n Co-payments. Co-payments vary by typeof beneficiary and service type. For all,outpatient exam co-payments start atnothing for first-line health care andincrease to as much as 10 Turkish lira(about US$6.70) for private hospitalconsultations. Active contributors, pas-sive members and their dependentsmake no payment at the provider site.The sum of their expenses (10 percentand 20 percent of treatment tools andoutpatient medications, for passivemembers and active contributors,respectively) is deducted directly fromtheir salaries. After consultation, GreenCard holders must pay 10 percent ofthe cost of treatment tools and outpa-tient medications at a pharmacy.

n Provision. Beneficiaries of SGK receiveprimary care from the publicly fundedfamily medicine model piloted in 2004 and gradually expanded there-after nationwide. Patients enroll with a family medicine provider, often ingeographic proximity to their homes.Family medicine physicians are givenmonthly capitation payments based on the number of patients enrolled and based on their individual perform-ances. Public health centers and postssupplement this system. There are not a sufficient number of family med-icine physicians to cover all patients, so referrals from primary care to secondary and tertiary care are nolonger required.

Most inpatient care is still providedby public hospitals, though the numberof private hospital beds has increased,climbing by 15 percent every year since2004. The Health Transformation Pro-gram proposed integration of mostpublic hospitals, allowing governmententities and payers to release their pro-vision and to facilitate hospital autono-my. Several smaller reforms have takeneffect while the integration plan runs its course. Examples of reform includegranting hospitals greater flexibility overfunding and investment decisions and establishing a payment system forphysicians that is partially based on performance.

55

State employs and pays public providers

Steward

Payer SGK (National payer)

Private payers

Patients

Public sector

DRG payments (and some fee-for-service) Reimbursement

Commission

Private sector

Public family medicine

2°/3°care

1°care

Public hospitals Private hospitals

Private providers

Health centers and posts

Patients

Ministry of Finance

Ministry of Health

Payment

Figure 28: Reformed Turkish Health System Structure

Source: OECD Reviews of Health Systems—Turkey, 2008; WHOSIS database; HealthTransformation Program in Turkey—Progress report, August 2008; press clipping; “GeneralOverview of the Public Health Sector in Turkey in 2006,” Policy Department Economic andScientific Policy of the European Parliament; saglik.gov.tr

population segments occurred in a step-wise fashion, with the first goal being todeepen all packages to the level of theGovernment Retirement Fund (whichhad the deepest package pre-reform),and the second goal being to add addi-tional services to this deepened package.

n Reimbursement and payments. A newly cre-ated Reimbursement Commission isresponsible for setting prices and mod-ulating the benefits package. Initially,few changes were made to the old, frag-mented fee-for-service model. In 2003,a system of performance-based supple-mentary payment was piloted in someministry of health hospitals; in 2004,this system was expanded nationwide.In 2007, the SGK created a bundledprice for outpatient and inpatient serv-ices. Finally, a system of diagnosis-relat-ed groups (DRGs) modeled on those inAustralia, was piloted. Implementationof DRGS is proceeding today in publicand private hospitals.

56

Expenditures


Income

Payment of claims to public and private providers

Payroll tax

Co-payments from beneficiaries (except exempt) SGK (national payer)

Ministry of Finance

Private payers Premiums

Payment of claims to public and private providers

Ministry of Health

Family medicine program

MoH hospitals

University hospitals


General tax


Figure 29: Financial Flows in the Turkish Health System

Source: OECD Reviews of Health Systems—Turkey, 2008

Health insurance coverage rate in TurkeyPercent

Mexico

China

India

Brazil

Russia


20082003

64-85 percent


Source: Kisa A, Younis M. Financing Health Care for the Poor in Turkey: Is a Temporary Solution Becoming a Permanent Scheme? Public HealthReports, Nov-Dec 2006; International Labour Organization, Social health protection: an ILO strategy towards universal access to health care, SocialSecurity Department, August 2007; OECD Reviews of Health Systems—Turkey, 2008; Tatar M et al., Informal Payments in the Health Sector: A CaseStudy from Turkey, Health Affairs, 2007


57

n Enablers. Turkey has developed an inte-grated information technology (IT) sys-tem and electronic identification cardsto replace the unique systems of each ofthe pre-reform payers. The Medula sys-tem for integrated claims processingand utilization tracking was introducedin 2007. In February 2010, the govern-ment announced the planned introduc-tion of an updated system that may bebetter able to provide integrated, real-time, self-serviced information. SmartCards will replace existing identificationcards and drivers’ licenses, and willcarry biometric data about the holder.Interviewees highlighted that the ITsystem had been an important way forthe SGK and its predecessors to estab-lish leverage over providers. What wasinitially described as an invoicing sys-tem was gradually expanded to includeperformance metrics.

n Financing. The Turkish health system isprincipally funded through payroll tax-ation, with a small contribution from

co-payments as can be seen in Figure29. Private payers collect premiumsfrom their members. For SGK, contri-butions are set at 12.5 percent of tax-able income, 7.5 percent of whichcomes from employers and 5 percentfrom beneficiaries. The governmentpays the contributions of disabled people, refugees, Olympic champions,veterans and children in social ser-vices. Poor people formerly covered bythe Green Card program are exemptfrom premium payments on a means-tested basis, and the government coverstheir premiums.

Impact of the Health Transformation Program

One of the major impacts of the HealthTransformation Program is that Turkeyhas seen an increase in the breadth ofcoverage, from 64 percent to 85 percentof the population covered in 2003 to 94percent of the population covered in2008.252-256 See Figure 30.

The positive impact of the HealthTransformation Program (HTP) can beseen in all dimensions of health systemperformance. Between 2000 and 2008,access to health care services has increasedand infant and maternal mortality rateshave improved. Inpatient admissions per100 people increased from 7.5 to 12.4,and outpatient contacts increased from2.4 to 5.4. Infant mortality improvedfrom more than 30 deaths per 1,000 livebirths to 20 deaths per 1,000 live births,and maternal mortality improved from 70per 100,000 births to 19.5 per 100,000live births.257 Patient satisfaction has dra-matically increased from 39.5 percent in2000 to 66.5 percent in 2007.258 259

Total health expenditure as a percent ofGDP has also increased from 4.9 percentin 2000 to 6.3 percent in 2008. Out-of-pocket expenditure on health decreasedfrom 28 percent to 20 percent over thistime period, and the number of house-holds driven into poverty by out-of-pock-et medical expenses was halved as seen inFigure 31.260 261 262

Percentage of households driven into poverty by catastrophic OOP medical expensesPercent

2003 20060504

Average OOP health spending and OOP health spending as a share of household expenditures for quintiles ofhouseholds with positive OOP expenditures US$, Percent

Percentage of householdexpenditures on health

US$

US$ Percent

4321(poorest)

5(richest)

Figure 31: Financial Protection from Catastrophic Out-of-Pocket Expenses in Turkey

Source: OECD Review of Health Systems—Turkey, 2008; McKinsey

Identified additional costs

System stewardship

Existing civil servants and World Bank External consultants: $40 million

Revenuecollection

Payroll taxes as main source of financing for the system, collected through tax system

Risk pooling Consolidated risk pool eliminated duplication leading to administrative savings

PurchasingConsolidated payersStrengthened purchasing function: $40 million

Enablers Most assets already ownedby the government One-time

investments Recurring

costs

$80 million

$48 million*

Total cost of system transition by type

health expenditure 0.2 percent of public

health expenditure

$68 million*

0.1 percent of total

Figure 32: Cost of the Transition in TurkeyUS$, millions, 2003-2009

58

were hired to supplement the ranks ofexisting civil servants. The other mainsource of cost was information technology(though even here, expenses were modestcompared to the major investments in ITseen in other single-payer systems, such asEngland’s National Health Service).

Best estimates from interviews andexternal sources are illustrated in Figure32. In total, from 2003 to 2009, it wasestimated that Turkey devoted an addi-tional 0.2 percent of total health systemexpenditures to system reform and man-agement capacity in order to accomplishthe changes required in the HealthTransformation Program. This is equiva-lent to $326.4 million, but the estimateapplies across both payers and providersas well as central systems. One-time costs(specifically, the design of payment mech-anisms, IT systems and external consult-ants) account for $80 million.

The incremental cost of system reformand building management capacity inTurkey was very small, primarily becauseexisting institutions were so strong andreforms were focused on streamlining thepre-reform system.

System Reform and ManagementCapacity Costs

Turkey is a unique case when it comes tounderstanding system reform and manage-ment capacity costs. Turkey’s reform effortshave focused on consolidating to a singlepayer with monopoly power, and therebyeliminating unnecessary duplication oftransactions within the system. Turkey alsopossesses strong institutions, with large,powerful and capable government minis-tries. These two factors combined meanthat administration costs have been keptlow in the new system, and that unbun-dling the costs of the reform from existingcosts is complex. Indeed, intervieweesexplained that this was never seen as a pri-ority; it was a question of how to makeoptimal use of existing resources, ratherthan a need to allocate additional resources.

Specifically, as the four parallel publicpayers have been combined, duplicationhas been eliminated and existing employ-ees have remained within the system.Interviewees explained that a small num-ber of individuals with specific expertise

Turkey has seen an increase

in the breadth of coverage, from

64 percent to 85 percent of the

population covered in 2003 to

94 percent of the population

covered in 2008.

* Estimate from interviews applies to whole system, including provision

Source: Interviews

ensure financial self-sustainability, butSGK itself has few incentives for reachingfinancial equilibrium.265

Like many countries, Turkey faces theproblem of an aging population. Thisdrives up health care use, and shifts thedisease burden toward chronic diseasesthat necessitate greater continuity of care,often at a higher cost. In addition, a high-er reliance on more sophisticated technol-ogy may lead to a net increase in fixedcosts within the system.266

Where Next?

Over the course of the reform period,Turkey saw a significant acceleration infiscal expenditure toward the health sec-tor, though total health expenditure as ashare of GDP stayed relatively constant.This is illustrated in Figure 33.

Today, SGK faces significant financialchallenges, with a substantial deficit.263 264

The recent economic crisis is expected toaggravate this trend. SGK offers a gener-ous benefits package with inadequatedemand management, and it possesseslimited strategic purchasing capabilities.The Turkish government is obliged tofinance the fiscal gap created by SGK to

59

Public health care expenditures as a percentage of GDPPercent

SGK

Other Gov agencies

MoH

34,2

18,1

081

8,9

+7%

071

4,6

20,2

31,7

+7%

9,3

+12%

22,5

4,9

4,6

12,3

05

27,6

06

7,0

4,55,6

01 03

24,4

14,9

6,920,6

30,1

17,5

4,6

5,8

10,8

4,0

5,8

13,8

4,4

042000

6,2 7,917,3

27,6

15,7

02

9,6

3,8

3,9

CAGR00-03

CAGR03-06

CAGR06-08

Extension in benefit package for Green Card holders

Harmonization of benefit packages for all different social insurance schemes under a single umbrella (SGK)

16% -9% =

5% 22% 9%

13% 8% 7%

Distribution of public expenditures by spending public agencies Billion US$, adjusted at 2008

05 0802 0601 03 072000 04

CAGR00-03

CAGR03-06

CAGR06-08

13% -2% 4%

Figure 33: Public Health Expenditure as a Share of Turkey’s GDP

1 Based on the hypothesis that spending on health care of government agencies other than MoH and SGK remains constant between 2006 and 2008 CAGR—Compound Annual Growth Rate

Source: SGK, Government national account, “Health at a glance, Turkey 2007” by MoH, McKinsey analysis

Ant

onin

Krat

ochv

il/Th

eRo

ckef

elle

rFou

ndat

ion

61

The case studies presented in Chapter 3—as well as thehistories of the health systems of Rwanda, South Korea,

Taiwan and Thailand outlined in the annex—teach valuablelessons: invest in institutions early, note that the requiredinvestment can be relatively small and know what to lookout for during the implementation process.

CHAPTER FOUR

Conclusions

Ant

ony

Nju

guna

/The

Rock

efel

lerF

ound

atio

n

62

In low-income countries with signifi-cant capacity and capability gaps, systemreform and management capacity costsreceived greater attention, with mixedresults. In Ghana, leaders acknowledgedthat implementation challenges were notsufficiently considered at the right time,during the design phase, leading to greaterdifficulties down the line. Specifically, thedesign choice for risk pooling at a districtlevel meant greater demand for alreadyscarce capabilities. Furthermore, this mayhave been compounded by weak centralcontrol and accountability mechanisms,which led to the misappropriation of cen-trally provided funds.

The experience of Ghana contrastsstrongly with that of the Indian state ofAndhra Pradesh. The Aarogyasri Trust isfocused on providing catastrophic protec-tion to poor communities.270 The chal-lenges of implementation were factoredinto the design of Andhra Pradesh’s sys-tem. There was an explicit decision not tocollect revenues directly from beneficiar-ies, but rather to fund the system throughtaxation. The reason was that the transac-tion costs of demand-side financingwould likely exceed the income it wouldgenerate. Nevertheless, a system of enroll-ment was developed because coverage iscapped at $4,300 per beneficiary duringthe course of any given year.271 Significantinvestment was made in interactive tech-nology (IT) systems to ensure that spend-ing would remain within this limit andthat there would be strong accountabilityfor expenditures.

