Health Financing: Trends and Challenges in the Caribbean Dr. Reynaldo Holder

1. . . Health Financing: Trends and Challenges in the Caribbean Dr. Reynaldo Holder Health Systems Development Caribbean Programme Coordination Caribbean Programme Coordination

2. OVERVIEW • Financing Function of the Health System: Concepts • Assurance Function • Financing Health in the Caribbean: Trends • Lessons and Recommendations from the Caribbean Commission on Health and Development Caribbean Programme Coordination

3. FINANCING FUNCTION The Financing Function: • Determining the available financial resources in the health system, or in each sub-system; • Collection of resources (taxes, contributions, co-payments, others) • Distribution and allocation of financial flows within the system. Caribbean Programme Coordination

4. Health Financing Systems THE GOAL: Universal Coverage Defined as access to health promotion and to key preventive, curative and rehabilitative health services for all, in a timely and respectful manner, with the highest levels of quality and dignity, regardless of ethnicity, social class, gender or ability to pay. PAHO, 2005 Caribbean Programme Coordination

5. Health Financing Systems • Purpose: To make funding available and to set the right incentives for providers, so as to ensure that all individuals have access to effective public and personal health services. WHO 2000 • Targets: • To generate sufficient and sustainable resources for health • To use these resources optimally • To ensure that everyone has financial access to health services Caribbean Programme Coordination

6. Health Financing SystemsPolicy Issues • Financing: • How are funds generated and collected and who bears the burden of paying? • What mix of services are bought? • Who benefits and the extent to which access to care is linked directly or otherwise to one’s payments/contributions? • Management: • Who pools and manages the funds and organizes or purchases health services? • How are services purchased and providers remunerated? Caribbean Programme Coordination

7. Sector Financing Role of the NHA To guarantee, monitor, and modulate the complementarity of resources from diverse financial sources in order to ensure that the population has equitable access to health. • Actions: • Policy-making to correct distortions in sectoral financing; • Monitoring the sectoral financing process • Negotiate with the principal providers • Redistribute funds in order to compensate for market asymmetries; • Define the criteria for resource allocation. Caribbean Programme Coordination

8. Health Financing Systems • Principal Financing Mechanisms: • Tax-based financing • Social Insurance • Private Insurance • User Fees • Community-based health insurance • Grants and external resources • Combined health financing systems Caribbean Programme Coordination

9. Health Financing Systems • Desirable features: • Mandatory pooling of income and health risk (Social insurance or tax-based plans) • Individual and household contributions on the basis of capacity to pay • Limited out-of-pocket or direct payments • Purchasing plans based on value-for-money and remuneration systems that are prospective and performance related • Public funds for public goods – private funds for private goods. Caribbean Programme Coordination

10. OVERVIEW • Financing Function of the Health System: Concepts • Assurance Function • Financing Health in the Caribbean: Trends • Lessons and Recommendations from the Caribbean Commission on Health and Development Caribbean Programme Coordination

11. Assurance Function Guarantee of effective coverage and access to essential health services for all • Elements for analysis: • Legal Framework • Benefits or entitlements • Structure and management • Population covered • Pooling • Provider payment mechanisms Caribbean Programme Coordination

12. Assurance FunctionRole of the NHA • Social Protection in healthare the mechanisms through which society ensures that individuals or groups of individuals can meet their needs and demands in health through adequate access to services, independent of their ability to pay. Caribbean Programme Coordination

13. Assurance FunctionRole of the NHA • These mechanisms include: • Definition of a guaranteed package of services • Delimitation of populations and territories that will be covered • Regulation and control of public and private compliance with insurance plans Caribbean Programme Coordination

14. Finance and AssuranceFunctions That every resident of the country has financial accessibility to health services and is protected against catastrophic health events and health-induced poverty. Caribbean Programme Coordination

15. OVERVIEW • Financing Function of the Health System: Concepts • Assurance Function • Financing Health in the Caribbean: Trends • Lessons and Recommendations from the Caribbean Commission on Health and Development Caribbean Programme Coordination

16. Health Sector Reform in the Caribbean(Evaluation of Results and Trends) • Financing health services is a major challenge for all English speaking Caribbean countries; • Implementation of reforms in financing mechanisms is slow; • Several mechanisms have been developed to improve allocation of financial resources (efficiency) • Limited progress in the move to ensure sustainability Caribbean Programme Coordination

17. Sources of Funding in the Caribbean • Taxes (general and earmarked) and Pooled Contributions (NHI or Social Insurance) are the predominant sources of funding • Contributions from taxes account for 21.2% of GDP, while Social Security contributions equals 0.8% • No country with good and desirable outcomes relies on grants or out-of-pocket payments Caribbean Programme Coordination

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19. Health Expenditure Below Average 8 --- --- --- 9 Caribbean Programme Coordination

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21. Health Expenditure in the Caribbean(The problems) • Insufficient Investment in Health • Inefficient allocation: • Hospital-based services account for 45 - 50% of the THE and even larger percentages of the GHE (60 – 70%) • The allocation for Primary Health Care services in the region, ranges from 14 – 24 % • Personnel cost account for 60 – 70% of the budget • Coverage Caribbean Programme Coordination

22. Financing Health in the Caribbean(What is the right formula?) • Universal agreement as to the desirability of some form of national health insurance • Only 3 Caribbean countries have NHI that offer coverage (access) to all residents (Antigua and Barbuda, Bermuda and Cayman Islands) • Proposals under discussion in BAH, BLZ, St. Lucia, St. Vincent & the Grenadines, JAM, DOM, and T&T • The small size of the pool in individual countries is a major obstacle Caribbean Programme Coordination

23. Financing Health in the Caribbean(What is the right formula?) • User Fees?? • Levies and Earmarked Taxes (Jamaica National Health Fund) • Other experiences: • Drug Funds: (JADEP-JAM, NHF-JAM, C-DAP-T&T) • Targeted Funds for the Poor: (PATH-JAM, MSA Health Card-Suriname) • A balanced mix of financing mechanisms (Singapore) Caribbean Programme Coordination

24. OVERVIEW • Financing Function of the Health System: Concepts • Assurance Function • Financing Health in the Caribbean: Trends • Lessons and Recommendations from the Caribbean Commission on Health and Development Caribbean Programme Coordination

25. Caribbean Commission on Health and Development • Lessons: • User fees are regressive, inequitable, and inefficient • THE as a percentage of GDP is more sensitive to improvements to the organizational structures for delivering health and the method of health financing than to the wealth of the country • Other options vs. Viability of NHI schemes Caribbean Programme Coordination

26. Caribbean Commission on Health and Development • Recommendations: • Scaling up coverage and public expenditure (THE 6% of GDP) • Additional expenditure should preferentially be directed to Primary Health Care and to programs that benefit the poor • Increase mobilization of resources from activities of the public health inspectorate and from strategic public-private partnerships • Portable Caribbean-wide health insurance • Allocation of funds for scaling up initiatives in relation to national and regional public health goods (surveillance systems, standards and regulations, research, and sharing best practices). Caribbean Programme Coordination

27. THANK YOU Caribbean Programme Coordination