Transcript Towards Innovative Healthcare Financing

Towards Innovative
Healthcare Financing
Ghana NHIS 10th Anniversary Conference
WHO Consultant Sheila O’Dougherty
November 2013
Outline of Presentation
• International trend: from opposing camps
to disappearing dichotomies
• Innovation and efficiency gains: the
relationship between three health
financing functions of revenue collection,
pooling of funds and health purchasing
International Trend Last 15+ Years:
Opposing Camps
GovernmentFunded Health
Systems
Integrated
Health System
Public
Financing
Health
Insurance
Vertical
Programs
Private
Financing
UHC Emergence: Disappearing Dichotomies
UHC
GovernmentFunded Health
Systems
Integrated
Health System
Public
Financing
Health
Insurance
Vertical
Programs
Private
Financing
Universal Health Coverage
• "Financing systems need to be specifically
designed to:
– Provide all people with access to needed
health services (including prevention,
promotion, treatment and rehabilitation) of
sufficient quality to be effective;
– Ensure that the use of these services does
not expose the user to financial hardship“
– World Health Report 2010, p.6
– More a journey than a destination
Changing Landscape: UHC & Focus on “How To”
UHC
GovernmentFunded Health
Systems
Integrated
Health System
Public
Financing
Health
Insurance
Vertical
Programs
Private
Financing
Three Health Financing Functions: Revenue Collection, Pooling, Purchasing
Institutional Roles & Relationships, Implementation Sequencing, HIS/M&E
Three Health Financing Functions
• Revenue collection is the source and
level of funds
• Pooling is the accumulation of prepaid
revenues on behalf of a population
• Purchasing is the transfer of pooled funds
to providers on behalf of a population
WHO/EURO/Joe Kutzin; Health Financing Policy:
A Guide for Decision-Makers; 2008
Efficiency Gains
• Consensus that efficiency gains are needed
to move towards UHC
• But…..less consensus on exactly how to
achieve efficiency gains
• Focal points for increasing efficiency and
innovative health financing:
– Relationships between three health financing
functions
– Intersection of health purchasing and service
delivery
Pooling & Purchasing Functions Separated by Revenue
Revenue
Collection
Pooling
of Funds
Purchasing
Providers
Population
National
Budget
Local
Budget
Payroll
Tax
Donor
Funds
Private
Funds
Separate or vertical pooling & purchasing arrangements
by revenue source increases fragmentation
Summary (Chart 1)
• Common perception that each revenue source is standalone or requires it’s own separate pooling and purchasing
arrangements
– National budget, local government budget, payroll tax (SHI),
other types of taxes, donors, private, etc.
• Can lead to health financing fragmentation and
inefficiencies:
– Less than optimal pooling of funds
– Less than optimal service or benefit package and provider
payment system specification
– At provider level, conflicting financial incentives in payment
systems (mess of arrows in payment to providers)
– Not achieving service delivery improvement objectives
– Not level playing field across types of providers
– Harder for people to access covered & appropriate services
Pooling & Purchasing Functions Not Separated by Revenue
Revenue
Collection
Pooling
of Funds
Health
Purchasing
Providers
Population
National
Budget
Local
Budget
Payroll
Tax
Donor
Funds
Pooling of Funds
Health Purchaser or Purchasers
Unified or Coordinated Benefits Package
Unified or Coordinated Provider Payment Systems
Private
Funds
Pooled
or not
Pooled
Purchasing with Health Budget Funds
• Input-based line item budgets funding public
facilities can be problematic if low budget level
doesn’t fund all services provided in health facility
– Not clear to provider what services funded and what
not funded
• Health budget purchasing better targeting or
matching priority services & poor populations
– Output-based provider payment systems
• Key is unit of service—not building but services for people
– Financial incentives for desired service delivery
improvements
– Align rather than fragment health purchasing
– Better targeting budget funds to priority services
opens space or clear role for private funds
Hypothetical Result if Kyrgyz MHI
(SHI) Completely Separated
Worker
Coverage
&
Benefits
• Vertical separation
tends to develop
inequitably over time
undermining road to
UHC
• Lose implementation
levers
NonWorker
Coverage
&
Benefits
Kyrgyzstan Health Financing Model
Revenue Source
Pooling and Purchasing (MHIF as Health Purchaser)
Uncovered Services
Partially Exempt
Payroll tax: SHI
additional benefits on
top of basic benefits
Co-payment
Supplemental benefits for
“insured”: reduced co-payment, “uninsured”
outpatient drugs
General revenue
Basic Benefit Package: free primary care from
health budget:
enrolled PHC practice, referral care with co-payment.
government buys
Defined population groups are fully or partially
universal coverage
exempt from co-payment.
for population
0
%
Population Coverage (Breadth)
100
%
Service Coverage (Scope/Depth)
Private
Services Contracted by MHIF
Fully Exempt
Private
Summary (Chart 2)
• More rather than less pooling of funds
• Clear health purchaser institutional structure, roles
and relationships
• Unified or coordinated benefits package
• Private OOP (user fees, copayments, etc.) directly
linked to benefits package
• Unified or coordinated provider payment systems
across revenue sources
• Reduces conflicting financial incentives at provider
level (clear arrows to providers)
• Stimulates desired health system structure and
service delivery improvements
• Easier for people to access covered & appropriate
services
Possible Relevance to Ghana
• Ghana doing excellent job moving toward UHC
• Innovations could consider:
– More unification or coordination of MOH
services/programs and NHIS benefit package
• Tied together by health worker salaries
– Potential for efficiency gains and reducing conflicting
financial incentives in payment systems for variable
costs of direct patient care (input-based line item
budget, fee-for-service, DRGs, per capita, donor
mechanisms)
– Ensure health purchasing and financial incentives
drive desired service delivery improvements
Conclusions
• Emergence of UHC as goal can be:
– Problem: creates unrealistic expectations
– Opportunity: disappearing dichotomies open avenues
for innovation
• Relationships between three health financing
functions and link to service delivery can drive
innovation and efficiency gains
• Health purchasing for health budget funds better
targeting priority services and poor populations
– Maximize impact of health budget
– Align pooling & purchasing for all revenue sources
– Create clarity and space for private financing