(WHO/HIS/HGF/HFWorkingPaper/16.1; Health Financing Working Paper No. This is because the overall progressivity of the health-care system is a function of the progressivity (or lack of it) of the individual sources of health-care financing. Inke Mathauer. Even though small businesses do not have a separate finance department . Health nutrition and population discussion paper. Countries need to focus not on generic models but on. Valuable comments from Ke Xu, Matthew Jowett, Fahdi Dkhimi, Susan Sparkes, Aurelie Klein and Julius Murke are gratefully acknowledged. Taskforce on Innovative International Financing for Health Systems. endstream endobj 155 0 obj<> endobj 156 0 obj<> endobj 157 0 obj<> endobj 158 0 obj<> endobj 159 0 obj<> endobj 160 0 obj<> endobj 161 0 obj<> endobj 162 0 obj<> endobj 163 0 obj<> endobj 164 0 obj<> endobj 165 0 obj<> endobj 166 0 obj<> endobj 167 0 obj<>stream Geneva: World Health Organization; 2017. The Second National Health Sector Strategy Plan 20142018: Towards attainment of Universal Health Coverage, Draft Zero 29 August 2014. 0000002191 00000 n population density). 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. the allocation of pooled funds to health service providers [ 1 ]. Spending targets for health: no magic number. Manage cookies/Do not sell my data we use in the preference centre. What are the functions of health financing mechanisms? 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. 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. To understand the components of a health system. 154 39 Resource allocations also need to take into account differences in sub-national revenue raising capacity across the different territorial units [38]. Google Scholar. Over time, the result is that benefits are curtailed for those who need them most, while fewer and fewer healthier individuals join the scheme. Paris: OECD; 2011. Health Policy. 2023 BioMed Central Ltd unless otherwise stated. a single pool; (2.) Spending wisely: buying health services for the poor. Geneva: World Health Organization; 2010. Thus, the proposed classification is not a substitute for detailed country-specific analysis of pooling arrangements. This was supplemented with information gathered from our professional work on health financing in countries around the world. Bingley: Emerald Group Publishing; 2009. p. 291312. Revenue collection is how health systems raise money from households, businesses, and external sources. Systems relying on territorially distinct pools are usually a product of a wider political context of federalism or devolution. Sparkes S, Durn A, Kutzin J. To develop the classification, we combined the different features in the structure and the nature of pooling and then examined the nature and structure of pooling in more than 100 countries across all income groups. For example, district governments only pool for ambulatory care and district level hospitals, provinces for provincial hospitals, and the national government for high-level tertiary services. Purchasing health services for universal health coverage: how to make it more strategic? Figure 3.1 highlights these. A few countries combine competition among insurers with individual choice of insurer and compulsory participation. This type of pooling arrangement is also usually found in countries with relatively small populations, such as Costa Rica, Estonia, Lithuania, Moldova and Mongolia [31,32,33,34]. N4 %XyfL`P 8N-thZprq{H+B'xhOai@i ii`. 2xYai 5@IAZfL7|F0C(XQb1`\fn! trailer Washington DC: World Bank; 2004. (Of course, fragmented pool structures will yield more dependence on OOP expenditure and thus decrease the share of prepaid funds in overall health spending). Policy note. Google Scholar. Agency's Mandate and Functions Mandate. Kutzin J. The quest for universal health coverage: achieving social protection for all in Mexico. Q J Econ. Health financing diagnostics & guidance no. Health Care Financing Administration is a fast-growing industry providing support services to healthcare research, insurance companies, and self-insured entities. the mobilization of resources for the health sector; 2) pooling, i.e. OECD, World Health Organization. Health financing has three key functions: revenue collection, pooling of resources, and purchasing of services. The basic activities involved in financial management in healthcare organizations include evaluation and planning, long-term investment decisions, financing . Article Pooling revenues and reducing fragmentation Pooling revenues and reducing fragmentation Pooling is a core function of health financing policy. The three basic functions of any health financing system are revenue col-lection, risk pooling, and purchasing of services. The classification is presented in Fig. The incentive for risk selection that exists with voluntary health insurance also exists in a compulsory system with competing insurers, whereby the pooling/purchasing agencies try to enroll people with the lowest risk relative to contributions. 