SHA Revision

Classifications of Health Financing: Units 9 and 10

First IHAT Draft

11th Meeting of Health Accounts Experts

Paris, 7-8 October 2009

1

Overview

• Key components of the accounting framework for health financing:

– concepts, classifications, accounts , indicators

• Classification of Health Financing Schemes (ICHA-HF)

• Classification of Financing Sources (ICHA-FS)

• Feedback from the consultation process: advantages and disadvantages of the proposal

• Points for discussion

2

Requirements for the accounting framework for health financing

• To improve the analytical power of SHA

– different needs of countries / current vs. future needs

• To improve the comparability of health expenditure data

– together with other elements of SHA 2.0

• To ensure feasibility of regular data reporting

– current vs. future possibilities

3

Main components of the accounting framework

• Key concepts and definitions – providing a comprehensive framework

• Tools proposed for international data collection

– Classifications

– Accounts (allocation of resources; revenue-raising)

– Key indicators

Main components of the accounting framework (cont.)

• Optional tools justified by

– different needs and capacity of countries

– future analytical needs

5

Key concepts

• Health financing schemes as the main “ building blocks” of a country’s health financing systems

• Financing agents: institutional units managing health financing schemes

– a financing scheme can be managed by one or more types of institutional units

• Financing sources: institutional units providing revenues

• Revenues of health financing schemes

Proposed framework

Financing

Sources (FS)

Types of

revenuesFinancing

schemes (HF)

Financing

agents

Providers (HP)

Functions (HC)

Current framework

Financing sources (FS)Financing agents

/ schemes (HF)

Functions (HC)

Providers (HP)

Classifications

Proposed for international data collection

• Classification of Health Financing Schemes: ICHA-HF

• Classification of Financing Sources: ICHA-FS

Optional tools

• Classification of Financing Agents: ICHA-FA

• Classification of Revenues of Health Financing Schemes: ICHA-R

– potential tool for international data collection

8

Proposed tables for international data collection

Financingsources

Types ofRevenues (*)

Financingschemes

Providers

Functions

HF × FS

HF × R(*)

HF × HC

HF × HP

*/under discussion

Definition of Health Financing Schemes

Health financing schemes are financing arrangements defined by their rules over

• mode of participation, basis for entitlement and coverage (who gets what);

• revenue-collection and pooling mechanisms (… and how it is financed)

10

An example: financing schemes and institutional units

Financing schemes Institutional units (Financing agents)

Central government

Social security funds

Insurance corporations

Non-profit Institutions

Households

Government funded schemes(programs)

Compulsory social insurance

Voluntary private insurance

Foreign aid programmes

Out-of-pocket payments

Health financing schemes are managed by one or more institutional units, but are not themselves institutional units

Classification of Health Financing Schemes: ICHA-HF

HF.1 Social and compulsory private health financing schemes

HF.1.1 Government funded schemes (with sub-categories )

HF.1.2 Social health insurance (with sub-categories)

HF.1.3 Compulsory private health insurance

HF.2 Voluntary private schemes (other than OOP)

HF.2.1 Voluntary health insurance (with sub-categories, including Voluntary Community-based insurance )

HF.2.2 NPISHs- funded schemes

HF.2.3 Enterprises funded schemes (other than employer-based insurance)

HF.3 Households out-of-pocket payment (with sub-categories)

HF.4 Rest of the World funded programmes

12

13

What are the main differences at the 1st level categories?

Characteristics of financing schemes

HF.1: Social and compulsory private (health financing) schemes

- aimed at ensuring access to basic health care for the whole society / large part / vulnerable groups

HF.2: Voluntary private schemes (other than OOP)

- pre-paid arrangements; -private initiatives; -access to care is based on discretion of private actors.

