Social Protection and Health Services Nicola Jones, PhD IDS/ UNICEF Course on Children and Social Protection

Presentation overview 1.Social protection and services: tensions and complementarities 2.Health vulnerabilities and shocks 3.Health care financing systems 4.Alternative health financing mechanisms

1. Social Protection and Services Source: Flickr/world bank

Tensions between demand and supply Social transfers and social insurance may increase demand for social services, but is there adequate attention to service supply? – E.g. Juntos CCT in Peru lead to rapid increase in demand for education and health services, but without sufficient increase in budget for increased service supply leading to initial beneficiary disillusionment – E.g. Cash transfers aimed at addressing food insecurity are likely to work best in areas with integrated markets, basic physical infrastructure and financial services – CCTs have substantially increased service access but gains in outcomes have been modest at best, highlighting that inadequate investments in service quality have been addressed (WB, 2009) – E.g. Rapid expansion of education services to meet MDG enrolment targets, but real concerns about quality learning – E.g. In Ghana health service coverage is relatively good, but there is low levels of uptake. Key reasons include insensitive treatment by medical staff and inadequate drug availability.

Trade-offs in social sector investments? The jury is still out as to whether investment in social protection provides value for money vis-a-vis other potential social policy interventions. A key question we need to consider is whether a focus on social protection risks potential trade-offs with investments in basic service provision in fiscally constrained contexts?

Defining fiscal space tt - 1t + 1t + 2t + 3 Time Government spending Available fiscal space Total spending Non- Discretionary spending Discretionary spending t + 4t + 5

Affordability Affordability (e.g % ‘GDP available’ under normal conditions) Fiscal Space or ‘room in the budget’ (e.g. 5% of total budget available under ‘normal’ conditions) Political space for social protection Other pressing priority 1 etc. Political space for... National priority #1 #2 #3

Significant potential fiscal space due to oil revenues. Sustained economic and revenue growth, but with a very low non-oil tax to GDP ratio. Key macroeconomic and fiscal aggregates suggest that a universal child benefit would be affordable, costing 2.0% of GDP compared with an overall fiscal surplus of 11.1% of GDP in The very low levels of health (2.2%) and education (1.2% ) spending suggest weak government commitment to use fiscal space for improved social service provision. Fiscal space for social protection: the case of Congo

Fiscal space for social protection: the case of Senegal Economic and revenue performance in recent years has been good, but with a relatively low tax level and revenue yields already relatively high there is limited scope for creation of fiscal space. The overall size of the public sector in relation to the economy as a whole is also relatively high, as total spending averaged 24.8% of GDP. Reallocation may be an area where fiscal space could be created, as discretionary spending stood at 17.8% of GDP in Estimates suggest that social protection would be relatively expensive for Senegal. A targeted child benefit would cost around 3.7% of GDP which would be much higher than total public health spending, so a more modest option would need to be found.

Discussion question Does the distinction between core social protection interventions and complementary services make sense to you? Why/why not? How would you alter the framework, if at all? What are the implications for the definitions of social protection you developed at the beginning of the course?

2. Social protection and health shocks

Rationale for Social Health Protection 60 year commitment to health as a universal human right Alma Ata (1978) declaration of “Health for All by 2000” Children’s right to the “highest attainable standard of health” (UNCRC)

Key health vulnerabilities: the example of West and Central Africa Of 68 MDG priority countries, not a single WCA country ‘on track’ for MDGs 4 & 5 on child & maternal mortality [Lancet, 2008] In 5 WCA countries, increased U5MRs Globally, WCA has highest regional average U5MR of 169 (per 1,000 live births, in 2007) Globally, WCA has highest regional average MMR of 1,100 (per 100,000 live births) Decrease in ODA for child health in half of WCA countries [UNICEF 2008]

High Mortality from Preventable Causes WHO Statistical Information System, 2008

High U5MRs parallel low maternal health service utilisation

Obstacles to health service access [ Weighted averages calculated from DHS data, ]

The barrier of health care costs Widespread poverty & financial barriers to health care services include: – 1/3 of total health care spending in 2/3 of all low-income countries is out-of- pocket [WHO, 2003] – High health care payments result in reduced expenditure for basic needs, loans and sale of assets Financial barriers to preventive & curative health services: o High levels of morbidity & mortality o Lost productivity o Lost time in school (due to child illness & children as caretakers) Inducing & entrenching levels of poverty and vulnerability, across the lifecycle and inter-generationally

Health expenditure can push hhs into poverty

3. Health care financing in WCA

Equity impacts of health expenditure [Data source: WHO 2008]

Out-of-pocket payments (OPPs) OPPs are all health related expenses incurred at the time of use of health service, including consultation fees, drugs etc. Exclude expenditure on transport to health care services. Exclude reimbursements, e.g. from insurance. Include fees (official & unofficial) paid to public and private health providers, and traditional healers.

