functions of health financing

By Jonas May 13, 2021 5min read 4233 views. However, evidence for efficiency improvement with increased market competition among purchasers is weak [25]. IM and PS reviewed and analysed the literature and drafted the manuscript. World Health Organization. PubMed 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. 0000013724 00000 n Sagan A, Thomson S. Voluntary health insurance in Europe: country experience. They also contribute to system-wide inefficiencies arising from the duplication of responsibilities for managing different pools (with purchasingoften linked to that). Innovations in Health System Finance in Developing and Transitional Economies. endstream endobj startxref Which approach is used will have a big impact on equity, on efficiency, on incentives, and on the supply of health care. Explain the need for evidence pertaining to the cost of delivery of. When people have access to publicly financed coverage schemes, this VHI is duplicating. 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]. trailer 0000009066 00000 n Risk pooling effectively means that the healthy subsidize the sick, and by implication due to their lower health risks, the young subsidize the old [14]. 4. Voluntary health insurance: its potentials and limits in moving towards UHC, health financing policy brief no. a single pool; (2.) Health (Just Now) WebHealth financing is a core function of health systems that can enable progress towards universal health coverage by improving effective service coverage and financial protection. Such a pool provides compulsory or automatic coverage for the entire population, usually for a defined package of services. is the health system function whereby collected health revenues are transferred to purchasing organizations. This mitigates some of the effects of segmentation, though remains often incomplete due to the entrenched power of the initially insured population groups. Another function of finance in business is the creation of long-term strategies. This is the so-called death spiral of voluntary health insurance [24]. 0000001076 00000 n Washington DC: World Bank; 2006. 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. 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. Smith PC. A desciptive framework for country-level analysis for health care financing arrangements. An appraisal of the health transformation Programme. Its main purpose is to share the financial risk associated with health . the accumulation and management of prepaid financial resources on behalf of some or all of the population; and 3) purchasing, i.e. "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 Innovations in health system finance in developing and transitional economies. There is certainly a tradeoff between coming to a useful, parsimonious number of categories and losing important nuances. 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]. the allocation of pooled funds to health service providers [ 1 ]. It concentrates on patient flows as well as the organization and delivery of all services dealing with the diagnosis and treatment of disease, or the promotion, maintenance and restoration of health. Health Policy. Kutzin J, Yip W, Cashin C. Alternative financing strategies for universal health coverage. Such systems are primarily found in both large and smaller higher-income countries like Germany, Netherlands, Switzerland, Czech Republic and Slovakia [15, 26]. SMG 1117A.641 . family members). Lancet. PubMed startxref It is possible to have competition across pools, i.e. This was supplemented with information gathered from our professional work on health financing in countries around the world. There are two forms of institutional setup found for this pooling arrangement. N4 %XyfL`P 8N-thZprq{H+B'xhOai@i ii`. 2xYai 5@IAZfL7|F0C(XQb1`\fn! Mathauer I, Dale E, Meessen B. there are different funds for different population groups, with the affiliation being based on socio-economic or (socio-) demographic criteria. #mHGilaa^{'D. 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]. While the issue of segmentation first emerged in Latin America [43], it is not limited to that region. Annual report 20152016. 814 0 obj <>stream 3. there is no explicit purchaser-provider split. Kutzin J. But the CBHIs expenditure and population coverage is very low in most countries [57]. Health financing comprises 2 main functions: resource mobilization mechanism (raising money for health) and financial management (efficient management of resources). Community based health insurance: how can it contribute to progress towards UHC? Health nutrition and population discussion paper. Mutuelle sant d'entreprise : les obligations de l'employeur ; 2018, https://www.service-public.fr/professionnels-entreprises/vosdroits/F33754 (Accessed on 10 January 2018). Pooling arrangements set the potential for redistributive health spending. Improved equity in service use and financial protection involve expanding risk pooling, and as such pooling is a policy objective in itself. BMC Health Serv Res. Theyintroduced mandatory membership, created linkages across pools or centralized pooling and provide subsidization for the poor and other vulnerable population groups [42]. However, little is known about how best to monitor health financing system progress towards UHC, especially in low- and middle-income countries. As the name suggests, it exists in addition to and along the other main pooling arrangements, as outlined above. 