HF.3: Household out-of-pocket payment

- households’ direct payment at the time of the use of services

HF.4: Rest of the world funded schemes

- resources are provided by RoW, - separate budget and management for the use of funds

SHA 2.0 vs. SHA 1.0

14

Revised ICHA-HF SHA Manual (current Version 1.0)HF.1 Social and compulsory private

schemes HF.1 General government

HF.1.1 Government funded schemes HF.1.1General government excludingsocial security funds

HF.1.1.1Central government funded schemes

HF.1.1.1 Central government

HF.1.1.2State/regional/local government funded schemes

HF.1.1.2 State/provincial government

HF.1.1.3 Local/municipal government

HF.1.2 Social health insurance HF.1.2 Social security funds

HF.1.2.1National health insurance (NHI)

HF.1.2.1 Social health insurance (excluding NHI)

HF.1.3Compulsory private insurance

SHA 2.0 vs. SHA 1.0

15

HF.2 Private sector

HF.2 Voluntary private schemes (other than OOP)

HF.2.1 Voluntary private health insurance

HF.2.1.1 Primary insurance coverage schemes

HF.2.1 Private social insurance

HF.2.1.1.1

Employer-based insurance HF.2.2Private insurance enterprises(other than social insurance)

HF.2.1.1.2 Community-based insuranceHF.2.1.1.3 Other primary coverage

schemesHF.2.1.2 Complementary voluntary

insurance schemesHF.2.2

NPISHs funded schemes HF.2.4NPISHs (other than socialinsurance)

HF.2.3Enterprises funded schemes HF.2.5

Corporations (other than healthinsurance)

SHA 2.0 vs. SHA 1.0

16

Revised ICHA-HF SHA Manual (current Version 1.0)

HF.3 Household out-of-pocket payment

HF.2.3Private household out-of-pocket expenditure

HF.3.1 Out-of-pocket excluding cost sharing

HF.2.3.1 Out-of-pocket excluding cost sharing

HF.3.2 Cost sharing: Government schemes and compulsory health insurance

HF.2.3.2 Cost sharing: central government

HF.3.3 Cost sharing: voluntary schemes

HF.2.3.3Cost sharing: State /provincial government

HF.2.3.5 Cost sharing: Social security funds

HF.2.3.7 Cost sharing: other private l insurance

HF.2.3.9 All other Cost sharing

HF.4 Rest of the world funded schemes

HF.3 Rest of the world

Allocation of resources (purchasing): What information is provided by SHA?

How much is spent on

- main types of services & goods (HCxHF);

- main disease or beneficiaries categories, or

- to main types of providers (HPxHF)

under the particular financing schemes;

(Optional tools): What institutional units (financing agents)carry out the „purchasing” under the particular financingschemes (HFxFA; HFxFAxHC; HFxFAxHP)

17

Definition of Financing Sources

• Financing Sources are institutional units from which health financing schemes collect / receive their revenues (through specific mechanisms, e.g., contributions to insurance, premiums paid, foreign grant, voluntary transfer, etc.).

– Government is treated as a financing source for government funded health financing schemes.

– Households are considered the financing source of out-of-pocket payments

18

Classification of Financing Sources

19

FS.1. General Government

FS.1.1 Central government

FS.1.2 State/Regional government

FS.1.3 Local government

FS.1.4 All Other Government Units

FS.2 Corporations

FS.3 Households

FS.4 Non-profit institutions serving households (NPISHs)

FS.5 Rest of the World

Differences to current version of FS categories

• The revised ICHA-FS does not contain the category ”Private sector”

– Under JHAQ, FS.2: “Private sector”. However, the meaning of “private” is ambiguous in this context (Corporations and Households contribute to both public funds and private funds )

• FSxHF: revenues raised in a given period

– may be greater / smaller than the expenditure on health services and goods (HFxHC)

20

Revenue collection and pooling: What information is provided by SHA (2.0)?

