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When 18-year-old factory worker Dou Huhai came down with a cold, after a 15-hour shift at a zipper factory on the outskirts of Beijing, he had “neither the money nor the time” to see a doctor so he just took some medicine. The following day, still drowsy from the medication, he caught his left hand in his punching machine. Dou comes from a peasant family in Shaoyu Town, Xihe County, in China’s north-western Gansu Province and is one of China’s estimated 200 million migrant workers. Now over 30 million migrant work- ers are covered by the Urban Em- ployee Basic Health Insurance Scheme (URBMI), according to the Chinese Medical Insurance Association Since 2003, the government has focused on two main types of insurance: the New Rural Cooperative Medical Schemes (NRCMS), which were initiated in 2003 for rural populations; and the URBMI, first piloted in 88 cities in 2007.
Equity: - those who need the services should get them, not only those who can pay for them; Quality: That the quality of health services is good enough to improve the health of those receiving services; and Financial-risk protection – Ensuring that the cost of using care does not put people at risk of financial hardship. Universal coverage brings the hope of better health and protection from poverty for hundreds of millions of people - especially those in the most vulnerable situations.
The health care system in India pre–dominantly is catered to by the private sector and a minuscule contribution through external flows. Expenditure in the private sector contributes to 78.05% of total health expenditure, public sector accounts for 19.67% and external flows 2.28%. In totality, health expenditure formed 4.25% of Gross Domestic Product (GDP).
Low public spending As a proportion of the GDP, India’s public spending on health, after increasing between 1950–51 and 1985–86, stagnated during 1995–2005, was 0·95% of the GDP in 2005, among the lowest in the world, compared with 1·82% in China and 1·89% in Sri Lanka.18 Analysis of the per person public spending on health shows that the situation is similarly bleak. The per person government spending on health in India was about 22% of that in Sri Lanka, 16% of that in China, and less than 10% of that in Thailand (table 1).18 Despite the steep increase in economic growth and the increase in the per person income and tax collections, a corresponding increase has not occurred in India’s total spending on health or on social sectors. Between 1993–94 and 2004–05, for example, compared with a 67% increase in real per person income and an 82% increase in per person tax collections, real per person public health
In 2005, India’s private expenditure of nearly 80% of the total expenditure on health was much higher than that in China, Sri Lanka, and Thailand (table 1). Two features of the private out-of-pocket expenditure are noteworthy. First, most of the expenditure (74%) was incurred for outpatient treatment, and not for hospital care; 26% was for inpatient treatment. Second, drugs accounted for 72%
Financial protection According to the National Family Health Survey 2005–06,14 only 10% of households in India had at least one member covered by medical insurance. India’s medical insurance sector remains weak and fragmented despite several medical insurance schemes operated by the central and state governments, public and private insurance com panies, and several community-based organisations.23,24 The benefi ts of insurance coverage accrue only to a few privileged individuals.25–28 For example, the Central Government Health Scheme, introduced in 1954, which off ers comprehensive medical care for outpatient and hospital admission, benefi ts only the employees of central government (those in service or retired) and their families, members of parliament, and judges in the supreme and high courts. Similarly, the Employees’ State Insurance Scheme, established in 1948, provides cash and medical benefi ts only to a select category of employees in factories in which at least ten people are employed.
Why universal coverage? Promoting and protecting health is essential to human welfare and sustained economic and social development. This was recognized more than 30 years ago by the Alma-Ata Declaration signatories, who noted that Health for All would contribute both to a better quality of life and also to global peace and security. Not surprisingly, people also rate health one of their highest priorities, in most countries behind only economic concerns, such as unemployment, low wages and a high cost of living (1, 2). As a result, health frequently becomes a political issue as governments try to meet peoples’ expectations. There are many ways to promote and sustain health. Some lie outside the confines of the health sector. The “circumstances in which people grow, live, work, and age” strongly influence how people live and die (3). Education, housing, food and employment all impact on health. Redressing inequalities in these will reduce inequalities in health. But timely access to health servicesa – a mix of promotion, prevention, treatment and rehabilitation – is also critical. This cannot be achieved, except for a small minority of the population, without a well-functioning health financing system. It determines whether people can afford to use health services when they need them. It determines if the services exist. Recognizing this, Member States of the World Health Organization (WHO) committed in 2005 to develop their health financing systems so that all people have access to services and do not suffer financial hardship paying for them (4). This goal was defined as universal coverage, sometimes called universal health coverage.
The box here labeled “current pooled funds” depicts the situation in a hypothetical country where about half the population is covered for about half the possible services, but where less than half of the cost of these services is met from pooled funds. To get closer to universal coverage, the country would need to extend coverage to more people, offer more services and/or pay a greater part of the cost from pooled funds.