Required Investment Is Relatively Small

Costing of the system reform and man-agement capacity was undertaken in fourof the eight systems profiled (AndhraPradesh, Chile, Ghana and Turkey).Historically, system reform and manage-ment capacity costs have not beenmethodically collected or published, making it difficult to peg the costs of this aspect of the transition to UHC. This analysis reconstructs the costs fromthe bottom up, with the assistance ofthose at the center of reform during the

Invest in Building Institutions Early

Leaders at the center of health reforms incase-study countries suggested that systemreform and management capacity costsare sometimes overlooked, occasionallyactively de-prioritized, or given insuffi-cient resources and management atten-tion. Technical capacity appeared to havea significant influence on the degree offocus on these costs. In middle-incomecountries where technical capacity andcapability are greater, the focus on systemreform and management capacityappeared to be lower. Here, there mayhave been a belief that officials in theministry of health would make the neces-sary changes—and an expectation thatthey would do so successfully. In hind-sight, reform leaders consistentlyexpressed the wish that they had focusedon institution-building earlier in thereform process, and paid more attentionto implementation issues.

As a consequence of these dynamics, inboth Chile and Turkey, reform has beenan iterative process, with the functions andcapabilities of the new payer organiza-tions and regulators evolving over time.In Chile, the national payer, El FondoNacional de Salud (FONASA), graduallytransformed its role from that of a“national accountant” principally chargedwith disbursing funds to providers to thatof a proactive payer that sought to securebetter provider performance and anenhanced patient experience. The scopeand depth of the regulation of bothFONASA and the private insurers(known as “ISAPREs”) was extendedfrom the 1990s through 2003.267 268 InTurkey, the consolidation of four separatepayers dedicated to particular segments ofthe population into a single nationalpayer (the Social Security Institution orSGK) evolved over five years, with jointoversight between the Ministry of Healthand the Ministry of Labour and SocialSecurity, initially building on existingbenefits packages and reimbursement sys-tems.269 Today, funds still flow from theministry of health directly to publicproviders. This might suggest a furtherstage of reform to come.

In low-income countries

with significant capacity and

capability gaps, system reform

and management capacity costs

received greater attention, with

mixed results.

63

its system. For Andhra Pradesh, the figureis 5.1 percent. In both cases, public healthexpenditure started from a very low base.The absolute figures—$115.6 million inGhana over six years and $60.7 million inAndhra Pradesh over three years—can beconsidered modest. Indeed, at purchasingpower parity, they represent an annualinvestment of $40.5 million and $56.3million in establishing the foundations of universality.

Where were Ghana’s investmentsmade? The largest component of systemreform and management capacity costshere was for the creation of the purchas-ing function at a district level. Ghana’sdesign choice led to the creation of morethan 130 purchasing institutions, eachrequiring investment. These also accountfor much of the revenue collection costs,as each district bears responsibility for theenrollment of informal sector workers.The other main sources of costs werestewardship in the design and implemen-tation of the program, and enablers suchas information technology and identifica-tion cards.

For Andhra Pradesh, the largest compo-nents of system reform and managementcapacity costs were the information tech-nology system and the workforce requiredto enroll and coordinate services to benefi-ciaries. Although parallel structures existfrom the pilot and scale-up phases, thesystem can be characterized as a single,centralized payer. This means that AndhraPradesh does not face the distributed costsseen in Ghana. Having been established in2007, the Andhra Pradesh system hashigher annual average costs than that ofGhana, in part because the initial outlays(e.g., for IT) have not been depreciated inthe calculations in this analysis.

In Ghana and Andhra Pradesh, theinvestment of 5 to 6 percent of publichealth expenditures has laid the founda-tions for universality. The institutions, sys-tems and processes in question haveenabled coverage to be extended to 85 per-cent of the population of Andhra Pradesh,and 45 to 70 percent of the population ofGhana. But for donors, the concern isabsolute investment costs rather than costsas a share of public health expenditures.

period examined. However, there may be gaps in this analysis, which seeks toprovide national governments and donorswith an indication of the costs and not aprecise figure. In all cases, capital costshave been relatively modest. For this rea-son, the estimates here reflect full costsand not costs depreciated over a numberof years. Note that systems transitioningto UHC are likely to incur these costs atthe outset of the transition, and that allestimates here have been adjusted to 2009constant dollars.

Figure 1 in the executive summaryillustrates the findings from the costing ofsystem reform and management capacity.Full details for each of the first four casestudies can be found in Chapter 3.

To understand these costs, it is helpfulto look at them through two lenses: thestrategy and the stage of health-systemdevelopment. Ghana and Andhra Pradeshare best examined side by side, since bothare low income, both faced weak legacysystems and both have sought to broadenhealth coverage. Chile and Turkey alsoshare similarities. Both countries are mid-dle income and more advanced in theirstage of health-system development. Theyhave both principally been concernedwith deepening the package of servicesavailable to their citizens and, accordingly,their reforms have been incremental fromstrong starting points.

For Ghana and Andhra Pradesh,health-system reform represented a signif-icant discontinuity as health coverage wasdramatically broadened. Ghana created its National Health Insurance Authority,and Andhra Pradesh established itsAarogyasri Health Care Trust. These twosystems illustrate the initial setup costs ofnew systems: they were fundamentallydifferent from those that preceded them(in both cases, very limited public provi-sion from the ministry of health, supple-mented by high out-of-pocket paymentsto private providers).

As a consequence, these costs includeone-time investments in infrastructure tolaunch the system (e.g., investment in IT).Ghana appears to have invested approxi-mately 6.6 percent of public health expen-ditures over the reform period to establish

In Ghana and Andhra

Pradesh, the investment of

5 to 6 percent of public health

expenditures has laid the

foundations for universality.

64

Implementation Lessons

The case studies examined reveal anumber of features that each of the

reform journeys have had in common:

Popular dissatisfaction is transposed through political leadership to positive action

Health system reform is typicallyprompted by popular dissatisfactionwith the pre-reform situation. In manycase studies examined—most notablyGhana, Andhra Pradesh, Taiwan andTurkey—health reform featured as aleading issue in election campaigns,and a priority for civil society lead-ers, prompting politicians to clearlyand publicly support reform efforts,and granting incoming governmentsa strong mandate for reform. It is pre-cisely through political leadership thatpopular dissatisfaction is transformedinto positive action.

Active and open support fromheads of government is essentialfor required political capital andintra-government alignment

Health reform typically requirescommitment from the head of the gov-ernment, not simply from an individualminister (such as that of health,finance or labor). This appears to befor three reasons. First, health systemreform requires the expenditure of sig-nificant political capital, which onlythe head of government has in suffi-cient quantities. Second, the origins ofreform are typically negative, reflect-ing dissatisfaction with the currentstate and meaning there is typically alack of consensus around a positive

plan. Third, as policymakers have sug-gested, only the head of governmentwould be able to resolve tensionswithin the government on the rightpath forward. Building this alignmentwithin government is thought to be acritical step. Specifically, since health-system reform often has significant fis-cal implications, and since ministriesof health are thought to over-empha-size provision rather than financing,key players in the case studies exam-ined here believed that political lead-ership was essential for progress.

It is often said that in politics, tim-ing is everything. When is it time foraction? Political leaders may need toconsider several questions: What isthe level of economic developmentand urbanization? Are there favorabledemographic conditions such as alow dependency ratio (the ratio ofthose who are not in the labor forcecompared to those who are)? Is therea sufficient degree of political open-ness, where the state is becomingaccountable to its citizens and respon-sive to their needs for health care?

Reform efforts require a cadre of competent leaders to makechange happen

Political and official leaders needto be capable and committed—andto have the prospect of retainingoffice for a sufficiently long period tooversee design and implementation.Leaders in Chile cited the catalyticeffect of small grants from theFulbright Program, the United StatesAgency for International Development(USAID) and the Rockefeller

Foundation for leadership develop-ment and overseas study that createda corps of informed and experiencedleaders who implemented the reforms.In 1999, a passionate and committedgroup of “rising stars” in Ghana’shealth system came together for aworkshop on community health insur-ance. Five years later, many of theparticipants were leading the designand implementation of the reform pro-gram. Building a cadre of competentleaders appears to be an essentialingredient of success.

Pragmatism trumps ideology in successful implementation.

Pragmatism is the watchword ofimplementation. Repeatedly in thecase studies examined, systems creat-ed new payer institutions, rather thanrepurposing existing institutions ordeveloping the functions within theministries of health, labor or finance.The purpose for this did not appearto be to accomplish a payer-providersplit. Policymakers at the center ofreform efforts suggested that it wasinstead for three other reasons. Thefirst was ensuring that the organiza-tions were focused on the task athand. The second was ensuring a single point of accountability for thefunds dedicated to the health system.The third was securing the best possi-ble talent by wrestling free of centralgovernment restrictions on pay and hiring.

1

2

3

4

65

The Path Ahead

Health system reform toward universalhealth coverage requires courage andcommitment. It can be a technicallytough—and perhaps even politicallytreacherous—journey to undertake. Yet itis difficult precisely because it is impor-tant, representing a new settlementbetween citizens and their governments.It has long been established that access tohealth services improves societies’ welfare.It makes an economic contribution forall; it diminishes impoverishment; and italleviates suffering. In short, it is desirable.

In all the cases examined, there was anoverwhelming belief that the situationhad improved substantially. Currentarrangements were deemed preferable tothose that preceded them, despite signifi-cant and serious challenges that stillremained. These case studies demonstratethat making substantial progress towarduniversal health coverage is possible.

The goal of universal coverage may benoble, but wanting to achieve it is notenough. Making universal coverage a real-ity demands investment in system reformand management capacity. Careful datacollection along the way is also critical toaid future analysis and planning.

As the case studies in this reportdemonstrate, relatively small investmentscan have a catalytic effect. These invest-ments are affordable because they aresmall, and important because they aretransformative. Coverage does not have tobe extended to the whole populationimmediately. Systems don’t change in asingle step, but instead make journeys touniversal coverage.

So, progress toward universal healthcoverage is desirable, possible and afford-able. That is why the international com-munity should support reform efforts—through open commitment, technicalassistance and funding. Only through thisglobal effort can we move ourselves andeach other toward better health, more pro-ductive lives and stronger economies in aworld that is far more interdependent thanever before.

Relatively small investments

can have catalytic effect…

these investments are affordable

because they are small and

important because they are

transformative.

In both cases, investment has been approx-imately $20 million per annum. Withhealth coverage extended to such a signifi-cant proportion of the population, thisrepresents a very positive return on invest-ment. It is a small price to pay forprogress, and one that sits well within thegrasp of both countries and the donorsthat support them.

Like Ghana and Andhra Pradesh, high-er-income Chile and Turkey both pursueda strategy that can be characterized as“broad then deep.” In the case of bothChile and Turkey, it is helpful to examinethe costs of the second part of the transi-tion to UHC: the investment in systemreform and management capacityrequired to deepen the package of servicesavailable to affected populations. In bothcases, many of the institutions, systemsand processes were already well-estab-lished before this transition began.

Both Chile and Turkey are middle-income countries. Accordingly, the size oftheir health sectors—and the scale of pub-lic expenditures for health—are signifi-cantly larger than those for either Ghanaor Andhra Pradesh. Accordingly, with rel-atively large funding, and with costs thatare incremental, it is no surprise that theoverall costs as a share of public expendi-tures are low. In Chile, the best estimateis that transitioning to UHC consumed0.9 percent of public health expenditures.In Turkey, the best estimate is 0.2 percentof public expenditures. Both Chile andTurkey benefit from support from donorssuch as the World Bank (which gaveChile a $66.1million loan that had a cat-alytic effect on reforms). The experiencesof Chile and Turkey suggest that dedicat-ing a relatively small portion of health sys-tem spending toward system reform andmanagement capacity is a wise investmentfor middle-income countries to make, andthat donors have important contributionsto offer to this process.

