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1 Ricardo Bitran, Ph.D. Rodrigo Muñoz, M.S. Ursula Giedion, M.S. Bitran & Asociados December 2003 Waiver Systems for Government- Financed Health Care:

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Presentation on theme: "1 Ricardo Bitran, Ph.D. Rodrigo Muñoz, M.S. Ursula Giedion, M.S. Bitran & Asociados December 2003 Waiver Systems for Government- Financed Health Care:"— Presentation transcript:

1 1 Ricardo Bitran, Ph.D. Rodrigo Muñoz, M.S. Ursula Giedion, M.S. Bitran & Asociados December 2003 Waiver Systems for Government- Financed Health Care: Lessons from Suriname and Jamaica

2 2 Contents Part I: Suriname Part II: Jamaica Part III: Conclusions

3 3 Part I Evaluation of Suriname’s Ministry of Social Affairs (MSA) Card System Suriname

4 4 Study objectives 1.Compliance of MSA Card system with own policy 2.Type I and II errors in MSA Card system 3.Use of services and out-of-pocket expenses by MSA Card beneficiaries 4.If necessary, explore alternative identification mechanism based on “proxy means test” Suriname

5 5 Description of MSA Card System Meets Requirement s (Poor or Near Poor) MSA Social Worker MEANS TEST Get MSA Card. If they get care, MSA pays for it Do not get MSA Card. If they get care they, or their insurer or employer, pay for it, not MSA Do not meet requirements Mission: –Identify the poor and near-poor and subsidize their health care –Pay health providers for services delivered to the MSA Card holders Suriname

6 6 Description of MSA Card System –Income-based criterion to identify the poor & near-poor –Small administrative fees –Modest co-payments for hospitalizations and medicines MSA Card system summary, in SF. and $ (period of Jan to Sep. 2000) MSA Card typeCurrency Monthly income rangeAdministrative fees Co-payment for hospitalization (per day) Co-payment for medicines at the pharmacy A: PoorSF.0 – 20,0001, $0 – B: Near-poorSF.20,000 – 30,0002,0001, $14.30 – Official selection criterion and fees: Suriname

7 7 Description of MSA Card System Other (informal) selection criteria:  Household size  Education level  Medical condition (chronic, disabled, handicapped, elderly)  Early adulthood pregnancy  Dwelling condition  Female single  Running water and electricity  Square meters per household member  Number of bedrooms  Cooking fuel used  Means of transportation  Distance to work  Presence of a previous card  MSA staff knows that the income-based criterion has flaws: they reach the poor more accurately with informal socio-economic criteria Suriname

8 8 1. Effectiveness of MSA Card System: Compliance with own policy 6% of MSA Card holders declared income below SF.30,000 Among those with income below SF. 30,000, 37% held MSA Card 94% of MSA Card holders with income above SF. 30,000. Limitations of these measurements: –5 percent of the 1,255 households declared an income below SF.30,000 –Income data from Household Budget Survey unreliable (poor correlation with expenditure) Possession of MSA Card according to self-reported income Number of households reporting incomeHas an MSA Card Does not have an MSA CardTotal Below SF. 30, Above SF. 30, ,192 Total ,255  Household survey: MSA officials use a higher implicit cut-off point. This is consistent with the other selection criteria based on the socio- economic assessment of applicants Suriname

9 9 2. Effectiveness of MSA Card System: Type I and II errors Type I error or Under-coverage: –Number of individuals entitled to an MSA Card who do not have one, divided by the total number of people entitled. Type II error or Leakage: –Number of MSA Card holders that are not entitled, divided by the total number of MSA Card holders. Suriname Poor: should have a card Non- Poor: should not have a card Has a card Ok Type II: Leakage (94%) Does not have a card Type I: Under- coverage (63%) Ok

10 10 2. Effectiveness of the MSA Card System: Type I and II errors Causes of error: Inappropriate classification criteria: –Actual cut-off line of SF.30,000 is too low  it does not represent the target population, i.e. the poor and near-poor. Some individuals are classified incorrectly: –Income-based classification is difficult to implement reliably. Some individuals are never classified: –Actual policy does not actively search for potential beneficiaries. Suriname

11 11 2. Effectiveness of the MSA Card System: Type I and II errors The SF.30,000 set too low, thus cut-off line does not identify the poor and near-poor. Researchers used official Surinamese poverty line to define the target population. Total number of individuals and households from the HBS IndividualsHouseholds Below the official poverty line2, Above the official poverty line2, Total4,9571,255  More than half of the population lives under the poverty line Suriname