In striving for this goal, governments face three fundamental questions: 1. How is such a health system to be financed? 2. How can they protect people from the financial consequences of ill-health and paying for health services? 3. How can they encourage the optimum use of available resources? They must also ensure coverage is equitable and establish reliable means to monitor and evaluate progress.
Figure 1.1 depicts a framework that would be required to fully explain the impact of insurance. The uptake of insurance or enrolment into insurance may depend on: how one perceives one’s own risk; an understanding of the product; and social factors such as trust in financial institutions as one pays into a fund where services are delivered just in case some event occurs. The first column in Figure 1.1 depicts the offer of insurance and the consumer reaction. The second column indicates that the utilisation of health care may depend on fees charged at point of contact and guidance from the service provider. The third column indicates that proper health care delivered through insurance can improve health status, reduce out-ofpocket expenditure and limit the decline in labour productivity or supply. The two non-health outcomes make up consumption smoothing. Actual quality of care and Background costs that are not covered through insurance determine the final outcomes. Enrolment is as much an impact as utilisation.
However, many of these countries have learned from previous successes and failures, allowing them to make faster progress with fewer resources than did high income countries that have already achieved universal access. Countries like Malaysia and South Korea have reached universal health coverage in two to three decades and at lower income levels and with a smaller share of national income than the higher-income countries that preceded them (table 3). Most health spending in these middle-income countries is pooled but the mechanisms for pooling vary. For example, pooled funds in Malaysia are generated almost exclusively from general taxes whereas in South Korea they come mostly from mandatory payroll contributions.28,58 Low-income and middle-income countries are using a wide range of strategies to achieve universal health coverage.2,11,59,60 Mexico is aiming to close coverage gaps by focusing on poor and marginalised groups. Its Seguro Popular programme provides access to health services for people who are ineligible for employment-based insurance schemes because they are self-employed, unemployed, or out of the workforce (e.g, students, children, and people who are retired).61 National health insurance schemes are being implemented in countries as diff erent as Ghana, Colombia, and Indonesia.59 Brazil has expanded access to health care through its family health programme (Programa da Saude Familiar) and related reforms to its national Unified Health System.62 Thailand has dedicated public revenues to a programme that fi nances care, largely through public health services, for people who are otherwise uninsured.33,63 India is among those countries with the lowest share of pooled health spending, yet it is pursuing multiple initiatives to reach universal health coverage.64 China, which initially turned health care over to private initiative during its early market reforms, has since recognised the limitations of private fi nancing and is seeking to expand insurance coverage through public programmes.65 These programmes have yielded varying degrees of success but the overall trend is favourable. They generally are pragmatic responses to a range of resilient popular pressures demanding better access to health care with greater fi nancial protection.
Direct payments have serious repercussions for health. Making people pay at the point of delivery discourages them from using services (particularly health promotion and prevention), and encourages them to postpone health checks. This means they do not receive treatment early, when the prospects for cure are greatest. It has been estimated that a high proportion of the world’s 1.3 billion poor have no access to health services simply because they cannot afford to pay at the time they need them (2). They risk being pushed into poverty, or further into poverty, because they are too ill to work.
In health, charges or fees are commonly levied for consultations with health professionals, medical or investigative procedures, medicines and other supplies, and for laboratory tests. Depending on the country, they are levied by government, nongovernmental organizations, faith-based and private health facilities. They are sometimes officially sanctioned charges and sometimes unofficial or so-called “under-the-table” payments. Sometimes both co-exist. Even where these charges are covered by insurance, patients are generally required to share the costs, typically in the form of co-insurance, co-payments and/or deductibles – payments the insured person has to make directly out of pocket at the time they use services because these costs are not covered by the insurance plan. Deductibles are the amount of expenses that must be paid out of pocket before an insurer will cover any expenses at all. Co-insurance reflects the proportion of subsequent costs that must be met out of pocket by the person who is covered, while co-payments are set as a fixed amount the beneficiary must pay for each service. We use the term direct payments to capture all these elements. However, because the term out-of-pocket payments is often used to capture the same ideas, we use the two terms interchangeably. For a pool to exist, money must be put into it, which is why a system of prepayment is required. Prepayment simply means that people pay before they are sick, then draw on the pooled funds when they fall ill. There are different ways of organizing prepayment for the people who can afford to pay (see Chapter 3) but in all countries there will be people who are unable to contribute financially. The countries that have come closest to achieving universal health coverage use tax revenue to cover the health needs to these people, ensuring that everyone can access services when they need them. Countries are at different points on the path to universal coverage and at different stages of developing financing systems. Rwanda, for example, has a tax system that is still developing, and three robust health insurance organizations
For a pool to exist, money must be put into it, which is why a system of prepayment is required. Prepayment simply means that people pay before they are sick, then draw on the pooled funds when they fall ill. There are different ways of organizing prepayment for the people who can afford to pay (see Chapter 3) but in all countries there will be people who are unable to contribute financially. The countries that have come closest to achieving universal health coverage use tax revenue to cover the health needs to these people, ensuring that everyone can access services when they need them. Countries are at different points on the path to universal coverage and at different stages of developing financing systems. Rwanda, for example, has a tax system that is still developing, and three robust health insurance organizations
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 (14). In 2005, the World Health Assembly unanimously adopted a resolution urging countries to develop their health financing systems to achieve these two goals, defined then as achieving universal coverage (15). The more that countries rely on direct payments, such as user-fees, to fund their health systems, the more difficult is it to meet these two objectives.
