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									 Health Systems Financing and
 the Path to Universal Coverage
                                                               by

    David B Evans, Director, Health Systems Financing, Health
                       Systems and Services
 Carissa Etienne, Assistant Director General, Health Systems and
                             Services




     Health Systems Financing and the Path to Universal Coverage
1|   New York, October 2010
                                                OUTLINE

     1. Universal coverage: the state of the
        world
     2. Health systems financing: determinant
        and solution
     3. The World Health Report 2010 and
        beyond

     Health Systems Financing and the Path to Universal Coverage
2|   New York, October 2010
                        Intervention Coverage
     1. Coverage with skilled birth attendants as low
        as 5%. More than 20 countries less than 50%.
     2. Coverage with 3 doses of DTP at 1 year: as
        low as 20% and around 25 countries less than
        70%.
     3. Great inequalities within most countries – the
        rich typically have coverage similar to high
        income countries, and the poor obtain
        substantially less

     Health Systems Financing and the Path to Universal Coverage
3|   New York, October 2010
             Patterns of exclusion: delivery by a medically trained person (SBA), DTP3
                                                                    (DTP) and MCV (MCV)
                                                                         – from DHS
                                                       MAR, 2004                                                                         KHM, 2000
                100




                                                                                                  100
Percentage




                                                                                     Percentage
                  50




                                                                                                    50
                       0




                                                                                                         0
                            1                   2           3            4          5                         1                   2           3            4   5
                                                       quintile                                                                          quintile
                                                    SBA            DTP                                                                SBA            DTP
                                                    Measles                                                                           Measles
                      Graphs by code and year                                                           Graphs by code and year




               Overall coverage and level of inequity differ by types of services

               Generally access to delivery by medically trained person more
                inequitable than vaccination services

                                Health Systems Financing and the Path to Universal Coverage
                  4|            New York, October 2010
                     Financial Risk Protection
Around 150 million people suffer financial
  catastrophe each year and 100 million
  pushed into poverty because they use
  health services, and are forced to pay out of
  pocket.




     Health Systems Financing and the Path to Universal Coverage
5|   New York, October 2010
            A long way from Universal Coverage
World Health Assembly Resolution 58.33, 2005:

Urged countries to develop health financing systems to:

 Ensure all people have access to needed services

 Without the risk of financial catastrophe linked to paying for
  care

Defined this as achieving Universal Coverage: coverage with
    health services; with financial risk protection; for all


      Health Systems Financing and the Path to Universal Coverage
 6|   New York, October 2010
                   What role does health financing play?

Three inter-related contributing factors
1.        Constant battle to raise sufficient funds for health in all
          settings, but fundamental insufficiency of resources in many
          countries. Need to diversify funding sources in others
2.        Too much reliance on direct out-of-pocket payments to
          finance health in many countries – limited financial risk
          protection. In others, the search for cost–containment means
          there is pressure to increase cost-sharing.
3.        Inefficiency and inequity in use of the available resources in
          countries, rich and poor
          Health Systems Financing and the Path to Universal Coverage
     7|   New York, October 2010
                                                  Solutions?

                                     Socio-economic context



                               Social determinants of health

               Supply                            Demand & Supply    Direct effects


                                                                       Health systems
Health systems                                     Health systems
                                                                         & health
    inputs                                            outputs
                                                                         outcomes
      Health Systems Financing and the Path to Universal Coverage
 8|   New York, October 2010
 Many interacting solutions but health financing is key
     WHO Framework for Assessing Health Systems
       (World Health Report 2000; Everybody's Business 2006)




       I
       N
       P
       U
       T
       S


     Health Systems Financing and the Path to Universal Coverage
9|   New York, October 2010
Raising Sufficient Funds: Fundamental Insufficiencies

High Level Task Force on Innovative International Financing for
     Health Systems 2009:
       A set of essential services that includes HIV prevention and
        treatment, and the accompanying health systems
        development for all interventions – average of $42 per capita
        (unweighted) in 49 low-income countries in 2009, rising to $65
        in 2015
       31 of them spent less than $31 per capita per year 2008. Only
        8 have any chance of reaching the required funding from
        domestic sources by 2015.

        Health Systems Financing and the Path to Universal Coverage
 10 |   New York, October 2010
   How to raise more domestically or diversify
   funding sources in higher-income countries
  Increase the priority given to health in government budget
      allocations
  – 45 countries currently devote less than 8% of their total
      spending to health, and 14 countries devote less than 5%
  – Taken as a group, the 49 low-income countries could
      raise an additional US$ 15 billion per year for health from
      domestic sources by increasing health’s share of total
      government spending to 15%.




