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Health financing country profiles 1997-2007

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Health Financing Country Profiles 1997–2007

Health Financing Country Proﬁles 1997–2007

WHO Library Cataloguing in Publication Data Health ﬁnancing country proﬁles 1997–2007 1. Delivery of health care - economics. 2. Health care economics and organizations. 3. Health services accessibility - economics. 4. Health expenditures. 5. Universal coverage. 6. Asia and the Paciﬁc. ISBN 978 92 9061 486 9 (NLM Classiﬁcation: WA 525)

© World Health Organization 2010 All rights reserved. Publications of the World Health Organization can be obtained from WHO Press, World Health Organization, 20 Avenue Appia, 1211 Geneva 27, Switzerland (tel.: +41 22 791 3264; fax: +41 22 791 4857; e-mail: bookorders@who.int). Requests for permission to reproduce or translate WHO publications – whether for sale or for noncommercial distribution – should be addressed to WHO Press, at the above address (fax: +41 22 791 4806; e-mail: permissions@who.int). For WHO Western Paciﬁc Regional Publications, request for permission to reproduce should be addressed to the Publications Ofﬁce, World Health Organization, Regional Ofﬁce for the Western Paciﬁc, P.O. Box 2932, 1000, Manila, Philippines, Fax. No. (632) 521-1036, email: publications@wpro.who.int The designations employed and the presentation of the material in this publication do not imply the expression of any opinion whatsoever on the part of the World Health Organization concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. Dotted lines on maps represent approximate border lines for which there may not yet be full agreement. The mention of speciﬁc companies or of certain manufacturers’ products does not imply that they are endorsed or recommended by the World Health Organization in preference to others of a similar nature that are not mentioned. Errors and omissions excepted, the names of proprietary products are distinguished by initial capital letters. All reasonable precautions have been taken by the World Health Organization to verify the information contained in this publication. However, the published material is being distributed without warranty of any kind, either expressed or implied. The responsibility for the interpretation and use of the material lies with the reader. In no event shall the World Health Organization be liable for damages arising from its use.

Table of Contents

Foreword..........................................................................................................................v Acknowledgements ..........................................................................................................vi Introduction ......................................................................................................................vii Australia ...........................................................................................................................1 Brunei Darussalam ..........................................................................................................4 Cambodia ........................................................................................................................6 China ...............................................................................................................................9 Cook Islands ....................................................................................................................12 Fiji ....................................................................................................................................15 Japan ...............................................................................................................................18 Kiribati ..............................................................................................................................21 Korea, Republic of ...........................................................................................................23 Lao People’s Democratic Republic ..................................................................................26 Malaysia...........................................................................................................................29 Marshall Islands ...............................................................................................................32 Micronesia, Federated States of ......................................................................................34 Mongolia ..........................................................................................................................37 Nauru ...............................................................................................................................40 New Zealand ....................................................................................................................42 Niue .................................................................................................................................45 Palau ...............................................................................................................................47 Papua New Guinea ..........................................................................................................50

iii

Philippines .......................................................................................................................53 Samoa .............................................................................................................................56 Singapore ........................................................................................................................59 Solomon Islands ..............................................................................................................62 Tonga...............................................................................................................................64 Tuvalu ..............................................................................................................................67 Vanuatu ...........................................................................................................................70 Viet Nam ..........................................................................................................................73

Foreword

Health ﬁnancing is one of the fundamental building blocks of health systems. Sound health ﬁnancing policies that raise adequate revenues and efﬁciently allocate them are essential if countries are to achieve universal coverage, where everyone has access to quality health services at an affordable cost. Yet many people in the Asia Paciﬁc region suffer severe ﬁnancial hardship because of the costs of health care. Many others simply go without treatment because they cannot afford to pay. In light of these concerns, an updated Health Financing Strategy for the Asia Paciﬁc Region (2010–2015) was jointly developed by the WHO Regional Ofﬁces for South-East Asia and for the Western Paciﬁc, and endorsed by the WHO Regional Committee for the Western Paciﬁc at its sixtieth session. This strategy includes target indicators to monitor and evaluate progress towards universal coverage. These indicators relate to sufﬁcient spending on health, reduced reliance on out-of-pocket payments, expansion of prepayment schemes and adequate safety nets for the most vulnerable. One of the key strategic areas is to improve the monitoring and evaluation of health ﬁnancing policy changes. The health ﬁnancing country proﬁles presented here relate to this strategic area on monitoring and evaluation, and the associated target indicators. The proﬁles provide summary information about the current health ﬁnancing situation in 27 countries of the WHO Western Paciﬁc Region. Health expenditure trends from 1997–2007 are presented (based on national health accounts data), along with a description of the key issues, challenges and ongoing health ﬁnancing reforms in each country. Selected references are also provided for readers who are interested in more detailed information. These proﬁles can be accessed at www.wpro.who.int/