12 12 2. Effectiveness of the MSA Card System: Type I and II errors MSA Card 40% Other insurance 37% No insurance 23% Poor 64% Non-poor 36% Health insurance among poor households Households with an MSA Card 141 households 140 households Cards needed = Cards leaked Type I error Not all poor households have health insurance: under-coverage Type II error Not all MSA cards belong to poor households: leakage Suriname

13 13 2. Effectiveness of the MSA Card System: Type I and II errors What are the causes of the under-coverage?  The data available do not permit clear determination of the causes IIIIIIIVV Percent of individuals without MSA Card (five lower deciles) However, the data suggest that a main cause is that some individuals are never classified.  Actual policy does not actively search for potential beneficiaries Suriname

14 14 3. Effectiveness of MSA Card System: Access to health services Ambulatory care Health problem during last 30 days MSA Card Other None Took no action regarding health problem Sought informal care only Sought formal care only Received care Hospitalized during the last year Non- poor Poor MSA Card Other None Pap-smear test during the last year (women) Children under 3 w/ immunizations up to date Prevalence of chronic illnesses Took no action regarding chronic illness Sought informal care for chronic illness Non- poor Poor Sought formal care for chronic illness Chronic illnesses Suriname Kind of insurance coverage

15 15 3. Effectiveness of MSA Card System: Financial protection Non-poor Poor Non-poor Poor Hospitalizations (yearly) Non-poor Poor Non-poor Poor Chronic illness care in the formal sector (monthly) MSA Card Other None Non-poor Poor MSA Card Other None Non-poor Poor Ambulatory care in the formal sector (monthly) Mean expenditure in $ (over the relevant population) Percentage of total household consumption expenditure Suriname Kind of insurance coverage

16 16 –Number of members under 15 years of age –Cooking fuel –Condition of the dwelling –Presence of electricity –Presence of telephone –Presence of toilet inside the dwelling –Construction material of the dwelling –Ownership or mortgage of the dwelling –Company water inside/outside the dwelling –Dwelling surface per capita –Number of bedrooms per capita 4. Exploration of alternative eligibility criteria R² = Suriname Statistically significant variables Initial list of variables

17 17 4. Exploration of alternative eligibility criteria Type I error Under-coverage Type II error Leakage Measured from HBS 1999/ Predicted with proxy means test 2228 Includes only the error caused by wrong classification  total under-coverage would be slightly higher Slight reduction in leakage Suriname

18 18 Conclusions With time, MSA staff has reduced classification errors by: –Using an implicit higher income cut-off point –Adopting informal criteria based on socio-economic status of applicants MSA beneficiaries tend to be poorer  System is progressive Under-coverage (poor people with no insurance): 23 percent –Caused mainly by lack of policies that actively search and screen the poor –Also caused by inadequate income cut-off line and informal selection criteria –Good performance in comparison with other countries –Coverage (poor people with MSA Card): 40 percent Leakage (MSA Card holders above the poverty line): 36 percent –Caused by errors during the screening process –Standard performance in comparison to other countries The good news: Needed cards = Leaked cards Suriname

19 19 Conclusions MSA Card increases utilization of health services by the poor: –Use of services by poor MSA Card holders approaches that of the non-poor, whereas the use by the uninsured poor is much lower: Card promotes equity in delivery –Adverse selection is also observed MSA Card reduces the financial burden of the poor: –Proportion of income allocated to health expenditure by MSA Card holders approaches that of the non-poor, whereas the uninsured poor spend much more: Card promotes equity in financing Available proxy means test: –Would not improve (may worsen) under-coverage –Would only slightly reduce leakage –Higher cut-off line would reduce both errors, but more cards needed Suriname

20 20 Part II Assesment of User Fee Program (UFP) in Jamaica Jamaica

21 21 Background Strengthening of user fee program (UFP) in late 1980s and 1990s –User fee revenue from a low 1% in 1986 to 10% in year 2000 Concerns that UFP creates access problems leading to: –Non-attendance at primary care (e.g. family planning) and other outpatient clinics (e.g. diabetes, hypertension) –Early hospital discharges –Increasing hospital re-admission rates –Non-attendance for elective surgery –Denial of access to birth and death registration data at hospitals Jamaica

22 22 Study Objectives 1.Examine policy and operational frameworks of UFP 2.Evaluate data on service use before and after UFP 3.Get views of key stakeholders on performance of UFP 4.Do ‘cost-benefit’ and ‘equity’ analysis of UFP 5.Recommend actions to re-design or expand UFP Jamaica

