1 Public Expenditures Review in Health Agnes Soucat, Lead
Economist
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2 Presentation Outline Objectives of the health sector and role
of the government Objective of a PER Efficiency Analysis and PERs
Equity Analysis and PERs Financing What about the health MDGs
?
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3 Objectives of the health sector and role of the government
Why investing in health ?
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4 Objectives of the health sector Improving health outcomes:
mortality, incidence/prevalence of diseases, suffering.. Income
protection: health expenditures, catastrophic illnesses
Responsiveness and accountability: demand, quality of life
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5 The role of the Government: Rationale for public action in
health Market failures: Public good: commons: non excludable, non
rejectable, non competitive Merit goods with a high level of
externalities Failures in the insurance market
Redistribution/Welfare: Benefiting the poor protecting the
poor
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6 Priority areas for public financing in health Market
FailuresRedistribution Health outcomes Pure public goods Merit high
externalities goods Poor have worse health outcomes Income
protection Insurance market e:g adverse selection Poor are more
exposed to financial consequences of illnesses Responsiveness and
accountability Poor have less voice to influence policy
decisions
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7 Specificity of the health sector Outputs are health sector
specific but outcomes are multisectoral Levels are intricated
Multiplicity of outputs
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8 Health sector Finance Agriculture Social Protection Infras
tructure Water and Sanitation Education Sector Health Outcomes
Litteracy etc.. Improve Quality of Life Revenue generation Safety
nets Increase and Protect Income Participation Increase
Involvement
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9 Presentation Outline Objectives of the health sector and role
of the government Objectives of a PER Efficiency Analysis and PERs
Equity Analysis and PERs Financing
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10 Objectives of a PER in health Analyze the amounts of public
financing flowing into health related activities whetehre publicly
or privately provided, with a focus on analyzing public policies
Analyze the performance of the overall health system (public and
private) in ensuring sustainable financing and quality service
delivery Contributing to better health and protection from
catastrophic expenditures in an equitable manner N.B.: National
Health Accounts focus on the accounting story while a PER focuses
on the analysis of public policies
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11 Presentation Outline Objectives of the health sector and
role of the government Objectives of a PER Efficiency Analysis and
PERs Equity Analysis and PERs Financing What about the health MDGs
?
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12 Efficiency Analysis and PERs Examples Efficiency Analysis:
Allocative efficiency: does money go to priority areas? Technical
efficiency: are the inputs minimized for a given output? Input
efficiency: Is the balance of inputs appropriate?
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13 Weak link between public spending and health outcomes *
Percent deviation from rate predicted by GDP per capita Source:
Spending and GDP from World Development Indicators database.
Under-5 mortality from Unicef 2002
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14 Allocative Efficiency Key questions: Is the public spending
focused on addressing market failures ie pure (or nearly pure)
public goods or goods with large externalities, including failures
of insurance markets ? Is the public spending focused on activities
that contribute to increased returns in education and investments,
economic growth and poverty reduction? Is the public spending
focused on activities that are most likely to benefit the
poor?
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15 Priority Programs (examples) vector control: eg: snails,
rats, mosquitos . environmental health : eg: toxic wastes, quality
of water, clean air communicable disease surveillance and
management: eg Tuberculosis Immunizations: herd immunity
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16 Per capita GDP 1990 Improvements in health and economic
take-off: changes in Per Capita GDP and IMR in Singapore
Contribution to Economic Growth and Poverty Reduction..
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17 IMR at the time of Economic Take-off in East Asia
Contribution to Economic Growth and Poverty Reduction..
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18 Nutrition in agriculture based economies Some diseases: HIV,
malaria Child mortality, fertility reduction associated with high
investment in education and low dependency ratios Contribution to
Economic Growth and Poverty Reduction..
20 Efficiency Analysis and PERs Examples Efficiency Analysis:
Allocative efficiency: does money go to priority areas? Technical
efficiency: are the inputs minimized for a given output? Input
efficiency: Is the balance of inputs appropriate?
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21 Technical Efficiency: Key questions What is the relative
weight of various sub- sectors (e.g. Tertiary VS Secondary VS
Primary VS outreach VS community based programs ) -What is the mix
of services provided (e.g. Curative Vs Preventive)
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22 Technical Efficiency:
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23 Relative allocation to levels of care: Mauritania Technical
Efficiency:
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24 Inter-country comparison: measles immunization vs public
expenditures
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25 Efficiency Analysis and PERs Examples Efficiency Analysis:
Allocative efficiency: does money go to priority areas? Technical
efficiency: are the inputs minimized for a given output? Input
efficiency: Is the balance of inputs appropriate?
