ZIMBABWE HEALTH FINANCING · financing schemes or management institutions, and providers and...

ZIMBABWE HEALTH FINANCING

GWATI GWATIHealth Economist: Planning and Donor

Coordination MOHCCTechnical team leader National Health

Accounts.

Our approach to HFP Development

• Key steps in the development of the policy have been undertaken:

– The development of this policy is highly consultative

– A Technical Working Group was established to drive preparatory activities towards this policy

– The TWG established a Core Team to focus on the specific pillars in the policy.

– A number of meeting sessions were convened by TWG- to arrive at draft zero

• Next steps:

– stakeholder consultations

– Draft with stakeholder inputs

– Validation workshop

Conceptual Framework: HFP Architecture

Overview of the Policy• Motivation and Context

• Policy Strategic Context

• Health Financing Policy Strategic Directions

• General Health Financing Policy Guidelines

• Health Financing Functions

Resource Mobilisation

and Revenue Collection

Purchasing and Provider

Payment Mechanisms

Risk Pooling and Cross

Subsidisation

Governance

For Each, the HFP States i) The Guiding Principles, ii) Policy Objectives and iii) Policy

Direction

Evidence of Current Situation and Rationale

Conceptual Framework

Motivation and Context

• Global call for UHC

• Socio-economic factors

• Increasing Disease Burden

• Need to harmonise all health financing functions

Overview of Health Financing in Zimbabwe

• Zimbabwe’s health system has been consistently financed by a mixture of funding sources with the major ones being :–Government through central budget allocation and

subnational governments i.e. local authorities– AID Agencies and Multilateral Organizations– Private companies, – Non-Governmental Organizations, – households (through out-of-pocket payments)

HEALTH FINANCING POLICY

Summary of Policy directions

Strategic Directions

Vision• The whole population of Zimbabwe has access to the highest possible level of health and quality of life regardless of income levels, social status, or residency.

Mission• To provide, administer, coordinate, promote and advocate for the provision of equitable, appropriate, accessible, affordable and acceptable quality health services and care to all Zimbabweans while maximizing the use of available resources, in line with the Primary Health Care Approach.

Goal• The goal of the Health Financing Policy is to guide Zimbabwe’s health system to move towards Universal Health Coverage (UHC) including financial risk protection, access to quality essential health care services, and access to safe, effective, quality, and affordable essential medicines and vaccines for all by 2030.

Policy Objectives

The National Health Financing Policy will be focused on reaching the following objectives:

• Mobilizing adequate resources for predictable sustainable funding of the health sector;

• Ensuring effective, equitable ,efficient and evidence based allocation and utilization of health resources;

• Enhancing the adequacy of health financing and financial protection of households and ensure that no-one is impoverished through spending on health by promoting risk pooling and income cross subsidies in the health sector;

• Ensuring that purchasing arrangements and provider payment methods emphasize incentivizing provision of quality, equitable and efficient health care services

• Strengthening institutional framework and administrative arrangements to ensure effective, efficient and accountable links between revenue generation and collection, pooling and purchasing of health services.

Guiding Principles and ValuesThe following values will guide the Health Financing Policy at all levels:

• Social solidarity

• Equity in health and health care

•Gender equality

•Healthcare as a right and shared responsibility

• Essential quality services integrating comprehensive primary health care

•Cost benefit and value for money

• Efficiency

• Appropriateness

• Affordability

• Public participation and user and provider satisfaction

• Transparency and accountability

•Ownership and

• Partnership in health

Sustainable Resource Mobilization and Revenue

Collection Policy Directions• The GoZ will seek to strengthen domestic health financing and abide by the

Abuja Declaration on Health where not less than 15% of budget shall be allocated to health.

• The GoZ will spend not less than $60 per capita per year to ensure the minimum comprehensive benefit package is financed.

• The GoZ will explore options for progressive earmarked taxes and levies to raise additional resources for health.

• Current mechanism to raise additional revenue to the health sector that has been successful and sustainable will be maintained and expanded where feasible. Examples include the National AIDS Levy, Health Services Fund, Workman’s Compensation Fund, Assisted Medical Treatment Order, and Accident Victims Compensation Fund on Motor Vehicle Insurance.

• The government will encourage various forms of mandatory prepayment mechanisms such as social health insurance (SHI), community based health insurance (CBHI), national health insurance (NHI) especially for the informal sector and rural areas as a means of achieving universal health coverage.

• Private health insurance will continue to be available as a voluntary prepayment mechanism for services not covered in the minimum benefits package.

• Special revenue generation provisions will be made for diseases of high national public health concern/significance as and when they emerge.

• All external aid for health will be harmonized, coordinated, monitored and evaluated in line with health priorities and plans of the government of Zimbabwe.

• The GoZ will continue to encourage and expand involvement of local philanthropy and charities for special health initiatives at all levels of care.

• The GoZ will explore, ensuring consistency with its key policy principles and goals, innovative partnership mechanism with the private sector to increase resources to health such as Public Private Partnerships, joint ventures and outsourcing guided by a strong regulatory framework.

