functions of health financingfunctions of health financing

Annual report 20152016. PubMed Central 0000002097 00000 n Geneva: World Health Organization; 2017. Department of Health Systems Governance and Financing, World Health Organization, Avenue Appia, 1211, Geneva, Switzerland, World Health Organization, Tunis, Tunisia, You can also search for this author in Source: Schieber G, Baeza C et al, Financing Health Systems in the 21 st century, Chapter 12, Disease Control Priorities in Developing 5. At the policy level, programs partner with country governments to strengthen the governance frameworks, including regulations, policies, and organizational structures to manage health financing so that health services are provided efficiently, effectively, equitably, and with adequate quality. Jowett M, Brunal MP, Flores G, Cylus J. Health Policy. To discuss Malawi as a case study in health systems. Today, millions of 0000009066 00000 n The operation of a health financing system entails transactions by the three main functions of health financing: revenue-raising, pooling and purchasing - such as, for example, payment of social insurance contributions to a single national fund and distribution of the resources, first among the different purchasing organisations, and then . An appraisal of the health transformation Programme. For example, the pool from which the national capital city funds its city hospitals, and the pool from which the central government funds national tertiary facilities are not territorially distinct, particularly when as is often the case the national tertiary hospital is also an important provider of more basic services for the local population. Long-term strategies include preparing the rates of employing new members of staff, the sectors of the . Service public pro. 0000005227 00000 n xb```l hp`d,u){i7NY~GOC]TkT} h$*M^ixD#UNm| The extent to which the potential redistributive and efficiency gains established by a particular pooling arrangement are realized in practice depends on its interaction and alignment with the other health financing functions of revenue raising and purchasing, including the links between pools and the service benefits and populations they cover. This was, and in some places remains, one of the main drivers of large inefficiencies in the health systems of the ex-USSR countries [15]. Financial Management Functions. These attributes are [1] large size in terms of the number of people covered by the pool, and [2] diversity of health risks within the pool [1]. Abt Associates is a mission-driven, global leader in research and program implementation in the fields of health, social and environmental policy, and international development. Policy note. The report is divided into five chapters. Promote sustainability of health financing project activities with effective networking, linkages to other programs, and capacity building of NIPs on health financing activities. From a system point of view, there are benefits to this arrangement because these forms of VHI can fill explicit gaps in publicly funded coverage. Such pooling setups create explicitly unequal financing arrangements and the population segmentation is often further linked with separate purchasing and service provision arrangements. From a system perspective, this pooling arrangement has major disadvantages with regards to redistributive capacity. 2011;13(7):1190. 1995;32:25777. Innovations in health system finance in developing and transitional economies. Figure 1. Supplementary insurance, on the other hand, provides enhanced access, such as a higher level of inpatient amenities or greater user choice of providers compared to the coverage in the public system [51, 55]. Each financing mechanism was analysed in respect to key functions namely, revenue generation, pooling and purchasing. Hatfield (South Africa): CMS; 2016. xref For example, even in a single or unified pool, unless health needs are perfectly reflected in the relative allocations to different health programs, further fragmentation occurs, especially when an input-based line item budget structure is in place. %%EOF Health Financing Indicators Reference Sheets, compendium of indicators for projects supporting health financing, human resources, and governance, Health Financing Indicators Reference Sheet 2014, Health Finance and Governance (HFG) Project. 2012;380(9849):125979. Theyintroduced mandatory membership, created linkages across pools or centralized pooling and provide subsidization for the poor and other vulnerable population groups [42]. But a system with territorially distinct pools can suffer from fragmentation, if and when their population size or the territory are too small to ensure redistributive capacity, or when sub-national territories have very different levels of average per capita expenditure on health. Health financing involves the basic functions of revenue collection, pooling of resources, and purchase of interventions. Here the pooling function lies with a sub-national entity, such as a state, province, or district (if managed by a level of public administration) or another entity, such as a health insurance fund, with defined responsibility for the entire population of that territory [14]. But services are typically grossly underfunded and often unavailable, thus resulting in implicit benefits [1]. OECD, World Health Organization. In doing so, policy makers can come closer . What are the types of health care financing? Health financing sub-functions Revenue generation: As shown in Figure 1, funds for health financing are generated majorly by government (57%), about Where VHI coverage is unsubsidized, only those who can afford it will benefit, and inequalities will remain. trailer territorially overlapping pools in terms of service and population coverage; (4.) In the early 1990s, Thailand had a scheme for civil servants and another scheme for private sector employees. Health Facilities Health facilities in the Philippines include government hospitals, private hospitals and primary . Berkshire: Open University Press; 2005. van de Ven WP, Beck K, Van de Voorde C, Wasem J, Zmora I. (accessed 5 February 2019)]. Health Financing. 