How much revenue; (i) from which institutional units of the economy

(HFxFS)(ii) in what ways (HFxR*);

are raised for the particular financing schemes (HFxRxFS**)

*/potential tool for international data collection

**/optional tools

21

“Public” versus “private”

Current use of terms is ambiguous:

• What do the terms of “Public expenditure” (OECD HD) and “Expenditure by general government” (SHA tables) refer to?

– Sources?

– Contribution mechanisms?

– Institutional units (collecting revenues / purchasing)?

– Financing arrangements?

22

“Public” versus “private”

Proposed interpretations

1) From the perspective of financing schemes

– Public and compulsory private expenditure (can be 2 separate categories); and

– Voluntary private expenditure

2) From the perspective of compulsory versus voluntary contribution mechanisms

– Public and compulsory private funds spent on health care (can be 2 separate categories) and

– private funds spent on health care

23

Health spending from public, compulsory private and private funds

24

Revenues of financing schemes Major expenditure aggregates

R.1 Non-earmarked revenues of Government Public funds spent on health care

R.2 Social insurance contributions

R.3 Grants

R.4 Subsidies

R.5 Government transfer to NPISHs

R.6. Compulsory private Insurance premiums

Compulsory private funds spenton health care

R 7. Voluntary private Insurance premiums Private funds spent on healthcare

R 8

Households disposable income and saving(used for OOP)

R.9 Voluntary transfers (other than grants)

R.10 Other revenue (not elsewhere classified)

Optional tools

• Classification of Financing Agents: ICHA-FA

• Classification of Revenues of Health Financing Schemes: ICHA-R

• Optional tables

– HF x FA; HC x HF x FA; HP x HF x FA

– Expenditure by diseases, age and gender and Health Financing Schemes

– HF x R; HFxFSxR

• Sectoral accounts

25

Proposed optional tables

Financing sources

Types ofRevenues (*)

Financingschemes

Financingagents

Providers

Functions

Collectingagents

HF × FS

HF × R (*)

HF × HF

HF × FA × HC

HF × FA × HP

HF × HP

HF × R × FSHF × R × CA

HFxFA

Advantages of the proposed framework

The revised framework:

• adequately reflects the complex and changing systems of health financing;

• eliminates the ambiguity regarding some of the ICHA-HF categories in SHA 1.0; – distinguishing government funded schemes (as a health

financing scheme) and government as institutional unit

• new tools for country-specific analysis; and

• sufficiently flexible to accommodate future changes

27

Is the implementation feasible?

• ICHA- HF

– the proposed changes are in accordance with solutions in national data reporting (e.g., Netherlands, Slovakia)

– several countries: changes required only in the names of categories

• ICHA-FS

– no important changes compared to JHAQ

• Implementation of optional tools

– Depends on countries’ needs and capacity

28

Questions for discussion (Unit 9: ICHA-HF)

1. Are the main purposes of the SHA framework for health financing adequately defined ?

2. The paper proposes the following key concepts: (i) health financing schemes (ii) financing (purchasing) agents;(iii) financing sources, (iv) revenues of health financing schemes. Is this an adequate starting point for the accounting framework?

3. Are the main proposed categories of ICHA-HF appropriate? Are there any financial arrangements of countries that cannot be brought under any of these categories?

4. Do the proposed tables provide sufficient information concerning the allocation of resources of the main financing sub-systems?

5. Should household out of pocket include /exclude cost-sharing?

29

Questions for discussion (Unit 10: ICHA-FS)

5. Are the main proposed categories of the Classification of Financing Sources appropriate?

6. Does the FSxHF table provide sufficient information concerning the revenue-raising of the main financing sub-systems?

7. Would you propose to also collect data for the type of revenues of the health financing schemes (HFx R table)?

8. Is there a need for guidance on how to deal with multiple intermediation of sources such as the flows of funds passing through several institutions before reaching the schemes?

9. What other issues would be useful to present in Unit 10?

30

Questions for discussion (Optional tools)

• Are the main proposed categories of the Classification of Financing Agents appropriate?