23 23 Review of “history” of UFP and exemption schemes 1993 User Fee Schedule –Different fees for public and private patients –Different fees for patients with or without insurance –Different fees for hospitals and health centers –Fixed fees –List of waived people + inability to pay 1999 User Fee Schedule –More detailed specification of services –Patients with insurance treated as private patients –Fees increase –Similar waiver scheme Jamaica

24 24 Review of “history” of UFP and exemption schemes Unusually large number of user fee studies in Jamaica over last 20 years. Consensus that collection of fees has increased steadily and substantially, though problems in collection detected (collection is only 60-65% of amount billed, Lefranc & Lalta (2001)). Recognized that utilization of health services dropped especially in public health facilities previous to 1994 Jamaica User fee collection as a percentage of total public health expenditure in selected countries SVG 1996Zimbabwe 1995 Jamaica 2001 Chile 1995Ghana 1999 Thailand 2000

25 25 Review of “history” of UFP and exemption schemes Drop of utilization in public facilities due to many factors –Low quality of government health services –Adoption of fees Several studies identify equity problem in access. For example: –Wagstaff (1998): horizontal equity problems in service provision, explained by lack of financial protection for the poor. –Lefranc & Lalta (2001): equity in access problems as income is shown to be a strong predictor of service use. Consensus that the waiver policy not working well, leading to basic problems shared by countries implementing waivers to protect the vulnerable: –Lack of a strong national waiver policy, leading providers establish their own waiver criteria –Substantial administrative burden to assess waiver eligibility Jamaica

26 26 Study results based on previous surveys: Hospital Information System (HIS) Results: –Total utilization of health services:  Total decline 14.4% for the period  “M”-shaped: pickup after historical low figures in 1994 and renewed drop after new increase of user fees in Increases in user fees Jamaica

27 27 Study results from previous surveys: Hospital Information System (HIS) Results: –Primary care services:  Total decline 34% for the period  Maternal child health services seem less elastic to price changes than curative OP (outpatient) visits and casualty visits  Substantial drop of service utilization in 1999 Introduction of user fees in health centers Jamaica

28 28 Study results based on previous surveys: Jamaican Survey of Living Conditions (JSLC) No substantial differences in self-reported health status Jamaica Percentage of those reporting illness/injury in last 4 weeks, (Quintile 1 and 5) 0,0 2,0 4,0 6,0 8,0 10,0 12,0 14,0 16,0 18, AVG Quintile 1 Quintile 5 Illness-related impairment higher among the lowest quintiles Days of illness/injury related impairment, (Quintile 1 and 5) 0,0 1,0 2,0 3,0 4,0 5,0 6,0 7,0 8,0 9,0 10, AVG Quintile 1 Quintile 5 Lower propensity to seek care among the poor (steady decline since 1999) Percentage of those ill seeking care, (Quintile 1 and 5) 0,0 10,0 20,0 30,0 40,0 50,0 60,0 70,0 80, AVG Quintile 1 Quintile 5

29 29 Study results based on previous surveys: Jamaican Survey of Living Conditions (JSLC) Use of public/private facilities –Jamaicans make strong use of private services. Even among the poorest, on average only one-half of those seeking care went to public facilities –General trend for this period: towards increase in proportion of people using public facilities  1992: 28.5%  2001: 38.7% JSLC Jamaica Public sector use by those seeking care, (Quintile 1 and 5) 0,0 20,0 40,0 60,0 80, AVG Quintile 1 Quintile 5 Use of public services by those seeking care (Quintile 1), ,0 20,0 40,0 60,0 80,0 100, AVG Medical CareMedicationHospitalization –Public sector used mainly by the poorest –For hospitalizations, the poorest only use hospital services whereas the majority buys medication in the private sector –These data suggest existence of quality- related problems in public sector

30 30 Study results based on previous surveys: Jamaican Survey of Living Conditions (JSLC) Use of public/private facilities by the wealthiest (Q5) –They rarely use public facilities when seeking medical ambulatory care or medications –For hospitalizations, public facilities are used extensively JSLC Jamaica Use of public services by those seeking care (Quintile 5), ,0 20,0 40,0 60,0 80,0 100, Medical CareMedicationHospitalization