Box 1.1. What a health financing system does: a technical explanation Health financing is much more than a matter of raising money for health. It is also a matter of who is asked to pay, when they pay, and how the money raised is spent. Revenue collection is what most people associate with health financing: the way money is raised to pay health system costs. Money is typically received from households, organizations or companies, and sometimes from contributors outside the country (called “external sources”). Resources can be collected through general or specific taxation; compulsory or voluntary health insurance contributions; direct out-of-pocket payments, such as user fees; and donations. Pooling is the accumulation and management of financial resources to ensure that the financial risk of having to pay for health care is borne by all members of the pool and not by the individuals who fall ill. The main purpose of pooling is to spread the financial risk associated with the need to use health services. If funds are to be pooled, they have to be prepaid, before the illness occurs – through taxes and/or insurance, for example. Most health financing systems include an element of pooling funded by prepayment, combined with direct payments from individuals to service providers, sometimes called cost-sharing. Purchasing is the process of paying for health services. There are three main ways to do this. One is for government to provide budgets directly to its own health service providers (integration of purchasing and provision) using general government revenues and, sometimes, insurance contributions. The second is for an institutionally separate purchasing agency (e.g. a health insurance fund or government authority) to purchase services on behalf of a population (a purchaser-provider split). The third is for individuals to pay a provider directly for services. Many countries use a combination. Within these broad areas, health service providers can be paid in many different
to purchase services on behalf of a population (a purchaser-provider split).
In April 2009, the Chinese government announced plans to provide “safe, effective, convenient and affordable” health services to all urban and rural residents by 2020 (25). If fully implemented, the reform will end market- based mechanisms for health that were introduced in 1978. Prior to then, the government had offered basic but essentially free health-care services to the entire population, but the new market-based approach resulted in a major increase in direct payments – from little more than 20% of all health spending in 1980 to 60% in 2000 – leaving many people facing catastrophic health-care costs. The new approach also meant that hospitals had to survive on patient fees, which put pressure on doctors to prescribe medicines and treatment based on their revenue-generating potential rather than their clinical efficacy. The government took steps to address these issues. The New Cooperative Medical Schemes, initiated in 2003 to meet the needs of rural populations, and the Urban Residents Basic Medical Insurance scheme, piloted in 79 cities in 2007, are at the heart of the latest reforms. The government aims to reduce dependence on direct payments and increase the proportion of the population covered by formal insurance from 15% in 2003 to 90% by 2011, and to expand access to services and financial
The recent health financing reforms in the United States will extend insurance coverage to a projected 32 million previously uninsured people by 2019 (27). Numerous strategies will be used to achieve this goal. Private insurers will no longer be able to reject applicants based on health status, for example, and low-income individuals and families will have their premiums subsidized (28).
