stewardship (oversight)
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Health Financing Overview Ke Xu Health Systems Financing World Health Organization December, 2007 Shanghai. Stewardship (oversight). Responsiveness ( the way people are treated and the environment ). Resource development. Service delivery (provision). Health. Financing - PowerPoint PPT PresentationTRANSCRIPT
Better Financing for Better HealthBetter Financing for Better Health
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Health Financing Overview Health Financing Overview
Ke XuHealth Systems FinancingWorld Health Organization
December, 2007Shanghai
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Stewardship(oversight)
Financing (collecting, pooling
and purchasing)
FUNCTIONS THE SYSTEM PERFORMS GOALS / OUTCOMES OF THE SYSTEM
Health
Fairness in financial
contribution
Responsiveness (the way people are
treated and the environment)Resource
development
Service delivery(provision)
Functions and Goals of Health System
I
N
P
U
T
S
Coverage
Efficiency
Quality
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Purpose of Health Financing
• Make funds available• Set correct incentives for
providers• Ensure access to care for all
individuals
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Health Financing Mechanisms
Health care services
Tax-based financing
Social health insurance
Other prepayment
schemes
Out-of-pocket payments
1. General tax or other revenue
2. Payroll tax
3. Contribution or premium
4. Direct payment
Household
External resource
Financing mechanisms
Financing sources
Natural resource revenue
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Health Financing Functions
Revenue collection• From whom?
– Patients or all population
• What approaches?• Equity issue
Pooling• Cross subsidies
– Income groups• Pooling
– Low risk and high risk
Purchasing• What to buy?
– benefit package
• From whom to buy? – Public/private, – provide directly
purchasing)
• How to buy them? – contracting, – provider payment
mechanisms
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Government Health Financing Approaches
• The two approaches: – tax-based financing – social health insurance
• May co-exist in a given system.• Each has its typical ways of fund
raising pooling and purchasing.• However, in practice they share some
common methods to fulfil financing functions.
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7Social Health InsuranceHealth Financing Functions
• Revenue collection– Compulsory membership- often, formal sector
employees (dependants)– Payroll tax-proportional to income (ceilings often
applied) shared by employee and employer– Government subsidies
•Disadvantaged population (premium)•Low price service in public facilities
• Pooling– Single pool /multiple pools– Cross subsidy between high and low income
groups, the healthy and unhealthy• Purchasing /providing services
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Tax-based Financing- Revenue Collection
• General tax (central and local levels)– Direct tax
• Individual income tax• Corporate income tax• Property tax
– Indirect tax• VAT/sales tax, • Excise duties• Import & export tax
– Other tax
• Government property revenue– Natural resources
• Oil, diamond, other natural resources
– Government-owned property
• External resources– Bilateral– Multilateral– NGOs
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What services?• Health prevention• MCH• Essential treatment &
drugs
Tax-based Financing - Purchasing
For whom?• All population• Poor & other
vulnerable• Mother & child
Methods of purchase?• Direct provision
through public facilities• Increased use of
contracting
Incentives for providers?• Medical staff are paid by
salary or a mix of payment methods
• Facilities are mainly funded through a budget
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By Pia Schneider: Provider Payment Reforms: Lessons from Europe and America for South Eastern Europe
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Social Health Insurance or Tax-based System?
• No evidence indicating relative superiority of tax-based versus social health insurance financing approaches.
• The two approaches may co-exist in a given system.
• Each has its typical ways of fund raising pooling and purchasing. However, in practice they share some common methods to fulfil financing functions.
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Challenges for Developing Countries -1-
• 150 million people face financing catastrophe
• 100 million people are pushed under the poverty line
• Even more people do not have access to effective and affordable health care
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13150 million people suffering financial catastrophe and 100 million people being pushed into poverty annually due to health spending
- 30,000 60,000 90,000
WPR
AMR
SEA
EUR
AFR
EMR
Number of people (1,000)
impoverishment
catastrophic
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Challenges for Developing Countries -2-
•Most developing countries rely heavily on out-of-pocket payment
•Government spending is insufficient and decreasing in some countries
•Voluntary based private prepayment schemes are in very small scales
•External resources are increasing, but still limited
•Funds available for health are scare and not always used efficiently
•Per capita THE<$50: 65 countries
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Approaches of Financing in Practice by Income
0%
20%
40%
60%
80%
100%
low lowmid
uppermid
high total
Mixed
SSH
Tax
OOP
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010
2030
4050
6070
8090
100
perc
enta
ge
(%)
GINCODTJKBDIINDPAKKHMGHANGANPLTGOCIVKGZBGDCAFTCDYEMSENSDNERIUZBVNMBFABENKENNICLAOAFGCOMMDAGNBHTILBRNERSLEGMBMLIUGAZWETZAMDGZMBMNGETHMWIRWAMRTBTNSTPMOZPNGPRKKIRTLSLSOSLB
low income countries
oop_the other_the ssh_the tax_the
Components of Total Health Expenditure (2003)
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Components of Total Health Expenditure (2003)
010
2030
4050
6070
8090
100
pe
rce
nta
ge
(%
)
MMRSGPCYPGRCKORCHEPRTISRBRBESPQATANDAUSBELBHSITASMRMCOKWTBRNAUTFINBHRMLTAREJPNISLDNKNZLNORCANSWEUSAIRLGBRDEUFRASVNNLDLUXSOM
high income countries
oop_the other_the ssh_the tax_the
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.01
.03
.1.3
13
815
% o
f ho
useh
old
s w
ith c
atas
trop
hic
expe
nditu
re (
log
arith
m)
3 5 8 14 22 37 61 100
out-of-pocket payment in total health expenditure % (logarithm)
OECD others
Proportion of households with catastrophic expenditures vs.share of out-of-pocket payment in total health expenditure
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Funds Available for Health Are Scare
Total health spending per capita 2002
AFR Global<10$ 10 1410-20$ 17 2520-50$ 8 2850-100$ 5 27>100$ 6 98Total 46 192
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Strategies
• Raise More Funds and Spend Efficiently • Reduce Out-of-pocket Payments and
Increase Prepayment• Strengthen Health Financing Function
– Collect financial contributions efficiently and fairly
– Pool these contributions so that the risk of having to pay for care is shared by all
– Purchase or provide health service effectively and ensure an efficient provider-payment system
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Out-of-pocket spending
for health care
Mixes of community cooperative and enterprise based health insurance, other private health insurance, SHI type coverage for specific groups and limited tax based financing
Absence of financial protection
Intermediate stages of coverage
Universal Coverage
•Tax-based financing
•Social health insurance
•Mix of tax-based and various types of health insurance
Incr
ease
prepaym
ent
Stages of Coverage and Organisational Mechanisms
Reduce
out-of-p
ocket p
ayments
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• All people should have access to essential interventions when needed
• Without the risks of financial catastrophe or impoverishment
Resolution "Sustainable Health Financing, Universal Coverage and Social Health Insurance" May 2005.
Geneva
Universal CoverageUniversal Coverage
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Thank you!
http://www.who.int/health_financing