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

Caribbean Programme Coordination 2005

Pan AmericanHealthOrganization

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Health Financing:Trends and Challenges in the Caribbean

Dr. Reynaldo Holder

Health Systems Development

Caribbean Programme Coordination



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






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.

FINANCING FUNCTION



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

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




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

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



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?

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?



Sector FinancingRole 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:1. Policy-making to correct distortions in sectoral financing;2. Monitoring the sectoral financing process3. Negotiate with the principal providers4. Redistribute funds in order to compensate for market

asymmetries;5. Define the criteria for resource allocation.

Actions:1. Policy-making to correct distortions in sectoral financing;2. Monitoring the sectoral financing process3. Negotiate with the principal providers4. Redistribute funds in order to compensate for market

asymmetries;5. Define the criteria for resource allocation.




Principal Financing Mechanisms:1. Tax-based financing

2. Social Insurance

3. Private Insurance

4. User Fees

5. Community-based health insurance

6. Grants and external resources

7. Combined health financing systems

Principal Financing Mechanisms:1. Tax-based financing

2. Social Insurance

3. Private Insurance

4. User Fees

5. Community-based health insurance

6. Grants and external resources

7. Combined 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.

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.



OVERVIEW









Assurance Function

Guarantee of effective coverage and access to essential health services for all

Elements for analysis:1. Legal Framework2. Benefits or entitlements3. Structure and management4. Population covered5. Pooling6. Provider payment mechanisms



Assurance FunctionRole of the NHA

Social Protection in health are 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.

Social Protection in health are 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.



Assurance FunctionRole of the NHA

These mechanisms include:

1. Definition of a guaranteed package of services

2. Delimitation of populations and territories that will be

covered

3. Regulation and control of public and private

compliance with insurance plans

These mechanisms include:

1. Definition of a guaranteed package of services

2. Delimitation of populations and territories that will be

covered

3. Regulation and control of public and private

compliance with insurance plans



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.



OVERVIEW









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

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



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

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



Health Expenditure

Caribbean(13 countries) Range

THE%GDP 5.7 4.3 – 9.8

GHE%THE 62 45 – 83

PHE%THE 38 17 - 55

OOP%THE 34 16 – 48

THE p.c.(ppp dollars)

US$ 288(ppp US$ 431)

US$ 48 - 798

BelowAverage

8

9

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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

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



Financing Health in the Caribbean(What is the right formula?)

Universal agreement as to the desirability of some form of national health insuranceOnly 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

Universal agreement as to the desirability of some form of national health insuranceOnly 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



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)

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)



OVERVIEW










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

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




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).

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).



THANK YOUTHANK YOU

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

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