Understanding Urban Health Systems Producing Health Outcomes in a Complex Environment

1. Understanding Urban Health Systems Producing Health Outcomes in a Complex Environment Dan Kraushaar APHA, Philadelphia, PA 2009 November 2009

2. What drives system performance? • The WHO health systems model is descriptive. Is there a functional model that explains health system performance? • Are there specific variables that can be used by policy makers to alter health system performance? • “Inside the Black Box of Health Systems” • “Policy Control Knobs” • William Hsiao, K.T. Li Professor of Economics and Health Policy • Harvard University School of Public Health

3. Functionally there are 5 variables that can be manipulated at a policy level • Financing • Organization of health services • Payment and incentives • Regulation • Influencing beliefs, preferences and care seeking • These variables interact.

4. 1. Financing: 4 actions • Determining the source of funding for health services for different income groups. (taxes, out-of-pocket, social and private insurance) • Identifying the services to be funded with public resources. • Determining who benefits from those services. • Creating policies which influence the most appropriate macro organization of financing to improve equity and risk sharing, e.g., social health insurance. • Example: • Out of pocket payments in urban areas is a primary source of financing. No risk pooling. Municipal resources go for hospitals. Weak public policy and minimal resource allocation.

5. 2. Organization of health services: 3 decisions • Influencing the mix of health providers: public, private or a combination of providers? • Determining what services are provided by the public sector and which by non public providers. For the latter, how to hold those providers accountable in achieving societal goals? • Influencing who should own health facilities and to whom should they be accountable for their performances? (Ownership determines the objectives which will be pursued by those organizations) • Example: • Most urban poor are served by private providers who are not accountable for health outcomes. Poor have limited access to publicly financed providers, and government hospitals predominate as the primary government provider.

6. 3. Payment and incentives: managing financial rewards and risks • Influencing how providers are paid and the incentives built into that method of payment. Incentives affect provider behaviors generally and specifically: • How providers interact with consumers • The quality of services provided • The amount of money spent on health • The distribution and retention of the work force • The coordination of services • The type of service provided • Example: • Conditional case transfers influence demand. Performance based contracts influence provider behavior. Profit maximizing private providers prefer out of pocket payments for drugs which influences the number of drug sellers, the type of drugs sold the location of the providers and the distribution of the work force.

7. 4. Regulation: Three purposes • Regulation includes the full range of legal instruments with which governments influence individuals and providers and what they do and how they act. • Three major purposes of regulation: • to provide safety protection for the general population • to enhance social equity by assuring everyone has access to basic health care • to correct market failures. • Regulation can influence health system structure and performance. • Regulation as a tool of public policy has seldom been effectively used to shape system performance.

8. 5. Shaping beliefs, preferences and demand • Elaborate methods exist in urban areas to shape people’s values, beliefs, preferences, expectations and lifestyles. Few of these methods are used as a public policy tool. • These methods have influenced people’s lifestyles, their care seeking and ultimately their health status. • Those same methods can be instruments of public policy. • Example: Smoking in India. A source of public revenue,, e.g., an instrument of public policy and a lifestyle choice.

9. Urban health policy “control knobs” • These 5 “control knobs” can affect urban health system performance, can determine who benefits from public subsidies and the level of health the results. • Financing • Organization of health services • Payment and incentives • Regulation • Influencing beliefs, preferences and care seeking • They can be used as instruments to affect health system performance. • They can influence both supply and demand. • They can be used to predict system performance.

10. Making the case for donors • What drives donors to fund (or not fund) something? • Evidence (extent of the problem, location, equity, effectiveness of interventions and programs) • Trends • Burden of the problem (rate, number) • Political imperative • Clear and compelling gaps in efforts to address problem.

11. How does urban health stack up? • Our evidence base is relatively weak. Interventions are not well defined nor documented nor at scale and effectiveness not demonstrably proven. • There is not yet a political imperative • There is a misperception of the burden. • Only recently are the trends becoming more clear • Systems for measuring burden are not well developed (e.g., there is no DHS for measuring the health status of the urban poor)