       Health Systems Financing and the Path to Universal Coverage
11 |   New York, October 2010
 Raise more domestically or diversify funding
              sources (cont)
  Raise revenue for health more efficiently
  –    In Indonesia clear and consistent regulations and a policy of zero-
      tolerance for corruption increased tax yield from 9.9% to 11% of non-
      oil GDP over four years

  Find new or diversified sources of funds e.g.
  –    Sales taxes: Ghana funded its national health insurance partly by
       increasing the value-added tax (VAT) by 2.5% (p27)
  –    "Sin" taxes, particularly on tobacco and alcohol: a 50% increase in
       tobacco tax alone would yield an additional US$1.42 billion just 22
       low income countries for which sufficient data exists.
  –    A currency transaction levy would be feasible in many countries.
  –    Solidarity levies - Gabon raised $30 million for health in 2009 by
       imposing a 1.5% levy on companies handling remittances and a 10%
       tax on mobile phone operators

       Health Systems Financing and the Path to Universal Coverage
12 |   New York, October 2010
                                                       High Reliance on Direct, Out-of-Pocket Payments (OOPs).
                                                        Catastrophic expenditures and reliance on OOPs (OOPs/THE)
                                                                 Proportion of households with catastrophic expenditures vs.
                                                                 share of out-of-pocket payment in total health expenditure
% of households with catastrophic expenditure (log)
                                                      8 15
                                                      3
                                                      1
                                                      .3
                                                      .1
                                                      .03
                                                      .01




                                                             3    5            8               14           22             37      61   100
                                                                 out-of-pocket payment in total health expenditure % (logarithm)
                                                                                           OECD              others




    No difference is found between social health insurance or tax-based financing
   systems in terms of protecting households against catastrophic expenditures (Xu et
   al., Health Affairs 2006).
                                                    Threshold?

Only when the proportion of direct, out-of-pocket payments in total
     health expenditures gets to around 20-30% that the incidence
     of financial catastrophe and impoverishment falls to negligible
     levels.


Recommendation: move as closely as possible towards this level by
    strengthening compulsory prepayment (tax, insurance) and
    pooling



        Health Systems Financing and the Path to Universal Coverage
 14 |   New York, October 2010
Optimizing prepayment and pooling: learning
         from country experiences
  –       It is possible to make substantial progress towards reducing direct payments,
          increasing prepayment and covering all people from pooled funds even at lower
          levels of national income. Chile, Colombia, Mexico, Rwanda, Thailand and
          Turkey have all made significant progress towards universal access by creating
          mechanisms that spread the financial risk across the population in the last
          decade - as have Brazil, China, Costa Rica, Ghana, Kyrgyzstan and the
          Republic of Moldova.
  –       Countries choose different mechanisms, mostly involving some mix of tax-
          based funding with various forms of mandatory insurance, Community
          insurance and micro-insurance have and can play a valuable role in the
          transition.
  –       Where people are allowed to opt-out, it is difficult to ensure that everyone has
          access to needed services of good quality. The rich and the healthy opt out and
          the poor and sick are left with poor services.
  –       Where pools are fragmented, equity goals are much more difficult to achieve –
          different groups capture better benefits and are reluctant to share
       Health Systems Financing and the Path to Universal Coverage
15 |   New York, October 2010
   Progressive Realization and Tradeoffs




       Health Systems Financing and the Path to Universal Coverage
16 |   New York, October 2010
                                                  Inefficiency: Some countries obtain higher levels of
                                                    health and coverage for the same expenditure
                                                  1,000
                                                                                                                                                                                                      Croatia   Czech Republic
                                                                                                                              Palau                                  Hungary
                                                                                                                                                                                                                            Kuwait
                                                                 Nauru
                                                                                                                   Trinidad & Tobago                       Seychelles

                                                                                                                                                  Latvia
                                                                                                                                                                                  Mexico          Uruguay                   Chile
                                                                                                                                                      Brazil
                                                                                                                        Grenada                                                                                             Cost Rica
Total health expenditure per capita (US$, 2006)




                                                                 Marshall                                                                                                                                       Cuba
                                                                                                                                                               Turkey
                                                                                                          Russia
                                                                 Namibia                 Tuvalu                                                   Jordan

                                                                                                                                                                                           Colombia
                                                                                             Kazakhstan

                                                                               Turkmenistan                                                                                    Peru


                                                                                                                                                                    Thailand
                                                    100
                                                                                                                      Egypt                                         China


                                                                                                                                                    Sri Lanka


                                                                                                                                                                    Viet Nam
                                                                  Haiti


                                                                                India                                  Uzbekistan




                                                                                                    Comoros

                                                                                Bangladesh

                                                     10
                                                          60              62            64                 66                 68             70                72                     74                 76            78               80
                                                                                                                                   Life expectancy (years)



                                                           Health Systems Financing and the Path to Universal Coverage
                                                  17 |     New York, October 2010
                                  How much is wasted?