31 31 Study results based on previous surveys: Jamaican Survey of Living Conditions (JSLC) Cost of services in the public/private sector –Overall, the mean cost for visits in the public health sector has increased from 5 J$ to 63J$ in year 2001 (Real 1990 $) –On average, Jamaicans spend three times more in private sector than in public sector Jamaica All Patients: Mean Patient Expenditure in Public and Private Facilities (Real $ 1990) AVG Public Private Quintile 1: Mean Patient Expenditure in Public and Private Facilities , (Real $ 1990) AVG Public Private –For the poorest, the mean expenditure on visits in private sector dropped substantially after 1999

32 32 Study results based on surveys collected for this study Survey Design –Applied to patients, front line workers and directors of health facilities –16 public health facilities surveyed  2 hospitals and 2 health centers from each RHA –280 Patients interviewed  231 outpatients and 49 inpatients –42 Frontline workers  26 cashiers, 11 SAOs and 5 others –27 Managers  13 administrative and 14 medical Jamaica

33 33 Study results based on surveys collected for this study User charges tend to be regressive –90% of patients in Q1 paid –65% of patients in Q5 paid In public facilities, most of poorest pay upfront whereas 50% of wealthiest either receive total or partial waiver or are granted a credit for future payment Worrisome situation as rich use predominantly more costly hospital services  Leakage of public subsidies 83% of inpatients did not pay charges –Most of inpatients in the sample belong to quintiles 3,4 and 5. 8% of outpatients did not pay charges –Most outpatients in sample from Q1 Jamaica Patients according to payment of services Service free/full exemption Payment of total or part of fee in the future Part of fee at the point of service Total fee at the point of service

34 34 Study results based on surveys collected for this study Patient attitudes: –Most of patients in Q1(86%) did not request waiver compared with 61% in Q5. –All waiver requests accepted and full or partial waiver granted. –More needs to be known to explain this situation. On the basis of other countries experiences this might be due to one or a combination of the following reasons  Inadequate information  Stigma  Complicated and time consuming procedures to receive an exemption together with low fee levels (“it is not worthwhile”) Jamaica Waivers: Patients’ behavior and system response Quintiles Did not ask for exemption --full payment made Exemption refused --full payment made Partial exemption -- payment made Full exemption or service free Total Source: Outpatients and inpatients survey, August 2003.

35 35 Study results based on surveys collected for this study Coping with payment of health care costs: –Most patients reported to have been in situation of not having funds to pay for their health care –Of those under financial pressure:  Borrowing from the extended family network seems to be the principal way of coping  One-fourth decided to delay treatment showing a problem of access to health services. Jamaica Patient coping under financial pressure Frequency% of total Never under financial pressure 7931 Have been under financial pressure Total Of those under pressure Borrow 6939 Delay treatment/stay at home 4626 Still come for treatment try best to pay 3520 Use home remedies 137 Borrow or delay treatment/stay at home 42 Go to a cheaper public facility 32 Savings 21 Pray/God provides/other 74 Total179100

36 36 Study results based on surveys collected for this study Financial aspects –Between 1998 and 2001 budget cuts were substituted by user fee increases –This implies a shift of financial responsibility from the public sector to patients without a simultaneous quality improvement –In this situation, utilization of services will drop (as has been observed) as there is only a price and no quality effect. MOH current budget User fee collection Jamaica Total budget and fee collection (real $J 2003) /981998/ / / /022002/

37 37 Conclusions and recommendations Institutions should have incentives to collect fees Price definition in 1999 Gazette defies basic economic design criteria User fees to be applied uniformly across country Fee collection evaluation and monitoring tools in health facilities Administrative cost of UFP is 8 percent of fee collection. However, data on UFP staff and salaries is still not clear. The good news: the institutional implementation of the UFP is in accordance to internationally accepted guidelines. Institutions to have incentives to grant waivers and to collect fees Government should set aside special fund for waiver reimbursement Users unaware of waiver rules Waivers to cover the neediest Jamaica

38 38 Part III Conclusions Conclusions

39 39 Conclusions 1.Pricing policy to be consistent with health policy objectives 2.Tendency to define user fee and waiver systems loosely 3.Designing & implementing systems of waivers: easier said than done 4.Successful waiver systems must be accompanied by appropriate incentive schemes 5.Chief incentive: provider to be reimbursed for forgone income from waivers 6.Propensity to abuse waiver systems by non-poor is substantial: leakage remains a threat 7.Waivers to cover the neediest: fine tuning of targeting systems seems possible mainly through individual means testing 8.Widespread education of the poor about their rights is essential 9.Evidence that waiver systems can improve equity in delivery and in financing Conclusions


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