'p 6l3/%J Finally, there may be specific coverage schemes for defined population groups, such as the poor [30]. 799 0 obj <>/Filter/FlateDecode/ID[<0390BB992C88AA479032C87A0FBB6257><540FDF402BF7DC42AD0DD7B5A9813B14>]/Index[787 28]/Info 786 0 R/Length 75/Prev 299315/Root 788 0 R/Size 815/Type/XRef/W[1 2 1]>>stream Healthcare organizations must be able to minimize costs in order to be financially successful. (accessed 5 February 2019)]. These latter three were replaced by a new health coverage scheme that was introduced in 2002, called the Universal Coverage Scheme (UCS), as a response to growing concerns about the huge differences in level of funding per capita across the schemes and the remaining coverage gap due to the failure of the voluntary insurance to reach much of the informal sector. they try to enroll members with low health risks relative to their contributions in order to incur lower health costs and thus reach a larger margin between revenues and expected expenditures. 2007;83(23):16279. But the key concern is that the existence of multiple pools implies fragmentation. fragmented systems with voluntary health insurance, duplicating publicly financed coverage; and (8.) IM is a senior health financing specialist; JK is the coordinator of the Health Financing Team, they both work in the Department of Health Systems Governance and Financing at the World Health Organization in Geneva. There are some countries that rely predominantly on a single national pool funded from general government revenues. Hungary, Bull World Health Organ. Implementing health financing reform: lessons from countries in transition. Multiple funds imply multiple information systems linked to each pool/purchaser that in turn may entail the need for more administrative staff at the level of providers. To cite variations across countries of different income levels. On the one hand, some have argued that a multiple competitive fund setup has the advantage of offering choice to beneficiaries and may create incentives for innovations, especially for purchasing. voluntary contributions from beneficiaries, are prone to adverse selection: people with higher risks are more likely to enroll than people with lower health risks. Correspondence to HGF guidance document no. 0000005327 00000 n Based on this, we propose a classification with eight broad types of pooling arrangements. . population density). 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. At the sub-national and health facility levels, programs strengthen the capacity for budgeting and financial management to increase accountability, reduce waste, and ensure that provider incentives are aligned with improved health outcomes. A Review of the National Health Insurance Scheme in Ghana: What Are the Sustainability Threats and Prospects? Health Systems Financing: The path to universal coverage. K]NiGe(T&k,JTNeu@#KWB&@XxDXw-2^ctyc9d"E@yk3'1V-o PKW em2VK: In turn, this can help countries assess their pooling arrangements and contribute to identifying policy options to address fragmentation or mitigate its consequences. Under the first form, the ministry of health typically pools these funds into the health budget and allocates them to service providers, i.e. Compulsory participation refers to the legal requirement that someone be included for coverage and goes hand-in-hand with contributory-based entitlement, i.e. Finally, it is important to keep in mind that while pooling reforms are needed to enhance redistributive capacity, realizing the gains set by the potential of a pooling arrangement requires more than pooling. The resources allocated to these different pools may come from a mix of centrally and sub-nationally raised revenues, with allocations often based on a consistent formula applied across the country. Geneva: World Health Organization; 2019. "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). CAS The indicators cover the following areas: The World Health Organization defines a well-functioning health financing system as one that raises adequate funds for health in ways that ensure people can use needed services and are protected from financial catastrophe or impoverishment associated with having to pay for them. 192 0 obj<>stream An additional layer of complexity is that in many countries several forms of fragmentation exist. Business Finance refers to corporate finance in the business world which is responsible for allocating resources, creating economic forecasts, evaluating equity and debt opportunities and many more functions within an organization. PubMed 1.2.1. Health financing policy brief no. Article 2S?dI9c{rP"=-Gsi1NU@ Due to voluntary participation, small pool size and little or no subsidization of poor and vulnerable groups, CBHI can play only a very limited role in progressing towards UHC. In any country, prepaid health revenues may be held, i.e. When coverage is compulsory or automatic for all population groups, the pool(s) have a more diverse mix of health risks. HSn0|lDP@bQlXdhe)o8NP*!