Strengthening health financing governance - Estonia country experience

1. Strengthening health financing governance - Estonia country experience 7.02.2018 Andres Rannamäe

2. Background information • Estonia – country in North-East Europe, member of EU • 1,32 M inhabitants • GDP – 18 000 USD per capita (estimate 2017) • Good health at low cost - Health outcomes close to EU-15 average, health expenditure lowest among EU-15 (WB) • National health insurance coverage >96% • 13% earmarked payroll tax payed by employer • Principle of solidarity • From 2018 Government extra contribution for pensioners

3. Phase 1 - Health financing governance 1991-2001 • National health insurance since 1991, establishment of NHIF with semi-independent district branches (17) and Board of Directors • Main concerns • Fragmentation - of the organization, pooling of funds, purchasing arrangements, management and governance • Low capacity – of the NHIF managementand performance (key functions, HR & IT), low capacity of governance and governors • No strategic coherence and direction

4. Phase II - Health financing governance beyond 2001 • 2001-2003 consolidation of NHIF into one legal entity (HQ + 4 regional branches), single pooling and single payer organization • Executive Board up to 4 members, NHIF managed by own law • Unified Board of Directors on national level only, 15 members • 5 from Government and Parliament • 5 from Employer Association • 5 from user associations – pensioners, children, patients, trade unions • Audit Committee • Clear governance arrangements and accountability

5. Phase 1 - Health care provider sector 1991-2001 • 100+ hospitals attached to the MOSA • Governance of hospital performance very formal by MOSA • PHC and family medicine reform 1994, independent practices with average headcount of 1600-2000 people per family doctor • Main concerns • Over capacity of hospital network • Out-dated medical technology and facilities • Health financing methods not motivating efficiency and quality • Old mental paradigms, including ownership and accountability

6. Phase II - Health care reform 2001 and beyond • Hospital Master Plan – from 100+ hospitals down to 18 acute care hospitals • The rest are for palliative and nursing care, closed down or merged • Full autonomy of service providers, hospitals have own governing body and arrangements • Hospitals managed according to private company law, yet most of them are “non-profitable” • Challenges • Provider discontinuity and integration of care • Strengthening primary and out-patient care

7. The organization of health financing and NHIF governance

8. Strengthening health financing governance – system approach • New law of NHIF from 2001 defines legitimate role and responsibilities of the BoD • Defining strategic direction and approving key decision • Overseeing executive board and NHIF performance • Building governors and Board capacity • Building transparent and evidence based reporting • Strengthening public accountability

9. The governance “good practice” • BoD is disciplined and committed, governance works • Board engagement in core issues • Health needs? HBP? • Provider related issues? Strategic purchasing? • Healthfinancingmechanisms & issues? • Quality of reporting is a key to good governance, governing body to set high standards for reporting • Evidence based reporting, shift from “what was done towards what was achieved” • Interdependency of the qualities of executive and governing bodies

10. The “governance issues” • Government definition of “owner” mandate vague • Difficulty to resolve by governors a clear and shared sense of the distinctive purpose of the purchaser – the value delivery • Clarity of setting strategic direction • Political power overdrives the professional competency • Rotation of governors rather high, an issue of sustainability • Board leadership is a challenge, defensiveness in attitude, little drive for change • “Building and pushing the governance bottom-up”!?

11. Increasing the capacity of the governing body More strategic • Commitment and leadership in setting strategic direction and keeping organization on selected track • Focus on strategy creation & execution • Create a need/demand for strategic discussion – relevant reports and inputs provided by executive board to “push” the discussion, diversity of ideas • Aligned and engaged around the strategy

12. Increasing the capacity of the governing body Capacities & Learning • Organization & Competency • Does size matter? • Good mix of professional competencies • Board leadership and stronger interaction between non-executive and executive boards • Build common knowledge base with BoD – joint seminars and events, brainstorming, learning from experience • Understand value delivered, impact made and assure “evidence based” meaningful reporting

13. Increasing the capacity of the governing body Stakeholder relations Understanding key stakeholders, build relations Openness, transparency, accountability – create corresponding environment, communication channels, public relations

14. The capacity of oversight bodies …change in governance concept • Dynamics in governance roles – from control and “no trust” towards stewardship and leadership • Balancing monitoring and mentoring • Overcoming the gap between executive and governing boards, more personal interaction between the boards • Diversity of thoughts, open discussion • Public sector need better governance to support efficiency and value delivery

15. Challenge of strengthening the health financing governance in Sudan New Health Policy 2030 - challenge to design entire health sector governance framework to support achieving UHC and implementing health finance strategy and health service delivery Great opportunity – NHIF in transition, strengthening of the health financing governance clearly in the agenda Assessment of NHIF governance done by WHO late 2016 Donor support and technical assistance available

16. Thank you for your attention!