This course proposes an overview of current global health challenges drawing on the insights of several academic disciplines including medicine, public health, law, economics, social sciences and humanities. This interdisciplinary approach will guide the student into seven critical topics in global health.
Designing Health Financing Systems for Universal Health Coverage by Inke Mathauer
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Del curso dictado por University of Geneva
Global Health: An Interdisciplinary Overview
135 calificaciones
De la lección
Governance for Global Health, Health Systems and Financing
This module is concerned with the global health system (which refers to responses to health conditions or the prevention of these) and the management of this system through global health governance.
Conoce a los instructores
Rafael Ruiz De CastañedaInstitute of Global Health - Faculty of Medicine
University of Geneva
Antoine FlahaultProfessor of Public Health and Director of the Institute of Global Health (Faculty of Medicine, University of Geneva) and co-Director of Centre Virchow-Villermé (Université Paris Descartes)
University of Geneva and Université Paris Descartes – Sorbonne Paris Cité
[MUSIC]
Hello, good morning or good afternoon wherever you are.
It's a pleasure to be here with you on this course.
This session here today is about designing health financing systems for
universal coverage.
Indeed, this is a topic that gets increasing attention globally, and
there's really now a movement towards universal coverage.
I will start my presentation by looking at the core problems and related causes,
then I provide a definition of universal health coverage and
explore its indications and dimensions.
Third, I will go into health financing system analysis and design issues.
And finally,
I will conclude with some core messages of the World Health Report 2010,
which is titled Health Systems Financing: The Path towards Universal Coverage,
and in fact, this presentation is largely based on this report.
So what are the core problems?
When can we say that there is a gap in universal coverage?
When people use health services, globally,
around 150 million people suffer severe financial hardship each year.
100 million are pushed into poverty
because they must pay out-of-pocket at the time they receive them.
Lack of effective access to health care services
can also be due to the non-availability of services.
Health services simply not being available in certain regions or areas.
There might be geographical,
cultural, or other barriers, or the quality of health services may be poor.
So what are the main underlying causes?
First, there is exclusion as a big issue.
Exclusion is link to factors outside the health system.
It's often referred to as social determinants of health.
These are, for example, inequalities in income and education, or they might
be social exclusion associated with factors such as gender and migrant status.
A second core factor is the health system itself which may be weak,
there may be insufficient health workers, medicine, and health technologies,
or service delivery might be ineffective.
Or information systems in the government leadership might be poor.
I assume that in other sessions of this course,
you're looking into the health system issues in more detail.
Third, the problem might be with the health financing system itself.
If a health financing system doesn't function, it means that the other parts of
the health system, what I just referred to in the previous point,
which are frequently called health systems building blocks,
these other parts then cannot function.
Now, this presentation will really focus on this third point,
not denying that the other two factors are equally important.
So let me come to a definition of universal coverage.
Health financing systems need to be specifically designed to ensure
that all people have access to needed health services, promotive,
preventive, curative, and rehabilitative.
And they must be of good quality,
without the risk of financial hardship linked to paying for care.
Now, there are a number of implications
related to universal coverage that need to be in place.
First, universal coverage implies financial risk protection.
Financial risk protection means that the cost of care does not put people at
risk of financial hardship.
Now, financial hardship is defined as paying more than 40% of household income
directly on health care after basic needs, namely food, have been paid for.
If you want to look into this in more detail,
have a look at the World Health Report on page five.
Now, financial risk protection,
in fact, goes hand in hand with the equity in the use of services according to need.
So whether you're rich or poor or whatever the circumstances,
people should have the same access when they have the same needs.
Likewise, universal coverage is associated with equity in financing,
which means that payments for health are made according to ability to pay.
Usually, that means that richer people, people with higher income,
should pay more than people with lower income.
So that ideally, the proportion of their income is spent on
health is the same across people.
And finally, universal coverage implies prepayment and
pooling of resources to the health financing system.
Prepayment really meaning that you don't make payments at the spot when you
actually receive services, but payments are made beforehand.
And I will come to pooling on a later slide.
The move towards universal coverage can thought of along three dimensions.
The first one relates to population coverage,
which is the arrow going towards the left.
The question is really who is covered?
And the related policy question is then,
how can the population coverage be extended to the non-covered?
That's what people would intuitively think of right away of universal coverage.
But in fact, there are two other dimensions which are equally important.
The second dimension leads to the question of which services are covered?
What's the service coverage?