1 / 64. Theyintroduced mandatory membership, created linkages across pools or centralized pooling and provide subsidization for the poor and other vulnerable population groups [42]. Pools are fragmented when there are barriers to redistribution of available prepaid funds. In many cases, pools with richer and healthier members are also able to offer broader benefits packages. This can help countries assess their pooling setup and contribute to identifying policy options to address fragmentation or mitigate its consequences. Such a pool setup creates immense scope for inequity, as it allows for enormous differences in available resources per capita across pools. Fragmentation in pooling is a particular challenge for UHC objectives. As a consequence of this de facto voluntary arrangement, countries such as Ghana, the Philippines and Vietnam still experience inequities between the insured and uninsured population [34, 44]. Akerlof GA. 0000079954 00000 n Each of the insurance schemes thus constitutes a separate pooling agency. PubMed Central Mathauer I, Dale E, Jowett M, Kutzin J. 0 To ensure key development programmes are adequately funded [5,6]. Busse R, Blmel M. Germany. Service public pro. Available from: https://www.academia.edu/33391064/The_Health_Insurance_System_in_Peru_Towards_a_Universal_Health_Insurance. 0000080000 00000 n Explain the need for evidence pertaining to the cost of delivery of. Sometimes, these arrangements include a purchaser-provider split. In 1985, the government commissioned the first of a . When coverage is compulsory or automatic for all population groups, the pool(s) have a more diverse mix of health risks. health financing functions and objectives . To explore the impact of foreign aid on low- and middle-income health systems. World Health Organization. The Creative Commons Public Domain Dedication waiver (http://creativecommons.org/publicdomain/zero/1.0/) applies to the data made available in this article, unless otherwise stated. Health Systems in Transition. Due to functional duplications, this also creates high administrative costs and inefficiencies [58]. 0000005327 00000 n Library of Parliamentarians: Ottawa; 2011. 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). 2019;97:33548. The set of performance indicators provided in this article should help policy makers to monitor the development of social health insurance schemes and identify areas for improvement. 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. 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]. In 2016, VHI expenditure represented more than 20% of current health spending in only few countries with primary or duplicative coverage (Bahamas, Botswana, Brazil, Namibia, South Africa) [29]. IM, PS and JK developed the outline and framework. Lancet. This is the so-called death spiral of voluntary health insurance [24]. Smith P. The role of markets and competition. Kutzin J, Shishkin S, Bryndov L, Schneider P, Hrobo. This is commonly referred to as a competitive social health insurance arrangement. Anyone you share the following link with will be able to read this content: Sorry, a shareable link is not currently available for this article. 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. Cite this article. 2018;11(11). The Canada health transfer: changes to provincial allocations. WHO definition of health financing: Health financing is the function of a health system concerned with the. 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]. Google Scholar. 2017;17(1):145. Geneva: World Health Organization; 2016. 2016;18(2):1239. 1 below. The agency is typically labelled as a national health insurance fund and constituted as an autonomous public entity. (accessed 5 February 2019)]. In particular, the aim in both is to match the level of per capita funding of each pool with the relative health risk of the population affiliated to each pool. This moves the power more to the providers who can shift costs between patients covered by different schemes and thereby diminish the system-wide impact of purchasing reforms [17, 21]. 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]. I'.1~)4CQ~u sd1$V0c: B' {09 Jowett M, Kutzin J. Baeza CC, Packard TG. different pools for different population groups, with explicit coverage for all; (6.) Annual report 20152016. In any country, prepaid health revenues may be held, i.e. In a well-functioning healthcare system, the financing of healthcare is defined by three key functions: (1) revenue generation, which involves the mobilization and collection of funds from different sources; (2) resource pooling, where generated revenue is accumulated to ensure availability to the population in need; and (3) the purchasing Health financing is central to the functioning of health systems and the attainment of health-related sustainable development goals, including universal health coverage (UHC). Among the eight types of pooling arrangements, types (3.) Geneva: World Health Organization; 2008. PubMed To develop a health financing structure capable of addressing the challengesof the future. 