The Rwandan government reports that 91% of the country’s population belongs to one of three principal health insurance schemes (17). The first, the Rwandaise assurance maladie, is a compulsory social health insurance scheme for government employees that is also open to private-sector employees on a voluntary basis. The second, the Military Medical Insurance scheme, covers the needs of all military personnel. The third, and most important for population coverage, is the cluster of Assurances maladies communautaires – mutual insurance schemes whose members predominantly live in rural settings and work in the informal sector. These mutual insurance schemes have expanded rapidly over the past 10 years, and now cover more than 80% of the population. About 50% of mutual insurance scheme funding comes from member premiums, the other half being subsidized by the government through a mix of general tax revenues and donor support (
Devising and implementing health finance strategy is a process of continuous adaptation, rather than linear progress towards some notional perfection. It must start with a clear statement of the principles and ideals driving the financing system – an understanding of what universal health coverage means in the particular country. This prepares the ground for the situation analysis (action 2). Action 3 identifies the financial envelope and how this is likely to change over time. It includes consideration of how much people are paying out of pocket and how much is spent in the nongovernmental sector. Action 4 considers the potential constraints on developing and implementing plans to move closer to universal coverage, while actions 5 and 6 cover the formulation and implementation of detailed strategies. The cycle, as we envisage it, is completed (action 7) when a country reviews its progress towards its stated goals (action 1), allowing its strategies to be re-evaluated and new plans made to redress any problems. It is a process based on continual learning, the practical realities of the system feeding constant re-evaluation and adjustment. Health financing systems must adapt, and not just because there is always room for improvement, but because the countries they serve also change: disease patterns evolve, resources ebb and flow, institutions develop or decline.
In 2009, the British National Institute for Health and Clinical Excellence announced that the National Health Service could not offer some expensive medicines for the treatment of renal cancer because they were not cost effective. The cuts provoked some public anger but were defended by the institute as being part of difficult but necessary moves to ration resources and set priorities. The fact is new medicines and diagnostic and curative technologies become available much faster than new financial resources.
Fig. 2.1 shows the average share of government spending on health by WHO region for the period from 2000 to 2007, the last year for which figures are available. The figures include contributions from external partners channeled through government budgets in both the numerator and denominator because few countries report them separately.
In Fig. 2.2, the vertical axis shows the proportion of total government spending allocated to health, and the bars on the horizontal axis represent countries in that region, ordered from lowest to highest levels of GDP per capita. Budget allocations to health in the WHO European Region vary from a low 4% of total government spending to almost 20%. Importantly, even though the priority given to health in overall government budgets generally increases with national income, some governments choose to allocate a high proportion of their total spending to health despite relatively low levels of national income; others that are relatively rich allocate lower proportions to health. This pattern can also be seen globally. Although government commitments to health tend to increase with higher levels of national income, some low- income countries allocate higher proportions of total government spending to health than their high-income counterparts; 22 low-income countries across the world allocated more than 10% to health in 2007 while, on the other hand, 11 high-income countries allocated less than 10%.
There are several reasons countries do not prioritize health in their budgets, some fiscal, some political, some perhaps linked to the perception in ministries of finance that ministries of health are not efficient. In addition, the budget priorities governments give to health reflects the degree to which those in power care, or are made to care, about the health of their people. Dealing with universal health coverage also means dealing with the poor and the marginalized, people who are often politically disenfranchised and lack representation.
– a tax on foreign exchange transactions in the currency markets
Fig. 2.3 shows that the recipient countries receiving more than US$ 20 per capita in external assistance for health in 2007 were middle- income countries, while the bulk of the low-income countries received less than US$ 5 per capita. Many of the poorest countries receive substantially less development assistance for health than their much richer neighbours. For example, Namibia, a lower-middle-income country, received about US$ 34 per capita for health in 2007, compared with US$ 10 in Mozambique, US$ 4.40 in the Democratic Republic of the Congo and US$ 2.80 in the Republic of Guinea (4). It would appear that many other factors, in addition to need, determine aid allocations.
The high-level taskforce suggested that the focus of many external partners on a few high-profile programmes and countries ran counter to the spirit of the 2005 Paris Declaration on Aid Effectiveness, which seeks to enable recipient countries to formulate and execute their own national plans according to their own national priorities (59). In its report, the taskforce called for a shift away from “international financing mechanisms that build on project applications approved in a development partner’s global headquarters or capital” (60). What is required is a refocusing on agreed financial contributions to national health plans rather than a continuation of project-based aid
Global variation in recourse to Caesarean section: The number of Caesarean sections varies enormously between countries. Data for Caesarean sections performed in 137 countries in 2007 show that in 54 countries, Caesarean births represented less than 10% of all births; in 69 countries, the percentage was more than 15%. Only 14 countries reported rates in the recommended 10–15% range. A country-specific analysis based on WHO-CHOICE (CHOosing Interventions that are Cost Effective) methods reveals that the cost of global excess Caesarean sections is over US$ 2 billion annually.
A recent medicine pricing study revealed that while generic medicines in the WHO regions of the Americas, South-East Asia and the Eastern Mediterranean were bought by the public sector at close to international reference prices, in the African, European and Western Pacific Regions, governments paid an average 34–44% more than they needed to (Fig. 4.2) (9). The same study revealed that certain medicines are nearly always sold at substantial mark-ups, with the prices varying significantly from country to country. Procurement prices for the branded form of ciprofloxacin (a broad spectrum antibiotic), for example, vary widely across developing countries, with some paying up to 67 times the international reference price
It is possible for India, even within the financial resources available to it, to devise an effective architecture of health financing and financial protection that can offer UHC to every citizen.
through their Departments of Health or by quasi-governmental autonomous agencies established for the purpose.