Sustainable Resource Mobilization and Revenue

Collection Policy Directions cntd…

Risk Pooling and Cross Subsidization

Policy Direction

• The government of Zimbabwe will explore new and strengthen existing mechanisms for promoting equity, risk equalization and reduce fragmentation with a special emphasis on ensuring that health spending does not lead to or deepen impoverishment especially in the poor and indigent population.

• A national mandatory prepayment scheme will be introduced and expanded as a key form of pooling risk to reduce out of pocket payments.

• There will be clear separation of functions and roles between pooling and purchasing of healthcare services.

Purchasing Policy Directions • Priority will be given to the purchase of cost effective services and those

essential for achieving universal health care, that is, the Essential Health Benefit package at all levels of care (primary, secondary, tertiary, and quaternary)

• A framework for regular evaluation of benefits and cost interventions will be put in place to ensure optimal choices.

• Services will be purchased from all registered and accredited providers (private and public).

• There will be separation of purchasing and provision functions for health care services.

• Health care resources will be allocated using needs based formula to achieve equity.

• There will be strengthening of current purchasing mechanisms and developing others that ensure that those who cannot afford to pay can still access services without facing impoverishment.

• There will be use of a mix of provider payment mechanisms that promote optimal provider performance while containing costs.

• There will be quality assurance for services purchased irrespective of funding mechanisms and level of care.

Governance Policy Directions

• Establishment of a Health Financing Coordinating body within the MOHCC to coordinate the various pillars of this policy (i.e., funds collection, pooling and purchasing functions within the GoZ)

• Financial management autonomy will be accorded to operational levels to effectively perform various health financing functions within the confines of the Public Finance Management Acts.

• The role of performance based financing in current and future schemes to be clearly defined where it strengthens the purchaser’s function.

• Planning, budgeting and resource allocation will be harmonized along the results based management principles in consultation with all stakeholders.

• The GoZ will strengthen existing mechanisms and/or establish new structures and systems for coordination and harmonization of funding at all levels of health care financing.

National Health Accounts

2015 in Zimbabwe

Outline Background and objectives

Methods

Findings

General findings and international comparison

Who funds the health system

Revenue of health schemes and financing sources

Who manages health funding

Financing schemes and financing agents

Who consumes health expenditure and for what purpose

Health expenditure by health providers

Health expenditure by health functions

Summary and recommendations

Background

Government of Zimbabwe is committed to universal

health coverage (UHC)

Since 2010, Zimbabwe made significant strides in

reducing infant mortality rates (IMR) and Maternal Mortality

Rates (MMR)

Health financing landscape may have been changed

since 2010 when last round of NHA was conducted

To understand key players and financial flows in the

health system, NHA 2015 was conducted

Objectives of the NHA

1. Provide updated estimates of health expenditure in

Zimbabwe’s health care system and an understanding of

financial flow

2. Provide financial estimates for the health system in

Zimbabwe at three levels, including sources of funding,

financing schemes or management institutions, and

providers and functions of health expenses;

3. Provide empirical evidence on health financing for

developing health financing policy and strategies in

Zimbabwe, and

4. Produce baseline information on health expenditure for

comparison to future reforms.

Terminologies1. Revenue of health financing schemes: Revenue is an increase in

the funds of a health care financing scheme, through specificcontribution mechanisms.

2. Financing sources (FS): The revenues of the health financingschemes received or collected through specific contributionmechanisms

3. Health schemes (HF): Components of a country’s health financialsystem that channel revenues received and use those funds to payfor, or purchase, the activities inside the health accounts

4. Financing agent (FA): Institutional units that manage health financingschemes.

5. Health providers (HP): Entities that receive money in exchange for orin anticipation of producing the activities inside the health accountsboundary.

6. Health functions (HC): the types of goods and services provided andactivities performed within the health accounts boundary.

General Findings and

International Comparisons

Overview of Findings

NHA Indicators (General) 2015

Total population(Zimstat) 13,943,242

Total nominal GDP (US dollar [USD])(Zimstat) $14,007,108,087

Total government health expenditure (USD) $309,699,620

Total health expenditure (THE) $1,447,785,504

THE per capita (USD) $103.83

THE as % of nominal GDP 10.34%

Government health expenditure as % total government expenditure 8.72%

Regional comparison

11.38

10.6210.34

9.258.93 8.80

6.98

5.58 5.414.99 4.81

4.33

3.37 3.313.04

0

2

4

6

8

10

12

Tota

l hea

lth

exp

end

itu

re a

s %

of

GD

P

Total Health Expenditure (THE) % Gross Domestic Product (GDP)

Health expenditure per capita (USD)

570

499 494482

385

248

179

105 10486

5242

2919 14

$0

$100

$200

$300

$400

$500

$600

Tota

l hea

lth

exp

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itu

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er c

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a

Total Health Expenditure (THE) per Capita in US$

Who funds

the health system?

