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Health Sector Reforms Professor dr JW Björkman Institute of Social Studies & Leiden University The Netherlands National School of Public Health Rio de Janeiro, Brazil 11 March 2009 Overview of Lecture I. II. III. IV. V. VI. VII. Introductory definitions and issues Approaches and generations of reform Historical context and policy goals Capacity constraints and corrections Models of funding and contracting Markets and public-private partnerships Types and strategies of health reforms Comparative Health Reforms Reform = modify current arrangements Re-form seeks to change ‘form’ Target-issues in the health sector 1) access to health services 2) cost of health services 3) quality of health services Overview of Major Approaches 1) 2) 3) 4) 5) 6) Institution Building – 1950s, 1960s Institutional Strengthening – 1960s, 1970s Development Administration – ’60s, ’70s Human Resource Management – 1980s Capacity Development – 1980s, 1990s Millennium Development Goals – 2000s Generations of Reforms 1) First– cut public expenditures and revive the public sector 2) Second– improve efficiency & effectiveness of public administration 3) Third– improve service delivery through sector-wide approaches Repetoire of Policy Instruments Establishment of autonomous organizations Introduction of user-fees (pay for service) Contracting out of service delivery Enablement and regulation of the private sector Basic Goals in Health Policy I. II. III. IV. V. VI. Universal access to health services Equity in sharing financial burdens Good quality health care Efficiency and cost control Satisfaction of patients Autonomy of professionals Financing Health Care General taxation Health insurance Out-of-pocket expenditures Historical Antecedents 1883 Germany’s mandatory social health insurance for workers & their families (employment-based scheme of premiums) 1948 Britain’s national health service for entire population (population-based scheme paid out of general taxation) 21st Century ‘Hybrids’ Employment-based arrangements for certain categories of workers are combined with population-wide and tax-based universal schemes. Retrenchment in 1970s Oil crises and economic stagnation High unemployment, declining state revenue, rising public expenditures Demographic shifts Ideologies about the role of the state Policy alternatives of competition and market choice Recognition of Private Sector Extensive private sector for health care in (almost) all countries Primarily out-of-pocket payments Largely un-regulated and dominated by medical professionals ‘Public-Private Partnerships’ due to declining government budgets Stage of Raising Revenues Reforms stimulated by economic recession Declining government revenues & budgets Pressure for reform emanate from central ministries of finance & planning Imposition of user-fees Dwindling capacity of citizens to pay Transaction costs Capacity Constraints (i) Limited implementation of policies Time needed for proper assessment ‘The smaller the capacity, the greater the ambition’ and vice-versa Staff features (numbers, skills, motivation) Organizational culture Patronage and favoritism Capacity Constraints (ii) Management information systems Incentive structures Lack of feedback Poor coordination Limited extent of the private sector Pressures for Policy Change Proliferation of cross-national studies Faulty assumption that policy as stated in law is the same as policy implemented ‘Spending-Services’ cliché Reform = shifts in decision-making power over allocation of resources and risks Shifts = intergovernmental, inter-personal Empirical Experience of HSR Countries implement reforms within (a) their own institutional legacies, (b) varying speeds of change, and (c) with different timings Describe any health system in terms of a country-specific mix of funding, contracting & modes of delivery Five Main Sources of Funding 1) 2) 3) 4) 5) General taxation Public and private insurance Direct payments by patients Voluntary contributions External aid from donors Three Basic Contracting Models 1) Integrated model – funding and ownership under same (public or private) agency 2) Contracting model – governments or third-party payers negotiate long-term contracts with health care providers 3) Reimbursement model – patient pays the provider, then seeks reimbursement from his/her insurance agency Other Contextual Elements Country-specific mixes: Formal and informal care Traditional and modern medicine Medical and related social services Health Care Reform: Bottom-line Combinations of core elements – funding, contracting (including payment modes) and ownership – determine the allocation of financial risks and decisionmaking power among the main players in the health care sector. Explanatory Variables External and internal pressures for change Structural features of social policy-making Institutional legacies and history Popular support and/or opposition Top-down versus bottom-up reforms Degree of ‘ambition’ – overly elaborate = plans remain on the ‘drawing board’ Types of Health Reform (i) Structural Adjustment in disguise (primarily cost-cutting) Market-oriented reforms *Assumption: markets create efficiency But profits from unnecessary care But transaction costs *Assumption: perfect information & choice Types of Health Reform (ii) Public health and public financing (the ‘Cinderella’ of all options for reform) Note: there is nothing inherently wrong with market-based reforms, provided they: *work for greater efficiency and equity *receive no government subsidies *comply with regulations Types of Health Reform (iii) ‘Idealist model’ is flawed – a ‘perfect market’ (where demand, expressed as purchasing power, determines supply and utilization of health care services) only works if those who need care are also those with the most resources for buying the care they need … whereas, in reality, the opposite is true! Strategies of Reform (i) 1) Deep structural changes to ensure minimum care for all citizens 2) Beware ‘pretended’ reforms 3) People always pay – but who is to pay more and who is to pay less? 4) Centrality of the ‘central’ level Strategies of Reform (ii) 5) Replace regressive fee-for-service with prepayment schemes 6) Progressive taxes are the best revenue for public health and insurance 7) Rationalize resources by reallocating personnel and mobilizing for outreach 8) Participatory dialog for empowerment Strategies of Reform (iii) 9) ‘Political will’ = choice and commitment 10) Health systems must help people get well when they are sick 11) Health systems must keep people healthy and stop them for becoming sick 12) Health systems must advance medical intervention and social transformation Observations (i) The role of governance in social policy and development (Lavis & Sullivan 1999): ‘Healthcare systems play a significant role in why we get well when we are sick; social environments play a significant role in why we are healthy or why we become sick in the first place’. Observations (ii) Landmark aspirations *1947 United Nations Covenant on Social, Economic and Cultural Rights *1978 Alma Ata Declaration of ‘Health for All by the Year 2000’ *1981 World Health Assembly strategy of ‘HFA & Primary Health Care’ *2000 Millenium Development Goals Recent Trends in Reforms public/private partnerships state ‘failure’ and market ‘failure’ shift in emphasis from ‘poverty causes ill-health’ to ‘ill-health causes poverty’ – and therefore health care provides opportunity for poverty alleviation as well as social development Conclusions about Reforms Greater socio-economic equity is vital to tackle the challenge of health Human right to health requires political commitment at all levels Health inequalities are rooted in socioeconomic structures Action is needed in all social policies Health Sector Reforms Obrigado! Thank you for your attention!