Health systems financing

Summary

This lecture delves into the critical function of health system financing, emphasizing the goal of universal health coverage that ensures quality services without financial hardship. It discusses the consensus that public financing, rather than market-driven or private insurance, is essential for achieving this coverage. The speaker outlines challenges such as raising sufficient funds, ensuring risk protection, and maximizing efficiency. Strategies for increasing public financing include improving tax collection, introducing new taxes, and reallocating budget funds. Examples from Thailand illustrate the benefits of rapid universal coverage implementation, including increased service utilization and reduced financial burden on citizens.

Takeaways

• 🏥 Health systems are crucial for financing universal health coverage, ensuring everyone receives quality health services without financial hardship.
• 💰 The primary objective of health financing is to achieve equity, where health services are allocated based on need, and financial contributions are made according to one's ability to pay.
• 🌐 The World Health Report 2010 highlights the importance of health systems financing, emphasizing the role of wealthy individuals in cross-subsidizing the health costs of the sick and the poor.
• 📈 Major challenges in health financing include raising sufficient funds, ensuring financial risk protection, and maximizing efficiency and equitable allocation of resources.
• 🚫 Market-driven, privately financed health systems do not achieve universal health coverage, necessitating a significant role for the state in organizing health financing.
• 🤝 The state's role in health financing is inherently political, as it involves enforcing cross-subsidization, which may not be favored by the healthy and wealthy.
• 🔄 There is a consensus that public financing is the best way to finance health systems, with tax financing and compulsory social health insurance being the main mechanisms.
• 💼 The private sector can still play a role in the administration and provision of health services, even under public financing models.
• 🚫 User fees and private voluntary insurance are not effective for financing health systems, as they exclude the poor and lack equity and efficiency.
• 💡 Countries can increase public financing by improving tax collection, introducing new taxes like sin taxes, reallocating budget funds, and improving efficiency in health service delivery.
• 🌱 Incremental approaches to universal health coverage can be slow, leaving many uncovered; rapid coverage of the informal sector through tax financing has been successful in countries like Thailand.

Q & A

What is the primary objective of a health system as mentioned in the script?

The primary objective of a health system, as mentioned in the script, is to achieve universal health coverage, ensuring that all people receive the quality health services they need without suffering financial hardship.

How is equity defined in the context of universal health coverage according to the script?

Equity in the context of universal health coverage is defined by three aspects: universal coverage for everyone, allocation of health services according to need, and financial contributions made according to one's ability to pay.

What is the role of the state in organizing a health financing system as per the script?

The state plays a high role in organizing the health financing system, particularly in enforcing the cross-subsidization of the sick and the poor by healthy and wealthy people, which does not happen naturally in markets.

Why are market-driven health systems considered ineffective in achieving universal health coverage?

Market-driven health systems, which are privately financed, are considered ineffective in achieving universal health coverage because they do not naturally lead to the cross-subsidization required to cover the costs for the sick and the poor.

What are the major challenges countries face in financing their health systems to achieve universal coverage?

The major challenges include raising sufficient funds to finance the health system, ensuring financial risk protection so people do not face financial barriers or ruin when accessing health services, and maximizing efficiency and equitable allocation of resources.

What is the minimum per capita amount required to achieve universal health coverage as suggested in the script?

Recent estimates suggest that around 87 per capita is required as an absolute basic minimum to achieve universal health coverage.

What are the best financing mechanisms to raise funds for the health sector according to the script?

The best way to finance the health system is through public financing, which can be done through tax financing from general revenues or compulsory social health insurance contributions.

Why are user fees considered a poor method for financing a health system?

User fees are considered a poor method for financing a health system because they involve no pooling of resources and are grossly inequitable, often excluding poor people from getting the care they need.

What are some methods countries can use to increase their public financing for health systems?

Countries can increase public financing by improving tax collection, introducing new taxes such as sin taxes on alcohol and tobacco, reallocating funds within the budget, and improving efficiency in the health sector.

How can a country start on the route towards financing its health system, and what is the situation typically faced?

A country typically starts with the richest quintile of the population covered through social insurance schemes or by their ability to pay user fees, and attempts to cover the absolute poorest strata of society, while the majority of the population remains uncovered. The country can then move incrementally to extend coverage or rapidly cover the entire informal sector through large tax financing.

What impact did Thailand's universal coverage scheme have on its population according to the script?

Thailand's universal coverage scheme dramatically increased the utilization of services, reduced unequal access and out-of-pocket expenditure, decreased medical impoverishment by 82%, and increased satisfaction with the health system from 83% to over 90%.