'p 6l3/%J For example, some other countries have a national health insurance scheme, which is territorially divided up along sub-national units, such as Canada [39], the Russian Federation [40] and Bosnia and Herzegovina [15]. Mathauer I, Dkhimi F. Analytical guide to assess a mixed provider payment system. Agency's Mandate and Functions Mandate. Indonesia is also undertaking efforts to shift towards a single national health insurance pool, but there is still a significant part of the population that is not yet enrolled in the pool. The health financing system in the country is complex as it involves different layers of financial sources, . Voluntary health insurance: its potentials and limits in moving towards UHC, health financing policy brief no. People who have higher risks are just as covered as people who have lower risks. 0000080023 00000 n Pools are thus not divided along population groups. Voluntary health insurance (VHI) with a primary coverage role is usually offered by multiple insurers competing for clients. Cashin C, Sparkes S, Bloom D. Earmarking for health: from theory to practice. Discussion paper. The level of per capita funding of the UCS has converged with that for the private sector employees scheme, but the civil servants still benefit from much higher levels of spending [45, 46]. The eleven essential functions of health systems are based on assessing the health status of the population and ill health factors, . Washington DC: World Bank; 2006. In: Chernichovsky D, Hanson K, editors. This chapter provides background on demographic and epidemiological trends, the configuration of Ghana's health system, and health financing functions and health systems goals. Book Subsidized health insurance coverage of people in the informal sector and vulnerable population groups: trends in institutional design in Asia. 814 0 obj <>stream Pooling ensures that the risk related to financing health interventions is borne by all the members of the pool and not by each contributor individually. Klasa K, Greer S, van Ginneken E. Strategic purchasing in practice: comparing ten European countries. Cuba, with a much larger population, also has this setup, as does Sri Lanka, where financial protection performance is relatively good despite a high share of OOP [29]. 2016;18(2):1239. Health financing involves not only methods of raising money for health care, but also allocation of those funds. FDA Staff Manual Guides, Volume I - Organizations and Functions . Resource allocations also need to take into account differences in sub-national revenue raising capacity across the different territorial units [38]. A Review of the National Health Insurance Scheme in Ghana: What Are the Sustainability Threats and Prospects? to (5.) The classification is presented in Fig. At one extreme is a single pool of all funds for health services covering the entire population of a country. Moreover, while they are important issues, in this paper we do not explore the source of revenues, nor the institutional-organizational details of how revenues are transferred to a pool. Pooling revenues and reducing fragmentation Pooling revenues and reducing fragmentation Pooling is a core function of health financing policy. Health financing reform is an inherently political process that alters the distribution of entitlements, responsibilities and resources across the health sector and beyond. (WHO/HIS/HGF/HFWorkingPaper/16.1; Health Financing Working Paper No. However, in most countries with complementary or supplementary VHI, VHI expenditure is below 10% of current health expenditure [29], and when a large part of the population has this form of VHI coverage, spillover effects are less severe [22, 53]. Mutuelle sant d'entreprise : les obligations de l'employeur ; 2018, https://www.service-public.fr/professionnels-entreprises/vosdroits/F33754 (Accessed on 10 January 2018). Health financing is a core function of health systems that can enable progress towards universal health coverage by improving effective service coverage and financial protection. In the health sector, Malaysia was to gradually move away from a policy of highly subsidized care for all population groups, encouraging the growth of the private sector in health and shifting to other financing methods, including insurance, to finance the healthcare system (Khoon, 2010). Various policy instruments and options exist to reduce fragmentation and increase redistributive capacity: 1) make participation compulsory to cover everybody; 2) merge different pools to increase the pool size and diversity in health risks; 3) cross-subsidize pools that have lower revenues and higher health risks; and 4) harmonize across pools, such as benefits, payment methods and rates [16]. the elderly outside the formal sector, or the very poor, other defined population groups [14]. Health Spending as % of GDP. Health Policy. 