Government expenditure on health [Data source: WHO 2008]

Emergence of User Fees in WCA Introduced following structural adjustment policies in 1980s 1987 Bamako Initiative: introduced community participation elements to user fee policies User fees aimed to: o Increase revenue with high efficiency o Counteract moral hazard o Improve quality and coverage of services o Rationalise pattern of health care-seeking behaviour o Safeguard equity through exemptions for the poor [James et al., 2008; Schieber and Maeda, 1997; SC UK, 2005]

Multi-layered negative equity effects Impoverishing impacts of user fees include: o Selling assets o Health expenditure at expense of other needs o Loans o Lost labour time Regressive, leading to decline in health service usage by poorest quintiles Undermining prevention & treatment of childhood illness

User fee exemptions Mali: Vaccinations Bed nets to protect against malaria Free malaria care to women and children Free TB and ARV treatment and preventive care for leprosy and other ‘neglected’ diseases Senegal Free deliveries and C- sections Coverage of individuals with a certificate of destitution: beneficiaries receive free care at public health facilities Free malaria care

4. Alternatives to user fees Source: Flickr World Bank

Community-based Financing Schemes Complementary coverage of SHI excluded populations Voluntary, private, non- profit insurance schemes Largely participatory Smoothing private expenditure Pooling health risks Strategic purchasing to encourage quality Low cost-recovery, on average 25% [Ekman, 2004] Continued OOPs to meet total costs High administrative costs Catch-22 of contributions from poorest Exclusion of the poorest Low coverage in region – highest is just 3% in Mali

Social Health Insurance in WCA: pros and cons Pros Pooling health risks Pooling financial contributions Aim of universal coverage, regardless of income level Redistributive Government contributions for indigent Protection from catastrophic expenditure Cons Difficulty covering large informal sector & population with unstable incomes WCA: ~1/10 population employed in formal sector Inequity in coverage: lower enrolment in poorest quintiles Source: Scheil-Adlung, et. al, 2006

Ghana: National Health Insurance Scheme Est. 2004, coverage of 54% population by mid-2008 – 12.5 million individuals Fees range from between 7 and 20 GHS (approx 5-15USD per annum) This is still a significant barrier to enrolment for the poor according to 2008 participatory study Lower registration among lowest wealth quintiles National Health Insurance Fund covers: i) formal sector workers who contribute ii) children under 18 years whose parents are both card holders iii) people over the age of 70; iv) pensioners; and v) the indigent Exemptions: i) All pregnant and lactating women, and new-borns ii) Announced but not yet implemented exemptions for children under 18 years.

Removal of user fees for U5MR impact Direct linkages between user fee removal, increases in service utilisation & reductions in child mortality Removal of user fees in 20 African countries would result in: o Estimated 233,000 under-five deaths prevented annually o 6.3% of under-five deaths

User fee removal prerequisites Estimating resource requirements o ~5-10% recurrent health care budgets annually o Uganda: increase of US$7 to $8.4 per capita Consider district level implications o Current allocation of user fee revenue to be replaced o District level decision making control over user fee revenue o Plan sequencing of user fee roll out carefully o Plan for increased health service demand o Plan for increased demand for drugs o Plan for short-term shortfall in health budgets through for instance donor bridge funding

Facilitating removal of user fees Implementation challenges of exemptions Selective exemptions by socio-economic status prone to costly and complex administrative procedures Confusion regarding who qualifies for exemption More effective: blanket exemptions for specific services Step towards removal of all fees: exemption mechanisms for the poor and particularly vulnerable populations requiring health services

Conclusions 2) Address prerequisites 3)Strengthen budget management 4) Understand potential of SHI and MHOs 5) Build political will nationally and with donors 1) Prioritise fee abolition for MCH

Discussion questions What political economy factors do you envisage facilitating or constraining a decision to remove health user fees in your context? If the removal of user fees were only feasible for a limited array of health services, which criteria would you use to select these services? How does your decision link back to discussions about economic and social risks and vulnerabilities?