Nouria Brikci Senior Policy and Advocacy Adviser Save the Children UK Domestic health financing in...
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Transcript of Nouria Brikci Senior Policy and Advocacy Adviser Save the Children UK Domestic health financing in...
Nouria BrikciSenior Policy and Advocacy Adviser
Save the Children UK
Domestic health financing in sub-Saharan Africa
Structure of the daySome theory and sharing of experiences
(session 1)Some feasibility discussion of financing
reforms in SSA (session 2)Case study of Tanzania (session 3)Group work: role play (session 4)
Structure of presentation
1. Some background definitions2. Why health financing matters in general
and for health governance particularly3. Outline of each financing mechanisms -
pros and cons4. Conclusion
Objectives
Participants get broad understanding of health financing theory and how relates to health governance
Participants are able to understand and analyse health financing debates in their countries/ work
Participants share experiences/ problems from their own contexts
1. DefinitionsUniversal coverage: achieving universal coverage means:
Providing all people with access to needed services of sufficient quality to be effective
Ensure that use of those services does not expose user to financial hardship
Health financing• Revenue collection: way money is raised to pay health
systems costs• Pooling of resources: accumulation and management of
financial resources to ensure that financial risk is borne by all pool members
• Purchasing of services: process of paying for health services
Principle key to governance: Equity horizontal equity, i.e. equal treatment of equals (thus equal
expenditure, utilisation or access for equal need, equal health outcomes)
vertical equity, i.e. unequals being treated differently according to the same criteria (thus unequal treatment for unequal need or unequal payment for those with unequal incomes).
2. Why health financing matters
An essential WHO health system’s pillarRelevance to health governance :
Equity and well being central - universal coverageTool for participation and reaching best interest of
populationLink with transparency/ accountabilityShould allow responsiveness
3. Various health financing mechanisms
Private Public
User charges Social Health Insurance (SHI)
Community Based Health Insurance (CBHI)
Taxation (direct, indirect, general, earmarked)
Private Health Insurance (PHI)
Medical Savings Accounts (MSAs)
Informal payments
Mixed methods
User fees/ chargesPros
– Raise revenue for health– Reduce frivolous demand– Cost containment– Exemption mechanisms can protect vulnerable
Cons– Limited revenue raised– Constrains necessary demand - Frivolous demand
not an issue in poor contexts– Very regressive – push people into poverty or debt– Exemption mechanisms do not work– Discourage early care seeking
Consensus: need to remove fees – how and what to replace them with?
The Sudden and Sustained Impact of Abolishing User Fees Total Monthly Outpatient Attendances in Kisoro District 1998-2007
0
10000
20000
30000
40000
50000
60000
Jan98
Jan99
Jan00
Jan01
Jan02
Jan03
Jan04
Jan05
Jan06
Jan07
Outpatient attendances 12 month moving average
User fees abolished
200% increase
Utilisation Rate1.6 visits perperson per year
Source: MoH SL, six month review, unpublished report
User fees removal in SSA
Sénégal 2006 - Free deliveries
All services free - Libéria february 2007
Burundi Aug 2006 – free for under fives and deliveries
Zambie april 2006 – free in rural areas
Kenya October 2007 – free deliveries
Uganda March 2001 : all services free
Free care for C Sections and under fives – Sudan feb 2008
Sierra Leone April 2010- Free care for pregnant and lactating women and children under five
Tanzanie 1993 – free services for under fives and maternity
Malawi – remained free
South Africa – free primary care
Ghana May 2008 - free for under fives and pregnant women
Lesotho January 2008 – free primary care
Zimbabwe Aug 2010 – free for pregnant women
Madagascar 2008 – free deliveries
Niger 2006 – free services for under fives and pregnant women
How to remove user fees1. Initial situational analysis
Evaluation of user fee rates Success of exemption policies How revenues used
2. Impact of revenue foregone at health centre level
3. Additional needs in terms of drugs and HRH4. Where additional funds will come from5. Communication
McPake B, Brikci N, et al (forthcoming), Removal of user fees - learning from international experience, Health Policy and Planning 2011
Community-Based Health Insurance
14
“any scheme managed and operated by an organization, other than a government or private for-profit company, that provides risk pooling to cover all or part of the costs of health care services” – usually voluntary
Pros– potential ability to collect revenue – pool funds – reach population groups that market based health
financing arrangements do not, such as population in the informal sector and socially excluded groups
Cons– small pool of funds/ fragmentation– Limited financial protection– Limited revenue collection– Poorest excluded– Difficult to transform into national level system
15
Limited role in low-income countries
Pros– enable the healthcare of the relatively affluent to be self-
financed,– free up public resources– encourage innovation and efficiency
Cons– discriminates in favour of healthy and young adults who use
little care – lead to market segmentation, cream skimming and exclusion of
vulnerable groups (such as the poor, ill and elderly)– creates a two-tier health system, where those with private
health insurance can access better quality services.– When subsidised by the state, it can prove to be very expensive
for the government.