67

Annex

68 CASE STUDY

Rwanda (1999–2005)

72 CASE STUDY

South Korea (1997–2000)

77 CASE STUDY

Taiwan (1995–2001)

80 CASE STUDY

Thailand (2001–2004)

68

The Evolution of Rwanda’s Health System (See Figure 35)

Rwanda’s health system prior to 1999

n Coverage and access to care. Prior tohealth system reform, less than 1 per-cent of Rwandans had coverage.280

Government officials were insured bythe Rwandaise Health Care Insurance,and the Genocide Survivors’ SupportFund covered medical services for theneediest victims. The military, privateinsurance and several community-basedhealth insurance programs covered avery small portion of the population.281

n Provision. The public and private sectorssplit provision, with nongovernmentalorganizations (NGOs) and other out-side organizations playing a large role.Most patients were required to pay outof pocket at the point of care, forcingmany to forego care altogether. InJanuary 1999, the primary care consul-tation rates were at an all-time low of0.24 visits per capita per year in therural population.282 283

The pilot phase of reform

n Design. In response to plummetinghealth service utilization, the ministryof health decided to develop and pilotother options for health financing andprovider payment. The Directorate ofHealth Care within the ministry creat-ed a steering committee composed ofrepresentatives from the central andregional levels and external partners tooversee the development and imple-mentation of the pilots.284 285 286

n Pilot setup. Between January and July1999, the ministry of health initiated54 community-based health insurance(CBHI) programs across threedistricts.287 Each plan was required topartner with a specific health center totest provider payment mechanisms.Two districts chose to have providerpayment managed jointly by the popu-lation and the providers, and the otherchose to have it managed solely by the

Physicians per 1,000 people in Rwandan regions Physicians per 1,000 people

Tanzania Ethiopia RwandaUgandaAngolaKenya GhanaZimbabwe Cameroon Sudan NigeriaNamibia Botswana EgyptSouth Africa

South

North

West

East

Kigali

Figure 34: Distribution of Physicians in Rwanda and Other African Countries

n Disease burden and interventions. Rwandasuffers from a high burden of commu-nicable disease and has one of theworld’s highest disease burdens overall.Rwanda lost 597 disability-adjusted lifeyears (DALYs) per 1,000 lives in 2004,more than double the world averageand higher than nearly all of its Sub-Saharan African peers. Infant mortality,under-five mortality and maternalmortality have all improved since1995,273 but remain higher than theMillennium Development Goal(MDG) targets.274

n Health system input factors. Rwanda hasone of the lowest numbers of physi-cians per capita in Africa, a problemfurther aggravated by the country’sregional disparities (e.g., difference innumber of physicians per capita byregion). See Figure 34.275 276 277 The sametrend holds true for all types of healthprofessionals, of whom Rwanda has lessthan half the number recommended by the World Health Organization(WHO).278 A growing number of community health workers providebasic care and education. The lack of human resources for health is exacerbated by poor access, with only 52 percent of births attended by ahealth professional.279

Case Study

HEALTH SYSTEM REFORMS IN RWANDA

1999–2005

Summary: Rwanda piloted community-based health insurance in three districtsbeginning in 1999 and by the end of2005 had scaled up the system nationwide.The impact of this reform has been sub-stantial with respect to the depth of cover-age and also with regard to the breadth of coverage, which has increased from 1 percent of the population in 2000 to 90 percent of the population in 2009. Duringthe same period, maternal and under-fivemortality have also improved dramatically.

Country Profile

Rwanda is a low-income, landlockedcountry in Central Africa recovering froma catastrophic genocide that took place in1994. It has a population of 10.4 million,80 percent of whom live in rural areas.Life expectancy is 55 years for men and58 years for women. Over the past 15years, Rwanda has made significantprogress toward restoring its economy topre-1994 status. The gross domesticproduct (GDP) today is $4.5 billion.272

Source: World Bank Report, World Health Report 2006

Provincial-level health offices created responsible for provision; later district-level offices created

Ministry of Health initiates design and development of prepayment schemes

Coverage mandatory for all citizens

54 community-based health insuranceschemes piloted across three districts

Jul 1999

86 percent of populationcovered by community-based health insurance

Benefits package extended to coverservices in nationalhospitals (in addition to district level services)

2006

Genocide

1994

Public health care services provided free to patients, paid for bythe government and donors

1994-95

MoH reintroduces pre-war level userfees

Government covers indigents and other vulnerable groups

Central policy workshop to review lessons fromthe pilot schemes

2000Primary care consultationrates for rural populations drops to all-time low 0.24 per capita (0.3 in 2007)

Jan 1999

President announces that prepayment health insurance schemes will form a core element ofgovernment strategy

2002

Plan formed to roll out pilot to the remainderof Rwanda

1985

2003

2008

1996

2009

69

After one year of operation, 88,000individuals had enrolled, about eightpercent of the total population acrossthe three districts.294 295

n Benefits package. The programs covereda basic health center package thatincluded all services and drugs provid-ed by the contracted health center. Thepackage also covered ambulance trans-port to a district hospital and a limitedpackage of services at the hospital.296

n Purchasing. Each program reimbursedthe associated health center by capita-tion payment. District hospitals werepaid on a per episode basis by theDistrict Federation of PrepaymentSchemes, which received 5 percent to10 percent of each program’s monthlydisbursement.

population. By July 1999, each healthcenter had signed contracts with therespective CBHIs, and the district populations began to enroll.288 289 290

n Program stewardship. Each program wasmanaged by its members, who elected a five-person executive committee.291

Each of the three districts had a DistrictFederation of Prepayment Schemes thatset overall district policy. All programswere subject to standardized bylaws anda prepayment contract between theprograms and the providers. Extensivetraining for providers and personneloccurred regularly.292 293

n Revenue collection and enrollment. Familiespaid about $4.30 to enroll, and wereentitled to benefits after a one-monthwaiting period. Members paid a co-payment of $0.17 per episode of care.

Source: Interviews; Schneider, P., and Diop, F., “Community-Based Health Insurance in Rwanda,” from Health Financing for Poor People: ResourceMobilization and Risk Sharing; Schneider, P., Diop, F., and Bucyana, S., “Development and Implementation of Prepayment Schemes in Rwanda,”Partnerships for Health Reform, 2000; Rwandan Ministry of Health Annual Report 2008; “Mutual Health Insurance Policy in Rwanda,” Rwanda Ministryof Health, Dec. 2004; Musango, L., et al., “Rwanda’s health system and sickness insurance schemes,” International Social Security Review, 2006

Figure 35: Timeline of Health System Reform in Rwanda

70

StewardMinistry of Health (MoH)

Payer

1°/2°care

Mili

tary

heal

thin

sura

nce

Priv

ate

heal

thin

surn

ace

3° care 3 Public referral hospitals (teaching hospitals in Butare and Kigali, neuropsych hospital in Ndera)

1 Private hospital (King Faisal)

Fee-for-service(some capitation)

Public health centers/ district hospitals

Government-assisted health facilities (GAHFs)

Private health facilities

Regi

onal

heal

thau

thor

ities

Rwan

daise

Hea

lthC

are

Insu

ranc

e

Community-based health insurance schemes (CBHIs)

Patients

Gen

ocid

eSu

rviv

ors’

Supp

ortF

und

Figure 36: Reformed Rwandan Health System Structure

n Revenue collection and enrollment.Enrollment remains contingent uponpremium payments at the family level.Premiums vary from program to pro-gram and range between $4.30 and$19.90. Co-payment also variesbetween $0.17 and $0.16 per diseaseepisode or between 5 percent and 25percent of the real cost of care. Thegovernment covers the cost of premi-ums and co-payments for indigentsand other vulnerable groups.302 303

n Benefits package. The benefits packagecomprises two parts: the MinimumPackage of Activities (MPA) and theComplementary Package of Activities(CPA). The MPA covers all services and

Scaling Up the Community-Based HealthInsurance (CBHI) Programs

n Lessons learned from the pilot. TheMinistry of Health and its partnersconducted a rigorous evaluation of thepilot phase and held a workshop in2000 to discuss how lessons learnedcould be applied during the scale-up.Primary recommendations includedadapting and enlarging the benefitspackage, developing fee-for-servicereimbursement for hospitals, andstrengthening organizational and finan-cial management in health facilities.297

n Scale-up. By 2002, pressure was mount-ing to extend the pilot nationwide, andPresident Paul Kagame announced theCBHIs as a core element of the gov-ernment agenda. Rwanda’s Ministry ofHealth, Ministry of Local Affairs andexternal partners created a strategy forscale-up and began to build the techni-cal capacity required (e.g., country-level systems, communications, train-ing materials and instructors, etc.).Less than three years later, CBHI infra-structure covered the entire country.298

Reform design and implementation inRwanda have relied on significant techni-cal and budgetary support from donors,including the governments of the UnitedStates, Switzerland, Belgium, Germanyand Norway, as well as the WHO, theInternational Labour Organization (ILO)and the Global Fund, amongst others.299

Key features of Rwanda’s reformed health system (See Figure 36)

n Payer structure and purchasing. Todayabout 85 percent of Rwandans are cov-ered by a CBHI. An additional fivepercent are covered by private insurers,the military, the government or theGenocide Survivors’ Support Fund.Most CBHIs and other insurers pur-chase services from providers using afee-for-service method, though someCBHIs still use a capitated system.300 301

drugs provided at the health centers,including pre- and post-natal care, vac-cinations, family planning, minor surgi-cal operations, and essential and genericdrugs. The CPA covers a limited num-ber of services at the district hospitals,including the cost of hospitalization,caesarian operations minor and majorsurgical operations, medical imagingand all diseases afflicting children up tofive years old. As of 2006, the CPA ben-efits package was extended to coverselect services in national hospitals.304 305

n Provision. Primary and secondary care isdelivered through public health centersand district hospitals, government-assist-ed health facilities and private health

Source: Interviews; Schneider, P., and Diop, F., “Community-Based Health Insurance inRwanda,” from Health Financing for Poor People: Resource Mobilization and Risk Sharing;Schneider, P., Diop, F., and Bucyana, S., “Development and Implementation of PrepaymentSchemes in Rwanda,” Partnerships for Health Reform, 2000; Rwandan Ministry of HealthAnnual Report 2008; “Mutual Health Insurance Policy in Rwanda,” Rwanda Ministry of Health,Dec. 2004; Musango, L., et al., “Rwanda’s health system and sickness insurance schemes,”International Social Security Review, 2006

71

facilities. Government-assisted healthfacilities, which account for about 40percent of primary and secondary carein Rwanda, are run by NGOs, religiousgroups and other third parties, but arepartially funded by the government.Private health facilities are limited andmostly located in Kigali. Records indi-cate the number of private physiciansthere grew from 69 in 1999 to 405 in 2001. Twelve Regional HealthAuthorities administer district-level pro-vision. Tertiary care is offered at fourhospitals in Rwanda, three of thempublic and one private.306 307 308 309


n Breadth of coverage. Rwanda has seendramatic growth in the breadth of itshealth coverage. It served less than 1percent of its population in 2000, andmore than 90 percent in 2009, as indi-cated in Figure 37.310 311 312 313

n Out-of-pocket expenditures. Rwanda hasseen a decline and rebound in out-of-pocket expenditures, as illustrated inFigure 38.

n Depth and quality of coverage. Depth ofcoverage, utilization and key healthindicators have improved since theintroduction of the CBHIs, though itshould be noted that outcomes are dueto many changes in the health systemand economy, and that the CBHIsare only one contributing factor.Beneficiaries of the programs haveaccess to medical services for a solid setof primary and secondary conditions at the local, district and national level.Annual curative visits per capita amongmembers of a CBHI are 1.2 to 1.6,while that figure is 0.2 for non-mem-bers, suggesting that coverage providesincreased access to care.314 Maternalmortality has nearly halved, down from1,400 deaths per 100,000 live births in2000 to 750 deaths per 100,000 livebirths in 2005. During the same peri-od, under-five mortality has improvedfrom 196 deaths per 1,000 live birthsto 112 deaths per 1,000 live births.315 316

Health insurance coverage rate in RwandaPercent

Cameroon 0.1

Uganda 0.1

Mali

Tanzania

Namibia

Kenya


2009200620032000


Source: Interviews; Schneider, P., and Diop, F., “Community-Based Health Insurance in Rwanda,”from Health Financing for Poor People: Resource Mobilization and Risk Sharing; Schneider, P.,Diop, F., and Bucyana, S., “Development and Implementation of Prepayment Schemes inRwanda,” Partnerships for Health Reform, 2000; Rwandan Ministry of Health Annual Report2008; “Mutual Health Insurance Policy in Rwanda,” Rwanda Ministry of Health, Dec. 2004;Musango, L., et al., “Rwanda’s health system and sickness insurance schemes,” InternationalSocial Security Review, 2006; interviews; ILO Social Health Protection Report, 2007


Ln Total health expenditurePer capita, US$, PPP

Ln GDPPer capita, US$ millions, PPP

2006

20052004

2003

20022001

200019991998

1997

1996

1995

Out of pocket spend as a proportion

Percent

Year

R2= 0.95

Community health insurance rolled out

Community health insurance piloted

of total health expenditure

THE—total health expenditure; Ln—natural logarithm; PPP—purchasing power parity

Source: International Monetary Fund, World Economic Outlook Database, October 2009; WHOSIS

Figure 38: Out-of-Pocket Expenditures & Correlation of THE to GDP in Rwanda

72

Case Study

HEALTH SYSTEM REFORMS IN SOUTH KOREA

1997–2000

Summary: In 1997, South Koreareplaced a fragmented payer landscapewith a government-run, single-payer sys-tem. This reform deepened the benefitspackage and broadened coverage from 94percent of the population then to 99 per-cent today. Since reforms began, out-of-pocket expenditure as a proportion of totalhealth expenditure has decreased from54.9 percent to 38.1 percent, whilespending on social insurance has increasedfrom 28.4 percent to 41.6 percent.