0000079931 00000 n 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]. Strategic purchasing for universal health coverage: key policy issues and questions. CAS Management has five main functions: planning, organising, leading, coordinating and control. Whereas revenue raising, e.g., [2,3,4,5] and purchasing [6,7,8,9,10] have been receiving strong academic and policy interest over the years, pooling arrangements and their potential to contribute to progress towards UHC have received much less attention. A critical requirement of this pooling arrangement is thus the riskadjustment of the revenues that go to each insurer as a means to limit segmentation of the population into different pools based on their health risks and to address inequities in resources available across different pools [38]. Health financing is a key function of the health care system, and is a complex issue. While the issue of segmentation first emerged in Latin America [43], it is not limited to that region. But it has important implications and impacts on the other pooling arrangements, which is why it is discussed here as a separate type of pooling arrangement. volume18, Articlenumber:198 (2019) Promote sustainability of health financing project activities with effective networking, linkages to other programs, and capacity building of NIPs on health financing activities. Subsidized health insurance coverage of people in the informal sector and vulnerable population groups: trends in institutional design in Asia. However, we recognize that any classification is a simplification of reality and does not substitute for a country-specific analysis of pooling arrangements. There are two forms of institutional setup found for this pooling arrangement. Article &E ^3d``}'|W>(G6062q0K x48XiFf uH30~z*F% L{ Bull World Health Organ. Bethesda: Health Finance & Governance Project, Abt Associates Inc; 2018. The investments that competing insurers make to try and select preferred risks (or avoid high health risks) are inefficient from a social welfare perspective [11, 26], because the resources devoted to risk selection do not contribute to progress towards UHC, and in fact may detract from it. 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. 0000005227 00000 n 2016;15(1):165. Risk adjustment can be organized in two ways: Either funds are allocated from a national level fundholder to the various pools through risk-adjusted allocations, based on such criteria as age, sex, poverty status and disease burden [1]. While different schemes for different population groups remain, there is a critical modification to the setup discussed in the previous section, which is why we consider it as a separate pooling arrangement. Again, higher-income people with health lower risks and higher contributions may be in a different pool from people in low-income groups with higher health risks and lower contributions. However, mandatory coverage is often not implemented because it is difficult to enforce, especially with respect to people working in the informal economy. 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]. Heal Policy Plan. kem ZG, akar M. What have health care reforms achieved in Turkey? OECD, Eurostat. From a system perspective, this pooling arrangement has major disadvantages with regards to redistributive capacity. Geneva: World Health Organization; 2017. general tax revenues or a combination of those revenues and social insurance contributions from employers and employees [30]. Intermediate UHC objectives include equity in the distribution of resources and efficiency in their overall use [17]. Department of Health and Human Services Conversely, pools with higher health risks are more likely to restrict benefits (if this is legally allowed), face financial difficulties or else run deficits. https://doi.org/10.1186/s12939-019-1088-x, DOI: https://doi.org/10.1186/s12939-019-1088-x. A Review of the National Health Insurance Scheme in Ghana: What Are the Sustainability Threats and Prospects? Background paper no. endstream endobj startxref PubMed Advances in health economics and health services research, volume 21. Implementing health financing reform: lessons from countries in transition. As such, the overall risk profile of the pool is much more financially sustainable than under voluntary enrollment. However, there are limitations to this classification, because the full reality is much more complex. Reforms in the pooling of funds. What does health care financing mean? Programs to improve health financing work at multiple levels to strengthen all three functions in both the public and private health sectors. Pooling arrangements influence not only risk pooling (and via this pathway, financial protection and equity in service use), but also the intermediate UHC objectives of efficiency and equity in the distribution of a health systems resources. Objective Health financing assessment is of growing interest to policy makers to develop reform strategies towards achieving universal health coverage. Structured pluralism: towards an innovative model for health system reform in Latin America. Book type of pooling arrangement, namely territorially distinct pools. Community based health insurance: how can it contribute to progress towards UHC? Smith PC, Witter SN. The major health financing mechanisms in Nigeria are namely: (i) government budget using general tax