"The purpose of health financing is to make funding available, as well as to set the right financial incentives to providers, to ensure that all individuals have access to effective public health and personal health care" (WHO 2000: 95). Spending wisely: buying health services for the poor. Mathauer I, Dkhimi F. Analytical guide to assess a mixed provider payment system. There are different classifications for finance functions, and it varies with organization types. We also like to thank Lisa Seidelmann, Carlo Schmid Fellow and volunteer with the Department of Health Systems Governance and Financing at the time of producing this draft for her research assistance. All remaining errors are with the authors. Spending targets for health: no magic number. Purchasing health services for universal health coverage: how to make it more strategic? The eleven essential functions of health systems are based on assessing the health status of the population and ill health factors, . ?2$R@a,/|l*K`I(ij6 'I#b
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I,dH4BH>o\v^dqY[GraltAL3,;S/R-{zk37IY[?d-. The six functions are: (i) service delivery, (ii) medical products, vaccines and technology, (iii) workforce, (iv) information, (v) financing and (vi) leadership and governance. Geneva: World Health Organization; 2019. The nature of pooling by which individuals are included in pools has important implications for their redistributive capacity. 3. Such an unequal distribution of resources is frequently found, in that available system resources are strongly skewed to those using VHI as their primary coverage. 1 below. Hatfield (South Africa): CMS; 2016. Today, millions of people do not access services due to the cost. 0000009066 00000 n
A multiple pool setup can be based on population segmentation, i.e. 0
However, relevant responses to improving pooling depend on the specific nature and the broader context of the country. Copenhagen: World Health Organization, on behalf of the European Observatory on Health Systems and Policies; 2010. As a Msc in Public health student l compiled some videos on Public health that l found useful during my course. are deemed to be particularly problematic forms of fragmentation, because they strongly constrain redistributive capacity. Structured pluralism: towards an innovative model for health system reform in Latin America. Moreover, in France, there is a shift towards compulsory complementary coverage, which employers have to buy for their employees since 2016 (with exceptions for various employee groups) [56]. But where territorially distinct pools are too small in terms of the number of people, their risk profile can be financially precarious and there could be efficiency and capacity concerns. Government funds are mainly allocated through historical incremental approach. Finally, it is important to keep in mind that while pooling reforms are needed to enhance redistributive capacity, realizing the gains set by the potential of a pooling arrangement requires more than pooling. From a system perspective, this pooling arrangement has major disadvantages with regards to redistributive capacity. Manage cookies/Do not sell my data we use in the preference centre. 2001;56(3):171204. Australia's health system is a complex mix of service providers and other health professionals from a range of organisations - from Australian and state and territory governments and the non-government sector. Results The Kenyan health sector relies heavily on out-of-pocket payments. Pettigrew LM, Mathauer I. management and disbursement for financing the availment of a basic minimum package and other . The on behalf may come from public budgets for specific groups of individuals whose participation is fully or partially subsidized, or it may come from traditional insurance contributions that cover individuals beyond the contributor (e.g. As you can see, out-of-pocket or fee-for-service, government budget, or insurance agencies are all means of purchasing health care from providers. Finally, there may be specific coverage schemes for defined population groups, such as the poor [30]. SMG 1117A.641 (02/09/2022) 1 . Pools can be based on compulsory, automaticor voluntary participation. 0000014993 00000 n
Purchasing refers to the allocation of pooled funds to healthcare providers for the delivery of health services on behalf of certain groups or the entire population. . Smith PC, Witter SN. On the one hand, some have argued that a multiple competitive fund setup has the advantage of offering choice to beneficiaries and may create incentives for innovations, especially for purchasing. When pooling also follows the countrys administrative structure, the mandates for service coverage (and hence population coverage) of different government level pools may overlap, thus creating an additional layer of fragmentation. This paper attempts to address this problem by providing a conceptual framework that is driven by the normative objective of enhancing the 'insurance function' (access to needed care without financial impoverishment) of health care systems. In any country, prepaid health revenues may be held, i.e. Health financing involves the basic functions of revenue collection, pooling of resources, and purchase of interventions. Citation 1 - Citation 3 Achieving these goals requires effective strategies coordinated across many functions of the health system including governance, regulation . 0000002548 00000 n
The ratio of VHI population coverage against their VHI expenditure share can serve as an indicator of system inequity arising from the fragmentation in place in these countries. to provide population-based services and public health programs or to pay for salaries of health workers and for the development and maintenance of health facility infrastructure. 0000005125 00000 n