• May the optional HF x FA and HC x HF x FA tables provide useful information for national analysis?

• Are the main proposed categories of the Classification of Revenues of Financing Schemes appropriate?

• May the optional HF x R table provide useful information for national analysis?

• Are the sectoral accounts (see Annex 4) useful additional tools for country-specific analysis?

• Are the tools proposed for accounting international assistance adequate and sufficient?

• What other issues would be useful to present among the optional accounting tools?

31

Thank you for your attention!

32

• Additional slides

33

Definition of financing agent

• A financing agent is an institutional unit managing one or more financing schemes: collects revenues and / or purchases services under rules of the given health financing scheme(s).

– Included are households as financing agent for out-of-pocket payments.

34

35

Classification of Financing Agents (ICHA-FA)FA.1. General GovernmentFA.1.1 Central government

FA.1.1.1 Ministry of Health FA.1.1.2 Other Ministries and public units (belonging to central

government)FA.1.1.3 National Health Service AgencyFA.1.1.4 National Health Insurance Agency

FA.1.2 State /Regional / Local government FA.1.3 Social insurance funds FA.1.9 All other general government unitsFA.2 Insurance corporationsFA.2.1 Commercial insurance companiesFA.2.2 Mutual and other non-profit insurance organisations FA.3 Corporations (other than insurance corporations)FA.3.1 Health management and provider corporationsFA.3.2 Corporations (other than providers of health services)FA.4 Non-profit Institutions serving households (NPISHs)FA.5 Households

FA.6 Rest of the WorldFA.6.1 International organisationsFA.6.2 Foreign governmentsFA.6.3 Other foreign entities

Definition of Revenues

• The revenue of health financing schemes is an increase in the funds of health financing schemes through specific contribution mechanisms.

• The categories of revenues are the types of contribution mechanisms, that is, the types of the ways through which funds of financing schemes are collected from financing sources

36

Classification of Revenues of financing schemes (ICHA-R)

R.1 Non-earmarked revenues of Government (domestic, foreign)

R.2 Social insurance contributions (with sub-categories)

R.3 Grants

R.3.1 Grants from foreign governments

R.3.2 From international organisations

R.3.3 From other general government unit

R.4. Compulsory private Insurance premiums

R 5. Voluntary private Insurance premiums

R 6 Households disposable income

R.7 Other revenue (with sub-categories)

R.7.3 Voluntary transfers other than grants

R.7.3.1 Domestic Voluntary transfers

R.7.3.2 Foreign Voluntary transfers

R.7.4 Miscellaneous and unidentified revenues

38

Types of insurance schemes

Types of insurer organisations

NationalHealthInsuranceAgency

Sicknessfunds

Insurancecompanies

Corporations *

Socialinsurance

x x x x

Compulsoryprivateinsurance

x x

Voluntaryinsurance

x x x x

*/E.g., Including Non-profit Institutions engaged in market production, HMOs, Employer-basedorganisations

Accounting for the different roles of government

40

HF.1 and HF.2: Main differences compared to the current ICHA-HF

Revised ICHA-HF Current ICHA-HF

HF.1 Financing schemes aimed at ensuring access to basic care for the whole / majority (or most vulnerable groups) of society

Regardless whether managed by government units or private enterprises

General Government

Institutional units of government and social security funds on all levels of government

HF.2 Voluntary schemes

Regardless whether managed by government units or private enterprises

Private sector All institutional units which do not belong to the government

Financing scheme Financing agentCounty

A

Country

B

HF.1.1

Government funded schemes

(programs ) total 30 5

FA. Ministry of Health 20

Other Ministries 5

NPISHs 5

HF.1.2 Compulsory social insurance total 60

FA.1.4 social security funds 40

FA.3 private insurance companies 20

HF.2.1 Voluntary private insurance total 5 10

FA.3 private insurance companies 5 8

FA.1.4 social security funds 2

HF.3

Households out-of-pocket

payment

FA.4

Households 50 25

HF.4 Foreign aid programmes total 15

FA.5 NPISHs (Domestic) 5

FA.1.3 government units 5

FA.5 Foreign NGOs 5

Example: Health expenditure by financing schemes and financing agents (optional

table)