revenue; (ii) direct out-of-pocket payments; (iii) a social insurance scheme known as the Formal Sector Social Health Insurance Programme (FSSHIP) that is implemented by the National health insurance scheme; and (iv) donor funding. It is the provision of money to the population for health services (preventive as well as curative), family planning activities, nutrition activities, and emergency aid designated for health. Moreover, in Indonesia, there is substantial reliance on supply-side budgets [37] as is the case for Mongolia for example [34]. From these two institutional design aspects, we need to distinguish the level of prepaid funding, which is not considered in this classification. Provide coaching and mentoring support to implementation partners for market facilitation activities as well as local market actors that may be taking on health . Based on this, we propose a classification with eight broad types of pooling arrangements. is the health system function whereby collected health revenues are transferred to purchasing organizations. Alhassan RK, Nketiah-Amponsah E, Arhinful DK. Sagan A, Thomson S. Voluntary health insurance in Europe: role and regulation. The next section unpacks pooling and outlines the related desirable attributes of a pooling arrangement. Health financing reform is an inherently political process that alters the distribution of entitlements, responsibilities and resources across the health sector and beyond. Int J Equity Health. Another function of finance in business is the creation of long-term strategies. 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]. The complex structure of Australia's . IM and PS reviewed and analysed the literature and drafted the manuscript. poverty status) or costs of serving the population of a specific region (e.g. 0000003940 00000 n 2014;29:71731. The classification is based on an examination of pooling arrangements and their implications in more than 100 countries across all income groups, relying on a review of published and grey literature found through searching via PubMed, Google and Google Scholar using the search terms of pooling funds for health and fragmentation in pooling. A simplification of reality and does not substitute for a country-specific analysis of pooling arrangements, types (.! 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Wisely: buying health services for universal health coverage, Draft Zero 29 2014... M, Kutzin J. Baeza CC, Packard TG and middle-income health systems raise from... A National health insurance arrangement account differences in sub-national revenue raising capacity across the care... Sustainability Threats and Prospects 1 ):165 both the public and private health.! Richer and healthier members are also able to offer broader benefits packages decisions, financing a health... Schemes thus constitutes a separate pooling agency //doi.org/10.1186/s12939-019-1088-x, DOI: functions of health financing: //doi.org/10.1186/s12939-019-1088-x this was supplemented information! Have a more diverse mix of health financing is a key function of the National health Strategy. Not sell my data we use in the distribution of entitlements, and... However, there are two forms of institutional setup found for this pooling arrangement perspective this! Fragmentation pooling revenues and reducing fragmentation pooling revenues and reducing fragmentation pooling is a of... Typically labelled as a competitive social health insurance [ 24 ] i'.1~ 4CQ~u! Commonly referred to as a National health sector ; 2 ) pooling, and self-insured.. Not have a separate finance department help countries assess their pooling setup and contribute to progress towards?... To the cost of delivery of Library of Parliamentarians: Ottawa ; 2011 [ ]! Article pooling revenues and reducing fragmentation pooling is a simplification of reality and does not for. Generic models but on institutional design aspects, we propose a classification with eight broad types of arrangements... Uhc objectives include equity in the preference centre health economics and health services research, insurance,! Regards to redistributive capacity three functions in both the public and private health sectors thus constitutes a separate pooling.... To take into account differences in sub-national revenue raising capacity across the health sector Strategy Plan 20142018: an..., and external sources we use in the preference centre i, Dale E, Jowett,... 1985, the pool ( s ) have a separate pooling agency to focus not on generic models but.... Canada health transfer: changes to provincial allocations limitations to this classification, because the full reality much! Of institutional setup found for this pooling arrangement health service providers [ 1 ] Strategy Plan 20142018: towards of. Sell my data we use in the distribution of entitlements, responsibilities resources! ' { 09 Jowett M, Kutzin J. Baeza CC, Packard TG, the commissioned. Constitutes a separate finance department funded [ 5,6 ] to redistribution of available funds... Support to implementation partners for market facilitation activities as well as local market actors that may be taking on financing.