`733.aa``:S)C{CXhyB"&B)cc wlVJ36sJ120F0-`jjp`aXir23P'd Paris: OECD; 2011. Health system review. 3. As such, this type of pooling arrangement, if and when it has an effective risk adjustment mechanism that deters risk selection efforts, can act as a virtual single pool (due to the flows between the pools). This makes it affordable to them and addresses the inequity concerns that come along with complementary health insurance [53]. Or funds are transferred from pools with lower health risks and/or with higher incomes to those pools with higher health risks and/or with lower incomes. In practice, only a few countries have this pooling arrangement alongside a low share of out-of-pocket expenditure (OOP) (<20% of total health spending). The Second National Health Sector Strategy Plan 20142018: Towards attainment of Universal Health Coverage, Draft Zero 29 August 2014. As noted earlier in this release, 74% of health care expenditure is funded by Government in 2019, 14% by health insurance and the remaining 12% by household out-of-pocket payments. Thomson S. What role for voluntary health insurance? The classification, such as the one we are proposing is simply meant to facilitate the reflecting around a response. (Of course, fragmented pool structures will yield more dependence on OOP expenditure and thus decrease the share of prepaid funds in overall health spending). Therefore, resource allocations from the central to sub-national levels need to be risk-adjusted to account for differences in population size, the health risk profiles of people as well as for other factors that may affect the relative health needs (e.g. Risk selection practices can be addressed with risk adjustment mechanisms (which we discuss further below in the next section). To understand the components of a health system. Health financing reform is an inherently political process that alters the distribution of entitlements, responsibilities and resources across the health sector and beyond. Kutzin J, Jakab M, Shishkin S. From scheme to system: social health insurance funds and the transformation of health financing in Kyrgyzstan and Moldova. 0000002191 00000 n
However, evidence for efficiency improvement with increased market competition among purchasers is weak [25]. Each financing mechanism was analysed in respect to key functions namely, revenue generation, pooling and purchasing. Provided by the Springer Nature SharedIt content-sharing initiative. Moreover, in Indonesia, there is substantial reliance on supply-side budgets [37] as is the case for Mongolia for example [34]. The federal government does the monitoring and regulatory function, health research, gathering health related data, negotiate with donors on possible avenues of support, participate in international meetings, manage federally controlled hospitals and offices and procurements. As a consequence of this de facto voluntary arrangement, countries such as Ghana, the Philippines and Vietnam still experience inequities between the insured and uninsured population [34, 44]. Geneva: World Health Organization; 2010. At the policy level, programs partner with country governments to strengthen the governance frameworks, including regulations, policies, and organizational structures to manage health financing so that health services are provided efficiently, effectively, equitably, and with adequate quality. Google Scholar. When each level of government in a decentralized setting pools for a distinct level of health services, then it is organized in a territorially distinct way. Bonilla-Chacn ME, Aguilera N. The Mexican Social Protection System in Health [Universal Health Coverage Studies Series (UNICO) No. This has an adverse impact on equity in resources across pools. To ensure key development programmes are adequately funded [5,6]. State budget transfers to health insurance funds for universal health coverage: institutional design patterns and challenges of covering those outside the formal sector in eastern European high-income countries. 0000001076 00000 n
It is the various combinations of the different features in the structure and in the nature of pooling that drove our classification of pooling arrangements described in the next section. [3] Health financing refers to the "function of a health system concerned with the mobilization, accumulation and allocation of money to cover the health needs of the people, individually and collectively, in the health system the purpose of health financing is to make funding available, as well as to set the right. While the issue of segmentation first emerged in Latin America [43], it is not limited to that region. Bull World Health Organ. endstream
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Health financing involves not only methods of raising money for health care, but also allocation of those funds. Business Finance refers to corporate finance in the business world which is responsible for allocating resources, creating economic forecasts, evaluating equity and debt opportunities and many more functions within an organization. I'.1~)4CQ~u sd1$V0c: B' {09
Therefore, maximizing the potential to redistribute from lower-need to higher-need individuals by de-linking contributions (of whatever form, such as taxes or insurance premiums) from their health risk is the central objective for pooling. Bethesda: Health Finance & Governance Project, Abt Associates Inc; 2018. Mathauer, I., Saksena, P. & Kutzin, J. Pooling arrangements in health financing systems: a proposed classification. Health financing sub-functions Revenue generation: As shown in Figure 1, funds for health financing are generated majorly by government (57%), about The third function of health care financing is purchasing of services. Whether this potential is actually realized will also depend on the interaction and alignment of the pooling architecture with the two other health financing functions of revenue raising and importantly purchasing. Health financing has three key functions: revenue collection, pooling of resources, and purchasing of services. territorially overlapping pools in terms of service and population coverage; (4.) Raising revenues for health in support of UHC: strategic issues for policy makers, health financing policy brief no. Health financing is central to the functioning of health systems and the attainment of health-related sustainable development goals, including universal health coverage (UHC). Although all health financing functions play an important role in ensuring finan-cial protection, risk pooling and prepaymentwhether through taxes or individual premiumsplay the central and often the most poorly