Health Equity Financing Pilot project

Dr. Sania NishtarSI, FRCP, PhD

Catastrophic Expenditures- “a medical poverty trap”

• Health costs are the most important precursor to poverty after illiteracy and unemployment .

• According to a recent WHO estimate, every year some 100 million people become impoverished and a further 150 million face severe financial hardship as a result of health care payments.

• Equity in Asia-Pacific Health Systems (EQUITAP) studied eleven countries in Asia and found that 78 million people fell below the $1.08 poverty line as a result of health payments

OOP health spending- an impetus for catastrophic expenditures

•  High health costs, where out-of-pocket (OOP) spending is common and high, can be catastrophic for the households.

• OOP acts as a financial barrier to essential health care, is a source of impoverishment, and exacerbates inequity.

• OOP health spending constitutes a principal means of financing health care throughout much of Asia and Pacific.

Financial catastrophe- specific threshold?

• There is no complete consensus regarding the specific threshold’ for defining financial catastrophe,

• Most agree that it should be measured in relation to a household’s capacity to pay’ and that may result with health care payments at or exceeding 40 percent of a household’s capacity to pay in any year…….

Tested means and strategies• Both developed and developing countries have

explored various options to finance their health system to protect the people from catastrophic expenditures.

• The means and strategies tested and implemented ranges from National and social health insurance schemes, Medical saving schemes, Community-based health insurance schemes Formal cost sharing or user-fees Establishment of Health Equity Funds

Health Equity Fund strategy

Health equity fund strategies have been developed to

improve access to health care services for the poorest by paying the provider on their behalf and is to

remove, as much as possible, the multiple barriers faced by the poor

(HEF) strategy is build around on two principlesi. a specific fund is allocated to compensate selected health

facilities for the services provided

ii. management of the fund is entrusted to a purchasing body that is independent of the health facility. This body—the health equity fund operator—fulfils the functions of targeting.

Rationale in the context of Pakistan• More than 60% of the population is employed in the

informal sector.

• The only option to pool for risk for this segment of the population over and above what the government provides free in hospitals is through social protection mechanisms.

• Existing government systems in this area have a narrow base—Zakkat and Bait-ul-Mal account for less than 1% of the total health spending.

• The potential within philanthropy is not fully tapped.

Rationale for the pilot project

It is envisaged that if a mechanism to efficiently and transparently manage and transfer funds is created and if donors have the visibility of use of their contributions, the base of social protection as a financing instrument can be significantly enhanced.

Goal

To develop a sustainable and replicable health financing model to protect the poor against catastrophic spending in health

Objective

To pilot a technology-based cash transfer intervention to protect the poor against catastrophic health expenditure

Services Points• The pilot project will test objective in a pilot setting

using the case-control, quasi experimental evaluation model

 • In the intervention site health equity fund and a

technology platform will be made available for use by Medical workers, who will seek urgent support on behalf of a patient in a situation where the person runs the risk of spending catastrophically on health.

• In a control site patients will seek social protection assistance through the existing channels

 

Performance IndicatorsEquity • Number of poor protected from catastrophic

expenditure Fair financing • Number of assisted patients protected against

catastrophic expenditure in the intervention site Responsiveness• Number of the patients who were satisfied with

the system in the intervention site i. Reduction in time to secure social protection assistanceii. Decrease in resources required to get approvals

Technology platform

The technology platform is being designed with following as core considerations:

• Standards compliance• Scalability• Cost efficiency• User friendly• High level data security• High level integration capacity

Service Request

Fund generated by Philanthropy

Clearing House

Manages Fund

Donors

Pharmacy LaboratoryHospital

Service Payment

Email Fax TelephoneIn

Person

@

SMSInternet

Feedback on Utilization to Donor

Email Fax Telephone In Person

@

SMS

IT Application

DataIP Network

Securelyconnected to the

Internet

Donors

Service Requesters

Service Providers

System Administrator

Moderator

Approving Manager

Users withoutAccess to Web

Mediator

Interface through the

Mediator

Universal Access to the IT System by all Class of Users

Service Request Form Algorithm to Determine

Eligibility IndexEligibility Index

Support Level

Eligibility Index

With the user of Technology and Pre-defined Criteria the Decision on Eligibility and the level of Support is

Determined Instantly

Candidates for assistance • Conditions that incur one time cost and cause

catastrophic expenditure • Non-emergency and non-chronic conditions for which

the state and the hospitals are not providing support • Intervention that can enhance quality of life • Conditions for which one time costs are approximately

below Rs. 50,000• preferably curable and life threatening conditions• Conditions where the hospital is not able to underwrite

costs • Conditions that preferentially afflict the poor • Intervention which increases productive years of life • An area where the NGO can continue to support over

the long term.

Up-scaling the pilot • If the project is successful, it can be • Up-scaled in the existing model with Heartfile

continuing to manage and build the equity pool; additional features can be introduced in the financing design such as by opening a credit line for patients who run the risk of spending catastrophically by paying lump sums and by introducing changes in philanthropy-related legislation

• Offered to the GOP for channeling existing Zakaat funds for heath

• Replicated in other countries with modification  

What value does this project bring?

• This project is being gauged in comparison with a) the existing state-run social protection system—Bait-ul-Mal

b) social protection systems in health established by the private sector; e.g., by the Aga Khan Foundation and Shaukat Khanum Hospital system

• In comparison with Bait-ul-Mal, the system i. eliminates duplication and abuse because of the capability to

electronically track ii. reduces opportunities for patronage because of the reliance on

multiple checks to ascertain eligibility as opposed to relieance solely on the Zakaat from criteria, which being endorsed by counselors.

iii.mitigates reliance on the efficiency of the social welfare officer to process and handle requests

What value does this project bring?• In comparison with social protection systems

established by the private sector, this system will

• Provide better visibility to donors; it will be configured to ensure that donors have the ability to view the use of their funds on a transaction basis and have the ability to instruct the demand specific use of their funds.

• Enable the donors to have full view of the administrative costs incurred and above a certain category, will be able to request for audit of any transaction or demand processing