Social Health Insurance for Universal Health Coverage

Technical Meeting 62nd Session of the WHO Regional Committee

for the Eastern Mediterranean5-8 OCTOBER 2015, Kuwait

Health Financing Systems and Universal Health Coverage

• In 2005, Member States endorsed a Resolution that urges countries to develop their health financing systems to:

- Ensure that all people have access to needed services without the risk of financial hardship

• In 2015, Heads of States adopted 17 SDGs with Target 3.8 calling on countries to pursue:– Universal Health Coverage

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WHR 2010: Three Dimensions of Universal Health Coverage

4World Health Organization

The Financing Function“Collection”

“Purchasing”“Pooling”

Moving towards Universal Health Coverage Requires Well-Functioning Health Financing Systems

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Out-of-Pocket Payments Undermine the Performance of Health Financing Systems

01020304050607080

Group 340–76%

Group 224–58%

Group 18–20%

Share of OOP in THE by Country Group, 2013

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GENERAL GOV’T REVENUE– Financed through budgetary allocation– Beveridge approach– Main source of funding in:

• Globally – UK, Australia, Finland, Italy, Greece, Sweden and others.

• In EMR – G1: GCC “nationals”; G2: Iraq, Libya; G3: Afghanistan, Pakistan

SOCIAL HEALTH INSURANCE– Financed through obligatory payroll taxes– Bismarck approach– Main source of funding in:

• Globally – Germany, Japan, France, South Korea, Turkey and others.

• In EMR – G2: I.R. of Iran, Tunisia, Morocco; G3: Djibouti

OTHER ARRANGEMENTS– Private Health Insurance – voluntary/for-profit– Community-Based Health Insurance – voluntary/not-for-profit– Medical Saving Accounts – obligatory with no pooling– Others

Prepayments Options for Countries to Consider

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General Government Revenue

Strengths– Pools risks for whole

population

– Relies on many different revenue sources – taxes, natural resources, others

– Single centralized governance system with potential for administrative efficiency and cost control

Limitations– Variations in funding and

budgetary allocations due to changing gov’t priorities

– Often disproportionately benefits the better off

– Potentially inefficient due to complex public sector rules and procedures

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Social Health Insurance

Strengths– Mandatory contributions

based on ability-to-pay

– Perceived as a ‘benefit’ tax with more ‘willingness to pay’

– Protects health financing from gov’t annual budgetary process

– Additional health revenue source

Limitations– Potential to exclude the poor and

vulnerable unless subsidized by gov’t

– Administrative cost can be high if fragmented

– Benefit packages do not often cover for promotive/preventive care

– Potential negative impact on employment because of increased cost of production

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GENERAL GOV’T REVENUE– Financed through budgetary allocation– Beveridge approach– Main source of funding in:

• Globally – UK, Australia, Finland, Italy, Greece, Sweden and others.

• In EMR – G1: GCC “nationals”; G2: Iraq, Libya; G3: Afghanistan, Pakistan

SOCIAL HEALTH INSURANCE– Financed through obligatory payroll taxes– Bismarck approach– Main source of funding in:

• Globally – Germany, Japan, France, South Korea, Turkey and others.

• In EMR – G2: I.R. of Iran, Tunisia, Morocco; G3: Djibouti

OTHER ARRANGEMENTS– Private Health Insurance – voluntary/for-profit– Community-Based Health Insurance – voluntary/not-for-profit– Medical Saving Accounts – obligatory with no pooling– Others

Prepayments Options for Countries to Consider

MIXED OPTION

Social Health Insurance Evolution (“SHI for UHC”)

• Historically, SHI covered formal sector (primarily public but also private) through obligatory payroll taxes

• Today, SHI evolved into a prepayment arrangement that covers formal and informal sectors and is financed by a mix of obligatory contributions and government budgetary allocations

• Why?– In low- and middle-income countries: large informal sector

(poor and non-poor) and vulnerable populations, unemployment– In high-income countries: aging populations, “unemployment”

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“SHI for UHC” in EMRScheme 1 Scheme 4 Scheme 3 Scheme 4 Pop (%)

EGY HIO (52%) 52%

IRNIHIO – 4 Funds (60%)

SSO – 2 Funds (33%)

AFMSIO (3.5%) Others (3.5%) 100%

JOR CIP (41.2%) RMS (27.2%) JUHs (1.3%)Other prepayment (17.5%)

87.5%

MOR CNOPS (9.1%) CNSS (24.9%) RAMED (28%)

Other prepayment

(4-5%)66-67%

SUD NHIF (28.7%)

Police and Military (5.6%)

Other prepayment (0.6%)

34.9%

“SHI for UHC”

Characterized by:

• Increased Social Solidarity

• (Quasi-) Independent Fund with Autonomy

• Entitlements because of your citizenship and not because of your job

• Split between Financing and Provision

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Driving:

• Equity and Fairness

• Strategic Purchasing and Enhanced Efficiency

• Protected Fund for Health

• Financial Sustainability

• Empowerment of the insured

• Covering the near poor and non-poor informal sector – Need to identify options and pursue their implementation

• Limiting Fragmentation– Need to structurally/functionally merge HIOs and Schemes

within HIOs• Ensuring Autonomy and Accountability

– Need to enact necessary legislations and enforce the regulations

• Investing in Information Technology– Need to develop population databases and HMIS for purchasing

• Framing the Role of Private Sector– Need to identify who is covering what and from which provider

Key Policy Issues in Designing “SHI for UHC” in EMR

Implementing “SHI for UHC”

• Governance – enact adequate laws and other legal provisions

• Membership Management – bring all population groups within the fold of SHI

• Fund Management – determine needed fund and set contributions to ensure sustainability

• Benefit Design – define benefit package and identify who pays for what

• Provider Management – accredit providers to ensure quality, and contract wit them using adequate payment mechanisms

• Information Management – establish HMIS, organize provider reporting and institutionalize monitoring

Thank You!