0000001757 00000 n All people have in principle access to the same benefits. Council for Medical Schemes (CMS). "The purpose of health financing is to make funding available, as well as to set the right financial incentives to providers, to ensure that all individuals have access to effective public health and personal health care" (WHO 2000: 95). Health Financing in Ghana. Health Systems Financing: The path to universal coverage. 0000012547 00000 n Seinfeld J, Montaez V, Besich N. The health insurance system in Peru: towards a universal health insurance: global development network; 2013 [cited 2019 Feb 25]. there are different funds for different population groups, with the affiliation being based on socio-economic or (socio-) demographic criteria. 1 / 64. the mobilization of resources for the health sector; 2) pooling, i.e. PubMed The threebasicfunctions ofanyhealthfinancingsystemare revenuecol lection,riskpooling,andpurchasingofservices.Figure3.1highlightsthese basic functions, together with the basic health system objectives they are designedtoachieve.Countriesneedtofocusnotongenericmodelsbuton healthfinancingfunctions andobjectives andthespecificmicroandmacro Moreover, in France, there is a shift towards compulsory complementary coverage, which employers have to buy for their employees since 2016 (with exceptions for various employee groups) [56]. "Health system financing is an essential component of UHC but progress toward UHC also requires coordinated actions across the pillars of the health system with particular attention to strengthening human resources for health." Health system financing health topic A system-wide approach to analysing efficiency across health programmes. HdSK0sNH{`9i SfWglvQ"{L$l$l}&j LIPX0st"$BB*4~f75HhO Z7 Alhassan RK, Nketiah-Amponsah E, Arhinful DK. The relative reliance of the health system on the aggregate level of prepaid funds versus out-of-pocket payments (OOP) is an important driver to achieve the UHC goals. Figure 1. Cashin C, Nakhimovsky S, Laird K, Strizrep T, Cico A, Radakrishnan S, Lauer A, Connor C, ODougherty S, White J, Hammer K. Strategic health purchasing Progress: a framework for policymakers and practitioners. Inke Mathauer. Smith PC. The nature of pooling by which individuals are included in pools has important implications for their redistributive capacity. Health care systems may be financed in various ways, including through government funding, taxation, out-of-pocket payments, private insurance, and donations or voluntary aid. A desciptive framework for country-level analysis for health care financing arrangements. The attributes of a countrys pooling arrangements that have positive implications for UHC goals are in many ways the opposite of what is implied by fragmentation. This has an adverse impact on equity in resources across pools. Health financing is central to the functioning of health systems and the attainment of health-related sustainable development goals, including universal health coverage (UHC). Correspondence to Based on this, we identify and present broad types of pooling arrangements and related fragmentation issues and discuss implications and challenges. #mHGilaa^{'D. Health financing - World Health Organization. Stewardship includes ensuring oversight, regulation, and accountability of all actors engaged in health financing functions of resource mobilization, pooling, and purchasing. Over time, the result is that benefits are curtailed for those who need them most, while fewer and fewer healthier individuals join the scheme. This duplication of functional responsibilities can be a major driver of inefficiency when seen from the perspective of the entire system rather than within each scheme [15, 20]. It is important to mention that supply side financing, where the health budget flows in a vertically integrated way to service providers, constitutes a pool, and in many cases is often the largest pool in low- and middle-income countries. Google Scholar. 2S?dI9c{rP"=-Gsi1NU@ They also need to monitor cash on hand, businesses may be profitable but have a shortage of cash and. There are some countries that rely predominantly on a single national pool funded from general government revenues. (Accessed on 25 February 2018)]. there is no explicit purchaser-provider split. Geneva: World Health Organization; 2008. Fragmentation in pooling arrangements. 0000035307 00000 n Risk pooling in health care financing: the implications for health system performance. It is the various combinations of the different features in the structure and in the nature of pooling that drove our classification of pooling arrangements described in the next section. Health financing policy brief no. 3. Health financing refers to the "function of a health system concerned with the mobilization, accumulation and allocation of money to cover the health needs of the people, individually and collectively, in the health system the purpose of health financing is to make funding available, as well as to set the right. Geneva: World Health Organization; 2017. Geneva: World Health Organization; 2010. co-payments), thus reducing out-of-pocket expenditure and potentially improving financial protection. Pooling is the health system function whereby collected health revenues are transferred to purchasing organizations. There are also some concerns, however. Meaning of terms Revenue Collection is the way health systems raise money from households (e.g. 0000008166 00000 n It is also a major public policy concern because of the spillover effects for the wider system, since the well-resourced private insurance system distorts the distribution of scarce health workers and other inputs to the service of the voluntarily insured at the expense of the rest of the population [41]. World Health Report. 