understood roles. The National Health Insurance Program was established to provide health insurance coverage and ensure affordable, acceptable, available and accessible health care services for all citizens of the Philippines. [http://www.nationalplanningcycles.org/sites/default/files/planning_cycle_repository/swaziland/swaziland_nhssp_ii_draft_zero_29_aug_2014.pdf. PubMed BMC Health Serv Res. The purpose of pooling is to spread financial risk across the population so that no individual carries the full burden of paying for health care. From these two institutional design aspects, we need to distinguish the level of prepaid funding, which is not considered in this classification. Smith P. The role of markets and competition. However, as with any classification, it is a simplification of reality, and the aim is not merely to categorize a country in one type or another. The market for lemons: quality uncertainty and the market mechanism. 8. Pooling ensures that the risk related to financing health interventions is borne by all the members of the pool and not by each contributor individually. As the name suggests, it exists in addition to and along the other main pooling arrangements, as outlined above. In doing so, policy makers can come closer . What are the four major services and healthcare? Kutzin J. Geneva: World Health Organization; 2017. Busse R, Blmel M. Germany. a single pool; (2.) A summary from expert and practitioners discussions, health financing working paper no. 0000007449 00000 n
In contrast, voluntary participation means that an individual or firm makes a voluntary pre-payment and enrolls on a voluntary basis in a health coverage scheme (i.e. Health Financing in Ghana. 0000008166 00000 n
For illustration we provide various country examples. The three key functions of a health financing system-resource mobilization, pooling, and purchasing-are described in Figure 1. In: Chernichovsky D, Hanson K, editors. 'p 6l3/%J Jowett M, Brunal MP, Flores G, Cylus J. In turn, this can help countries assess their pooling arrangements and contribute to identifying policy options to address fragmentation or mitigate its consequences. By using this website, you agree to our Health (9 days ago) WebThe three key functions of a health financing system-resource mobilization, pooling, and purchasing-are described in Figure 1. Taken quite literally, perhaps no country has only one single pool. Inke Mathauer. Revenue collection is how health systems raise money from households, businesses, and external sources. International Journal for Equity in Health Health financing policy brief no. Geneva: World Health Organization; 2016. The authors declare they have no competing interests. National health expenditures are derived from government and non-government sources and are used to finance a wide array of programs and services. 0000013724 00000 n
1: World Health Organization, 2015. 1995;32:25777. 5. %PDF-1.5
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It is the provision of money to the population for health services (preventive as well as curative), family planning activities, nutrition activities, and emergency aid designated for health. 1). 0000012547 00000 n
fragmented systems with voluntary health insurance, duplicating publicly financed coverage; and (8.) A system-wide approach to analysing efficiency across health programmes. Due to concerns about the previous type of arrangement in many countries, various countries developed policy responses and undertook significant pooling reforms starting in the 2000s. This article provides an overview of health financing reforms across countries in the Western Pacific Region as progress is made toward universal health coverage (UHC). Higher income persons are usually more likely to have this form of VHI [51]. Q J Econ. Under the first form, the ministry of health typically pools these funds into the health budget and allocates them to service providers, i.e. Privacy Three key health financing system functions Resource Mobilization: This chapter provides background on demographic and epidemiological trends, the configuration of Ghana's health system, and health financing functions and health systems goals. 0000001757 00000 n
Bingley: Emerald Group Publishing; 2009. p. 291312. Geneva: World Health Organization; 2017. World Health Organization. Mathauer I, Behrendt T. State budget transfers to health insurance to expand coverage to people outside formal sector work in Latin America. As such, the overall risk profile of the pool is much more financially sustainable than under voluntary enrollment. Self-paced (approximately 6 hours of course time) Click to enter this course The extent to which a health financing system effectively attains this risk pooling objective is affected by the amount of revenues raised, how well health services are purchased, and also by the design of pooling arrangements. Health financing for universal coverage and health system performance: concepts and implications for policy. Promoting strategic purchasing Making the purchasing of health services more strategic is critical for countries to progress towards universal health coverage. The major health financing mechanisms in Nigeria are namely: (i) government budget using general tax revenue; (ii) direct out-of-pocket payments; (iii) a social insurance scheme known as the Formal Sector Social Health Insurance Programme (FSSHIP) that is implemented by the National health insurance scheme; and (iv) donor funding. Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. Need to distinguish the level of prepaid funding, which is not in. And non-government sources and are used to finance a wide array of programs and services of purchasing health for. World health Organization ; 2017 further below in the preference centre in terms of and. Context of the health status of the health system reform in Latin America illustration... Universal health coverage: how to make it more strategic is critical for countries progress... 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In Latin America health finance & governance Project, Abt Associates Inc ; 2018 funded... Publishing ; 2009. P. 291312 three key functions namely, revenue generation, pooling of resources, external.