Shin Young-soo, MD, Ph.D. WHO Regional Director for the Western Paciﬁc

Acknowledgement

These country proﬁles are a product of the Health Care Financing team in the WHO Western Paciﬁc Region led by Dr Dorjsuren Bayarsaikhan, Regional Advisor in Health Care Financing. Ms Megumi Ohwada developed the country-speciﬁc analytical charts and Mr Jürgen Menze wrote brief analytical summaries, under the guidance of Dr Chris James. The team would like to thank all WHO country ofﬁces and WHO Western Paciﬁc Regional Ofﬁce for their inputs and comments. Special thanks to Mr Chandika K Indikadahena from WHO Headquarters, who provided region and country-speciﬁc National Health Accounts data. This is the ﬁrst edition of health ﬁnancing country proﬁles. The team plans to issue updated proﬁles on a regular basis and therefore we welcome your comments and suggestions, which would help us to improve the work.

Introduction

The Health Financing Strategy for the Asia Paciﬁc Region (2010–2015) aims to assist Member States in achieving universal coverage through effective health ﬁnancing policies. Universal coverage means that all people have access to the full range of necessary personal and preventive health services without excessive ﬁnancial burden. The path to universal coverage requires both sufﬁcient allocation of ﬁnancial resources to health and their effective and efﬁcient use. The strategy, in support of universal coverage, proposed 8 strategic areas:

1) 2) 3) 4) 5) 6) 7) 8)

Increasing investments and public spending on health Improving aid effectiveness for health Improving efﬁciency by rationalizing health expenditure Increase the use of pre-payment and pooling Improving provider payment methods Strengthening safety-net mechanisms for the poor and vulnerable Improving evidence and information for policy making Improving monitoring and evaluation of policy changes.

The strategy supports a strong government role in health ﬁnancing through taxation and/ or social health insurance to reduce ﬁnancial barriers in accessing health care associated with out-of-pocket payments, particularly for the poor. The strategy encourages countries to update their own health ﬁnancing policies and strategies to attain universal coverage in the near future. For monitoring and evaluation purpose, the strategy proposed 4 inter-related target indicators, which can be adjusted to country speciﬁc situations:

1) 2) 3) 4)

Out-of-pocket spending should not exceed 30%–40% of total health expenditure Total health expenditure should be at least 4%–5% of GDP Over 90% population is covered by prepayment and risk-pooling schemes Close to 100% coverage of vulnerable populations with social assistance and safetynet programs.

The health ﬁnancing country proﬁles presented in this document correspond to the four target indicators above, and the strategic area on improving monitoring and evaluation of policy changes. The health expenditure and associated macroeconomic data used in these proﬁles

vii

Health Financing Country Proﬁles 1997–2007 come from the WHO National Health Accounts (see http://www.who.int/nha/en/ for further details). Note that the data used may at times differ from country-generated data, although WHO works closely with governments to ensure consistency whenever possible. Note also that data are aggregated at the national level. Health expenditure data is supplemented by information from WHO, government and academic documents. These provide summaries of countries’ recent health ﬁnancing policies and issues. Links to more detailed country information and analysis are provided throughout. National Health Accounts deﬁnitional issues:

•

Total Health Expenditure (THE) is the sum of General Government Health Expenditure and Private Health Expenditure. General Government Health Expenditure (GGHE) equals the total outlays by government entities to purchase health services and goods. These are typically spent by ministries of health and social health insurance funds, but can also be other government agencies, such as defence, education and local government agencies. It includes both recurrent and investment expenditures made during the year. Private Health Expenditure (PvtHE) equals the total outlays on health by private entities. These are often predominantly direct household out-of-pocket (OOP) payments for health services. PvtHE can also be in the form of private prepaid and risk-pooling plans (either private insurance or provision of care by private ﬁrms and corporations), or non-proﬁt institutions serving households.

•

The revenue base of both GGHE and PvtHE can comprise multiple sources, including external as well as domestic funds.