0000064650 00000 n basic functions, together with the basic health system objectives they aredesigned to achieve. This article provides an overview of health financing reforms across countries in the Western Pacific Region as progress is made toward universal health coverage (UHC). This is inconsistent with the objective of financial protection and equity of access to services in relation to need. Or funds are transferred from pools with lower health risks and/or with higher incomes to those pools with higher health risks and/or with lower incomes. In: Kutzin J, Cashin C, Jakab M, editors. Geneva: World Health Organization; 2019. 0000002300 00000 n I'.1~)4CQ~u sd1$V0c: B' {09 For any given level of prepaid funds in a health system, the specific features in these two key design aspects determine the redistributive capacity of those funds to support access to needed services with financial protection, and they have important implications for efficiency. Latin American development forum. While independent attributes, these often go together, as larger pools are more likely to include a greater diversity of risks. Health financing: the basics FP Financing Roadmap. For illustration we provide various country examples. https://doi.org/10.1093/heapol/czt054. a. the QIO program provides patients with information about the quality of care at US hospitals b. the QIO program focuses on helping medicare and medicaid beneficiaries c. the QIO program offers incentives to physicians for reporting quality measures d. the QIO program allows medicare beneficiaries to file complaints about quality of care sicker individuals would have to pay more because they would need more health services [18]. JK contributed to the interpretation of evidence and the manuscript drafting. Even in countries with highly centralized pooling, there are usually several pools of funds that are used to pay for some health services, for example occupational health programs, supply-side funding for other government services such as those delivered through vertical programs or voluntary health insurance [1]. Thomson S. What role for voluntary health insurance? In turn, this may result in a cycle of increasing premium rates and other actions that insurers take to reduce their risks and improve their financial sustainability. Usually, only a (small) part of the population benefits from this type of coverage, which is typically linked to formal sector employment but not mandated by law. In someother countries that have managed to overcome different schemes for different population groups and established a unified pool for contributors and non-contributors, fragmentation remains also because much of the informal sector population is defined as non-poor and must contribute to be part of the pool. Many of those with non-contributory entitlement are paying taxes in some form, but the distinction is the absence of direct linkage between explicit contribution and entitlement. lessons learned and policy implications are outlined below across each of the health financing functions with linkages to intermediate objectives of efficiency, equity . However, there are limitations to this classification, because the full reality is much more complex. Intermediate UHC objectives include equity in the distribution of resources and efficiency in their overall use [17]. The Kakwani index has its origins in public finance and so its utility in health-care financing as a policy making tool is easy to demonstrate. Fragmentation in pooling can also contribute to inefficiency in the health system, as it typically implies a duplication (or multiplication) in the number of agencies required to manage the pools (and, usually, purchasing as well) [19]. management and disbursement for financing the availment of a basic minimum package and other . California Privacy Statement, As you can see, out-of-pocket or fee-for-service, government budget, or insurance agencies are all means of purchasing health care from providers. Conversely, there is no population segmentation when coverage and participation in a pool is independent of peoples socio-economic or (socio-)demographic criteria. However, mandatory coverage is often not implemented because it is difficult to enforce, especially with respect to people working in the informal economy. <]>> Popovich L, Potapchik E, Shishkin S, Richardson E, Vacroux A, Mathivet B. Russian Federation: health system review. Another function of finance in business is the creation of long-term strategies. Programs to improve health financing work at multiple levels to strengthen all three functions in both the public and private health sectors. Arrangement has major disadvantages with regards to redistributive capacity [ 38 ] Earmarking for health care financing: implications... Comparing ten European countries developing and transitional economies from households ( e.g https! Systems are based on assessing the health sector and vulnerable population groups [ 14.... 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