Thus private sector facilities such as hospitals and medical colleges outside metropolitan areas will be allowed to propose and commission projects claiming up to 20% of the cost as grant from the Government.
What is viability gap funding? There are many projects with high economic returns, but the financial returns may not be adequate for a profit-seeking investor. For instance, a rural road connecting several villages to the nearby town. This would yield huge economic benefits by integrating these villages with the market economy, but because of low incomes it may not be possible to charge user fee. In such a situation, the project is unlikely to get private investment. In such cases, the government can pitch in and meet a portion of the cost, making the project viable. This method is known as viability gap funding.
The Viability Gap Funding Scheme provides financial support in the form of grants, one time or deferred, to infrastructure projects undertaken throughThe Viability Gap Funding Scheme provides financial support in the form of grants, one time or deferred, to infrastructure projects undertaken through public private partnerships with a view to make them commercially viable. GoI has established a Viability Gap Fund to aid the PPP infrastructure projects which face the viability gap due to inherent nature of the project. The Scheme is administered by the Ministry of Finance.Read more: http://wiki.answers.com/Q/What_is_Viability_gap_funding#ixzz27eXgm031
Health financing strategies uhc 27 09 12
Health Financing Strategies
Universal Health Coverage
Vikash R. Keshri Dr. Chetna
Universal Health Coverage:
What is Universal Health Coverage?
Health System Financing in India.
Health Financing Strategies:
Where we are? Status of Heath Financing
More Money For Health: How to generate more
More Health to Money: How to Utilize the
resources and prevent wastages.
Health financing strategies in India
As proposed by the HLEG on UHC
As proposed in Proposed Draft 12th Plan
Existing Health Insurance schemes in India
Critical Review of Existing Schemes Proposed plan
Universal Health Coverage:
“Ensuring that all people have access to needed Promotive,
preventive, curative and rehabilitative health services, of
sufficient quality to be effective, while also ensuring that the
use of these services does not expose the user to financial
World Health Organization
“Ensuring equitable access for all Indian citizens, resident in
any part of the country, regardless of income level, social
status, gender, caste or religion, to affordable, accountable,
appropriate health services of assured quality ( Promotive,
preventive, curative and rehabilitative) as well as public health
services addressing the wider determinants of health delivered
to individuals and populations, with the government being the
guarantor and enabler, although not necessarily the only
provider, of health and related services”.
HLEG on UHC, Planning
Universal Health Coverage:
Three related objectives:
Equity in access to health services
Quality of health services good enough to improve the health
of those receiving services; and
Cost of care does not risk financial hardship.
1883 Health Insurance Bill, Germany became the first country to
make nationwide health insurance mandatory.
In U. K. Enactment of the National Insurance Act in 1911 and the
National Health Service (NHS) in 1948.
Article 25.1 of the 1948 Universal Declaration of Human Rights
states right to health as an important fundamental right.
1966, The International Convention on Economic, Social and
Cultural Rights recognized "the right of everyone to the
enjoyment of the highest attainable standard of physical and
1978: Alma-Ata declaration & the vision of "health for all”
World Health Assembly resolution 58.33 adopted 'Universal
Health Coverage' in 2005,
Health System Financing in India:
• State Subject
• Predominantly catered by Private Sector
• Private 78.05% vs. Public 19.05% vs. 2.28% External flow.
Table 1: Health Expenditure in India (2004-05)
Source: National Health Account 2004 – 05, MOHFW, GOI
Share of GDP
External Flow 2.28 0.10
Source: National HealthAccount 2004 – 05, MOHFW, GOI
Distribution of Public & Private Health Spending
Health Expenditure in India: International
Source: A. K. Shiva Kumar, L. C. C., Mita Choudhury, Shiban Ganju, Vijay Mahajan, Amarjeet Sinha, Abhijit Sen (2011).
"India: Towards Universal Health Coverage 6: Financing health care for all: challenges and opportunities." Lancet 377:
Why Universal Coverage?
Promoting and protecting health essential for human welfare
and sustained economic and social development.
30 years: the Alma-Ata Declaration
Health: One of most Important priorities of people
Many ways to promote and sustain health : Education, housing,
food and Employment.
Timely access to health services – a mix of promotion,
prevention, treatment and rehabilitation – Very critical
Well-functioning health financing system – Essential.
