Presentation on theme: "Health Care Financing in Pakistan: Trends and Issues"— Presentation transcript:
1 Health Care Financing in Pakistan: Trends and Issues Dr. Rashid JoomaDirector GeneralMinistry of Health, Pakistan
2 Purpose of a Sound Health Care Financing Policy Beyond “how much should we spend…”A sound HCF policy should look at:The Overall need and Available fundsHow money flows to ensure the system reaches its objectivesCreating incentives to enhance health care deliveryProvide social protection against routine and catastrophic health care expenses
3 The Current Government Setup FederalPolicyBudgetSurveillanceM&EReportingFundsOversightDirect OversightM&EProvincialReportingFundsOversightDirect ImplementationM&EDistrict
4 Current Health Care Spending Total: Rs 152 billion (2% of GDP)Or about USD 17 per capitaGovernment contribution is about a quarterReflects only about a 50% increase over the past 15 years (when adjusted for inflation and population growth)Based on data for government funding. Private data come from HIES There are no latter surveys that look at this. The HIES resumed looking at health expenses. These results are not available to me.The 152 billion is the sum of direct payment by the 3 levels of government and out of pocket expenses by households, but does not include spending by non-MoH government (military, police, semi govt orgs like PIA etc), private insurers and other 3rd party payers (ie private employers paying for their employees)
5 Where it goes Government: prevention, curative care and infrastructure Private sector and NGOs: mostly curative care
6 Some current restraints Limited revenue collection (<15% of GDP)Limited revenue collection by provincial or district governmentsDistinction between recurrent and development budgets, sometimes with management of each with different deptsWithin sub-units (eg hospitals) different things are paid from different funding sourcesUnder utilization of allocated fundsFor eg, a hospital is built with development funds and run on recurrent budgets. However the many prevention programs in the Federal MoH are all run on development funds
7 Is increased funding needed… Absolutely!However, this is not the final answerHealth outcomes are not well correlated with health spendingIn fact setting a total as a target may not be very helpfulEqually important toprioritize fundingdesign technically sound interventions andmonitor results that are geared towards effective and equitable targetsThe countries with child mortality rates below 30 per 1,000 have public health expenditure spending ranging from 1.4 to 8.7 of GDP and $7 to $4,200 per capita (Savedoff, What should a country spend on health care? Health Affairs, volume 26 (4), July/August 2007)US outspends Canada by % per capita but Canada has better health outcomesVital to emphasize that while the total funding is important, it is more important to see how it is spent – or in our case not spent, MoH routinely underspends its budget allocations
8 General SuggestionsNeed an overarching plan that looks at the overall health needs to establish the funding envelope (and also assigns deliverables and responsibilities for different stakeholders)Making sub-units (for e.g. districts or even clinics) accountable for their budgets and their deliverablesDefinition of “minimum essential” packagesAssign accountability and responsibility for servicesFinancial and budgetary implications (rewards or otherwise) tied to quality of services providedM&E framework including results and finances
9 Raising Adequate funds TaxationEarmarkingApproach external donorsAllowing provincial or local revenues to go directly to health locallyUser feesPakistan has one of the lowest taxation rates of around 15% of GDP.Earmarking would be allocating certain taxes for health. Same can be applied to donor funds. For eg you can say that xxx% of sales tax on pharmaceuticals goes for health. Or a new tax on tobacco goes to health (the Super Fund in the USA is exactly this)At the moment all external donors (bi- or multi lateral and others) combined account for <2% of the total health care spendingUser fees can be increased rather than waived. Currently public health care costs about 85% of the same care in the private sector. This is because there are so many out of pocket expenses in the public sector. In part these can be controlled by improving funds at these facilities which the user fees can contribute to. On the other hand the nominal user fees neither contribute significantly to the govt suppot nor are they a major burden on the consumers
10 Pooling RiskCatastrophic health insurance is being provided in Pakistan via the Rural Support NetworksGovernment leverages expenses related to natural disastersGovernment increases coverage and payments for expensive healthcare such as hospitalization, esp when these payments are pro-rated acc to incomesAcc to a World Bank survey: Social Protection in Pakistan, Managing Household Risks and Vulnerability (2007), 54% of all economic shocks faced by people were due to health related expenses and that prople coped with thisby either reducing food intake (33%), putting a child to work (10%) or pulling a child from school (8%).
11 Equitable Provision of Services Pro-rate user fees and other expenses acc to income of clientsConditional Cash Transfers (CCT) to attract clients to prevention services and as social support for the poorestSupport funds for indigent care (zakat)NGO and philanthropic supportPro-ration would mean that the poor get a higher (or complete) subsidy on their expenses. This can only work if the govt. has significant user fees or means of paying for services on behalf of the clientsConditional Cash Transfers are payments made to clients if they avail certain services. Typically they are a demand creation mechanism (eg tubal ligation scheme with MoPW). However, they can also be used to provide social support to the poor, eg cash is someone’s child completes all vaccines etc. Mexico does this for school enrolment, vaccines, antenatal and postnatal care and some primary health.
12 Efficient Provision of Services Adequate funding for what is plannedTimely and efficient disbursement of fundsA results monitoring systemPilot trials of Results based financingDelegate control over budgets, implementation as well as responsibility to local implementersLocal community involvement in planning and then monitoring servicesToo often funds are under allocated for what is intended. These lead to under performance and low morale. Either don’t plan activities or plan them with adequate funds.A results based monitoring system would ensure that under performance and its causes are highlighted in real time so that they can be addressed.Results based financing would 1) provide incentives for good performance and 2) penalties for under performance. Eg are in Afghanistan (vaccination) and Bangladesh (many measures).Allowing local control means that people are responsible for what they achieve. By not allowing them to control budgets or aspects of implementation (ie, human resources etc), we are currently giving local managers excuses (often legitimate) for failure.
13 Role of non-state actors Providers of quality care (Rural Support Networks, charitable hospitals/ clinics)Providers of essential services (Edhi)Providers of social safety nets (Edhi, other NGOs)Providers of employment or employment/ income generation (include micro credit, vocational training)Piloting new health care models (AKHS)Funding some care