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26 Input Efficiency Key questions: Are recurrent cost at the
level required by capital invested (eg unreliable, insufficient
funding of key inputs (drugs)..) Are Non-Salary Recurrent
expenditures and the wage bill balanced? (e.g s alaries crowding
out other inputs, non salary recurrent recycled into staff
incentives)
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27 Evolution of health budget: Mauritania Input Efficiency
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28 Budget of the Ministry of Health by nature of Expenditures
Input Efficiency Evolution of health budget: Rwanda
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29 Presentation Outline Objectives of the health sector and
role of the government Objectives of a PER Efficiency Analysis and
PERs Equity Analysis and PERs Financing
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30 Equity Analysis and PERs Examples Equity Analysis: Physical
Access Human Resource Deployment Availability of Drugs or other
inputs Benefit Incidence Analysis Equity and Financing Mechanisms
Insurance Incidence Impact of Cost Recovery
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31 Physical Access to Essential Health Services, Mauritania,
1999 Poorer Richer
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32 Availability of Nurses and Infant Mortality- Cameroon
1999
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33 Availability of Essential Drugs per Region, Mauritania, 1999
Poorer Richer
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34 BIA India Example Who Gets the Public Subsidy?
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35 Population covered by publicly funded health insurance,
Thailand 2000
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36 Presentation Outline Objectives of the health sector and
role of the government Objectives of a PER Efficiency Analysis and
PERs Equity Analysis and PERs Financing What about the health MDGs
?
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37 Private spending equals or exceeds public spending in
SSA
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38 Donors are a major source of funding in some countries
Financing of health services Financing sources:Rwanda
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39 Lack of Predictability of Donor Assistance
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40 Tax finance doesnt guarantee poor do well
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41 Presentation Outline Objectives of the health sector and
role of the government Objectives of a PER Efficiency Analysis and
PERs Equity Analysis and PERs Financing What about the health MDGs
?
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42 Ethiopia: MDGs Needs Assesment total incremental cost per
capita 2005-2015
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43 Expected impact of key interventions on under five mortality
rate, Ethiopia 2005- 2015 Prevention/promotion LLITN) for U 5
1%77%84%11.% Family planning9%56%67%6.2% Hib vaccination0% 51%4.7%
Vitamin A supplementation56%77%84%4.4% Complementary
feeding34%63%67%4.3% Exclusive breast feeding38%63%80%4.3% (1) Key
interventions (2) Baseline (3) Target 2009 (4) Target 2015 (5) Est.
reduction in U5MR Estimated U5 mortality reduction by 2009 is 48%
and 61% by 2015. MMR 36%
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44 Projected Government Health Expenditures as a Percent of GDP
Needed for a $34 Per Capita CMH Recommended Package of Services for
a $34 Per Capita CMH Recommended Package of Services
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45 Cost of scaling up health services incremental cost per
capita 2005-2015 for reaching the MDGs Scale Up StrategyHealth
OutcomesMDGs reached Step 5 : Expansion and Upgrade of Referral
Care Further decrease of : child mortality, maternal mortality, HIV
MTC transmission Provision of HAART, multi-drug resistant TB and
severe malaria treatment Step 4: Expansion and Upgrade of Emergency
Obstetrical care Further decrease of : child mortality maternal
mortality HIV MTC transmission Reduced MM by 75% Step 3: First
level clinical upgrade Further decrease of: Child mortality
Maternal Mortality Malaria, morbidity & mortality TB Reduced
malaria mortality by 50% Increase TB DOTS coverage Step 2: Health
Services Extension Program Decrease in child mortality Reduction in
HIV Mother To Child Transmission Reduction of deaths due to
pregnancy by 40% Reduce malaria mortality morbidity Reduce Child
malnutrition Reduced child mortality by two third Step 1:
Information and Social Mobilization for Behavior change Decrease in
child mortality due to HIV, malaria, diarrhea diseases Reduced HIV
transmission Reduced malaria morbidity and mortality Reversed trend
in HIV incidence and stabilized trend in HIV prevalence
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46 Prediction on achieving MDG for child survival in Ethiopia
Achieving the Health extension/outreach service targets Achieving
the family/community based service targets Achieving the clinical
based service targets Deaths per thousand births
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47 Conclusion : best practices Focus on who captures public
funding: particularly distribution between rich and poor Combine
routine HMIS data with with households surveys Place public
spending in the context of private expenditures (households
insurance, donors) Examine trends..dynamic analysis Evaluate
expenditures in the context of changes (e.g decentralisation,
epidemiological transition, etc.) Include recommendations on how to
improve public expenditures allocation and management