Health Reform, Health Financing, and Population Health

Dominic S. Haazen, Sr. Health Specialist, The World BankRiga, Latvia

Presentation Outline

Program of Action elements relevant to this discussionKey health reform interventions in the countries in transitionDevelopments in health financing and payment systemsRecent developments in HIV/AIDSImplications for population health

Program of Action – ICPD 1994universal access - primary health careuniversal access – comprehensive reproductive health services

including family planning

reductions in infant, child and maternal morbidity and mortalityincreased life expectancy

Accomplishments – ICPD+5 1999population concerns integrated into development strategies in many countriesmortality in most countries continued to fallbroad-based definition of reproductive health increasingly accepted steps being taken to provide comprehensive services in many countries

increasing emphasis on quality of care

rising use of family planning methods greater accessibility to family planning

Unfinished Agenda – ICPD+5 1999Still unacceptably high mortality/morbidity

HIV/AIDS Infectious diseases, such as tuberculosisMaternal mortality/morbidityAdult NCD mortality for countries with economies in transition , especially among men

Adolescents particularly vulnerable to reproductive and sexual risks. Lack of access by many to reproductive health information and services

Constraints/Needs – ICPD+5 1999financial, institutional, HR constraintsgreater political commitment needednational capacity must be developed, but increased international assistance is needed more domestic resources must be allocated effective priority-setting within each national context is an critical factorintegrated approach: policy design, planning, service delivery, research and monitoring

Action Items – ICPD+5 1999ensure social safety nets are implementedstrengthen specific health programs:

infant/child health programs that improve prenatal care and nutrition,maternal health services, quality family-planning services efforts to prevent transmission of HIV/AIDS and other sexually transmitted diseases;

Action Items – ICPD+5 1999strengthen health-care systems to respond to priority demands

ensure resources are focused on the health needs of people in poverty

develop special policies and health promotion programs to address rising or stagnating mortality levelsstrengthen national information systems to produce reliable statistics in a timely manner.

Key Health Reforms – ECA RegionIntroduction of primary health careDecentralization of health facilitiesHealth insurance (various models)Provider payment reformsRationalization of health services

Hospitals, EMS, PHC, specialists

Introduction of health promotion and prevention approaches, strategiesAdoption of DOTS

WB Supported Interventions – 1991-2001% of Total Loans/ Credits

0%

5%

10%

15%

20%

25%

Primary Health Care

Hospitals

TB and AI DS

HMI S

Health

Promotion/ Disease

ControlHealth Policy Reform

Health Financing

Reform/ I nsurance

Quality I mprovement

Human Resource Dev.

Pharmaceutical Policy

Health Financing Dimensions

Revenue raising – amount/methodPooling of fundsResource allocationCoverage/benefit package

Out of pocket payments

Purchasing methods

Provision of services

Purchasing of services

Pooling of funds

Collection of funds

Allocation mechanisms(provider payment)

Allocation mechanisms

Allocation mechanisms

Ind

ivid

ua

ls

Contributions

Coverage

Coverage

Health care

Choice?

Choice?

User charges

Funding flowsBenefit flows

Health System Financing & Population Links

Revenue Raising Methodspayroll tax emerged as a standard source of health care financing14 countries have payroll taxes: 9 as main financing mechanism, 5 as complementarycontribution rates range from 2% in Kyrgzstan to 18% in Croatia7 countries rely primarily on taxationOut-of-pocket costs range from less than 20% in Slovenia and Croatia to over 80% in Georgia and Azerbaijan

0% 20% 40% 60% 80% 100%

Georgia

Azer.

Kyrgyz

Moldova

Kazakh.

Albania

Romania

Poland

Russia

Latvia

Slovakia

Hungary

Croatia

Estonia

Slovenia

Czech

Public OOP

Out of Pocket Payments in ECA

Out of Pocket Payments - ImpactOOP payments affect treatment choice

riskier interventions such as surgery require larger paymentsServices that may be seen as discretionary (pre- and post-natal care), may be avoided

Quality of care and waiting times may depend on ability to payUndermines universality of publicly financed health programs

0

2,000

4,000

6,000

8,000

10,000

12,000

CI S-7 Other CI S South-East

Europe

Turkey Russian

Federation

EU

Accession

Europe &

Central Asia

0

5

10

15

20

25

30

35

GDP/ Capita ($PPP)

Taxes/ Capita ($PPP)

Taxes % GDP

Revenue Raising Capacity …

0

100

200

300

400

500

600

700

800

CI S-7 Other CI S South-East

Europe

Turkey Russian

Federation

EU

Accession

Europe &

Central Asia

0

1

2

3

4

5

6Public Health/ Capita ($PPP)

