Vilcu I, Probst L, Dorjsuren B, Mathauer I. Health financing systems have a key role in achieving universal health coverage (UHC) across the globe. Risk pooling is the spreading of the financial risk associated with the need to use and pay for health services, rather than to be fully borne by the individual who falls ill [11].The objectives of this paper are to raise the profile of pooling as a health financing policy instrument and to provide a simple classification of country pooling arrangements through which we discuss the challenges typically associated with how fragmentation manifests in each setting. 814 0 obj <>stream 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. SMG 1117A.641 (02/09/2022) 1 . 1 / 64. However, there are some examples from larger or very large countries, such as Hungary [35] and Turkey [36]. As such, automatic entitlement is typically solely funded from general budget revenues. Purchasing health services for universal health coverage: how to make it more strategic? a single pool; (2.) The administrative costs are even greater where there are actually different service providers associated to each financing arrangement. Advances in health economics and health services research, volume 21. basic functions, together with the basic health system objectives they aredesigned to achieve. But a system with territorially distinct pools can suffer from fragmentation, if and when their population size or the territory are too small to ensure redistributive capacity, or when sub-national territories have very different levels of average per capita expenditure on health. 0000002097 00000 n HdSK0sNH{`9i SfWglvQ"{L$l$l}&j LIPX0st"$BB*4~f75HhO Z7 Countries need to focus not on generic models but on. Health financing: the basics FP Financing Roadmap. Table1 outlines the respective features under each. Thailand is a prominent example for this pooling arrangement. 0000012547 00000 n Sparkes S, Durn A, Kutzin J. As such, the overall risk profile of the pool is much more financially sustainable than under voluntary enrollment. 0000014440 00000 n 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]. Busse R, Blmel M. Germany. The Canada health transfer: changes to provincial allocations. Paris: OECD; 2011. Annual report 20152016. State budget transfers to health insurance funds: extending universal health coverage in low- and middle-income countries of the WHO European region. Higher income persons are usually more likely to have this form of VHI [51]. An appraisal of the health transformation Programme. Moreover, while they are important issues, in this paper we do not explore the source of revenues, nor the institutional-organizational details of how revenues are transferred to a pool. All people have in principle access to the same benefits. type of pooling arrangement, namely territorially distinct pools. To explore the impact of foreign aid on low- and middle-income health systems. View below: When viewing on a desktop, maximize for optimized view. Pools may be organized as territorially distinct. Cite this article. Conversely, there is no population segmentation when coverage and participation in a pool is independent of peoples socio-economic or (socio-)demographic criteria. 14]: The World Bank; 2013 [http://siteresources.worldbank.org/HEALTHNUTRITIONANDPOPULATION/Images/MexicanSocialProtectionSysteminHealth.pdf. pooled, in one or several pools. A desciptive framework for country-level analysis for health care financing arrangements. . An additional layer of complexity is that in many countries several forms of fragmentation exist. Health Policy. Its main purpose is to share the financial risk associated with health . In turn, this can help countries assess their pooling arrangements and contribute to identifying policy options to address fragmentation or mitigate its consequences. Advances in health economics and health services research, volume 21. Health financing has three key functions: revenue collection, pooling of resources, and purchasing of services. 2S?dI9c{rP"=-Gsi1NU@ Each financing mechanism was analysed in respect to key functions namely, revenue generation, pooling and purchasing. Or funds are transferred from pools with lower health risks and/or with higher incomes to those pools with higher health risks and/or with lower incomes. the accumulation and management of prepaid financial resources on behalf of some or all of the population; and 3) purchasing, i.e. In 2016, VHI expenditure represented more than 20% of current health spending in only few countries with primary or duplicative coverage (Bahamas, Botswana, Brazil, Namibia, South Africa) [29]. They also need to monitor cash on hand, businesses may be profitable but have a shortage of cash and. In 1985, the government commissioned the first of a . Book 4. Under the second form of institutional setup, countries have established a single national fund that is managed by a separate pooling and purchasing agency, usually with a purchaser-provider split. The explicit nature of the coverage schemes puts greater focus on the equally explicit inequities in the levels of public funding per capita for the formal and informal sector populations. I'.1~)4CQ~u sd1$V0c: B' {09 First, there are higher administrative costs of having multiple pooling/purchasing agencies rather than one, which can raise system-wide costs. kem ZG, akar M. What have health care reforms achieved in Turkey? The set of performance indicators provided in this article should help policy makers to monitor the development of social health insurance schemes and identify areas for improvement. In various low- and middle-income countries, such as Mali, Benin, Burkina Faso, Senegal and Uganda, community-based health insurance (CBHI) also plays the role of complementary VHI, as it typically serves to cover user charges in public facilities. PubMed Central CAS 0000046058 00000 n Where VHI coverage is unsubsidized, only those who can afford it will benefit, and inequalities will remain. Bonilla-Chacn ME, Aguilera N. The Mexican Social Protection System in Health [Universal Health Coverage Studies Series (UNICO) No. U;c!