And the related policy question is then,
how can other additional services be included in the benefit package?
That's the dimension going towards the back, and
the third dimension is the one going upwards, which is about direct costs.
Which proportion of the costs are covered?
So how much do people actually still have to pay out-of-pocket on the spot?
And there, the question is really how can we reduce cost sharing and user fees?
The yellow box in the middle depicts the amount of currently pooled and
prepaid funds.
The aim is then to extend this funding amount
in order to extend coverage into the three dimensions.
So the question is, how large should this yellow box actually get?
Should it really fill completely the larger box,
which is depicted with the red lines?
In fact, can we think of specific coverage targets that would help us understand or
see what the yellow box should look like?
Now, with respect to the first dimension population coverage,
the answer is pretty straightforward.
In fact, 100% of the population should be covered, all population groups and
their families need to be covered.
They need to have financial risk protection.
But when it comes to the second dimension,
namely service coverage, the question is less straightforward.
Now, it's important to have a clearly defined package of needed services, but
still, there are a number of considerations to take into account.
First, are the resources available and what can the country afford?
Also, what are the country's health service priorities?
That depends on the country context, on the disease burden, and
many other factors.
And finally, it depends on preferences for specific services and for
specific population groups.
So this has to be kept in mind when one wants to define the actual
benefit package.
And then finally, how much of the cost should be covered?
Should it be 100%?
Well, the level of prepayment should be as high as possible but not necessarily 100%.
Why?
When everything is paid for, there is what's called moral hazard,
which means that people could use more services than they actually need,
because they think, well, everything is covered for, and
that then would effect rational consumption of services.
In fact, there's evidence.
The incidence of financial hardship is negligible once out-of-pocket
expenditure as a share of total health expenditure, falls below 15 to 20%.
For many low-income countries, this figure of 15 to 20% is still far away to reach.
So in a way, that can be a target that countries can strive for.
It is very important to see the linkages and
the trade-offs between those three dimensions.
In fact, they are closely interrelated.
And in order to describe a country's status of universal coverage,
the three dimensions have to be explored and reported on.
Extending the three dimensions of coverage at the same time may be difficult for
many low-income countries.
Additional resources are usually required to finance the extension within the three
dimensions of universal coverage at the same time.
Or else, a country may need to decide which dimension of universal coverage it
would want to pursue primarily and initially, and then at a later stage,
look at the other dimensions.
Now, that we have looked at what a health financing system should strive for,
let me come to the third section of my presentation, namely, how one can analyze
a health financing system and also what that implies for it designs.
There are basically three core health financing functions.
These are resource collection, pooling, and purchasing.
And then there is the overarching storage function that serves to regulate and
coordinate the overall system, the health financing system and
the health system in general.
I will now explain in more detail each of the three functions.
Revenue collection is what most people actually associate with health financing.
It's the way money is raised to pay health system costs.
Money is typically received from households or
from organizations or companies and
sometimes from contributions outside the country called external resources.
This is basically the funding from donors.
Resources can be collected through general or specific taxations, so
that's a income tax or VAT, indirect taxes.
Or else from compulsory or voluntary health insurance contributions or what's
the least desired option from direct out-of-pocket payments, such as user fees,
and then finally from donations, be that from donors or from NGO's.
Pooling is a very important function, but
often it doesn't actually get the attention it should get.
Yet, the architecture of the health financing system is really largely defined
and determined by the way the system pools.
So pooling is the accumulation, the putting together and the management of
financial resources to ensure that the financial risk of having to pay for health
care is borne by all members of the pool and not by the individuals who fall ill.
So the main purpose of pooling is to spread the financial risk associated with
the need to use health services.
Or in other words,
it's really about strengthening the potential to redistribute within the pool.
If funds are to be pooled, they have to be prepaid.
So prepayment and pooling really goes together.
And that can be done through taxes and/or insurance contributions, for example.
In fact, most health financing systems include an element of pooling funded by
prepayment, combined with direct payments from individuals to service providers.
Last, not least, there's purchasing, and
this function is really about the process of paying for health services.
There are three main ways.
First, government provides
budgets directly to its own health service providers.
That's what we would call integration of purchasing and provision.
And the government may use general government revenues, or
sometimes we've had also health insurance contributions.
The second way is to have a separate purchasing agency, for example,
a health insurance fund, or a government authority.
And that agency would purchase services on behalf of a population.
So in this case, there would be a split between the purchaser and the provider.