Total Health/ Capita ($PPP)

Public Health as % GDP

… and Impact on Health Spending

Public Health Spending vs. GDPR2 = 0.9023

0

200

400

600

800

1,000

1,200

0 5,000 10,000 15,000 20,000

GDP/Capita ($PPP)

R2 = 0.9609

0

200

400

600

800

1,000

1,200

0 2,000 4,000 6,000 8,000

Tax Revenue/Capita ($PPP)

Coverage – “Basket of Services”Many/most countries have attempted to define, but with limited success

14 studies funded through WB alone

e.g., Armenia - universal coverage only for primary/emergency services; some secondary services available only for the poorEven when defined, non-poor often benefit disproportionately

Definition of “emergency” in Armenia

Urban-rural disparities in access

Payment Methods – Physician ServicesW. Europe All Hospita

lO/P

SpecialistPHC

Salary Finland Portugal

England Ireland

Italy Denmar

k German

y

EnglandIreland

Italy

Sweden

Fee-for-service France Belgium

Germany Sweden

Germany

Capitation England Ireland

Capitation/FFS Denmark

Italy

Capitation/Salary

Spain

Flat Rate/FFS Austria

Payment Methods – Physician ServicesECA Region All Hospital O/P

Specialist

PHC

Salary MD, BY, TM, TJ,

AZ

SI, AL, CZ, AM, RO, BG

SI, AL

Fee-for-service GE, LV LV, LT, PL, RO, BG

FFS/Volume limit CZ

Capitation AL, PL, HU

Capitation/FFS GE CZ, RO, BG, EE, SI,

SK

Capitation/Bonus GE, EE, LT

Capitation/Fund-holding

LV

Payment Methods – Inpatient Care

0

2

4

6

8

10

12

14

Western Europe ECA (existing) ECA (in Dev't)

Num

ber

of

Cou

ntri

es

Line I tem

Per Diem

Per Case

Global Budget

Global Budgetwith DRG/ Case-Mix Adjuster

Payment Methods and IncentivesMechanisms Incentives for Provider Behavior

Prevention Service Delivery

Cost Containment

Line Item Budget

Fee-for-Service

Per Diem

Per Case (e.g., DRG)

Global Budget

Capitation

Provider Payment Methods - Impact

Any one method by itself does not satisfy all objectivesAdditional incentives are needed to address those inherent in selected approachMore sophisticated methods often require information systems that may not (yet) be available in transition countries

0

200

400

600

800

1000

1994 1995 1996 1997 1998 1999 2000 2001 2002

Year of report

UkraineLatvia

Belarus

Russian Federation

Estonia

Casesper million

HIV infections newly diagnosed per million population1994-2002, selected countries, eastern Europe

EuroHIV

Lithuania

Up d

ate

at

3 0 J

une

20

0 3

0

20

40

60

80

100

1994 1995 1996 1997 1998 1999 2000 2001 2002

Year of report

Kazakhstan

Belarus

Uzbekistan

Casesper million

HIV infections newly diagnosed per million population1994-2002, selected countries, eastern Europe

EuroHIV

Moldova

Kyrgyzstan

Up d

ate

at

3 0 J

une

20

0 3 GeorgiaAzerbaijanArmenia

Tajikistan

Poland

Czech Republic

HungarySlovenia

Romania

HIV infections newly diagnosed per million population1994-2002, selected countries, central Europe

0

10

20

30

40

1994 1995 1996 1997 1998 1999 2000 2001 2002

Year of report

Casesper million

Serbia & Montenegro

EuroHIV

Slovakia

Upd

ate

at

3 0 J

une

20

0 3

HIV/AIDS Regional Support StrategyRaising political and social commitmentGenerating/using essential information

Estimating the economic and social impactImproving surveillanceMaximizing value for moneyEstimating resource requirements

Prevention of TB and HIV/AIDSHarm reduction, focus: CSW, IDU, prisons

Sustainable, high quality careFacilitating large-scale implementation

Implications for Population HealthUnfinished rationalization agenda:

Misallocation of resourcesService quality (incl. reproductive health)Under-funding of PHC and prevention

Limited public funding in many countries

Reproductive health must competeChallenge to ensure access for poor/rural

Provider payment systems incentivesMust encourage RH related activities

Implications for Population HealthPrimary health care “immature”

Obs./Gyn. specialists still do most RHPublic confidence in PHC abilities

Information systems tell us little about what is going on (“known unknowns”?)

Amount of ante-natal/post-natal careOther reproductive health activitiesHospitalization (ALOS, C-section, comp.)Disease surveillance

Thank you!!

Dominic S. Haazen, Sr. Health Specialist, The World BankRiga, Latviadhaazen@worldbank.org