1963 and 1989, the breadth and depth of coverage increased in a step-wise manner by population segment. By 1990,94 percent of the population was coveredby more than 350 insurers. In 1997, the government created the NationalHealth Insurance Corporation, consoli-dating the fragmented system, standard-izing and deepening the benefits package,and broadening coverage to the remain-ing portion of the population. The evolution of the system is described inFigure 39.319-324

South Korea’s health system prior to 1997

n Stewardship. The Ministry of Healthand Welfare (MoHW) sets overallhealth sector policy and sets fee

Country Profile

South Korea is a high-income countrywith a population of 48.6 million and agross domestic product (GDP) of $929billion. Life expectancy at birth is 79years.317 South Korea suffers from a bur-den of non-communicable disease.Cancer and cardiovascular disease are the leading causes of death.318

Overview of South Korea’s Journey Toward Universal Health Coverage

South Korea’s transition to universalhealth coverage began in 1963, when the Health Insurance Law was enacted,mandating universal coverage. Between

Health Insurance mandatory for employees and dependents in firms >500 people

Federation of Korean MedicalInsurance Societies formed

‘Medicaid’ established for the poorest

Health insurance mandatory gov’t employees, industrialfirms with >300 people

1979

Health Insurance Law enactedmandating universal coverage

1963

Militarycoup d’etat

Health insurance mandatory foremployees and dependents in firms >100 people

1981

Regional medical insurance pilot in 3 geographies to coverinformal sector

Ruling party runs reelection campaign stumping for UHC

1987

Health insurancemandatory for rural residents

1988

Health insurance mandatory for urban residents

1989

National Health Insurance Act enacted, creating the National Health Insurance Corporation

1997

National HealthInsurance Act implemented

1999

Health Insurance Review Agency established

200094 percent ofpopulationcovered

1990

9 percent of populationcovered

>98 percent ofpopulation covered

2010

1977

Source: Universal Health Care Coverage in Korea,” Anderson, Health Affairs, 1989; “Health Care Reform in South Korea: Success or Failure?” Lee,Amer. J. Public Health, Jan 2003; “National Health Insurance Program in Korea 2001,” National Health Insurance Corporation of the Republic ofKorea, Aug 2001; “Thirty years of national health insurance in South Korea: lessons for achieving universal health care care coverage,” Kwon,Health Policy and Planning, June 2008; “Payment system reform for health care providers in Korea,” Kwon, Health Policy and Planning, 2003

Figure 39: Timeline of Health System Reform in South Korea

73

Steward

Payer

Patients


Ministry of Health and Welfare (MoHW)

2°/3°care

1°care

Payment Fee for service

Private providers

National Health Insurance Corporation (NHIC)

Public providers

HealthInsurance Review Agency (HIRA) reviewsfees and evaluates service performance and economics

Patients

Source: Universal Health Care Coverage in Korea,” Anderson, Health Affairs, 1989; “HealthCare Reform in South Korea: Success or Failure?” Lee, Amer. J. Public Health, Jan 2003;“National Health Insurance Program in Korea 2001,” National Health Insurance Corporation of the Republic of Korea, Aug 2001; “Thirty years of national health insurance in South Korea:lessons for achieving universal health care coverage,” Kwon, Health Policy and Planning, June2008; “Payment system reform for health care providers in Korea,” Kwon, Health Policy andPlanning, 2003

Figure 40: Reformed South Korean Health System Structureschedules for providers. The govern-ment also funds or subsidizes most insurers.325 326 327

n Payer structure and coverage. The Feder-ation of Korean Medical InsuranceSocieties administers all insurers (morethan 350) and processes all claims.Private insurers cover 90 percent of thepopulation, and the governmentdirectly insures a portion of those notcovered privately. Each insurer covers awell-defined population segment based on workplace and geography.Beneficiaries have no choice of insurer.The benefits packages are largely con-sistent across insurers, but provide rela-tively limited coverage.328 329 330

n Reimbursement and payment mechanisms.Providers were reimbursed on a fee-for-service basis. Prices are set by theMoHW, and claims are processed bythe Federation of Korean MedicalInsurance. Beneficiaries pay premiumsand co-payments.331 332 333

n Provision. Private physicians and hospi-tals provide the majority of care.Patients have access to all providers,though rural residents must visit a primary care physician before beingreferred to a hospital.334 335

Key Features of South Korea’s ReformedHealth System (See Figure 40)

n Stewardship. The MoHW sets overallhealth sector policy and the overallbudget, including the reimbursementceiling for the system. The ministryalso monitors the National HealthInsurance Corporation (NHIC) andHealth Insurance Review Agency(HIRA).336

n Payer structure and benefits package. TheNHIC is a not-for-profit, single payercovering more than 98 percent of thepopulation. The benefits package iscomprehensive, including almost allinpatient and outpatient services, den-tal care, traditional medicine, prescrip-tion drugs and preventive services.337

n Payment mechanisms. Providers are reim-bursed through a fee-for-service mech-anism, though moving to a diagnosis-related group (DRG) system is current-ly under consideration. The HIRA isresponsible for medical fee review andevaluating performance and economyof provision.338

n Provision. More than 90 percent of allhealth services in South Korea are provided by private facilities. Morethan 80 percent of physicians are spe-cialists, compared to 50 percent or less in other high-income nations.Referrals are required from a primarycare physician to receive secondary and tertiary care.339 340

n Depth of coverage. The standardized,comprehensive benefits package offeredby the NHIC is significantly deeperthan many of the benefits packagesthat existed before 1997.343 344 Over thepast 20 years, South Korea’s healthinfrastructure has grown tremendously,utilization has increased and healthoutcomes have improved. The numberof physicians per capita has doubledfrom 8 in 1989 to 16 in 2004, and thenumber of physician visits per capitahas increased from 6 to 11 over thesame period. Infant mortality hasimproved from 12 deaths per 1,000live births in 1989 to 4 deaths per1,000 live births in 2005.345 346

74

Health insurance coverage rate in South Korea Percent

Taiwan

Thailand

Japan

Singapore

Health insurance coverage rate of select peers Percent, latest available over 2005-07

20052000198519801977 19951990

Source: International Labour Organization, Social health protection: an International Labour Organization strategy towards universal access to healthcare, Social Security Department, August 2007; Kwon, S. Thirty years of national health insurance in South Korea: lessons for achieving universalhealth care coverage. Health Policy and Planning 2009;24:63–71


Impact of the health system reforms

n Breadth of coverage. South Korea hasseen an increase in the breadth of cov-erage from less than 9 percent in 1977,to nearly 94 percent in 1990, to 99percent in 2005, as illustrated inFigure 41.341 342

n Out-of-pocket expenditures. South Koreahas seen a long decline in out-of-pock-et expenditures, as illustrated in Figure 42.

South Korea has seen a

long decline in out-of-pocket

expenditures…

75



9.89.69.4 10.210.0

2006

2005

20042003

20022001

2000

1999

1998 1997

19961995

9.5 9.7 9.9 10.1

Out of pocket spend as a proportion of total health expenditurePercent

Year

National Health Insurance Act passed

Asian financial crisis

National Health Insurance Act implemented

R2 = 0.99



Figure 42: Out-of-Pocket Expenditures and Correlation of Total Health Expenditure to GDP in South Korea

76

n Financing. Total health expenditure as apercent of GDP has increased from 4.2percent in 1997 to 6.6 percent in2007, in line with expectations basedon GDP (see Figure 43).347 348

Out-of-pocket expenditure as a propor-tion of total health expendituredecreased from 54.9 percent in 1995to 38.1 percent in 2004. Spending onsocial insurance increased from 28.4percent to 41.6 percent during thattime (see Figure 44)349 350

38.1

41.641.342.536.232.9

28.426.225.9

1995

0

1989 2003 2004

23.0

3.4

61.5

3.63.33.0

1991

2.52.1

1993

1.8

1997

0

60.1

1999

57.7 54.949.6

2001

44.4 38.3 38.4

Distribution of national health expenditures Percent

Government

Social insurance

OOP

Private insurance

Other

Figure 44: Breakdown of South Korea’s Total Health Expenditure Over Time

Source: Kwon, S. Thirty years of national health insurance in South Korea: lessons for achievinguniversal health care coverage. Health Policy and Planning 2009;24:63–71


19991995 20011997 200720052003

7,0006,5006,0005,5005,000

500

4,5004,0003,5003,0002,5002,0001,5001,000

0

GDP per capitaUS$ (PPP adjusted)

80,00060,000

UK

Turkey Poland

Netherlands

Luxembourg

Italy Germany

France

20,0000

Argentina

USA

Korea

40,000

Per capita total health expenditures in selectedcountries, as a function of GDP per capita US$ (PPP adjusted), 2006

Total health expenditures Billion US$

19991995 20011997 200720052003

R2 = 0.88


Source: WHO National Health Accounts; OECD; McKinsey analysis

Figure 43: Change in Total Health Expenditure Over Time

77

Country Profile

The island of Taiwan lies off the south-eastern coast of China. It has a grossdomestic product (GDP) of $698.6 billion, similar to the GDPs of Australiaand Poland.351 It has a population of23.2 million, with 81 percent of residents living in urban areas. Lifeexpectancy is 79 years. Taiwan suffersfrom a burden of non-communicableand chronic diseases. Cancer and cardiovascular disease are the leadingcauses of death. Total health expen-diture accounts for 6.1 percent of GDP.352

Case Study

HEALTH SYSTEM REFORMS IN TAIWAN

1995–2001

Summary: In 1995, Taiwan replaced a fragmented payer system with a government-run, single-payer one. This reform broadened coverage from 59 percent in 1995 to 99 percent today.All beneficiaries are entitled to a compre-hensive benefits package, and patient sat-isfaction with the system has increasedfrom 33 percent to 79 percent.

By the end of 1995, 92 percent of the population is enrolled

Low-Income Household Insurance created

Department of Health created

Farmer’s Insurance created

1970

1990

National Health Insurance Bill passed in Parliament

1994

Gov’t Employees Insurance created

1958

Labor Insurance created

1950

Global budgetimplementationcomplete for severalhealth sectors, including hospitals

2002

Premier declares objective of “health insurance for all by year 2000”

1986

Martial lawabolished

1986National Health Insurance created

1995

Bureau of National Health Insurance created to administerthe scheme

99 percent of the population is enrolled

2001

59 percent of Taiwan citizens are covered by a health insurance scheme

1985

Source: “National Health Insurance and Technology Adoption: Evidence from Taiwan,” Shin-Yi Chou, et al, Contemporary Economic Policy, 2004;“Does Universal Health Insurance Make Health Care Unaffordable? Lessons from Taiwan,” Jui-Fen Rachel Lu, et al., Health Affairs, 2003; “Thehealthcare system in Taiwan,” Delon Wu, World Hospitals and Health Services; “Taiwan’s New National Health Insurance Program: Genesis andExperience So Far,” Tsung-Mei Cheng, Health Affairs, 2003; “Health Systems in East Asia: What Can Developing Countries Learn from Japan andthe Asian Tigers?” Adam Wagstaff, World Bank, 2005; “National Health Insurance System,” Taiwan Health Care Reform Foundation, thrf.org.tw;“Taiwan Takes Fast Track to Universal Health Care,” T. R. Reid, Apr 2008, npr.org; “The Emerging Health Care Market in Taiwan: An EconomicAnalysis,” Yanrui Qu, Asia Research Center, Apr 1999

Figure 45: Timeline of Health System Reform in Taiwan

Overview of Taiwan’s JourneyToward Universal Health Coverage

Taiwan’s transition to universal healthcoverage began in 1950 with the creationof Labor Insurance. The next 40 yearssaw a step-wise broadening and deepen-ing of the benefits package, with multipleinsurance programs established to coverspecific population segments. By 1985,59 percent of the population was covered.In 1995, the government created NationalHealth Insurance to expand the breadthof coverage, improve quality and containcosts. By 2001, 99 percent of the popula-tion was enrolled and had access to care.The evolution of the system is describedin Figure 45.353-360

Steward

Payer

Patients


Department of Health

2°/3°care

1°care

Payment

Fee for service (DRG for 50 most common

diseases)

Private providers

Patients

Bureau of National Health Insurance (BNHI)

Priv

ate

insu

ranc

e

National Health Insurance Fund

Smart Card system

Globalbudget

for several sectors

Source: “National Health Insurance and Technology Adoption: Evidence from Taiwan,” Shin-YiChou, et al., Contemporary Economic Policy, 2004; “Does Universal Health Insurance MakeHealth Care Unaffordable? Lessons from Taiwan,” Jui-Fen Rachel Lu, et al., Health Affairs, 2003;“The healthcare system in Taiwan,” Delon Wu, World Hospitals and Health Services; “Taiwan’sNew National Health Insurance Program: Genesis and Experience So Far,” Tsung-Mei Cheng,Health Affairs, 2003; “Health Systems in East Asia: What Can Developing Countries Learn fromJapan and the Asian Tigers?” Adam Wagstaff, World Bank, 2005; “National Health InsuranceSystem,” Taiwan Health Care Reform Foundation, thrf.org.tw; “Taiwan Takes Fast Track toUniversal Health Care,” T. R. Reid, Apr 2008, npr.org; “The Emerging Health Care Market inTaiwan: An Economic Analysis,” Yanrui Qu, Asia Research Center, Apr 1999

