functions of health financing

Mathauer I, Dkhimi F. Analytical guide to assess a mixed provider payment system. This is followed by an outlineof the key institutional design aspects of pooling arrangements and how these can create fragmentation. a sub-national pool per state, province or district. 0000003940 00000 n 0000006764 00000 n This is the so-called death spiral of voluntary health insurance [24]. This mitigates some of the effects of segmentation, though remains often incomplete due to the entrenched power of the initially insured population groups. Then, within each health financing function, key performance issues and associated measurable indicators are developed. Preker A, Langenbrunner J. CAS Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. However, evidence for efficiency improvement with increased market competition among purchasers is weak [25]. The set of performance indicators provided in this article should help policy makers to monitor the development of social health insurance schemes and identify areas for improvement. The UCS pooled together all of those revenues plus increased budget allocations. Kutzin J, Yip W, Cashin C. Alternative financing strategies for universal health coverage. WHO Regional Office for Europe: Copenhagen; 2016. 1 / 64. Among the eight types of pooling arrangements, types (3.) Pooling ensures that the risk related to financing health interventions is borne by all the members of the pool and not by each contributor individually. The on behalf may come from public budgets for specific groups of individuals whose participation is fully or partially subsidized, or it may come from traditional insurance contributions that cover individuals beyond the contributor (e.g. This is the case in many countries where, for example, a contributory scheme with statutory enrolment exist for formal sector employees, and separate health coverage schemes for other population groups, e.g. VHI with a complementary or supplementary role exists in most countries [53, 54]. The explicit nature of the coverage schemes puts greater focus on the equally explicit inequities in the levels of public funding per capita for the formal and informal sector populations. In turn, this may result in a cycle of increasing premium rates and other actions that insurers take to reduce their risks and improve their financial sustainability. The quest for universal health coverage: achieving social protection for all in Mexico. startxref In the early 1990s, Thailand had a scheme for civil servants and another scheme for private sector employees. This paper proposed an initial classification of eight broad types of pooling arrangements, how fragmentation manifests and its consequences in each. Voluntary health insurance expenditure in low- and middle-income countries: exploring trends during 1995-2012 and policy implications for progress towards universal health coverage. Health Policy. 0000035307 00000 n Google Scholar. 0000010246 00000 n The incentive for risk selection that exists with voluntary health insurance also exists in a compulsory system with competing insurers, whereby the pooling/purchasing agencies try to enroll people with the lowest risk relative to contributions. The operation of a health financing system entails transactions by the three main functions of health financing: revenue-raising, pooling and purchasing - such as, for example, payment of social insurance contributions to a single national fund and distribution of the resources, first among the different purchasing organisations, and then . What does health care financing mean? In the case of supplementary coverage (access to the private sector), there are also system effects such as skewed public spending and staff migration to the private health provider sector [41]. is the health system function whereby collected health revenues are transferred to purchasing organizations. 2015;119(9):115363. Common to these low- and middle-income country examples is that they did not manage to merge all coverage schemes into one pool due to the resistance of the formal sector employees for a unified national scheme. However, the overall level of prepaid funds arises from how a health system raises revenues, and not how it organizes pooling arrangements. In doing so, policy makers can come closer . , v2HuW]:'01%`!cl/i*u$oL|Sf_%^G;SPCY+ZxcsA^[W' ^`^^ AHjX FqtHI(@[10*i. Fragmentation is further aggravated, as a small part of the better-off population is often enrolled in commercial voluntary health insurance, whilst a small share of people in the informal sector may enroll in voluntary community-based health insurance schemes [41, 42]. Pooling is the health system function whereby collected health revenues are transferred to purchasing organizations. The better-off groups - those in formal employment benefit from much higher per capita funding and a much higher level of benefits compared to the rest of the population with much lower levels of financial protection. 