=(i\s Implementing health financing reform: lessons from countries in transition. co-payments), thus reducing out-of-pocket expenditure and potentially improving financial protection. Kutzin J. 2016;15:67. Health financing is central to the functioning of health systems and the attainment of health-related sustainable development goals, including universal health coverage (UHC). complementary or supplementary voluntary health insurance. 0000001076 00000 n Beyond survival protecting households from health shocks in Latin America. The function of pooling and the ways that countries organize this is critical for countries progress towards universal health coverage, but its potential as a policy instrument has not received much attention. Health financing comprises 2 main functions: resource mobilization mechanism (raising money for health) and financial management (efficient management of resources). Alternatively, in a non-competitive arrangement, people could be assigned to specific pools, with enrollment being based on explicit criteria, so that the different pools cannot compete for beneficiaries [11]. Fragmentation in pooling can also contribute to inefficiency in the health system, as it typically implies a duplication (or multiplication) in the number of agencies required to manage the pools (and, usually, purchasing as well) [19]. 2014;16(1). Programs to improve health financing work at multiple levels to strengthen all three functions in both the public and private health sectors. 787 0 obj <> endobj From these two institutional design aspects, we need to distinguish the level of prepaid funding, which is not considered in this classification. Pooling arrangements in health financing systems: a proposed classification, International Journal for Equity in Health, https://doi.org/10.1186/s12939-019-1088-x, http://www.internationalhealthpartnership.net//CMS_files/documents/working_group_2_report:_raising_and_channeling_funds_EN.pdf, http://www.nationalplanningcycles.org/sites/default/files/planning_cycle_repository/swaziland/swaziland_nhssp_ii_draft_zero_29_aug_2014.pdf, http://siteresources.worldbank.org/HEALTHNUTRITIONANDPOPULATION/Images/MexicanSocialProtectionSysteminHealth.pdf, https://www.academia.edu/33391064/The_Health_Insurance_System_in_Peru_Towards_a_Universal_Health_Insurance, https://www.service-public.fr/professionnels-entreprises/vosdroits/F33754, http://creativecommons.org/licenses/by/4.0/, http://creativecommons.org/publicdomain/zero/1.0/. Health Spending as % of GDP. territorially distinct pools; (3.) Health Policy. Health Policy. Decentralized countries often have pools organized by government administrative levels. A multiple pool setup can be based on population segmentation, i.e. The purpose of pooling is to spread financial risk across the population so that no individual carries the full burden of paying for health care. 0000002300 00000 n xref Geneva: World Health Organization; 2016. 2013;91(8):60211. As you can see, out-of-pocket or fee-for-service, government budget, or insurance agencies are all means of purchasing health care from providers. Bull World Health Organ. 2012;380(9849):125979. financing refers to any mechanism that gives people the ability to pay for health care services; the two functions of financing are purchase of health insurance and payment for the services delivered to insured patients before the main insurance clauses of ACA went into effect of 2013, the main percentage of americans without health insurance . Anyone you share the following link with will be able to read this content: Sorry, a shareable link is not currently available for this article. Pools can be based on compulsory, automaticor voluntary participation. Cashin C, Sparkes S, Bloom D. Earmarking for health: from theory to practice. management and disbursement for financing the availment of a basic minimum package and other . For illustration we provide various country examples. Self-paced (approximately 6 hours of course time) Click to enter this course lessons learned and policy implications are outlined below across each of the health financing functions with linkages to intermediate objectives of efficiency, equity . 2. Geneva: World Health Organization; 2010. Thailand Health Systems in Transition. Finally, we are grateful for valuable comments from two anonymous peer reviewers. comprising 50% of the health system but regulatory functions of the government have yet to be fully maximized. 0000005125 00000 n 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; and to ensure that the use of these services does not expose the user to financial hardship. Int J Equity Health. It has important similarities with the (2.) Gautier J. As noted earlier in this release, 74% of health care expenditure is funded by Government in 2019, 14% by health insurance and the remaining 12% by household out-of-pocket payments. 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. PubMed HSn0|lDP@bQlXdhe)o8NP*!}73H$8xKSY=5MfrjOj#]GIKz*=nE{/fw3A&/4`CJj+@K,*0'P2 mkgXEi{i5wD There are two forms of institutional setup found for this pooling arrangement. World Health Organization. startxref As a result of inadequate diversity of healthier and sicker people, the costs of care for a pool based on voluntary coverage are in principle higher than for the average in the population. When people have access to publicly financed coverage schemes, this VHI is duplicating. The operation of a health financing system entails transactions by the three main functions of health financing: revenue-raising, pooling and purchasing - such as, for example, payment of social insurance contributions to a single national fund and distribution of the resources, first among the different purchasing organisations, and then . https://doi.org/10.1093/heapol/czt054. 