This is the ﬁrst edition of health ﬁnancing country proﬁles. The WHO Regional Ofﬁce for the Western Paciﬁc plans to issue updated health ﬁnancing country proﬁles on a regular basis and, therefore, we welcome your comments and suggestions, which would help us to improve this work.

Dr Henk Bekedam Director, Division of Health Sector Development

Introduction

viii

Australia

Australia is a high-income country with a total population of 21.5 million in 2008. Gross domestic product (GDP) per capita was US$ 44 617 in 2007. The predominant source of health care ﬁnancing is general government health expenditure (GGHE) which is mainly ﬁnanced through general taxation. In 2007, total health expenditure (THE) was 8.7% of GDP, equivalent to US$ 3886 per capita. Out-of-pocket (OOP) payments made up 17.9% of THE; GGHE was 68.3% of THE. GGHE amounted to 17.5% of general government expenditure (GGE), 5.9% of GDP, and US$ 2655 per capita. Charts 1, 2 and 3 show historical trends in health expenditure.

Chart 1 Trends in health care expenditure in Australia, 1997–2007 50 000 45 000 40 000 35 000 30 000 25 000 20 000 15 000 10 000 5000 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

100 90 80 70 60 50 40 30 20 10 0 Other private expenditure as % of THE Real GDP per capita (US$, 2007)

US$ (constant 2007 prices)

Percentage (%)

GGHE as % of THE

OOP payment as % of THE

Health Financing Country Proﬁles 1997–2007

Chart 2 Health expenditures as % of GDP in Australia, 1997–2007 10% 9% 8% 7% 6%

5% 4% 3% 2% 1% 0% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

THE as % of GDP

GGHE as % of GDP

In 1984 a universal and compulsory health care system, Medicare, was introduced. As a supplement to other general taxation revenues which mainly fund the health sector the mandatory income-related Medicare levy was imposed. Australians with lower income are exempt from paying the levy. Medicare provides inpatient treatment without additional fees and on average covers 85% of outpatient care costs. For those who decide to be treated as private patients and therefore can choose their doctor Medicare covers 75% of inpatient care costs1. Costs not covered by Medicare are either recovered by OOP payments or private health insurance which accounted for 7.5% of THE in 2007, as seen in Chart 4. The government encourages people to purchase private health insurance through rebate on premiums, Medicare levy surcharge for the better-off and Lifetime Health Cover. Under Lifetime Health Cover, people who take out hospital cover earlier in life are charged lower premiums throughout their lives. About half of all Australians have private health insurance. A publicly funded safety net is in place to assist those whose OOP expenditures on health care services reach a certain threshold in a calendar year.

Australian Government (2008) About Australia: Health Care in Australia

Australia

Chart 3 Trends in health care expenditure in Australia, 1997–2007 4500 4000 3500 100 90 80 70 60 2500 50 2000 40 1500 30 1000 500 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 20 10 0 Real THE per capita (US$, 2007)

US$ (constant 2007 prices)

3000

percentage (%)

Real GGHE per capita (US$, 2007) GGHE as % of GGE

Chart 4 Breakdown of the percentage of total expenditure on health in Australia by main contribution mechanisms, 1997 and 2007 100

80 66.968.3 60 %

1997 2007

20 9.7 0.0 0.0 0 General Taxation Social Health Insurance Prepaid Private Schemes 7.5

16.917.9 6.6 6.2

Out-of-pocket payment

Other

Links Australian Department of Health and Ageing (1999- ) Occasional Papers: Health Financing Series Australian Government (2008) About Australia: Health Care in Australia Li S. (2006) Health Care Financing Policies of Australia, New Zealand and Singapore, Research Paper RP06/05-06 of the Hong Kong Legislative Council, Hong Kong WHO (2009) Western Paciﬁc Country Health Information Proﬁles 2009 Revision, Manila

Australia

Brunei Darussalam

Brunei Darussalam is a high-income country with a total population of 390 000 in 2007. Gross domestic product (GDP) per capita was US$ 31 760 in 2007. The predominant source of health care ﬁnancing is general government health expenditure (GGHE) which is mainly ﬁnanced through general taxation. In 2007, total health expenditure (THE) was 1.9% of GDP, equivalent to US$ 618 per capita. Out-of-pocket (OOP) payments made up 22.0% of THE; GGHE was 77.8% of THE. GGHE amounted to 5.3% of general government expenditure (GGE), 1.5% of GDP, and US$ 481 per capita. Charts 1 and 2 show historical trends in health expenditure. The budget for health care is allocated by the Ministry of Finance and administered by the Ministry of Health. Since the Government universally provides and pays for comprehensive health care services, there is a limited market for private health insurance for citizens and permanent residents. As shown in Chart 3, OOP payments have decreased slightly in recent years while public spending has increased.