It determines use of health services when people need them. It
determines if the services exist.
Three Dimensions of Universal Health
Three fundamental questions ?
1. How is such a health system to be financed?
2. How can they protect people from the financial
consequences of ill-health and paying for health
3. How can they encourage the optimum use of available
- Also Equity and Monitoring and Evaluation.
A theory of change due to health insurance
Source: Impact of national health insurance for the poor and the informal sector
in low- and middle-income countries: Systematic Review
Where we are?
Savedoff W. D. Political and economic aspects of the transition to universal health coverage.
Lancet 2012; 380: 924–32
Where we are? …..
Savedoff W. D. Political and economic aspects of the transition to universal health
coverage. Lancet 2012; 380: 924–32
Where we are? …..
High proportion of the world’s 1.3 billion poor no access to health
services simply because they cannot afford to pay at the time they
Even if covered with insurance: Uncovered Cost is burden.
Raising adequate funds from a sufficiently large pool of individuals.
Supplemented with donor support and general government
Spending these funds on the services a population needs.
Countries are at different points on the path to universal coverage
and at different stages of developing financing systems
Financing for Universal Health
Specifically designed Financing systems to:
Provide all people access needed health services.
Ensure, use of these services does not expose the user
to financial hardship
What are the problems?
3 Fundamental Problems:
Availability of Resources.
Over reliance on direct payments.
In Efficient and Inequitable distribution of resources
Three critical areas of health financing:
Raise sufficient money for health.
Remove financial barriers to access and reduce financial risks of
Make better use of the available resources.
What a health financing system does?
General or specific taxation, Compulsory or Voluntary health
insurance contributions & Direct out-of-pocket (User Fee or
Accumulation and management of financial resources. an element of
pooling funded by prepayment, combined with direct payments (Cost
Three main ways to do this. (Either single of
First, the government to provide budgets directly to its own
health service providers (integration of purchasing and
provision) using general government revenues and,
sometimes, insurance contributions.
Second, An institutionally separate purchasing agency
(e.g. a health insurance fund or government authority) to
purchase services on behalf of a population (a purchaser-
Third, Individuals to pay a provider directly.
On the path to Universal Coverage:
In April 2009: safe, effective, convenient and
affordable” health services to all urban and rural
residents by 2020.
The New Cooperative Medical Schemes, initiated in
The recent health financing reforms extend insurance
coverage to projected 32 million previously uninsured
people by 2019.
Republic of Korea:
Since 1989 all are covered
More Money for Health:
No magic bullet to achieve Universal Health Coverage.
New medicines and diagnostic and curative technologies
become available much faster than new financial
Raise more Funds for Health:
Broadly, three ways to raise additional funds or diversify
sources of funding:
Higher priority in existing spending, particularly in
Find new or diversified sources of domestic funding; and /
To increase external financial support.
Ensuring a fair share of total government
spending on health:
Table: Government expenditure on health as a percentageof total
government expenditures by WHO region, 2000–2007a
Table:The share of total government expenditure allocated
to health in the WHO European Region, 2007
Diversifying Domestic Sources of
Two main ways:
1. To allocate more of the existing financial resources to
2. To find new methods to raise funds or to diversify the
Indonesia: Increases tax revenues by encouraging compliance
Ghana: 70–75% of f its National Health Insurance Scheme with
general tax funding, 2.5% national health insurance levy on VAT.
Germany: Gesundheitsfond: New fund to inject more money in
SHI from General taxation.
France: Contribution sociale généralisée, Special fund for NHI
form tax on real estates and other traditional.
Diversifying Domestic Sources of
Revenue: Some Options
Special levy on
$$–$$$ Australia has recently imposed a
levy on mining companies;
Pakistan has a long-standing tax on
Levy on currency
$$–$$$ Some middle-income countries with
important currency transaction
Diaspora bonds $$ Used in India, Israel and Sri Lanka,
although not necessarily for health
$$ Initially in Brazil in the 1990s
subsequently replaced by a tax on
capital flows to/from the country
$$ Taking 1% of bill would raise a lot of
money; relevant to low-, middle- and
$$ These excise taxes on tobacco and
alcohol exist in most countries
Excise tax on
$–$$ Romania: Proposing to implement a
20% levy on foods high in fat, salt,
additives and sugar.
$ Selling franchised products or services
from which a percentage of the profits
goes to health
Tourism tax $ Airport departure taxes are already
widely accepted; a component for
Direct Payment: Why is it so
Direct payments are the least equitable form of health
Governmental not willing to spend more.
No capacity or will to generate POOL.
Taps into new areas.