Or thirdly, individuals pay a provider directly for services, through
out-of-pocket expenditure, which is still a very common way of paying for services.
In fact, most countries use a combination of these three ways.
So in short, in order to understand how the health financing system works,
how it operates, or
in order to explore how to modify the health financing system in order to move
closer towards universal coverage, the following core questions are helpful.
With respect to resource collection,
the questions are who pays, who collects, and with what mechanisms?
Regarding pooling, the questions are how to share risks?
How to arrange for cross-subsidies across different pools, if there are several?
And with respect to purchasing, the questions are what services to buy,
from whom, from which providers, public or private, at what level, and
how to pay providers, with what provider payment mechanisms?
At the bottom of the slide in the circles, you see the health financing objectives
that a health financing system should strive for.
These are sufficient and equitable and efficient resource.
Generation, financial accessibility.
And third, optimal use of services.
And in fact, the three health financing functions relate and
contribute to each of these objectives.
So what are the health financing options that are conducive for universal coverage?
In fact, there's a continuum of health financing options for universal coverage,
namely those that comprise all health financing mechanisms with prepayment,
pooling, and equity in access and equity in financing.
So in fact, health financing systems that move towards universal coverage,
they are clustered around text-based financing and social health insurance or
a mix of both, and in fact, in most of the countries, it is indeed a mix.
A country will, at a given point in time, lean more towards one particular health
financing option than another, as it will be confronted with different constraints
and enabling factors of a social, economic, and political nature.
So one may ask, what is better, tax-based financing or social health insurance?
But in fact, that's the wrong question.
Inherently, none of the two is better than the other one and
very much depends on the country context.
And even more,
it really depends on how in detail such a health financing system is designed.
So let's look at another core question that one has to ask.
How to organize and what to improve
within the health financing system to achieve universal coverage?
And the argument I'm making here is that one of the key factors is the role of
institutional design and organizational practice of a health financing system.
So let's look into this in more detail.
The health financing functions and
its related tasks become more concrete by the institutional design that
specifies the health financing functions as well as by the organizational practice.
Thus largely determining how the actual
health financing is being put into practice.
What means institutional design?
Well, the institutional design defines the health financing system architecture, and
it's the sum of all formal rules, the laws, the regulations, the degrees,
the ordinances, the that relate to the health financing system.
The institutional design can be well-defined, it an be very conducive for
universal coverage, or it may be prescribed and
defined in a way that is not conducive.
On the other hand,
organizational practice are only organizational activities of the actors
in the system, be that the government, the different ministries, the purchasers,
the health financing agency, the health service providers, the employers, etc.
So the organizational activities of all those actors, and so
really, it's about rule implementation and compliance.
How do these actors implement the rules, and how do they comply with it?
And last, not least, we also need to look at the capacity to do so.
The organizational capacity to actually comply and implement the rules.
Organizational practice by the actors might be in line with the institutional
design world.
There might be some differences.
That very much also depends on the incentives that organizational actors
have, and on the way the institutional design is defined and
whether that is in the interests of organizational actors.
Here are some examples of the specific
tasks relating to each health financing functions.
Now, I don't want to read them out and go into detail.
But just to say that in order to understand a health financing system,
we really need to analyze in detail each of these related tasks,
look at the institutional design, look at the organizational practice.
Here again, at the top right-hand side,
you have some examples relating to stewardship.
And so ultimately, the question is really whether the institutional design of your
health financing system and its related organizational practice can contribute to
achieving the health financing objective.
Whether the health financing system can really perform or not, and
what are causes?
The causes might be related to the institutional design, or else, and often,
it's a combination of the organizational practice as well.
So let me conclude this presentation with some of the key messages from
the World Health Report.
First, millions of people still cannot use needed health services because they
are unavailable or they are too expensive.
Second, millions more suffer financial ruin,
suffer financial hardship each year because they must pay for
the health services they use at the time they receive them.
Now, this World Health Report 2010 provides options for countries
wishing to modify their health financing system, so that they can move closer
to ensuring all people can use services without the risk of financial hardship.
Options are also provided for
higher income countries wishing to maintain universal coverage.
I will come to a close of my presentation.
In the presentation, you will find a list of core documents
from the World Health Organization related to universal coverage.
There are also some references provided of the documents that I referred to.
And last, not least, let me point to the disclaimer here.
And so I would very much thank you for your attention.
All the best to you and bye-bye.
[MUSIC]
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