Private Health Insurance
Social Health Insurance
16
Definition: legally mandatory to obtain HI with a designated (statutory) 3rd party payer through contributions or premiums not related to risk that are kept separate from other legally mandated taxes or contributions
Pros• Relate initial payment to income rather than risk, • Increase financial accessibility• Potentially large risk pooling ie subsidisation/
redistribution• Increase transparency - politically acceptableCons• Tax on payroll: can increase overall production cost• Focuses on formal sector• Can create two tier health system• Tends to exclude those in greatest need• Feasibility issues in SSA
Tax financed systems
General pros• Payment related to income• Progressive • Potentially very large risk pool• Still largely untapped in SSAGeneral consFeasibility issues: administrative capacity,
tax avoidanceLack of transparency
General or hypothecated tax?
General taxes: Pros • Draws on broad revenue base• Allows trade-offs between health care and other areas
of public expenditure
Cons• Lack of transparency• Linked to economic growth• Feasibility issues: administrative capacity
General or hypothecated tax?
Hypothecated taxes:
Advantages• Ensures stable and increased revenue back• More transparent hence decreases resistance to taxation • Separates health from competing national priorities• Improved accountability• Less susceptible to political manipulation
Disadvantages• Hypothecation could be solely cosmetic• Too dependant on economic cycles• Can lead to rigidity in budgetary system where expenditures
are linked to revenue generated and not to policy decisions • May be to advantage of powerful pressure groups
Direct or indirect tax?• Direct taxes on individuals, HH and firms and collected by
government • Indirect taxes on transactions and commodities
Direct taxesAdvantages:• Usually progressive • Administratively simple when records of income etc exists
Disadvantages: • if informal market is large then need strong institutional
capacity• can create horizontal inequity:
– When income tax rates vary geographically– When some form of income are exempt from income tax– When some forms of expenditure are tax deductible
Direct or indirect tax?
Indirect taxes
Advantages: • highly visible • can promote heath if tax on health damaging goods
Disadvantages: • Indirect taxes are overall regressive as related to
consumption not overall income. In particular: – People with higher income save more and savings are not
subject to indirect taxes– People with lower income spend proportionately more of
their income on heavily taxed goods (ie food)– Many indirect taxes are set as lump-sum amounts (for
example vehicle licenses)
Tax Financed Systems
22
Not politically acceptable? Hypothecated taxLarge informal sector? Example of GhanaPoor economic growth? Tax other sectors
such as corporationsLack of admin capacity? Regressive tax
rates
ConclusionHealth financing key to governanceHealth financing sits within health systemNo perfect answerUniversal coverage/ equity
User fees to be removed CBHI limited scope/ success Public financing mechanisms best in
principle
Thank you ...and some literature
World Health Report (2010), Health systems financing – the path to universal coverage, available at www.who.int
McIntyre D, Gilson L, Mutyambizi V (2005) Promoting equitable healthcare financing in the African context: current challenges and future prospects, Equinet Discussion Paper Number 27, October 2005, available on http://www.equinetafrica.org/bibl/docs/DIS27fin.pdf
Mills A (2007), Strategies to achieve universal coverage: are there lessons from middle income countries?, World Health Organisation, available on http://www.who.int/social_determinants/resources/csdh_media/universal_coverage_2007_en.pdf
Di john J (2006), The Political Economy of Taxation and Tax Reform in Developing Countries, Research Paper No. 2006/74, UNU World Institute for Development Economics Research (UNU-WIDER), available on http://62.237.131.23/publications/rps/rps2006/rp2006-74.pdf
Tuan Minh Le, Blanca Moreno-Dodson and Jeep Ojchaichaninthorn(2008), Expanding Taxable Capacity and Reaching Revenue Potential: Cross-Country Analysis, Policy Research Working Paper 4559, World Bank, available on http://ideas.repec.org/p/wbk/wbrwps/4559.html
SCUK (2008) Freeing up healthcare – a guide to removing user fees, available at www.savethechildren.org.uk
Carrin G and James C (2005) Social health insurance: key factors affecting the transition towards universal coverage, International Social Security Association, Vol 58 (1): 45-64, available on http://www.who.int/health_financing/issues/shi_key_factors.pdf
Ministry of Health
Ministry of Finance/ IMF
Poor population
Health workers
Kabanda Obed
Peter Nyakubega
Denis Bakomeza
Bertha A Matiya
Celestine Barigye
Michelle Ntukanyagwe
Henry T Kayondo
Alex Muhereza
Mukhtar Bulale
Aua Bale Anna Kilala Anne Musuva
Godknows Giya
Okello Ayen Daniel
Grace Malera Fathia Nour
John Wainaina Kenneth
Angela Kamakila
Betigel Workalemahu
Gordon Workalemahu