Attractive option during Economic Recessions.
Out-of-pocket payments as a function of gross
domestic product (GDP) per capita, 2007
Source: National Health Accounts [online database]. Geneva, World Health
The effect of out-of-pocket spending on financial catastrophe and
Source: Xu K et al. Exploring the thresholds of health
expenditure for protection against financial risk.
Strength in Numbers:
• Cost Sharing
Most effective way for financial risk of paying for health services
is to share it, and the more people who share, the better the
Three interrelated options:
• Replace direct payments with forms of prepayment, most
commonly a combination of taxes and insurance
• To consolidate existing pooled funds into larger pools, and
• To improve the efficiency with which funds are used.
• A total of 49 health-related community schemes operate in
Bangladesh, India and Nepal.
More health for the Money: Using
Pricewaterhouse Coopers’ Health Research Institute:
More than half of US$ 2 trillion-plus that the United
States of America spends on health each year is wasted
The European Health care Fraud and Corruption
Little less than 6%, lost to mistakes or corruption.
Ten Leading Causes of Inefficiency:
1. Medicines: underuse of generics and higher than necessary
prices for medicines
2. Medicines: use of substandard and counterfeit medicines
3. Medicines: inappropriate and ineffective use.
4. Health-care products and services: Overuse or supply of
equipment, investigations and procedures
5. Health workers: Inappropriate or costly staff mix, unmotivated
6. Health-care services: Inappropriate hospital admissions and
length of stay
7. Health-care services: Inappropriate hospital size (low use of
8. Health-care services: Medical errors and suboptimal quality of
9. Health system leakages: waste, corruption and fraud
10. Health interventions: Inefficient mix/ inappropriate level of
Table: Medianprice ratios of public-sector procurement
prices for generic medicines, by WHO region:
How can this in- efficiency be
WHO-CHOICE (Choosing Interventions that are
Cost Effective) Strategy Eliminate Unnecessary Spending on Medicine
Improve quality control of Medicine
Use Medicine appropriately
Get Most out of technologies and services
Improve hospital Efficiency – Size and Length of stay
Get care right the first time
Eliminate waste and corruption
Critically assess the service needed:
Tackling Inefficiency: Lebanon’s Example
1998: 12.4% of GDP on health, Highest in the Eastern
60% Out-of-pocket payments among the highest in the region.
Series of reforms implemented to improve equity and efficiency.
• Revamping of the public-sector primary-care network;
• Improving quality in public hospitals; and
• Improving the rational use of medical technologies and
medicines Including use of quality-assured generic
GDP on health from 12.4% to 8.4%. Out-of-pocket spending as
a share of total health spending from 60% to 44%
• First concrete step:
During planning process of 12th Five Year Plan: widely
termed as Health Plan.
• Planning commission constituted a High level Expert Group
on Universal Health coverage 2010.
• Mandate: Developing a framework for providing easily
accessible and affordable health care to all Indians.
• HLEG also recommended Appropriate Health Care Financing
as key strategy to achieve Universal Health Coverage.
Current Scenario in India:
Low Priority to Public Health Spending.
Low Per Capita Expenditure on Health:
High Burden of Private Out of Pocket Expenditure.
Wide Variation in Public Health Expenditure across states.
Large share on State Government Expenditure (Nearly 2/3rd).
States with low public expenditure on health typically find
themselves fiscally constrained by two factors:
Centre’s Allotment of Revenue is not uniform.
Less scope for extra development allocation by the poorer
Many state governments do not accord high priority to health.
Financial protection against medical expenditures is far from
universal. Expenditure on social insurance 1.13% of total health
spending in 2004-05.
The new architecture for UHC: 6 CriticalAreas:
1. Health Financing and Financial Protection
2. Health Service Norms
3. Human Resources for Health
4. Community Participation and Citizen
5. Access to Medicines, Vaccines and
6. Management and Institutional Reforms
Three core objectives need to be tackled:
Ensure an adequacy of financial resources for the provision of
universal access to essential health care.
Provide financial protection and health security against
impoverishment to the entire population of the country; and
Put in place financing mechanisms that is consistent in the
A predominant role for public financing;
Related to this, coverage is compulsory (where linked to
contribution) or automatic (where based on certain
characteristics such as residence or citizenship); and
Universal entitlement without exclusion.
Requires: Compulsion & Subsidization
Government Spending on Health: 2.5% of GDP by 2012 &
3% by 2022. (Table)
Ensure availability of free essential medicines.