Figure 46: Reformed Taiwanese Health System Structure Taiwan’s Health System Prior to 1995

n Stewardship. The Department of Healthsets overall sector policy and providesbasic inputs to public hospitals.361

n Payer structure and coverage. Thirteen dis-tinct insurance programs managed bydifferent entities cover approximately59 percent of the population (ten pro-grams make up the majority of thiscoverage).362 363 364 The four programsproviding the majority of coverage areLabor Insurance, Low-IncomeHousehold Insurance, Farmer’sInsurance and Government EmployeeInsurance.365 Each has a unique benefitspackage, claims and billing process andset of prices. Private insurance is rare.Only Government Employee Insurancecovers dependents, leaving 41 percentof the population uninsured. In 1992,more than 91 percent of children under14 and more than 42 percent of elderlypeople were uninsured.366 367

n Reimbursement and payment mechanisms.Providers were reimbursed on a fee-for-service basis. Beneficiaries paid payroll-based premiums.368

n Provision. Primary care is provided pri-marily by private clinics and healthfacilities. Seventy percent of theseorganizations contract with the 13health insurance programs. Secondaryand tertiary care is split between publichospitals (which provide one-third ofcare) and private hospitals (which provide two-thirds of care, with 85 per-cent of private facilities contractingwith the health insurance programs).Beneficiaries of the insurance programsmust visit providers that are under con-tract by their insurance programs.369 370

78

n Benefits package. The benefits package iscomprehensive and includes inpatientservices, outpatient services, dentalservices, traditional Chinese medicine,prescription drugs, diagnostics, treat-ment for mental illness, home healthcare and some preventive health servic-es.375 376

n Enrollment. Beneficiaries pay premiumsto enroll. Each premium is calculatedbased on taxable income, the beneficia-ry’s number of dependents and theshare of the contribution that must bemade by the beneficiary (as opposed tothe employer or the government,which also contribute). Between 1995

Key features of Taiwan’s reformed healthsystem (See Figure 46)

n Stewardship. Taiwan’s Department ofHealth sets overall sector policy andoversees the Bureau of National HealthInsurance (BNHI).371 372

n Payer structure and coverage. TheNational Health Insurance program isa government-run, mandatory insur-ance plan that provides coverage for 99percent of the population. All citizens,their dependents, foreigners with resi-dent permits and their dependents arecovered. The scope of private insuranceis very small.373 374

79

Health insurance coverage rate in Taiwan Percent

South Korea

Thailand

Japan

Singapore

Health insurance coverage rate of select peers Percent, latest available over 2005-07

2001200019961995(end)

1995(start)

1991

Source: International Labour Organization, Social health protection: an ILO strategy towardsuniversal access to health care, Social Security Department, August 2007; Lu JR, Hsiao W. DoesUniversal Health Insurance Make Health Care Unaffordable? Lessons From Taiwan Health Affairs(2003), Vol 33 (3)

Figure 47: Impact on Coverage and 2002, the premium rate was 4.25percent of taxable income; this rateincreased to 4.55 percent in 2002 andto 5.17 percent in 2010.377

n Payment mechanisms. Providers are pri-marily paid via global budgets and feesfor service.378 379 For some conditions, aresource-based relative value scale isused, and diagnosis-related groups(DRGs) are phasing in.380 Paymentbased on performance is being testedfor physicians treating breast cancertherapy, diabetes, asthma and hyper-tension.381 Global budgets apply todental care, traditional Chinese medi-cine, clinics and hospitals.382 383 384

Co-payments are required for mostmedical services and vary by service type,location of care and whether the patienthas a referral. Catastrophic diseases, childdelivery, preventive health services andmedical services in select geographies donot require co-payments. Low-incomefamilies, children under three years of ageand veterans are exempt from making co-payments.385-389

n Provision. Taiwan has 1.6 physicians per1,000 people and 6 hospital beds per1,000 people. Nearly all primary careproviders are private, and 90 percent ofthem contract with the BNHI.Secondary and tertiary care is splitbetween public and private hospitals.Thirty percent to 35 percent of hospi-tal beds and 15 percent of hospitals arepublic.390 391 More than 98 percent of allhospitals contract with the BNHI.392 393

No referrals are required to receive hos-pital medical services, and patients canvisit any provider.394 395

n Enablers. Taiwan relies on a sophisticatedinformation technology and smart cardsystem to identify patients and trackmedical records. The smart cards storemedical information related to prescrip-tions, diagnostics, routine treatments,catastrophic illnesses, organ donationand palliative care.396 397 398 399


n Breadth of coverage. Taiwan has seen anincrease in its breadth of health insur-ance provision, covering 59 percent ofthe population in 1995 and 99 percentin 2001 (see Figure 47).400 401 402

n Depth of coverage. The National HealthInsurance benefits package is compre-hensive, replacing the distinct benefitspackages provided by the previous sys-tem of fragmented payers.403 The quali-ty of services is reinforced by the intro-duction of DRGs and pay-for-perform-ance reimbursement, and utilizationhas increased. A study conductedshortly after the introduction ofNational Health Insurance found thatformerly uninsured beneficiaries hadincreased their outpatient visits toequal the number of visits made bythose who were previously insured.404

Patient satisfaction has increased from33 percent to 79 percent.405

Thailand’s health system prior to 2001

n Stewardship. The Ministry of PublicHealth (MoPH) was responsible forsetting overall health sector policy andsubsidizing the public health insuranceprograms. The ministry also providesbasic inputs to public health facili-ties.409-415

n Payer structure and coverage. Seventy percent of the population was coveredby some form of health insurance in1995. The Medical Welfare Scheme for the poor was the largest program,covering 44 percent of the population.The Social Security Scheme, WorkersCompensation Scheme, Civil ServantsMedical Benefit Scheme and privateinsurers mainly covered the formal sector. Informal sector workers could join the Voluntary Health Card Scheme for about $14 per year.Payments for health services could be waived for the very poorest at the discretion of public health staff.416-420

80

Country Profile

Thailand is a lower-middle-income coun-try with a population of 67.4 million. Lifeexpectancy at birth is 69 years.406 Thecountry suffers from a split burden of com-municable and non-communicable diseases.The top three causes of death are cardio-vascular disease, cancer and HIV/AIDS.407

Overview of Thailand’s JourneyToward Universal Health Coverage

Thailand’s transition to universal healthcoverage began in 1975 with the creationof the Medical Welfare Scheme to coverthe poor. Between 1975 and 1992, theThai government established a series ofhealth insurance programs for specificpopulation segments. By 1995, 70 percentof the population was covered by someform of insurance. In 2001, the govern-ment established the Universal CoverageScheme to cover the informal sector.Preexisting payers for the formal sectorwere not reformed. The evolution of thesystem is described in Figure 48.408

Summary: Thailand introduced itsUniversal Coverage Scheme in 2001 tocover the informal sector, adding to afragmented system of payers that previous-ly only covered the formal sector. Theimpact of the reform can be seen in thebreadth, depth and financing of coverage.Breadth of coverage increased from 70percent of the population in 1995 tonearly 100 percent today.

The benefits package in the UniversalCoverage Scheme is quite comprehensive,and beneficiaries are entitled to pay nomore than 30 baht ($0.84) per medicalvisit. Total health expenditure as a per-cent of GDP has remained constant, butimpoverishment due to payment forhealth services has decreased substantially,from 18.3 percent before 2001 to 8.0percent in 2004.

Thai-Rak-Thai (TRT) Party winsnational election, having campaigned on a health careplatform of “30 baht for all”

Economic crisis

Social HealthInsurance Scheme established to cover private sector employees

Civil Servant Medical Benefits Scheme established to cover government employees, retirees, and their dependents

Voluntary Health Card and scheme establishedfor the poor and near poor in the informal sector

59 million people (96 percent of population) are covered by thescheme

2004

1980

1983

1991

Medical Welfare (Low-Income) Schemeextended to the elderly, < 12 years, and disabled

1992

Medical Welfare (Low-Income) Scheme establishedto cover the poor

1997

National Health Security Act passed, creating new institutions to regulate the quality and financial elements of the scheme

2002

30 baht Health Scheme beguncovering all individuals and requiring no patientto pay more than30 baht ($0.84) per medical visit

2001

By the end of the year, 25 million people (40 percent of population) are covered by the new scheme

Ministry of Public Health restructured to oversee all health activities

1975

Ministry of Public Health decentralizes responsibility for health facilities to local governments

2010

70 percent ofpopulation covered by some form ofhealth insurance

1995

Source: “Thailand: Universal Health Care Coverage Through Pluralistic Approaches,” ILO Subregional Office for East Asia; “Future prospects of vol-untary health insurance in Thailand, Supakankunti, Health Policy and Planning, 2000; “Knowledge-based changes to health systems: the Thai experi-ence in policy development,” Tangcharoensathien et al., Bulletin of the WHO, Oct 2004; “Early Results from Thailand’s 30 Baht Health Reform:Something to Smile About,” Damrongplasit et al., Health Affairs, 2009; “The evolution of Thailand’s health system after three crises, three adjust-ments, and three decades of growth,” Nitayarumphong et al., IDRC; “Universal Coverage in the Land of Smiles: Lessons from Thailand’s 30 BahtHealth Reforms,” Hughes, Health Affairs, 2007

Figure 48: Timeline of Health System Reform in Thailand

Case Study

HEALTH SYSTEM REFORMS IN THAILAND

2001–2004

81

Steward

Payer Private Insur-ance

Patients

Public, provincial (MoPH) hospitals Private hospitals

Wealthy

Ministry of Public Health (MoPH)

2°/3°care

1°care

Payment

Universal Coverage Scheme (30 Baht Scheme)

Private sector

employ-ees

Social Security

andWorker Comp

Schemes

Gov’temployeesand retirees

and their dependents

CivilServants Medical Benefit Scheme

Capitation/ DRG Capitation/fee for service

DRG/feefor service

Fee for service

Social Security Schemecontracted providers

Private providers

Public primary care units (health centers and community hospitals)

Informal sector

Nat’l Health Security Office (NHSO)

Source: “Thailand: Universal Health Care Coverage Through Pluralistic Approaches,” ILO Sub-regional Office for East Asia; “Future prospects of voluntary health insurance in Thailand, Supakan-kunti, Health Policy and Planning, 2000; “Knowledge-based changes to health systems: the Thaiexperience in policy development,” Tangcharoensathien et al., Bulletin of the WHO, Oct 2004;“Early Results from Thailand’s 30 Baht Health Reform: Something to Smile About,” Damrongplasitet al., Health Affairs, 2009; “The evolution of Thailand’s health system after three crises, threeadjustments, and three decades of growth,” Nitayarumphong et al., IDRC; “Universal Coverage inthe Land of Smiles: Lessons from Thailand’s 30 Baht Health Reforms,” Hughes, Health Affairs, 2007

Figure 49: Reformed Thai Health System Structure

n Reimbursement and payment mechanisms.Each program had its own mode of provider reimbursement. TheVoluntary Health Card Scheme, CivilServants Medical Benefit Scheme andprivate insurers purchased servicesusing a fee-for-service mechanism. TheSocial Security Scheme and WorkersCompensation Scheme used capitation.Finally, the Medical Welfare Schemepaid hospitals based on a combinationper-capita and diagnoses-related group(DRG) system, and provided a globalbudget for primary care to individualprovinces.421

Key Features of Thailand’s Reformed HealthSystem (See Figure 49)

n Stewardship. The MoPH is responsiblefor setting overall health sector policyand continues to subsidize the publicinsurance programs. The ministry willtransfer most public health facilityduties to local governments by the end of 2010.424

n Payer structure and benefits package.Nearly 100 percent of the populationis covered by some form of healthinsurance. The National HealthSecurity Office administers theUniversal Coverage Scheme and regis-ters providers. The Universal CoverageScheme covers about 45 million peo-ple, 67 percent of the population, andprovides a fairly comprehensive bene-fits package. The 30 Baht Schemewithin the Universal Coverage Schemeentitles each beneficiary to pay nomore than 30 baht ($0.84) per medicalvisit, including drugs.425 426 427

n Payment mechanisms. The UniversalCoverage Scheme uses capitation topurchase services from providers at alllevels of care. Weighted DRGs are alsoused in some places. The SocialSecurity Scheme uses capitation fornon-work-related medical problems,while the Workers CompensationScheme uses a fee-for-service mecha-nism for work-related medical needs.The Civil Servants Medical BenefitScheme uses a combination of DRGsand fee-for-service payments, and pri-vate insurers continue to use the fee-for-service mechanism.428 429

n Provision. The MoPH provides almost70 percent of all hospital services andbeds in Thailand. Provincial andnational hospitals are the only onesoffering specialist medical services.Primary care units are the contractingunit for purchasing from the UniversalCoverage Scheme. Each patientenrolled in the Universal CoverageScheme must register with a publichealth unit in the local residential area

n Provision. For primary care, informalsector workers and low-income benefi-ciaries had to visit public primary careunits. Private sector employees usedproviders contracted with the SocialSecurity Scheme. All other beneficiariescould choose providers freely. Referralsto secondary and tertiary care wererequired for beneficiaries of theMedical Welfare and Voluntary HealthCard Schemes.422 423

to be used as the primary point of care.Outside of the Universal CoverageScheme, the popularity of privateproviders is growing among those whocan afford them.430 431

Impact of the Health System Reforms (See Figure 50)

n Breadth of coverage. Thailand has seen anincrease in its breadth of health cover-age, from offering coverage to 70 per-cent of the population in 1995 to near-ly 100 percent today.432

n Out-of-pocket expenditures. Thailand hasseen a long-term decline in out-of-pocket expenditures, as illustrated inFigure 51.

n Depth of coverage. The depth of healthcoverage has increased substantially forthe newly insured, and access to carehas increased in that population. In2001, the outpatient contact rate forthe then-uninsured was 60.9 percent.By 2005, the outpatient contact ratehad increased to 73.3 percent. Health

82

outcomes have also improved: infantmortality has improved from 11 deathsper 1,000 live births in 2000 to 7deaths per 1,000 live births in 2006,and under-five mortality has improvedfrom 13 deaths in 1,000 to 8 deaths in1,000 over the same period.

n Financing. Total health expenditure as apercent of GDP has remained fairlyconstant over the period of reform, buthas tripled in absolute dollars. Out-of-pocket expenditure as a proportion oftotal health expenditure has decreasedfrom 33.1 percent in 2001 to 25.9 per-cent in 2007, and government expen-diture has increased from 51.3 percentto 58.8 percent over the same period(see Figure 52). Impoverishment dueto payment for health services hasdecreased substantially since the intro-duction of the Universal CoverageScheme, dropping from 18.3 percentbefore 2001 to 8.0 percent in 2004.