Financing sources (Institutions)

Financing sourcesAmount

(Million USD)

Percentage

of THE

Government (Central and local governments) 309.70 21.39%

Corporations (Employers) 411.54 28.43%

Households (OOP plus private contribution to

health insurance)362.46 25.04%

Non-profit institutions serving households

(NPISH)3.24 0.22%

Rest of the world (Donors) 360.85 24.92%

Total 1447.79 100.00%

Financing source by sector

Financing sources Amount (Million USD) Percentage (%)

Public (Government+ HI from

public employers)502.43 34.70%

Private (OOP+ HI form private

employers or HH)584.51 40.37%

External (Donors) 360.85 24.92%

Total 1447.79 100.00%

Who manages health expenditure?

Who manages money

(Health schemes)

Government schemes and compulsory contributory health care financing schemes451.33

31%

Voluntary health care payment

schemes433.49

30%

Household out-of-pocket payment

343.7424%

Rest of the world financing schemes

219.2215%

Who manages money (Institutions)---

Financing agent

General government

451.3331.2%

Insurance corporations

430.2629.7%

Corporations3.240.2%

Households343.7423.7%

Rest of the world

219.2215.1%

Out of pocket health expenditure

The total out of pocket expenditure reported on the household survey was estimated at $343.74 million, equivalent to $24.65 per capita.

7.6 percent of households in Zimbabwe incurred catastrophic health expenditure (CHE) in 2015

Poorest Less poor Middle Less rich Richest Total Pop

Incidence of CHE 13.38% 8.68% 8.37% 5.20% 2.77% 7.64%

Health expenditure by providers

and functions

Health expenditure by providers

Hospitals36.5%

Providers of ambulatory health

care33.3%

Providers of health care system

administration and financing

12.1%

Providers of ancillary services

6.7%

Providers of preventive care

6.2%

Retailers and Other

providers of medical goods4.1%

Unspecified health care providers

0.7%

Rest of the world0.3%

Rest of economy0.1%

Residential long-term care facilities

0.0%

Other1.1%

Health expenditure by functions

Curative care56.6%

Governance, and health system and financing

administration12.1%

Preventive care15.4%

Ancillary services (non-specified by function)

7.4%

Medical goods (non-specified by function)

3.5%

Long-term care (health)2.4%

Other health care services not elsewhere classified

(n.e.c.)1.8%

Rehabilitative care0.9%

Other5.1%

Health expenditure of

Government schemes by health

functions

Functions

Amount

(Million

USD)

Percentage

Curative care 200.77 64.83%

Rehabilitative care 0.69 0.22%

Ancillary services (non-specified by function) 1.50 0.48%

Preventive care 75.78 24.47%

Governance, and health system and financing administration 30.96 10.00%

Total 309.70 100.00%

Health expenditure of health

insurance from public employers

by health functions

FunctionsAmount

(Millions USD)Percentage


Inpatient curative care 50.69 26.30%

Outpatient curative care 35.07 18.20%


Medical goods (non-specified by function) 21.57 11.19%


administration27.10 14.06%

Total 192.73 100.00%

Health expenditure of health

insurance from private employers or

households by functions

Functions

Amount

(Millions

USD)

Percentage


Inpatient curative care 91.41 37.97%

Outpatient curative care 47.67 19.80%

Unspecified curative care (n.e.c.) 0.02 0.01%


Medical goods (non-specified by function) 23.39 9.72%

Preventive care 0.69 0.29%


administration40.12 16.66%

Total 240.76 100.00%

Summary and Recommendations

Summary Overall health expenditure

THE was estimated at $1.45 billion, equivalent to

$103.83/capita.

THE accounted for more than 10 percent of GDP of the same

year

Financing sources

Domestic resources account for the majority (75.74 percent) of

THE

Donors remain an important source of funding for health in

Zimbabwe (24.26 percent), particularly for preventive care.

Health insurance schemes through public and private employers

and individuals accounted for 28.92 percent of THE, with

expenditures of $430.26 million.

Financial protection

OOP represents 25 percent of THE

7.6 percent of households incurred catastrophic health

expenditure

13.38% of the poorest households incurred catastrophic health

expenditure

Summary (continued…) Health providers and functions

Health expenditure was unevenly distributed

between curative and preventive care.

Curative care shared 57 percent of THE, while

preventive care accounted for 15 percent of

THE

The administrative costs accounts for more

than 14% of funds managed by health insurance

companies

More than 30% of health expenditure of health

insurance for public employees were spent to

ancillary services

Recommendations Increase government spending on health

Advocate allocation of government budget for

health, reversing the decline trend of budget

allocation.

Advocate both health and economic benefits of

investing in health

Allocate more resources for preventive care

Government needs to take more responsibility of

preventive care

Advocate value for money of investing in

preventive care

Improve efficiency of health insurance schemes

Reduce administrative costs

Strategic contracting health providers

Utilization review of claims

Reduce fragmentation of health insurance

schemes

Recommendations (continued…)

Develop strategic purchasing mechanisms

Pay health providers based on outputs or outcomes

rather than inputs

Grant health providers with autonomies

Incentivize better quality and outcomes.

Address inequities of utilization of health services

and catastrophic health expenditure

Subsidize the poor

Improve the quality of care at public

facilities, particularly for ancillary services (e.g.

imaging services)

Include the poor in the social welfare safety net

Carry out an equity study to understand better the

inequality issue.

Strengthen the integration of vertical and disease

specific programs

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