Use general taxation as the principal source of health care
Do not levy sector-specific taxes for financing
Do not levy fees of any kind for use of health care services
Introduce specific purpose transfers to equalize the levels
of per capita public spending on health across different
Accept flexible and differential norms for allocating
Expenditures on primary health care account for at least
70% of all health care expenditures.
Do not use insurance companies or any other independent
agents to purchase health care services.
• Three Provisions can be considered:
• Direct provision
• Direct provision plus contracted-in services
• Purchase by an independent agency.
Purchases of all health care services under the UHC system
directly by the Central and state governments.
All government funded insurance schemes should, over time, be
integrated with the UHC system. National Health Entitlement
Cards. RSBY transferred to MOHFW and Used as technical
Finally, two determinants for the Success of UHC system:
Clear Cut guideline for contracting in and service provision.
A common IT enabled information, gathering, networking and
Actual draft 12th plan: Proposed
Comprehensive health care strategies to achieve UHC during
plan period. But can take 3 Plan periods to fully implement
Public sector health care system requires substantial
expansion and strengthening.
Increased expenditure by the centre and states.
Cooperation between the public and private sectors through
contracting-in of services and PPP.
Expansion and increase access od RSBY.
Effective regulation of medical practice, public health, food
and drugs, etc. needs to be pursued.
Prescription drugs reforms, promotion of essential generic
medicines making these universally available to all patients
as part of the Essential Health Package.
Innovative models of financing:
Health included for “viability gap funding” up to a ceiling of
20% of total project costs under a PPP scheme.
Towards Universal Health Coverage:
Public health care including preventive interventions will be
both funded and universally provided by the government;
Government will finance but not necessarily directly provide
other clinical services at different levels, defined in an
Essential Health Package (EHP), built separately for out-
patient (ambulatory) and in-patient care
Towards Universal Health Coverage…..
Full and free access to essential generic medicines, through
Government pharmacies (for public providers) and Jan Aushadhi
stores (private provider/facility).
RSBY system used in terms of beneficiary coverage, facility
enrollment and prevention of fraud.
Package of services under RSBY, it is proposed, can be expanded
States partially fund UHC pilots in high focus districts using
“Incentive Pool” under the NHM.
Provision of EHP through public autonomous, empowered and
accountable facility networks.
Empanelled public and private provider integrated care networks,
with citizen choice.
Health Insurance Schemes being implemented by GOI
and States Govt.
Scheme Coverage Features
Mostly benefits(≤INR30 000)
for admission to hospital for a
family on a floater basis,
(INR25 000) for death of
earning head of the family;
compensation at the rate of
INR50 per day for a maximum
of 15 days to the earning head
or spouse of the family; one
maternity benefit with 1 year
waiting period with INR2500
for normal and
INR5000 for caesarean
Only for families below
the poverty line and
for individuals younger
than 70 years;
Yearly rate of INR300 for
an individual; INR450 for
of five; INR600 for a
family of seven
members with a
government subsidy of
INR200, INR300, and
(launched in 2008)
Cashless coverage of all health
Only hospital admission and day-
total of INR30 000 insured per
family below poverty line per year.
Pre-existing illnesses also covered;
Reasonable expenses for before
and after hospital admission for 1
day before and 5 days after;
Transport allowance (actual with
limit of INR100 per visit) subject to
a yearly limit of INR1000
Only BPL Family
Up to five members for 1
renewal yearly; registration
fee for a family is INR30;
contribution 75% & state
government 25% of the
(launched in 2003)
Covers risk of INR100 000 for one
surgery and INR200 000 for several
surgeries in a year with a Premium
Pre-existing diseases are
Cashless surgery at fixed tariff
Member of Registered
Rural Cooperative Society
of Karnataka for a
minimum of 6 months;
All members of the family
Upper age limit 75 years
INR30 000 a year
For a family of five;
Up to INR60 000 a year for
treatment at home, if required;
Up to INR15 000 a
year for maternity need;
Subsistence allowance of INR50 a
day if bread
winner is hospitalized; coverage of
all existing illnesses, and cashless
An accident insurance benefit of
INR100 000 for death
or full disability and INR50 000 for
Families below the poverty
Beneficiary’s contribution is
for a typical family with five
members below the poverty
line is INR399 a year;
a central government
subsidy of INR300 from the
Universal Health Insurance
Scheme and an additional
subsidy of INR33 each from
the state government
and the local organization;
implemented through a
INR 200 000 insured per family;
covers hospital admission for
surgeries and treatment of
diseases such as heart, cancer,
neurosurgery, renal, burns, and
Families below the poverty
through health camps;
INR330 per year per family
are paid by the state
government; Validity for 1
year or up to the time when
the overall claim ratio
reaches 120% of the
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