0000006049 00000 n 2007;83(23):16279. [http://www.nationalplanningcycles.org/sites/default/files/planning_cycle_repository/swaziland/swaziland_nhssp_ii_draft_zero_29_aug_2014.pdf. Policy note. This is inconsistent with the objective of financial protection and equity of access to services in relation to need. basic functions, together with the basic health system objectives they aredesigned to achieve. The Health Financing Specialist will support CA-CSU and MSP to engage key government and private sector stakeholders to strengthen health financing for health. IM, PS and JK developed the outline and framework. When each level of government in a decentralized setting pools for a distinct level of health services, then it is organized in a territorially distinct way. Prakongsai P, Limwattananon S, Tangcharoensathien V. The equity impact of the universal coverage policy: lessons from Thailand. Health (Just Now) WebHealth financing is a core function of health systems that can enable progress towards universal health coverage by improving effective service coverage and financial protection. Advances in health economics and health services research, volume 21. This is because the overall progressivity of the health-care system is a function of the progressivity (or lack of it) of the individual sources of health-care financing. There are two forms of institutional setup found for this pooling arrangement. Pettigrew LM, Mathauer I. 0000080023 00000 n Health financing for UHC consists of three core functions: 1) revenue raising, i.e. Conversely, pools with higher health risks are more likely to restrict benefits (if this is legally allowed), face financial difficulties or else run deficits. Each financing mechanism was analysed in respect to key functions namely, revenue generation, pooling and purchasing. In healthcare management there are three managerial levels: top-level, middle-level and frontline managers. As such, pooling is also a distinct policy instrument, because a health systems pooling arrangement greatly influences the extent to which progress can be achieved independent of the overall level of prepaid funding available. 0000008860 00000 n Geneva: World Health Organization; 2010. Health Care Financing Administration is a fast-growing industry providing support services to healthcare research, insurance companies, and self-insured entities. Anyone you share the following link with will be able to read this content: Sorry, a shareable link is not currently available for this article. PubMed The classification is presented in Fig. U;c!=(i\s Revenue collection is how health systems raise money from households, businesses, and external sources. As changes in the pooling arrangements are about redistribution of funds, this is ultimately also very political, and it is hence important to understand the feasibility and manage the political economy of pooling reforms. territorially distinct pools; (3.) Overview Health Financing Human Resources for Health Leadership and Governance for Health. Health financing has three key functions: revenue collection, pooling of resources, and purchasing of services. Book Geneva: World Health Organization; 2017. This module includes the indicators on health financing from the compendium of indicators for projects supporting health financing, human resources, and governance developed by the HFG project. Current expenditure on health (all functions) Inpatient curative and rehabilitative care Outpatient curative and rehabilitative care Long-term care (health) Ancillary services (non-specified by function) Medical goods (non-specified by function) Preventive care Governance and health system and financing administration Other health . Systems relying on territorially distinct pools are usually a product of a wider political context of federalism or devolution. fragmented systems with voluntary health insurance, duplicating publicly financed coverage; and (8.) Health financing is central to the functioning of health systems and the attainment of health-related sustainable development goals, including universal health coverage (UHC). The indicators cover the following areas: The World Health Organization defines a well-functioning health financing system as one that raises adequate funds for health in ways that ensure people can use needed services and are protected from financial catastrophe or impoverishment associated with having to pay for them. These countries had therefore decided to create an explicit coverage program for people outside the formal sector, whilst trying to gradually increase the level of funding to narrow the gap in per capita expenditure across the different schemes. taxes, user fees, private health insurance), business (e . type of pooling arrangement, namely territorially distinct pools. In turn, this can help countries assess their pooling arrangements and contribute to identifying policy options to address fragmentation or mitigate its consequences. Spending wisely: buying health services for the poor. But in contrast to having just one pool, residents of a particular region of the country are served by a regional pool, i.e. Here the pooling function lies with a sub-national entity, such as a state, province, or district (if managed by a level of public administration) or another entity, such as a health insurance fund, with defined responsibility for the entire population of that territory [14]. a single pool; (2.) Cashin C, Sparkes S, Bloom D. Earmarking for health: from theory to practice. 0000025210 00000 n In a well-functioning healthcare system, the financing of healthcare is defined by three key functions: (1) revenue generation, which involves the mobilization and collection of funds from different sources; (2) resource pooling, where generated revenue is accumulated to ensure availability to the population in need; and (3) the purchasing Voluntary health insurance (VHI) with a primary coverage role is usually offered by multiple insurers competing for clients. 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