SHIELD Strategies for Health Insurance for Equity in Less Developed Countries

1. SHIELD Strategies for Health Insurance for Equity in Less Developed Countries Filip Meheus Institute of Tropical Medicine, Antwerp, Belgium & Royal Tropical Institute, Amsterdam, The Netherlands On behalf of the SHIELD team Joint meeting "Universal Coverage" April 23, 2010 - Amsterdam

2. The SHIELD project Aim of the SHIELDproject: To critically identify and evaluate existing inequities in health care in Ghana, South Africa and Tanzania and the extent to which health insurance mechanisms could address equity challenges.

3. Introduction Introduction to SHIELD and research objectives What are the various work packages? Sources of health care financing in each country Preliminary findings on financing & benefit incidence Combining financing & benefit incidence Modelling Conclusions

4. Research objectives Evaluate the distribution of the current health care financing burden between socio-economic groups Evaluate the distribution of health care benefits across socio-economic groups Identify and critically evaluate current experience, and options for the likely future development of health insurance mechanisms in relation to their actual and/or potential equity impact and their feasibility and sustainability given attitudes of key stakeholders Phase I Phase II

5. Workpackages and their inter-relationships WP7: Development of policy recommendation & dissemination WP6: Method documentation & toolkit development WP1: Evaluation of existing health systems WP5: Evaluation of health insurance options WP 4: Stakeholder views & acceptability of insurance design WP2: Financing Incidence Analysis WP3: Benefit Incidence Analysis

6. Overview of sources of health care financing by country

7. Prepayment schemes in each country Ghana: ~60% coverage – whole population, built around district MHO South Africa: Private voluntary health insurance ~14% of the population Tanzania: 8% coverage by NHIF (civil servants) + SHIB (private and para-statal) in Tanzania CHF for rural population only covers approx 1% of population

8. Fragmentation of financing system South Africa= >120 schemes with different risk pool and benefit packages. Ghana= ~130 district mutual health insurance schemes with different risk pool. Tanzania: No risk equalisation or cross-subsidies between schemes (NHIF, SHIB); no risk equalisation or cross-subsidies across districts (CHF). Need to ensure income and risk cross-subsidies & financial risk protection →Universal coverage

9. WP2: Financing Incidence Financing incidence analysis determines which socio-economic groups bear what burden of funding health services. Financing is regarded as equitable if contributions to funding health care are according to ability to pay. Focuses on major sources of general tax revenue (personal income tax, corporate income tax, VAT, fuel levies & excise duties), out-of-pocket payments and contributions to insurance schemes.

10. Distribution of tax base between sources

11. Progressivity in overall health financing in Ghana, South Africa and Tanzania

12. WP3: Benefit Incidence Benefit incidence analyses (BIA) determines what benefit (expressed in monetary terms) different socio-economic groups derive form using health services. Health service use is regarded as equitable if benefits are distributed according to need for health care. Traditionally, benefit incidence analyses have concentrated on assessing government subsidies and the extent to which these subsidies are targeted at the poor. In SHIELD we applied BIA methodology to the full range of public and private health services in each country

13. WP3: Benefit Incidence Combines the cost of providing various services with information on utilisation of each type of service by individuals in households. BIA uses data obtained from a household survey undertaken in each country to obtain accurate data on health service utilisation.

14. BIA: Outpatient

15. BIA: Inpatient

16. Distribution of benefits vs needs % share of total benefits/need

17. FIA & BIA conclusion Overall financing incidence is progressive in all three countries The poor pay less than their income share in health finance Overall the distribution of health care benefits is pro-rich The poor receive less than their population share of health care benefits The distribution of health care need is higher among the poor than the non-poor The poor ‘need’ more health care than the non-poor The distribution of health care benefits varies inversely to the distribution of need for care in all three countries The poor that need more health care are receiving less than they ‘need’

18. FIA & BIA conclusion Progressive financing system →good? South Africa – private insurance and income tax accounts for the progressive results Only the rich benefit from insurance premiums Tanzania – income tax, VAT, health insurance contributions accounts for the progressive results Insurance contributions fragmented Pro-rich benefits from health care (public and private) →disturbing? Factors underlie the pattern →access

19. Health care finance, benefits and need: South Africa (SA) and Tanzania (Tz)

20. Work package 5: modelling Aim: provide an overall equity and financial sustainability assessment for the set of feasible options to achieve universal coverage in each country. Modelling is regarded as an input to understanding the potential implications for the health system of moving towards universal coverage. →Make estimates of the likely resource implications of health financing changes WP5 is still ongoing. Only South Africa has currently developed a preliminary model Research question: "What will be the total expenditure on health care in an NHI"

21. Modelling resource requirements Three key variables in the model: Expenses = population x service utilisation rates x unit costs Use of different scenarios of how utilisation will increase (as financial protection in provided). Use of scenarios on how unit costs will need to increase to ensure that the currently under-resources public health sector services are improved to appropriate quality. e.g. DSBA, other public increase, full private, mid between public and private, real annual increase, etc.

22. Further work - WP5 Further refine UC model. Develop other options: e.g. medical cover scheme extended to greater section of the population; rest reliant on public sector. Look at how health financing system changes may impact FIA and BIA Look at funding side: What allocation from general tax revenue would be required (% share of health sector)? What mandatory insurance would be required?

23. Health insurance promoting access to care and financial protection in Tanzania

24. Conclusion Objective of SHIELD is two-fold: Document existing inequities in financing and delivery of health care in Ghana, South Africa and Tanzania and, Assess current & future insurance options in terms of equity, feasibility and sustainability. SHIELD as taken a system-wide perspective FIA is consistently progressive but financing system is fragmented, and only part of society benefits from the progressively funded services.

25. Conclusion Benefits are mostly pro-rich, and wealthier socio-economic groups get a larger share of benefits not only relative to their population share, but also relative to the distribution of need. FIA and BIA clearly show cross-subsidy problems → integrated pool of funding important.

26. To conclude South Africa decided in 2007 to introduce NHI system. Funded by general tax revenue and mandatory contributions from employers and employees in the formal sector. In Tanzania there is proposal to merge existing health insurance schemes under management of single insurer. Despite facing considerable challenges, Ghana is pursuing a universal coverage policy.

27. SHIELD partners For more informaton visit: http://web.uct.ac.za/depts/heu/SHIELD/about/about.htm