Examples for indicators: revenue collectionand pooling

• Share of domestic revenues of Government to current expenditure & gross capital formation

• Share of grants from international organisations in revenues of government funded schemes

• Share of foreign voluntary transfers in revenues of government funded schemes / NGOs health programmes

• Share of government funded schemes (programs), compulsory social insurance, compulsory private insurance, voluntary health insurance, out-of-pocket payments and other private schemes in total current expenditure

42

Examples for indicators: allocation of resources

Current expenditure by compulsory social insurance (on key healthcare functions)

– Current expenditure by compulsory social insurance, executed by social security agency

– Current expenditure by compulsory social insurance, executed by for-profit insurance companies

• Expenditure on prevention by government funded schemes

– Expenditure on prevention by government funded schemes, executed by local governments

– Expenditure on prevention by government funded schemes, executed by NGOs

43

Financing scheme Financing agent

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(programs)

IS.1.2Local

government unitsHC.6x HF.1.1

x IS.1.2

IS.5

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x IS.5

HF.1.

2

Compulsory

social insurance

IS.1.4Social security

fundsHC.Ix HF.1.2

X IS.1.4

IS.3Private insurance

companiesHC.Ix HF.1.2

X IS.3

HF.4 Foreign aid

programs)

IS.5

NGOsHC.6.x HF.4.

x IS.5

IS.1.3 Government

units

IS.6

Foreign NGOs

HC.6.x HF.4.

x IS.6

Health expenditure by function, financing schemes and financing agent (extract) (optional table)

45

Revenues of Financing Schemes

(HF) by Financing Sources (FS)

FS.1

FS.1.1 FS.1.3

FS.2

FS 4FS.5

FS.6

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HF.1.1 General government funded

schemes

HF.1.1Compulsory social health

insurance

HF.1.2 Compulsory private insurance

HF.2.1

Voluntary private insurance

HF.2.4Non-profit institutions serving

households

HF.2.5Corporations (other than health

insurance)

HF.3Private households out-of-pocket

exp.

HF.4

Rest of the world

46

R.1 R.2 R.3.1 R.3.3 R.4 R.5 R.6 R.7 R.1-7

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HF.1Government and compulsory

health insurance

HF.1.1 Government funded schemes

HF.1.2

.

Compulsory social health

insurance

HF.1.3Compulsory private health

insurance

HF.2Voluntary health schemes (other

than OOP)

HF.2.1

.Voluntary private insurance

HF.2.2 NPISH health programs

HF.2.3 Corporation health programs

HF.3 Households out-of-pocket payment

HF.4 Rest of the world health programs

Accounting for International assistance and loans

Major forms of transactions:

• Foreign revenues of health financing sub-systems:

– (1) grants and voluntary transfers (other than grants) – earmarked for health

– (2) non-earmarked grants and voluntary transfers (other than grants)

• Loans (changes in financial assets / liabilities), which may:

– (3) balance the general government budget

– (4) finance a special health-related programme (e.g., health-specific loan given by the World Bank)

Accounting for international assistance

R.1 Non-earmarked revenues of Government: domestic (R.1.1)

R.1.2 Non-earmarked revenues of Government: foreign (??)

R.2 Social insurance contributions (with sub-categories)

R.3 Grants

R.3.1 Grants from foreign governments

R.3.2 From international organisations

R.3.3 From other general government unit

R.7 Other revenue (with sub-categories)

R.7.3 Voluntary transfers other than grants

R.7.3.1 Domestic Voluntary transfers

R.7.3.2 Foreign Voluntary transfers

Total domestic revenues

Total foreign revenues

Accounting for international assistance