Impoverishment due to

payment for health services has

decreased substantially since the

introduction of the Universal

Coverage Scheme…

Health insurance coverage rate in Thailand Percent

Health insurance coverage rate in select peers Percent, latest available over 2005-07

19931975 2004200019951963 2007*

Thailand

South Korea

Taiwan

Japan

Singapore

* Data from ILO report published in 2007; date for data not provided

Source: Hughes, D. & Leethongdee, S. 2007. Universal Coverage in the Land of Smiles: Lessons from Thailand’s 30 Baht Health Reforms. Health Affairs 26(4):9.

Figure 50: As coverage increases, Thailand’s health insurance coverage rate is close to that of Asian peers

83


2007200520032001199919971995

Total health expendituresBillion US$

20032001199919971995 20072005

2.8

2003

33.1

51.3

2000

26.433.7

50.5

24.927.3

2002

57.6 57.6

2001 2004 2005 2006 2007

57.0 57.2 58.857.5

3.7 3.3 3.1 2.8

27.6 27.2 25.9

OtherPrivate insurance

GovernmentSocial security

OOP

Distribution of national health expenditures Percent

2.6

Figure 52: Changes in Thailand’s Health Financing Over Time



2006

2005

20042003

2002

20012000

1999

1998

19971996

1995

Out of pocket spend as a proportion of total health expenditurePercent

Year


Universal Coverage “30 Baht” Scheme launched


R2 = 0.88



Figure 51: Out-of-Pocket Expenditures and Correlation of THE to GDP in Thailand

Source: WHO National Health Accounts; OECD; McKinsey analysis

Adalet ve Kalk›nma Party

Andhra Pradesh

Accesso Universal con Garantías Explicitas

Bureau of National Health Insurance

Community-Based Health Insurance

Community Health Center

Complementary Package of Activities

Disability Adjusted Life Year

Danish International Development Agency

United Kingdom Department for International Development

Diagnosis-Related Group

District-Wide Mutual Health Insurance Scheme

Emekli-Sandigi (Government Employee Retirement Fund)

Federation of Korean Medical Insurance Societies

Fondo Nacional de Salud

Gross domestic product

Ghana-Diagnosis Related Group

Health Insurance Review Agency

Human immunodeficiency virus/acquired immunodeficiency syndrome

Health Transformation Program

Institución de Salud Previsional

Information technology

Millennium Development Goal

Mutual Health Organization

Ministry of Health

Ministry of Health and Welfare

Ministry of Public Health

Minimum Package of Activities

Nongovernmental Organization

National Health Insurance Authority

National Health Insurance Corporation

National Health Insurance Fund

National Health Service

New Patriotic Party

Organisation for Economic Co-operation and Development

Out-of-pocket

Payment associated with diagnosis

Private Commercial Health Insurance Scheme

Primary Health Center

Private Mutual Health Insurance Scheme

Servicio Médico para Empleados

Sosyal Güvenlik Kurumu (Social Security Institution)

Servicio Nacional de Salud

Sistema Nacional de Servicios de Salud

Sigortalar Kurumu (Social Security Association)

Taiwan-Diagnosis Related Group

United Kingdom

United States Agency for International Development

Value-added tax

World Health Organization

Yesilkart (Green Card)

84

AK Party

AP

AUGE

BNHI

CBHI

CHC

CPA

DALY

DANIDA

DFID

DRG

DWMHIS

ES

FKMIS

FONASA

GDP

G-DRG

HIRA

HIV/AIDS

HTP

ISAPRE

IT

MDG

MHO

MoH

MoHW

MoPH

MPA

NGO

NHIA

NHIC

NHIF

NHS

NPP

OECD

OOP

PAD

PCHIS

PHC

PMHIS

SERMENA

SGK

SNS

SNSS

SSK

TW-DRG

UK

USAID

VAT

WHO

YK

Abbreviations

85

1 WHA Resolution 58.33. Geneva: WHO; 2005. Available at: www.who.int/gb/ebwha/pdf_files/WHA58/WHA58_33-en.pdf ).

2 Bloom, D. & Canning, D. 2000. The Health and Wealth of Nations. Science 287(5456):1207-209; Fogel, R. 2004. The Escape from Hunger and Premature Death, 1700-2100: Europe, America, and the Third World. New York: CambridgeUniversity Press; Baeza, C. & Packard, T. 2006. Beyond survival: protecting households from health shocks in Latin America.Washington, D.C.: The World Bank and Stanford University Press.

3 Carrin, G., Mathauer, I., Evans, D.B. 2008. Universal coverage of health services: tailoring its implementation. Bull World Health Organ 86, pp. 817-908.

4 Ibid.

5 Garrett, L., Chowdhury, M., Pablos-Mendez, A. 2009. All for universal health coverage. The Lancet 374 (Oct 10).

6 Kutzin, J., 2000. Toward Universal Health Care Coverage: A Goal-oriented Framework for Policy Analysis. World Bank HumanDevelopment Network.

7 The Rockefeller Foundation. 2010. Transitioning to Universal Health Coverage: A Small Price to Pay for Progress.Available at www.rockfound.org/news/publications

8 Ibid.

9 www.jointlearningnetwork.org

10 The World Health Report 2010. Health Systems Financing: the Path to Universal Coverage.

11 WHA Resolution 58.33. Geneva: WHO; 2005. Available at: www.who.int/gb/ebwha/pdf_files/WHA58/WHA58_33-en.pdf ).

12 Kutzin, J. 2000. Toward Universal Health Care Coverage: A Goal-oriented Framework for Policy Analysis.World Bank Human Development Network.

13 World Health Organization. 2000. World Health Report.

14 Baeza, C. & Packard, T. 2006. Beyond Survival: Protecting Households from Health Shocks in Latin America.Washington, DC: The World Bank and Stanford University Press.

15 Central Committee of the Communist Party of China, State Council. 2009. Guidelines on Deepening the Reform of Health-care System.

16 Bump, J. June 2010. The Long Road to Universal Health Coverage: A century of lessons for development strategy. Working paper prepared for PATH. Seattle, WA: PATH.

17 Drouin, J.P., Hediger,V., Henke, N. 2008. Health Care Costs: A Market-Based View. McKinsey Quarterly (Sep): 1-10.

18 Baeza, C. & Packard, T. 2006. Beyond survival: protecting households from health shocks in Latin America. Washington, DC: The World Bank and Stanford University Press.

19 World Health Organization. 2006. World Health Report 2006. Geneva.

20 International Monetary Fund and International Development Association. 2009. Heavily Indebted Poor Countries (HIPC)Initiative and Multilateral Debt Relief Initiative (MDRI)—Status of Implementation.

21 World Health Organization. 2006. World Health Report 2006. Geneva.

22 World Health Organization. 2008. The Global Burden of Disease: 2004 Update. Geneva.

23 International Labour Organization. 2008. Social Health Protection: An ILO Strategy Toward Universal Access to Health Care. Geneva.

24 UK Department for International Development. Project details: Andhra Pradesh Health Sector Reform Programme. Available at: http://projects.dfid.gov.uk/ProjectDetails.asp?projcode=108071-101&RecordsPerPage=10&countrySelect=IN-India&PageNo=5. Accessed April 7, 2010.

25 Garrett, L., Chowdhury, A.M.R., Pablos-Mendez, A. 2009. All For Universal Health Coverage. Lancet 374(9):1294-99

26 Hsiao, W. & Heller, P. 2007. What Macroeconomists Should Know about Health Care Policy. Washington, DC: InternationalMonetary Fund.

27 Omaswa, F. & Boufford, J.I. 2010. Strong Ministries for Strong Health Systems. New York: The Rockefeller Foundation.

28 Discussions with health systems leaders closely involved in the reforms.

29 Indian Ministry of Health, Medical, and Family Welfare. 2009. Profile of Andhra Pradesh. Available at: mohfw.nic.in. AccessedFebruary 4, 2010.

30 Ministry of Statistics and Programme Implementation, Government of India. Gross state domestic product at current prices.Available at: mospi.nic.in. Accessed February 8, 2010.

31 Mallipeddi, R., Pernefeldt, H., & Berhkvist, S. 2009. Andhra Pradesh Health Sector Reform, A Narrative Case Study. ACCESSHealth Initiative: Results for Development Institute.

Endnotes

86

32 Rajiv Arogyasri Health Insurance Scheme. 2008. Available at: rajivaarogyasri.wordpress.com. Accessed February 8, 2010.

33 Fresh bids invited for Rajiv Arogyasri insurance scheme. 2007. The Hindu (Aug 23).


35 Ibid.



38 eHealth India. 2009 Award for Government/Policy Initiative of the Year.

39 “Aarogyasri”—Revolutionising public health through conviction and innovative ICT application. 2009. Available at: ehealthon-line.org. Accessed February 10, 2010.


41 Roles and responsibilities of Rajiv Aarogyasri Medical Coordinator. Available at: www.aarogyasri.org. Accessed February 8, 2010.







48 Aarogyasri Health Care Trust. 2007. Surgery/Therapy List.

49 Aarogyasri Health Care Trust. 2007. Follow-Up Services for Aarogyasri Beneficiaries.

50 Department of Health, Medical, and Family Welfare, Government of Andhra Pradesh. 2010. Aarogyasri Health Care Insurance Scheme—Norms for Billing and Guidelines for Utilization of Amounts Received by the Government Hospitals under Aarogyasri Scheme.

51 Mallipeddi, R., Pernefeldt, H., & Berhkvist, S. 2009. Andhra Pradesh Health Sector Reform, A Narrative Case Study.ACCESS Health Initiative: Results for Development Institute.


53 Aarogyasri Health Care Trust. 2008. Health Camp Policy.

54 Aarogyasri Health Care Trust. 2007. Detailed Work Flow Description of Medical Camp in Aarogyasri Portal.


56 Role of Aarogyamithra. 2007. [cited 2010 February 10]. Available at: aarogyasri.org. Accessed February 1, 2010.

57 Health India. 2009 Award for Government/Policy Initiative of the Year.

58 “Aarogyasri”—Revolutionising public health through conviction and innovative ICT application. 2009. Available at: ehealthonline.org. Accessed February 10, 2010.


60 Department of Health, Medical, and Family Welfare, Government of Andhra Pradesh. 2010. Aarogyasri Health Care Insurance Scheme—Norms for Billing and Guidelines for Utilization of Amounts Received by the Government Hospitals under Aarogyasri Scheme.

61 CM’s plea to PM to provide financial aid to “Arogya Sri.” 2009. Available at: andhrajyothy.com. Accessed February 8, 2010

62 Joint Learning Workshop. 2010. Moving Toward Universal Health Coverage: Results for Development.


64 AP Health Sector Reform Programme Launched. 2007. Available at: ukinindia.fco.gov.uk. Accessed February 4, 2010.

65 Aarogyasri Health Care Trust. 2008. Health Camp Policy.

66 Aarogyasri Health Care Trust. 2007. Detailed Work Flow Description of Medical Camp in Aarogyasri Portal.


68 Mallipeddi, R., Pernefeldt, H., & Bergkvist, S. 2009. Andhra Pradesh Health Sector Reform, A Narrative Case Study.ACCESS Health Initiative: Results for Development Institute.


70 Taking Health Care to the People. 2008. Available at: inclusion.skoch.in. Accessed February 5, 2010.

71 Social Security Department, International Labour Organization. 2007. Social Health Protection: An ILO Strategy towardUniversal Access to Health Care.

