1 | Designing health financing systems for universal coverage 03 November 2014 Benoit Mathivet Department of Health Systems Governance and Financing World Health Organization Designing health financing systems for universal coverage 03 November 2014 Benoit Mathivet Department of Health Systems Governance and Financing World Health Organization

2 | Outline I.What is at stake II.What are the challenges III.How can health financing policy contribute? (with links to EMP)

3 | I. What is at stake?

4 | Widespread issues of physical access to care… Globally, there is a widespread lack of access to healthcare services due to: -Lack of physical availability of services, -Geographical constraints, -Cultural constraints etc. When care is available there are: -quality issues, -lack of adequate inputs (trained staff, medicines, equipment) People can actually lose trust in the system and stop seeking care because of the above. I.

5 | Worsened by financial risk… And when people do contact health services: – Globally around 150 million suffer severe financial hardship each year. – 100 million are pushed into poverty because they must pay out-of- pocket at the time they receive them. – Medicine often represent an important share of the OoPs ….which may in turn represent a strong desincentive to seek treatment. I.

6 | II. UHC and its challenges Ensuring that all have access to the care they need, of good quality, without suffering financial hardship.

7 | Linkages and trade-offs The 3 dimensions are closely interrelated Extending the 3 dimensions of coverage at the same time may be difficult for poor countries: –Financial resource are scarce. –Managerial capacity may be weak. –There are numerous political and cultural challenges to overcome. II.

8 | III. How can Health Financing Policy contribute to progresses toward UHC?

Quality Utilization Need Universal financial protection Final UHC goals Health financing within the overall health system Revenue collection Pooling Purchasing Benefits UHC intermediate objectives Equity in resource distribution Efficiency Rest of health system Transparency and accountability Wider context/ extra-sectoral factors (SDH) How health financing arrangements can influence progress towards UHC Source: Joe Kutzin

10 | Revenue collection: how to bring more domestic money to the health sector? Increase the priority given to health in national budget, for instance following the Abuja (2001) objectives (15% of state budget deicated to health). If all signatory countries reached Abuja objectives domestic funding would by far exceed external funding for health. Explore the potential for new domestic revenue sources: sin taxes (alcohol, tabacco), taxes on money transfers, on communication, on air tickets etc… Improve the efficiency of tax collection. This sounds obvious… but for instance many free healthcare schemes remain incomplete promises (with often a lack of adequate medical workforce/ medicines & equipment) until they are properly planned and receive appropriate funding.

11 | Function 1- Revenue collection: how to bring more domestic money for health?

12 | Pooling: fight against fragmentation/duplication Pooling implies prepayment, before the illness occurs, as opposed to direct payment at the point of delivery when illness occurs. The main purpose of having a pool is to spread the financial risk associated with the need to use health services. It is also meant to disconnect the amount and quality of benefits received by the sick from their level of financial contribution. A note on CBHI: there is increasing evidence that small, separate pools gather little resources, on a voluntary basis, with no subsidization from the state. They therefore give access to a very limited package of care, different for each pool, and leave the most vulnerable behind (solutions exist, through subsidization and (near) mandatory enrollment, e.g. Rwanda). Having a multitude of separate pools, small or big (the later being often related to vertical interventions), also duplicate costly administrative processes instead of paying for health services. Source: cited/adapted from WHR 2010

13 | Purchasing: providing the right incentives Purchasing mechanisms all have edges and flaws, they can be combined to cumulate the former and compensate the later. –Fee-for-service: can be an incentive for increasing provision, but may favor provider-induced demand (medicines are concerned) and increases financial risk for the payer. –Per-capita funding: brings money were patients are, but requires proper, autonomous management. –Case-based funding: strong incentive for efficiency, can trigger the adoption of generic medicines, favor cheaper medicines providers, and overall incentivize more rational utilization of all physical resources. –Performance based funding: aims at increasing provision/utilization of essential services (including immunization etc.) and quality.

14 | Benefits policy: being clear about what is covered. Health financing mechanisms can incentivise certain behaviors among the population when they access parts of this benefit package (for instance a degree of cost-sharing to avoid over consumption of some services or medicines). Clarity and proper knowledge of the benefit package and of conditions of access are key to empower people, improve utilization and enhance financial risk protection (example of inpatient drugs and equipment).

Sequencing of HF reforms 1.Pooling 3a.Rationalization 3b. Increased Benefits & pop. coverage 3c. SD quality gains Provide an incentive for better distribute & manage funds for Frees-up resources for Enables risk protection a,b,c : solid ground for increased State (and donors) spending in health 2.Purchasing mechanisms

16 | The role of institutional design & organizational practice Resource collection and related tasks Purchasing and related tasks Health Financing functions Stewardship Pooling and related tasks Institutional design Organizational practice Institutional design Organizational practice Institutional design Organizational practice Financial accessibility Organizational practices are organizational activities, e.g. rule implementation and compliance and capacity to do so. The institutional design defines the HF system architecture and is the sum of all formal rules (laws, regulations) relating to the health financing system. Source: Inke Mathauer

17 | Thank you very much for your attention! For further information: