The Centre for International Health Faculty of Medicine, University of Toronto 4th Annual Global Health Research Conference 15th Annual GHEC Conference
Health financing and the dual challenge of infectious and chronic diseases
-The Case of MexicoJulio Frenk, M.D., PhD. Minister of Health Mexico
Toronto, Canada April 20, 2006
Outline
1. Emerging challenges to health systems financing
2. Structural reform in Mexico
2
Emerging challenges
Epidemiological and demographic transition
Health system
Technological innovation Patient empowerment
3
Selected causes of death Mexico, 1955-2005
Infectiuos and Parasitic
Diarroheal Dis.
Respiratory Inf.
Epidemiological backlog
Perinatal Dis. Malnutrition
Maternal Cond. Cardiovascular Dis. Injuries Malignant Neoplasms Chronic Respiratory Dis.
1955
2005
Genitourinary Dis.
Neuropsychiatric Cond Congenital A. Diabetes Ill-defined
35% 25% 15% 5% 0% 5% 15%
Emergent problems
Ill-defined
25% 35%
Source: INEGI/Sec Salud. Mortality Database
4
Epidemiological transition
100
80
% deaths
60
40
20
0 1950 Backlog 1975 2000 2025 Emergent problems
5
(Non Communicable & Injuries / Communicable, Reproductive and Nutritional)
The dual challenge index
World Regions and Mexico by State
Coahuila Nuevo León Distrito Federal Colima Chihuahua Tamaulipas Sinaloa Durango Nayarit Michoacán Aguascalientes Morelos Hidalgo Zacatecas Jalisco San Luis Potosí Sonora Querétaro Veracruz Mexico Yucatán Campeche Guanajuato Tabasco Baja California Sur Baja California Edo de México Tlaxcala Guerrero Puebla Quintana Roo Oaxaca Chiapas
1.0 2.0 4.0
EAs & P
LAC ME & NA
WORLD SAs SSA
-1.0
1.0
2.0
4.0
6.0
8.0
Ratio
EAs&P= East Asia & Pacific LAC= Latin America & Caribbean ME&NA = Middle East & North Africa Sas = South Asia SSA = Sub-Saharan Africa Sources: DCP2, 2006; INEGI, 2004; CONAPO, 2002
6.0
8.0
10.0
Word
LAC
6
Health – poverty: The unacceptable paradox
Poverty alleviaton
Poverty trap
7
The three pillars of public policy
Public policies
Evidence on best practice
8
Technical
Political
Ethical
Outline
1. Emerging challenges to health systems financing
2. Structural reform in Mexico 2.1 Ethical pillar
9
Ethical basis of reform
Key concept
Values
Social inclusion
Principles
Universality National portability Explicit prioritization
Equal opportunity
Financial justice
Free at point of delivery Financial solidarity
Corresponsibility
Subsidiarity Democratic budgeting Accountability
Autonomy
10
The vision
1943
Social Insurance Ministry of Health
Salaried workers, mainly urban
Independent workers, poor, mainly rural
2003
11
Universal Social Protection for Health
Outline
1. Emerging challenges to health systems financing
2. Structural reform in Mexico 2.1 Ethical pillar 2.2 Political pillar
12
Consensus building
Between branches of government: legislative and executive. Between levels of government: state and federal. Over time: more than one Administration.
13
Outline
1. Emerging challenges to health systems financing 2. Structural reform in Mexico 2.1 Ethical pillar 2.2 Political pillar 2.3 Technical pillar 2.3.1 The problem
14
Problem
Almost half of Mexican households lack health insurance, which limits access to care, reduces opportunities for risk pooling, and generates catastrophic expenditures.
15
Global public goods as an input to national policy making
Types of knowledgerelated on public goods Concepts
Examples WHO framework for health system performance assessment National health accounts Priority setting methods
Household Income and Expenditure Surveys
Methods
Instruments
World Health Survey
Evidence
16
Cross-national comparisons
Financial imbalances in 2000
1. Level: insufficient investment (5.7% of GDP) vis-a-vis the dual challenge 2. Source: predominance of out-of-pocket payments (55%) 3. Distribution
3.1. Among populations: more than three times between insured and uninsured
3.2. Among states: 5 to 1 between the state with the highest and the lowest per capita federal expenditure 4. State contributions: 89 to 1 5. Allocation items: current expenditure versus investment
17
Impoverishment due to health care expenditure
2 million: catastrophic expenditures
1.5 million families
.5 million families
1.8 million families
2.3 million: impoverishing expenditures
18
Organization by population groups
Social Groups Insured
Functions
Stewarship Financing
Before the reform:
Uninsured
Poor
Urban/Rural
Middle class
Delivery
IMSS/ISSSTE
19
Federal and State Private Governments sector
After the reform: Organization by functions
Social Groups
Insured Uninsured
Poor
Urban/Rural
Functions
Stewarship
Middle class
Ministry of Health
Financing
Delivery
Universal Social Protection
Pluralism
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Components of stewardship
Health
policy formulation: defining the vision and direction for the entire health system; setting priorities, and advocating intersectorial action for “healthy policies”.
Regulation:
setting fair rules of the game with a level playing field and protecting comsumers.
Intelligence:
assessing performance and sharing
information.
21
22
Components of financing
Revenue
collection: mobilizing money from households, firms and donors.
Fund
pooling: accumulating revenues for the common advantage of participants by sharing financial risks.
Purchasing:
allocating money to providers in order to deliver interventions.
23
Objectives of the reform
Create a legal framework to increase public expenditure for health in a gradual, fiscally responsible, and sustainable manner.
Achieve greater allocative efficiency by protecting funding for cost-effective community-based preventive interventions.
Protect families from health expenditures by a collective mechanism to manage risks in a fair way. Transform incentives from supply-side to demand-side in order to promote quality, efficiency, and responsiveness to users. Restructure the Ministry of Health away from direct provision of care for the poor and towards stewardship of the entire health system.
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Outline
2. Structural reform in Mexico 2.1 Ethical pillar 2.2 Political pillar 2.3 Technical pillar 2.3.1 The problem 2.3.2 Key features
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New financial architecture for health
Health goods
Stewarship
Federal
Resources
MOH budget Contributory fund for CHS Contributory fund for PHS
Fund for protection against catastrophic expenditures
Public goods
Community health services
Personal services (Popular Health Insurance)
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Essential services
High- specialty interventions
Structure of financial contributions
Public insurance scheme Beneficiary
IMSS
(salaried employees in the private sector)
Contributions
Federal Co-responsible government contributor Private employer
Social contribution Social contribution
Employee
ISSSTE
(salaried employees in the public sector)
Employee
Federal employer
Solidarity contribution Statelevel Federal Govern Government -ment
Popular Health Insurance
(non-salaried workers, selfemployed and persons outside of the labor force)
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Family
Social contribution
Strenghthening the supply side: The other half of the reform
Quality improvement Management reform
Performance evaluation Information systems Human resource development Drug supply
Technology assessment
Infrastructure planning
28
Innovations of the reform
Universal health insurance Social protection system for health
Budgetary priority to public health
Affiliation with explicit rights for all
Protection against catastrophic expenses
Democratic budgeting
Plan to strengthen supply of resources and services
29
Coverage strategy: Horizontal and vertical
ACCELERATED COVERAGE
Benefits
Catastrophic expenses coverage
High specialty interventions
Comprehensive package of essential health services
Community health services
I
30
II
III
IV
V
VI Decile
VII
VIII
IX
X
Beneficiaries
Horizontal coverage
Families (000) 14,000 11,500*
Enrollment of families
12,000
10,000
8,000 6,000 4,000 2,000
5,000
3,555
295.5
0
Year
31
Progressive vertical coverage
Not covered
Complexity levels
Fund for Protection against Catastrophic Expenditures
Comprehensive Package of Essential Services
32
Demand for services
Outline
2. Structural reform in Mexico 2.1 Ethical pillar 2.2 Political pillar 2.3 Technical pillar 2.3.1 The problem 2.3.2 Key features 2.3.3 Implementation: results and challenges
33
Imbalance: Insufficient investment
Health expenditure as percentage of GDP
16.0 14.0 12.0 13.7 14.7 2000 2004
/1
Percentage
10.0 10.0 8.0 6.0 4.0 2.0 0.0 USA
10.0
9.3 8.1
8.7
9.3 6.3
Latin American Average 2002=6.6 2000=6.5
5.7
Uruguay
Colombia
Costa Rica
México
34
/1 USA. 2003, Uruguay, Colombia and Costa Rica 2002
Insured population by income
80
73.0
60
Percentage
54.7
40
39.4
20
7.0
2000
II III
Income Quintile
2005
IV
2006
V
0
I
35
Incidence of excessive health expenditure
Excessive health expenditure trend by income quintile 1992-2004
40
16 14
Excessive health expenditure trend by insuring condition 1992-2004
30
% of households % of households
12 10 8 6 4 2
20
10
0 1992 1994 1996
Year
0
1998
2000
2002
Quintile III Total
2004
1992
1994
1996
Uninsured
1998
Year
2000
2002
Total
2004
Quintile I Quintile IV
Quintile II Quintile V
Insured
36
Progressivity of benefits
%
20
19.6%
15
10
5
2.1%
I 37 II III IV V VI VII VIII IX X
Income
Challenges
Maintaining the pace of enrollment and improving quality of care. Sustaining investment expansion in the health sector.
Converting the system into being more client-oriented and responsive.
Strengthening provider incentives and developing a more competitive environment on the supply-side.
Converging towards a single national risk pool, especially for protection against catastrophic expenditures. Mainstreaming evidence and information as key tools for implementation.
Involving the diversity of actors to maintain broad support base and assure continuity in the face of political transition.
38
Outline
2. Structural reform in Mexico 2.1 Ethical pillar 2.2 Political pillar 2.3 Technical pillar 2.3.1 The problem 2.3.2 Key features 2.3.3 Implementation: results and challenges 2.3.4 Relevance to other countries
39
Relevance to other countries
Reorganizing financing as an strategy to solve similar problems: out-of-pocket predominance, financial injustice, and catastrophic expenditures, in the context of the dual challenge.
Reforming in a context of budgetary constraints and the central role of incentives, efficency, consumer satisfaction, and accountability.
Stressing the value of health for economic performance and changing the views of policy makers in other sectors.
Restructuring the Ministry of Health for better stewardship of a health care system oriented towards universal access to high-quality care with fair financing.
40
“All progress is precarious, and the solution
of one problem brings us face to face with another problem.”
Martin Luther King, Jr. Strength to Love, 1963
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