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Regional Experiences in Health Financing Reforms

Explore the sources, levels, pooling, and allocation of funds in health financing reforms with insights from Eastern Europe. Learn about policy tools, organizational characteristics, budgeting, and purchasing mechanisms.

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Regional Experiences in Health Financing Reforms

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  1. Regional Experiencesin Health Financing Reforms Lessons for Uzbekistan? February 2006

  2. Overview • Sources and Levels of Financing • Pooling and Allocation of Funds • Use of Funds (“Purchasing”) • Policy Tools (“Who”, “What”, “From Whom”, “How to Pay”) • Organizational Characteristics

  3. Provision of Care Focus Budgeting/Purchasing Allocation mechanisms Pooling of Funds Sources/Levels of Funds Source: Kutzin/WHO, 1999

  4. Sources and Levels of Financing

  5. Public Health Expenditure as % of GDP <= 12 <= 10 <= 8 <= 6 <= 4 <= 2 EU-15: 8.9 (2001) No data Central, South East Europe & Baltics: 5.8 (2001) Source: HFA database

  6. Going Up in Eastern Europe; Mixed in CIS

  7. Source and Levels of Funds:Too Little?* Uzbekistan * global trends mid 1990s

  8. EEC/FSU: Use of the Payroll Tax

  9. Why? • Increase Funds • Stabilize Flows of Funds Year-by-Year • Improved Management • Greater Transparency

  10. Mixed Funding: Compromise Social Insurance Taxes as Share of Total Labor Cost, mid-1990s

  11. Russia

  12. Health Insurance in Kazakhstan

  13. Use of General Revenues: A Regional Trend (!) • Netherlands, France, Kazakhstan, and Russia • Decreasing Payroll and Moving to General Revenues • Others, such as Uzbekistan, holding off new payroll taxes

  14. (2) Pooling/Allocation of Funds

  15. Trends to Greater Pooling • Increased Pooling • Poland, Estonia, Lithuania, Romania • Kyrgyz Republic • Regional-Level Pooling • Russia, Kazakhstan, Uzbekistan • Law of Local Self-Governance ??? • Does NOT work for Health

  16. Uzbekistan:Per Capita Expenditures for Healthby Oblast (2004)

  17. (3) Use of Funds“Strategic Purchasing” Policy Tools “For Whom”, “What”, “From Whom”, “How To Pay”

  18. “For Whom” To Buy • Universal Coverage, in principal • But, social insurance has shut out many: • Estonia – 7% • Poland and Russia – 10% • Albania and Bosnia – 30% ??? • Some New Initiatives • Armenia: Cover Only Low-Income

  19. For Whom to Buy (2)Is the Purchaser Targeting the Poor and Vulnerable?Percentage of Government Subsidy for Health to Income Groups Gwatkin, 2001

  20. Difficult to Implement Main objective – promise only what you can pay for cost of BBP= “what” * volume * cost Requires sophisticated data collection and analysis systems First step – Negative List: what is not included !?! Set up a continuous process of review Article #49 in constitution – a specific Ukrainian constraint “What” to BuyBasic Benefits Package

  21. Co-Payments Modify utilization (volume) Supplementary income for health providers But…can create equity concerns Many now do it: Eastern Europe and FSU Successful Model: Kyrygzstan Copays related to income-level; outpatient drug benefit Supplementary Insurance Cannot develop unless there is a clear and transparent product, i.e., Benefit Package Injects more funding into health sector “What” To Buy (2)Beyond the Benefits Package

  22. A Few Successes…

  23. “From Whom” To Buyand “How” To Pay… • Almost every country “Contracts” for services • Soft, internal relational contracts • But…little “selective contracting” • Still often excludes private sector • MIS systems underdeveloped, fragmented, non-standard, not secure • Successful Exceptions: Baltics, Czech Republic • Payment Systems • Enormous: almost every country

  24. “How” to Pay (2)Start Point

  25. How to Pay (3)Moving to New Performance-Based Payment Systems

  26. Western Europe Capitation for Public Sector FFS for Private England, Norway, Belgium Combination (Denmark, Spain) Eastern Europe /FSU Capitation (17 of 27) FFS for priority services, or Bonuses (NIS) for rural placement (Estonia, Georgia) or meeting targets (Russia) Directions West & East:Primary Care

  27. Some Countries Change…and Change…and Slovakia Fee for Service 60:40 Mix of Capitation/FFS Capitation 1993 1994 1998 Why: Policy Objectives Kept Changing

  28. Paying for Inpatient Services –Following the EU

  29. EEC/NISConvergence with EU… • Most EU Countries • Global Budget • Case-Mix Adjuster

  30. Payment Systems: Remaining Issues • No Model Optimal • Right Mix of Incentives? • Capital Payment: Not Included • Providers: No Autonomy/Internal Incentives? • Lack of Civil Service Reforms • Informal Payments • Debt and Arrears • MIS and Quality Assurance Systems Necessary

  31. Pre-Paid vs. Out-of-Pocket Payments

  32. Payment Systems Impact ? Don’t Implement Alone, but with... Pooling of Funds Quality Systems Management and Information Systems Provider Autonomy/ Civil Service Reforms

  33. First Steps… • New Legal Status to Providers • Primary Care • Baltics: freestanding practices and independent contractors • Hospitals • Public, Non-Profits: Czech Rep, Estonia, Latvia, Lithuania, Kazakhstan • Autonomy: Hungary, Armenia • New Contracts, Civil Service Reforms, Management Strengthening…true decentralization

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