87

72 Department of Health, Medical, and Family Welfare, Government of Andhra Pradesh. 2007. Arogyasri Community HealthInsurance Scheme for Below Poverty Line Families in Mahaboobnagar, Anatapur, and Srikakulam Districts.

73 Ramakrishnan, H. 2009. YSR’s formula: Aarogyasri. The Economic Times.


75 Arogyasri Health Care Trust. Vital Statistics. Available at: aarogyasri.org. Accessed February 9, 2010.


77 IndiaStat. New Delhi. Available: http://www.indiastat.com/default.aspx. Accessed February 20, 2010.

78 Ramana, K. & Andhra, V. July 24, 2009. GDP Growth Halves to 5.5 percent. Available at: dnaindia.com. Accessed February 8, 2010.


80 Ibid.

81 Health insurance for government staff soon. 2010. The Hindu (Feb 6).

82 World Development Indicators. World Bank. Washington, DC. Available at: http://data.worldbank.org/indicator. Accessed February 11, 2010.

83 WHOSIS. World Health Organization. Geneva. Available at: http://www.who.int/whosis/en/Accessed February 20, 2010.

84 Ibid.

85 The Republic of Ghana. 2007. Service Availability Mapping (SAM).

86 WHOSIS. World Health Organization. Geneva. Available at: http://www.who.int/whosis/en/ Accessed February 20, 2010.

87 Ibid.

88 Ibid.


90 Oxfam. Ghana: Where “Successful Health Insurance” is Neither Successful Nor in Fact Health Insurance. Available at:http://www.afronets.org/archive/201002/msg00038.php. Accessed February 25, 2010.

91 Accra: National Development Planning Commission. 2009. Citizens’ Assessment of the National Health Insurance Scheme.

92 National Health Insurance Authority, Directorate of Corporate Affairs and Strategic Direction. 2010. The Road to Ghana’sHealth Care Financing.


94 Agyepong, I.A. & Adjei, S. 2007. Public Social Policy Development and Implementation: A Case Study of the Ghana NationalHealth Insurance Scheme. Health Policy and Planning 11.

95 Ghana: National health insurance scheme launched. 2004. IRIN News.


97 Agyepong, I.A. & Adjei, S. 2007. Public Social Policy Development and Implementation: A Case Study of the Ghana NationalHealth Insurance Scheme. Health Policy and Planning11.

98 Baltussen, R., Rhodes, E.B., Narh-Bana, S.A., Agyepong, I. 2006. Management of mutual health organizations in Ghana.Tropical Medicine and International Health 11(5):5.

99 Contribution of Mutual Health Organizations to Financing, Delivery, and Access to Health Care. 2001. Ghana Case Study:International Labour Organization.



102 Ghana: National health insurance scheme launched. 2004. IRIN News.



105 Ibid.

106 Ibid.

107 The Political Development of the Ghanaian National Health Insurance System: Lessons in Health Governance. 2007. USAID.


109 Ibid.

110 National Health Insurance Act 650. 2003. Republic of Ghana.

88


112 Witter, S. & Garshong, B. 2009. Something old or something new? Social health insurance in Ghana. BMC International Health and Human Rights 9(20):13.

113 National Health Insurance Authority, Directorate of Corporate Affairs and Strategic Direction. 2010. The Road to Ghana’s Health Care Financing.

114 National Health Insurance Act 650. 2003. Republic of Ghana.

115 Independent Review. 2008. Health Sector Programme of Work Ministry of Health, Ghana.



118 Membership registration. [cited 2010 March 15]. Available at: http://www.nhis.gov.gh/?CategoryID=162&ArticleID=104

119 National Health Insurance Scheme. [cited 2010 March 15]. Available at:http://img.modernghana.com/images/content/report_content/NHIS.pdf

120 Ibid.

121 ID Card. [cited 2010 March 15]. Available at: http://www.nhis.gov.gh/?CategoryID=162&ArticleID=106

122 Premium and Registration Fee. [cited 2010 March 15]. Available at: http://www.nhis.gov.gh/?CategoryID=162&ArticleID=105




126 About Us (Ghana Health Service). [cited 2010 March 11]. Available at:http://www.ghanahealthservice.org/aboutus.php?inf=Background

127 Adjei, E. 2003. Health Sector Reforms and Health Information in Ghana. Information Development 19(256).


129 Ibid.


131 National Health Insurance Scheme. [cited 2010 March 15]. Available at:http://img.modernghana.com/images/content/report_content/NHIS.pdf


133 WHOSIS. World Health Organization. Geneva. Available at: http://www.who.int/whosis/en/. Accessed February 20, 2010.


135 Project Information Document. 2007. Health Insurance Project (Government of Ghana): World Bank.


137 Ibid.




141 Oxfam. Ghana: Where “Successful Health Insurance” is Neither Successful Nor in Fact Health Insurance. Available at: http://www.afronets.org/archive/201002/msg00038.php. Accessed February 25, 2010.


143 Delivering on the NHIS Promise. 2010. Ministry of Health, Ghana.

144 Ghana Demographic and Health Survey. 2008. Accra, Ghana: Ghana Statistical Service, Ghana Health Service.





89


150 International Monetary Fund. October 2009. World Economic Outlook Database. WHOSIS.

151 Oxfam. Ghana: Where “Successful Health Insurance” is Neither Successful Nor in Fact Health Insurance. Available at: http://www.afronets.org/archive/201002/msg00038.php. Accessed February 25, 2010.


153 Ibid.

154 Zakaria-Tamale, M. 2009. Ghana: NHIS Challenges Can Cripple Health Delivery. [cited 2010 March 10]. Available at: allafrica.com.


156 Danso, K. 2009. Ghana’s Health Care Arithmetic—Where is the Money Going to? [cited 2010 March 10]. Available at:ghanaweb.com.


158 Project Information Document. 2007. Health Insurance Project (Government of Ghana): World Bank.




162 United Nations. Demographic and Social Statistics. Geneva. Available at: http://unstats.un.org/unsd/demographic/products/socind/default.htm. Accessed February 12, 2010.


164 UNdata. United Nations. Geneva. Available at: http://data.un.org/. Accessed February 15, 2010.

165 Death and DALY estimates for 2004 by cause for WHO Member States, Persons all ages. World Health Organizations. Availableat: http://www.who.int/healthinfo/global_burden_disease/estimates_country/en/index.html. Accessed February 14, 2010.

166 Letelier, L. & Bedregal, P. 2006. Health reform in Chile. Lancet 368(2).


168 Ibid.

169 WHO National Health Accounts. World Health Organization.


171 Manuel, A. 2002. The Chilean Health System: 20 Years of Reforms. Salud Publica de Mexico 44(1).

172 Unger, J-P., De Paepe, P., Cantuarias, G., Herrera, O. 2008. Chile’s Neoliberal Health Reform: An Assessment and a Critique. PLoS Medicine 5(4):5.

173 Bitran, R. & Escobar, L. 2008. The Politics of the AUGE Health Reform in Chile. Results for Development Institute: Bitran y Asociados.

174 Country Studies: Chile Health Programs. [cited 2010 April 2]. Available at: country-studies.com/chile/health-programs.html


176 Country Studies: Chile Health Programs. [cited 2010 April 2]. Available at: country-studies.com/chile/health-programs.html


178 Barrientos, A. & Lloyd-Sherlock, P. 2000. Reforming health insurance in Argentina and Chile. Health Policy and Planning 15(4):6.




182 Ibid.

183 Holst, J., Laaser, U., Hohmann, J. 2004. Chilean health insurance system: a source of inequity and selective social insecurity. Journal of Public Health 12(11).

184 Bastias, G., Pantoja, T., Leisewitz, T., Zarate, V. 2008. Health care reform in Chile. CMAJ 179(12):4.


90


187 Ibid.





192 Lenz, R. & de la Maza, M.L. Financial Reform and Information Systems: The Chilean Experience of FONASA in the 90s. Lenz Consultoria.

193 Ibid.

194 Ibid.

195 Staff Appraisal Report. 1992. Chile, Health Sector Reform Project. The World Bank.

196 Health Sector Reform Project. 2001. [cited 2010 April 3]. Available at: http://web.worldbank.org/external/projects/main?pagePK=64283627&piPK=73230&theSitePK=40941&menuPK=228424&Projectid=P006639


198 Lenz, R. & de la Maza, M.L. Financial Reform and Information Systems: The Chilean Experience of FONASA in the 90s. Lenz Consultoria.

199 Ibid.


201 Ibid.

202 Ibid.

203 Tsai, T. & Ji, J. 2009. Neoliberalism and its discontents: impact of health reforms in Chile. Harvard International Review.

204 Realizing Rights through Social Guarantees: An Analysis of New Approaches to Social Policy in Latin America and South Africa.2008. World Bank, Social Development Department.


206 Primera Encuesta Nacional de Calidad de Vida y Salud. 2000. Ministerio de Salud de Chile, Instituto Nacional de Estadisticas.


208 Historia del Ministerio, 2a parte. [cited 2010 April 2]. Available at: http://www.redsalud.gov.cl/portal/url/page/minsalcl/g_conozcanos/g_mision_vision/hist_actualidad_mision_vision.html

209 Hanzich, J. 2005. A man on a mission: Chilean President Ricardo Lagos’s health reform plan. Harvard International Review.


211 Ibid.


213 Aprueba garantias explicitas en salud del regimen general de garantias en salud. 2007. Decreto no 44: Ministerios de Hacienda y Salud.

214 Régimen General de Garantías de Salud Nº 19966. 2005. Ministerio de Salud.


216 Garantia por problema de salud. 2007. [cited 2010 March 4]. Available at: fonasa.cl

217 Guia informativa del AUGE. 2006. FONASA.


219 Ibid.

220 Realizing Rights through Social Guarantees: An Analysis of New Approaches to Social Policy in Latin America and South Africa.2008. World Bank, Social Development Department.

221 Law 19.888. 2003. Ministerio de Hacienda, Chile.




225 Bitran, R. & Escobar, L. 2008. The Politics of the AUGE Health Reform in Chile. Results for Development Institute: Bitran yAsociados.

91


227 Realizing Rights through Social Guarantees: An Analysis of New Approaches to Social Policy in Latin America and South Africa. 2008. World Bank, Social Development Department.

228 Chile: 20 Años de Esquemas Liberales en Protección Social. 2002. United Nations Development Program.


230 World Economic Outlook Database. 2009. International Monetary Fund.

231 OECD DAC. Organisation for Economic Co-operation and Development.


233 Chile: 20 Años de Esquemas Liberales en Protección Social. 2002. United Nations Development Program.


235 Discussions with health systems leaders closely involved in the reforms

236 Barrientos, A. & Lloyd-Sherlock, P. 2000. Reforming health insurance in Argentina and Chile. Health Policy and Planning 15(4):6.

237 González, C. 2009. Superintendencia exige a Fonasa cumplir con Plan AUGE. La Nación.

238 Evaluación Plan AUGE. 2009. Adimark GfK.



241 Staff Appraisal Report. 1992. Chile, Health Sector Reform Project. The World Bank.

242 Health Sector Reform Project. 2001 [cited 2010 April 3]. Available at: http://web.worldbank.org/external/projects/main?pagePK=64283627&piPK=73230&theSitePK=40941&menuPK=228424&Projectid=P006639

243 FONASA budgets 1985-2010. fonasa.cl.

244 Discussions with health systems leaders closely involved in the reforms .

245 FONASA budgets 1985-2010. fonasa.cl.

246 Ibid.

247 Superintendencia de Salud budgets 2005-2010. DIPRES.cl.

248 Superintendencia de ISAPREs budgets 2002-2004. DIPRES.cl.

249 MIF approves $1.7 million to Chile to foster productivity and management tools in hospitals. 2005. [cited 2010 April 7].Available at: http://www.iadb.org/NEWS/detail.cfm?Language=En&artType=PR&artid=2685&id=2685

250 Organisation for Economic Cooperation and Development. OECD DAC Aid Statistics. Paris. Available at: www.oecd.org/dac/stats/data. Accessed on February 10, 2010.

251 OECD Reviews of Health Systems—Turkey. 2008.

252 Social Security Department, International Labour Organization. 2007. Social Health Protection: An ILO Strategy towardUniversal Access to Health Care.


254 Tatar, M., Ozgen, H., Sahin, B., Belli, P., Berman, P. 2007. Informal Payments in the Health Sector: A Case Study from Turkey.Health Affairs 26(4):10.

255 Kisa, A. & Younis, M. 2006. Financing health care for the poor in Turkey: Is a temporary solution becoming a permanentscheme? Public Health Reports 121(Nov-Dec).

256 Sosyal Guvenlik Kapsami Social Security Coverage. 2009. SGK.

257 The European health report 2009: health and health systems. World Health Organization.

258 Turkey Health Transformation Program—Progress Report. 2008.

259 Turkey Health Transformation Program—Progress Report. 2009.



262 Yazar, I. 2008. SGK lifts health carnets without waiting for smart cards. Today’s Zaman.

263 Health at a Glance—Turkey 2007. 2008. Ankara: Ministry of Health, School of Public Health.

264 National Accounts. Department of National Accounts, State Institute of Statistics (Turkey).

92


266 Ibid.

267 Lenz, R. & de la Maza, M. L. 1997. Financial Reform and Information Systems: The Chilean Experience of FONASA in the90s. Santiago, Chile: Lenz Consultoria.