  We estimate that somewhere between 20% and 40%
     of health resources could be wasted through 10
     common causes of inefficiency
  Possible areas to search for increased efficiency
     include
         Reducing unnecessary expenditure on medicines and
          health technologies, using them more appropriately and
          improving quality control
         Reducing leakages and corruption
         Improving hospital efficiency
         Choosing the right interventions
       Health Systems Financing and the Path to Universal Coverage
18 |   New York, October 2010
                     Systemic causes of inefficiency

  Paying providers:
  •       Fee for service inefficient generally
  •       Payment for performance has been shown to increase
          coverage and quality, but needs a good information
          system and has to be modified frequently
  Active purchasing:
  •       Has the potential to improve efficiency, but requires
          strong management and no corruption
  Fragmentation:
  •       not only makes it difficult to achieve equity goals, but is
          inherently inefficient

       Health Systems Financing and the Path to Universal Coverage
19 |   New York, October 2010
              Protecting the poor and vulnerable: Patterns of exclusion differ
             Delivery by a medically trained person (SBA), DTP3 (DTP) and MCV (MCV)
                                                      MDG, 1997                                                                          VNM, 2002
               100




                                                                                                  100
Percentage




                                                                                     Percentage
                 50




                                                                                                    50
                      0




                                                                                                         0
                           1                   2           3            4        5                            1                   2           3            4   5
                                                      quintile                                                                           quintile
                                                   SBA            DTP                                                                 SBA            DTP
                                                   Measles                                                                            Measles
                     Graphs by code and year                                                            Graphs by code and year




              But gradient of inequity may vary by country as well as
               service
                               Source: DHS surveys


                            Health Systems Financing and the Path to Universal Coverage
              20 |          New York, October 2010
              Protecting the poor and vulnerable
 –      Free services for groups (exemptions or vouchers) or
        conditions – exemptions have proved particularly difficult to
        implement in Africa and ensuring particular services are at zero
        costs for everyone might be administratively easier
 –      Charges are not the only financial barrier - see next slide




       Health Systems Financing and the Path to Universal Coverage
21 |   New York, October 2010
       Health Systems Financing and the Path to Universal Coverage
22 |   New York, October 2010
       Protecting the poor and vulnerable (cont)
 –      Cash transfers, conditional or otherwise, offer options for
        ensuring greater access and providing greater financial risk
        proteciton. Conditional transfers most appropriate for clearly
        defined, measureable actions where target group can be
        easily identified




       Health Systems Financing and the Path to Universal Coverage
23 |   New York, October 2010
                                                  OUTLINE

       1. Universal coverage: the state of the
          world
       2. Health systems financing as a key
          determinant and solution
       3. The World Health Report 2010 and
          beyond

       Health Systems Financing and the Path to Universal Coverage
24 |   New York, October 2010
                       World Health Report 2010
         Health Systems Financing: the Path to Universal Coverage
       To be launched by WHO on 22 November 2010 followed by a Ministerial
              Conference to discuss implications at national and international
                       levels. Hosted by the German Government



       Builds on WHO Constitution; Alma Ata and Health for All; World Health
          Report 2008 on Primary Health Care in which Universal Coverage was
                               one of the four key areas




       Health Systems Financing and the Path to Universal Coverage
25 |   New York, October 2010
                       World Health Report 2010
 1.     It builds on country experiences to identify what are options for
 •      Raising more or diversifying funding for health
 •      Minimizing reliance on direct, out-of-pocket payments through
        prepayment and pooling
 •      Improving efficiency and equity in resource use

 2.     It is a message of hope: many examples of countries that have made good
        progress in at least one of these areas. So every country could do
        something in at least one of these areas

 3.     While much of the report is technical, the last chapter recognizes the
        political realities – there are a lot of necessary steps to ensure that good
        ideas are implemented in practice



       Health Systems Financing and the Path to Universal Coverage
26 |   New York, October 2010
How can the global community better assist
 countries move more rapidly towards UC
  1. Donor and lending institutions agree to mechanisms to ensure
     predictable, stable, increased flows (for health) – keep
     promises.
  2. Donors and lending institutions fund priority activities included
     in PRSPs, SWAPs, or strategic plans - or provide budget support
     to government. Recipient govts should decide priorities rather
     than donors
  2. Channel external funds through existing or nascent institutions
     for pooling funds rather than bypassing them e.g. Rwanda.


        Health Systems Financing and the Path to Universal Coverage
 27 |   New York, October 2010
            Actions for Global Community - 2
                  Improving Efficiency
  4. Reduce fragmentation and transaction costs, particularly in the
     way external funds are channeled and with application and
     reporting – Estonia for HIV and drug users; Kyrgyzstan for TB
     funding. Rwanda permanent secretary reported at WHA2010 that
     Rwanda has to report on 890 different health indicators to the
     various donors, almost 600 for HIV and TB alone. Vietnam had 400
     aid missions to review health projects in 2009.
  5. Practice what we preach – get more efficient at global level rather
     than continually introducing more fragmentation, more
     secretariats – now more than 140 global health initiatives of
     various types


       Health Systems Financing and the Path to Universal Coverage
28 |   New York, October 2010
            Actions for Global Community - 4
  6. Provide scaled up support to allow countries to develop and
     implement health financing strategies, and consistent health plans,
     allowing them to move more quickly towards, or maintain,
     Universal Coverage

  How?




       Health Systems Financing and the Path to Universal Coverage
29 |   New York, October 2010

								
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