}73H$8xKSY=5MfrjOj#]GIKz*=nE{/fw3A&/4`CJj+@K,*0'P2 mkgXEi{i5wD But in contrast to having just one pool, residents of a particular region of the country are served by a regional pool, i.e. 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. Each financing mechanism was analysed in respect to key functions namely, revenue generation, pooling and purchasing. 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. These are 1) the nature of pooling and 2) the structure of pooling. Taken quite literally, perhaps no country has only one single pool. Paris: OECD; 2011. 0000080023 00000 n 0000008166 00000 n Complementary insurance for user charges complements coverage of the public system by covering all or part of the residual costs (e.g. 2018;11(11). Google Scholar. Different frameworks for assessing of health . 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. . 2018;122:45772. Health Policy. The third function of health care financing is purchasing of services. In doing so, policy makers can come closer . the mobilization of resources for the health sector; 2) pooling, i.e. Forum for Health Economics & Policy; 1998: 1 (1). Among the eight types of pooling arrangements, types (3.) 1: World Health Organization, 2015. 2011;13(7):1190. Such an unequal distribution of resources is frequently found, in that available system resources are strongly skewed to those using VHI as their primary coverage. Key facts Kroneman M, Boerma W, van den Berg M, Groenewegen P, de Jong J, van Ginneken E. The Netherlands: health system review. 1 / 64. Library of Parliamentarians: Ottawa; 2011. To discuss Malawi as a case study in health systems. Such pooling setups create explicitly unequal financing arrangements and the population segmentation is often further linked with separate purchasing and service provision arrangements. Part of 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 From these two institutional design aspects, we need to distinguish the level of prepaid funding, which is not considered in this classification. Source: Schieber G, Baeza C et al, Financing Health Systems in the 21 st century, Chapter 12, Disease Control Priorities in Developing 5. Hence, the primary locus of policy action to influence the level of prepaid and pooled funds is revenue raising, not pooling, and the same holds for the policy question about equitable financing of the health system. 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]. The company has multiple offices in the U.S. and program offices in more than 40 countries. Health financing: the basics FP Financing Roadmap. Programs build local capacity to track public and private health spending. PS is a health systems adviser working in the WHO Country Office of Tunisia. 0000002224 00000 n Soors W, Devadasan N, Durairaj V, Criel B. To understand the key challenges to health systems. ), (7.) volume18, Articlenumber:198 (2019) Washington DC: World Bank; 2006. complementary or supplementary voluntary health insurance. the mobilization of resources for the health sector; 2) pooling, i.e. Berkshire: Open University Press; 2005. van de Ven WP, Beck K, Van de Voorde C, Wasem J, Zmora I. The result is that even where it is legally mandatory for the entire population, it is de facto voluntary coverage. Gautier J. Background paper no. Advances in health economics and health services research, volume 21. 0000011158 00000 n Alhassan RK, Nketiah-Amponsah E, Arhinful DK. Int J Equity Health. In contrast, voluntary participation means that an individual or firm makes a voluntary pre-payment and enrolls on a voluntary basis in a health coverage scheme (i.e. Mathauer I, Dale E, Jowett M, Kutzin J. Long-term strategies include preparing the rates of employing new members of staff, the sectors of the . multiple competing pools with risk adjustment across the pools; and in combination with types (1.)-(6. This overlap turns into duplication of service coverage particularly in big cities, with the main policy consequence being large inefficiencies in the form of excess provider capacity [15]. PubMed Central We propose eight broad types of pooling arrangements: (1.) In the early 1990s, Thailand had a scheme for civil servants and another scheme for private sector employees. IM, PS and JK developed the outline and framework. Gottret P, Schieber G. A practitioners guide health financing revisited. 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