268 Staff Appraisal Report. 1992. Chile, Health Sector Reform Project. World Bank.

269 Ministry of Health,Turkey. 2009. Turkey Health Transformation Program: Progress Report.

270 Aarogyasri Health Care Trust. About Scheme. Available at: http://www.aarogyasri.org/ASRI/FrontServlet?requestType=CommonRH&actionVal=RightFrame&pageName=About_Scheme_phaseI. Accessed March 2, 2010.

271 Aarogyasri Health Care Insurance Scheme. 2010. Norms for Billing and Guidelines for Utilization of Amounts Received by the Government Hospitals under Aarogyasri Scheme. Department of Health, Medical, and Family Welfare, Government of Andhra Pradesh.



274 Rwanda MDG Report. 2003. United Nations Development Group.


276 World Health Report 2006. 2006. World Health Organization.

277 Annual Report 2006-07. 2007. HRD Policy and Planning: Ministry of Health and Social Services.

278 World Health Report 2000. 2000. World Health Organization.

279 Rwanda: Interim DHS, 2007-08. 2009. National Institute of Statistics of Rwanda.


281 Mutual Health Insurance Policy in Rwanda. 2004. Ministry of Health.

282 Schneider, P., Diop, F., Bucyana, S. 2000. Development and Implementation of Prepayment Schemes in Rwanda. Partnershipsfor Health Reform: Abt Associates.

283 Partners for Health Reformplus Project. 2004. The Role of Pilot Programs: Approaches to Health Systems Strengthening.Chapter 4: Community-Based Health Insurance in Rwanda, pp. 71-89. Abt Associates and USAID.


285 Schneider, P., Diop, F., et al. 2000.

286 Schneider, P., Diop, F., Leighton, C. 2001. Pilot Testing Prepayment for Health Services in Rwanda: Results andRecommendations for Policy Directions and Implementation. Abt Associates.

287 Reaching the Poor with Health Services: Rwanda. 2008. World Bank.


289 Schneider, P., Diop, F., Leighton, C. 2001.

290 Health financing for poor people: resource mobilization and risk sharing. 2005. Bulletin of the World Health Organization.

291 Reaching the Poor with Health Services: Rwanda. 2008. World Bank.


293 Bulletin of the World Health Organization. 2005.


295 Partners for Health Reformplus project. 2004.


297 Schneider, P., Diop, F., Leighton, C. 2001.

298 Partners for Health Reformplus project. 2004.

299 Partners for Health Reformplus Project. 2006. Catalogue of Community Based Health Financing Schemes, Rwanda. Abt Associates and USAID.


301 Musango, L., Butera, J., Inyarubuga, H., Dujardin, B. 2006. Rwanda’s health system and sickness insurance schemes.International Social Security Review 59(1).


303 Musango, L., Butera, J., et al. 2006.

93

304 Ibid.

305 Rwanda: Service Provision Assessment Survey, 2001. 2003. Ministry of Health and National Population Office, Rwanda, and ORC Macro.




309 Rwanda: Service Provision Assessment Survey, 2001. 2003. Ministry of Health and National Population Office, Rwanda, and ORC Macro.


311 Mutual Health Insurance Policy in Rwanda.2004. Ministry of Health.


313 Ghana & Rwanda Set the Example on Scaling Up Health Insurance in Africa. 2009. Accra: World Bank.


315 Rwanda MDG Report. 2003. United Nations Development Group.

316 Rwanda: Interim DHS, 2007-08. 2009. National Institute of Statistics of Rwanda.



319 Anderson, G. 1989. Universal Health Care Coverage in Korea. Health Affairs.

320 Kwon, S. 2008. Thirty years of national health insurance in South Korea: lessons for achieving universal health care coverage. Health Policy and Planning.

321 Kwon, S. 2003. Payment system reform for health care providers in Korea. Health Policy and Planning 18(1):8

322 National Health Insurance Program in Korea 2001. 2001. National Health Insurance Corporation, Republic of Korea.

323 Lee, J-C. 2003. Health Care Reform in South Korea: Success or Failure? American Journal of Public Health 93(1):3.

324 Jeong, H-S. 2005. Health care reform and change in public-private mix of financing: a Korean Case. Health Policy 74:12.


326 Kwon, S. 2008.

327 Jeong, H-S. 2005.


329 Kwon, S. 2008.

330 Jeong, H-S. 2005. Health care reform and change in public-private mix of financing: a Korean Case. Health Policy 74:12.

331 Kwon, S. 2008.

332 Kwon, S. 2003. Payment system reform for health care providers in Korea. Health Policy and Planning 18(1):8.

333 Jeong, H-S. 2005.


335 Kwon, S. 2008.


337 Ibid.

338 Ibid.

339 Ibid.

340 Lee, J-C. 2003. Health Care Reform in South Korea: Success or Failure? American Journal of Public Health 93(1):3.

341 Social Security Deparment, International Labour Organization. 2007. Social Health Protection: An ILO strategy towardUniversal Access to Health Care.

342 Kwon, S. 2008.

343 Ibid.



346 Kwon, S. 2008.

94


348 Kwon, S. 2008.


350 Kwon, S. 2008.

351 World Economic Outlook Database. 2009. International Monetary Fund.

352 Taiwan Statistical Data Book. 2009. Council for Economic Planning and Development, Taiwan.

353 Lu, J-FR. & Hsiao, W. 2003. Does Universal Health Insurance Make Health Care Unaffordable? Lessons from Taiwan. HealthAffairs 22(3).

354 Wu, Y. 1999. The Emerging Health Care Market in Taiwan: An Economic Analysis. Working Paper No 92. Asia ResearchCenter, Murdoch University.

355 Wu, D. n.d. The health care system in Taiwan. World Hospitals and Health Services 42(1).

356 Chou, S-Y., Liu, J-T., Hammitt, J. 2004. National Health Insurance and Technology Adoption: Evidence from Taiwan.Contemporary Economic Policy 22(1):12.

357 Reid, T.R. 2008. Taiwan Takes Fast Track to Universal Health Care. National Public Radio.

358 Cheng, T-M. 2003. Taiwan’s New National Health Insurance Program: Genesis and Experience So Far. Health Affairs 22(3).

359 Wagstaff, A. 2005. Health Systems in East Asia: What Can Developing Countries Learn from Japan and the Asian Tigers? World Bank.

360 Health Care in Taiwan, National Health Insurance System. [cited 2010 March 8] Available at: thrf.org.tw




364 Yang, H-C. & Morlock, L. 2010. The Formulation of National Health Insurance Policy (book forthcoming).

365 Lu, J-FR. & Hsiao, W. 2003. Does Universal Health Insurance Make Health Care Unaffordable? Lessons from Taiwan. Health Affairs 22(3).


367 Yang, H-c. & Morlock, L. 2010. The Formulation of National Health Insurance Policy (book forthcoming).

368 Wagstaff, A. 2005. Health Systems in East Asia: What Can Developing Countries Learn from Japan and the Asian Tigers?:World Bank.

369 Wu, Y. 1999. The Emerging Health Care Market in Taiwan: An Economic Analysis. Working Paper No 92. Asia Research Center, Murdoch University.



372 Cheng, T-M. 2003. Taiwan’s New National Health Insurance Program: Genesis and Experience So Far. 22(3).

373 Ibid.

374 Insurance Coverage. 2010. Bureau of National Health Insurance.


376 Covered and Non-covered Services. [cited 2010 April 13]. Available at:http://www.nhi.gov.tw/english/webdata.asp?menu=11&menu_id=592&webdata_id=3166

377 How Premiums Are Calculated. [cited 2010 April 13]. Available at:http://www.nhi.gov.tw/english/webdata.asp?menu=11&menu_id=591&webdata_id=3153

378 Lu, J-FR. & Hsiao, W. 2003. Does Universal Health Insurance Make Health Care Unaffordable? Lessons from Taiwan. 22(3).




382 Ibid.

95

383 Health care in Taiwan, National Health Insurance System. [cited 2010 March 8] Available at: thrf.org.tw




387 Wu, D. The health care system in Taiwan. World Hospitals and Health Services 42(1).




391 Morlock, L. 2009. Case Study: Expanding Health Insurance Coverage in Taiwan. Presentation in Comparative Health Insurance,Johns Hopkins University.



394 Wu, Y. 1999. The Emerging Health Care Market in Taiwan: An Economic Analysis. Working Paper No 92. Asia ResearchCenter, Murdoch University.


396 Reid, T.R. 2008. Taiwan Takes Fast Track to Universal Health Care. National Public Radio.

397 Yang, H-c. & Morlock, L. The Formulation of National Health Insurance Policy (book forthcoming).

398 The Taiwan Health Care Smart Card Project. 2005. Smart Card Alliance.

399 IC Card Functions. [cited 2010 April 13]. Available at:http://www.nhi.gov.tw/english/webdata.asp?menu=11&menu_id=594&webdata_id=3172

400 Lu, J-FR. & Hsia, W. 2003. Does Universal Health Insurance Make Health Care Unaffordable? Lessons from Taiwan. 22(3).


402 Davis, K. & Huang, A. 2008. Learning from Taiwan: Experience with Universal Health Insurance. Annals of Internal Medicine.


404 Cheng, S.H. & Chiang, T.L. 1997. The Effect of Universal Health Insurance on Health Care Utilization in Taiwan: Results froma Natural Experiment. JAMA 278(2).

405 Morlock, L. 2009. Case Study: Expanding Health Insurance Coverage in Taiwan. Presentation in Comparative Health Insurance,Johns Hopkins University.



408 Damrongplasit, K. & Melnick, G. 2009. Early Results from Thailand’s 30 Baht Health Reform: Something to Smile About.28(3):11.

409 Nitayarumphong, S., Porapakkham ,Y., Srivanichakorn, S., Wongkongkathep, S., Baris, E. The Evolution of Thailand’s HealthSystem after Three Crises, Three Adjustments, and Three Decades of Growth. The International Development Research Centre.Available at: http://www.idrc.ca/en/ev-118494-201-1-DO_TOPIC.html. Accessed February 30, 2010.

410 Supakankunti, S. 2000. Future prospects of voluntary health insurance in Thailand. Health Policy and Planning 15(1):9.

411 Towse, A., Mills, A., Tangcharoensathien,V. 2004. Learning from Thailand’s health reforms. BMJ 328.

412 Sakunphanit, T. 2007. Thailand: Universal Health Care Coverage Through Pluralistic Approaches. International LabourOrganization.

413 Hughes, D. & Leethongdee, S. 2007. Universal Coverage in the Land of Smiles: Lessons from Thailand’s 30 Baht HealthReforms. Health Affairs 26(4):9.

414 Pannarunothai, S., Patmasiriwat, D., Srithamrongsawat, S. 2004. Universal health coverage in Thailand: ideas for reform andpolicy struggling. Health Policy 68:23.

415 Damrongplasit, K. & Melnick, G. 2009. Early Results from Thailand’s 30 Baht Health Reform: Something to Smile About.28(3):11.

416 Ibid.

417 Nitayarumphong, S., Porapakkham, Y., Srivanichakorn, S., Wongkongkathep, S., Baris, E. The Evolution of Thailand’s HealthSystem after Three Crises, Three Adjustments, and Three Decades of Growth. The International Development Research Centre.

96

418 Towse, A., Mills, A., Tangcharoensathien, V. 2004. Learning from Thailand’s health reforms. BMJ 328.

419 Hughes, D. & Leethongdee, S. 2007. Universal Coverage in the Land of Smiles: Lessons from Thailand’s 30 Baht Health Reforms. Health Affairs 26(4):9.

420 Tangcharoensathien, V., Wibulpholprasert, S., Nitayaramphong, S. 2004. Knowledge-based changes to health systems: the Thai experience in policy development. Bulletin of the World Health Organization 82(10).

421 Sakunphanit, T. 2007. Thailand: Universal Health Care Coverage Through Pluralistic Approaches. International Labour Organization.

422 Supakankunti, S. 2000. Future prospects of voluntary health insurance in Thailand. Health Policy and Planning 15(1):9.

423 Sakunphanit, T. 2007. Thailand: Universal Health Care Coverage Through Pluralistic Approaches: International Labour Organization.

424 Ibid.

425 Ibid.


427 Tangcharoensathien, V., Wibulpholprasert, S., Nitayaramphong, S. 2004. Knowledge-based changes to health systems: the Thaiexperience in policy development. Bulletin of the World Health Organization 82(10).

428 Hughes, D. & Leethongdee, S. 2007. Universal Coverage in the Land of Smiles: Lessons from Thailand’s 30 Baht HealthReforms. 26(4):9.

429 Tangcharoensathien, V., Wibulpholprasert, S., Nitayaramphong, S. 2004. Knowledge-based changes to health systems: the Thai experience in policy development. Bulletin of the World Health Organization

430 Sakunphanit, T. 2007. Thailand: Universal Health Care Coverage Through Pluralistic Approaches: International Labour Organization.


432 Ibid.

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