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. In 2005/2006 public, external and private contributions to the total health expenditure were 21.6%, 60.7% and 18.2% respectively. The National Health Insurance Program was established to provide health insurance coverage and ensure affordable, acceptable, available and accessible health care services for all citizens of the Philippines. FDA Staff Manual Guides, Volume I - Organizations and Functions . Smith PC, Witter SN. As such, this type of pooling arrangement, if and when it has an effective risk adjustment mechanism that deters risk selection efforts, can act as a virtual single pool (due to the flows between the pools). 201102-E 25. Ministry of Health Swaziland. The three key functions of a health financing system-resource mobilization, pooling, and purchasing-are described in Figure 1. PubMed Central 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. What are the types of health care financing? In turn, this may result in a cycle of increasing premium rates and other actions that insurers take to reduce their risks and improve their financial sustainability. All authors have read and approved the final manuscript. While the issue of segmentation first emerged in Latin America [43], it is not limited to that region. Raising revenues for health in support of UHC: strategic issues for policy makers, health financing policy brief no. Provided by the Springer Nature SharedIt content-sharing initiative. 1: World Health Organization, 2015. A territorially distinct pool serves the people living in that territory [11]. Terms and Conditions, N4 %XyfL`P 8N-thZprq{H+B'xhOai@i ii`. 2xYai 5@IAZfL7|F0C(XQb1`\fn! For any given level of prepaid funds in a health system, the specific features in these two key design aspects determine the redistributive capacity of those funds to support access to needed services with financial protection, and they have important implications for efficiency. Known for its rigorous approach to solving complex challenges, Abt Associates is regularly ranked as one of the top 20 global research firms and one of the top 40 international development innovators. Mathauer I, Theisling M, Mathivet B, Vilcu I. Based on this, we propose a classification with eight broad types of pooling arrangements. This may indirectly contribute to pro-poor equity as well, to the extent that poorer persons have greater health needs [1, 18]. Washington DC: World Bank; 2006. Google Scholar. To ensure key development programmes are adequately funded [5,6]. Health financing diagnostics & guidance no. Voluntary health insurance expenditure in low- and middle-income countries: exploring trends during 1995-2012 and policy implications for progress towards universal health coverage. This duplication of functional responsibilities can be a major driver of inefficiency when seen from the perspective of the entire system rather than within each scheme [15, 20]. , v2HuW]:'01%`!cl/i*u$oL|Sf_%^G;SPCY+ZxcsA^[W' ^`^^ AHjX FqtHI(@[10*i. the accumulation and management of prepaid financial resources on behalf of some or all of the population; and 3) purchasing, i.e. Automatic participation is typically based on legal or constitutional obligations, and the basis for entitlement is non-contributory, deriving from citizenship, residence or other factors such as poverty status, etc. Pooling ensures that the risk related to financing health interventions is borne by all the members of the pool and not by each contributor individually. Copenhagen: World Health Organization, on behalf of the European Observatory on Health Systems and Policies; 2010. Int J Equity Health. Health financing involves not only methods of raising money for health care, but also allocation of those funds. Kutzin J, Shishkin S, Bryndov L, Schneider P, Hrobo. Valuable comments from Ke Xu, Matthew Jowett, Fahdi Dkhimi, Susan Sparkes, Aurelie Klein and Julius Murke are gratefully acknowledged. 3. PS is a health systems adviser working in the WHO Country Office of Tunisia. Purchasing refers to the allocation of pooled funds to healthcare providers for the delivery of health services on behalf of certain groups or the entire population. 0000079954 00000 n 2001;56(3):171204. As changes in the pooling arrangements are about redistribution of funds, this is ultimately also very political, and it is hence important to understand the feasibility and manage the political economy of pooling reforms. Cutler DM, Zeckhauser RJ. In the early 1990s, Thailand had a scheme for civil servants and another scheme for private sector employees. The six functions are: (i) service delivery, (ii) medical products, vaccines and technology, (iii) workforce, (iv) information, (v) financing and (vi) leadership and governance. Multiple forms of fragmentation co-exist, and dimensions other than pooling also result in fragmentation. 0000013724 00000 n These tend to reflect particular challenges due to the nature and consequences of fragmentation in each. 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 other hand, competition among insurance pools creates an incentive for pool managers to cream skim, i.e. 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. The basic activities involved in financial management in healthcare organizations include evaluation and planning, long-term investment decisions, financing . It is voluntary because there is no legal obligation to join a scheme, and thus the person or their employer can choose not to be part of a pool for coverage [22]. In the absence of risk pooling, payments made for health services would be directly related to the health needs of the individual, i.e. 1.2.1. Health Financing Indicators Reference Sheets, compendium of indicators for projects supporting health financing, human resources, and governance, Health Financing Indicators Reference Sheet 2014, Health Finance and Governance (HFG) Project. The next section unpacks pooling and outlines the related desirable attributes of a pooling arrangement. When each level of government in a decentralized setting pools for a distinct level of health services, then it is organized in a territorially distinct way. 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