Chart 1 Trends in health care expenditure in Brunei Darussalam, 1997-2007 35 000 100 90 30 000 80 25 000 70 Real GDP per capita (US$, 2007)

US$ (constant 2007 prices)

20 000 50 15 000 40 30 20 5000 10 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 0

Percentage (%)

GGHE as % of THE

OOP payment as % of THE

10 000

Other private expenditure as % of THE

Chart 2 Health expenditure as % of GDP in Brunei Darussalam , 1997-2007 5%

% 2% 1% 0% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

THE as % of GDP

GGHE as % of GDP

Chart 3 Trends in health care expenditure in Brunei Darussalam, 1997-2007 1200 100 90 1000 US$ (constant 2007 prices)

80 70 60 percentage (%)

800

Real THE per capita (US$, 2007) Real GGHE per capita (US$, 2007) GGHE as % of GGE

600

50 40

400

30 20 10

200

0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Chart 4 Breakdown of the percentage of total expenditure on health in Brunei Darussalam by main contribution mechanisms, 1997 and 2007 100

76.777.8

60 %

1997 2007 40

23.022.0 20

0.0 0.0 0 General Taxation Social Health Insurance

0.1 0.1 Prepaid Private Schemes Out-of-pocket payment

0.1 0.1 Other

Links WHO (2009) Western Paciﬁc Country Health Information Proﬁles 2009 Revision, Manila

Brunei Darussalam

Cambodia

Cambodia is a low-income country with a total population of 13.4 million in 2008. Gross domestic product (GDP) per capita was US$ 598 in 2007. Out-of-pocket (OOP) payments are the predominant source of health care ﬁnancing. General government health expenditures (GGHE) are ﬁnanced through general taxation, which are largely supported by external donors. In 2007, total health expenditure (THE) was 5.9% of GDP, equivalent to US$ 36 per capita. OOP payments made up 60.1% of THE; GGHE was 29.0% of THE. GGHE amounted to 11.2% of general government expenditure (GGE), 1.7% of GDP, and US$ 10 per capita. Charts 1 and 2 show historical trends in health expenditure. An ofﬁcial user fee policy was introduced in 1997. This helped reduce under-the-table payments. However, it also deterred poor patients from seeking care. OOP payments as a share of THE reached a peak in 1999. Since then, it has been on a general downward trend and dropped by 5.6% from 1997 to 2007, as can be seen in Chart 3.

Chart 1 Trends in health care expenditure in Cambodia, 1997-2007 700 100 90 600 80 500 70 Percentage (%)

Real GDP per capita (US$, 2007)

US$ (constant 2007 prices)

400

60 50

GGHE as % of THE

300

40 30 20

OOP payment as % of THE

200

100 10 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 0

Other private expenditure as % of THE

Chart 2 Health expenditures as % of GDP in Cambodia, 1997-2007 10% 9% 8% 7% 6% %

5% 4% 3% 2% 1% 0% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

THE as % of GDP

GGHE as % of GDP

Much of the decline in OOP has been attributed to health equity funds (HEFs) which have been mainly funded by donors and constitute an important building block on Cambodia’s way to universal coverage. HEFs serve as funded fee-exemption schemes. They currently cover the healthcare costs of the poor in more than half of the health districts nationwide. The percentage of the population found eligible ranged from 12% to 25% of a district’s population2. Expansion of HEFs is a key component of the Master Plan for Social Health Protection (adopted in 2005 and revised in 2009) which outlines the country’s strategy to attain universal coverage. In addition to the expansion of HEFs, the Master Plan envisages that the informal (predominantly rural) sector shall be covered by community-based health insurance (CBHI) schemes co-sponsored by development partners. Therefore the membership of CBHIs which was around 40 000 persons in 20083 is being further expanded. At the national level, the aim is to implement a compulsory social health insurance scheme for formal salaried workers. In general, the Master Plan envisions providing effective and equitable access to affordable quality of health services for all Cambodians by 2015 and thereby achieving universal coverage. The Health Strategic Plan and the Strategic Framework for Health Financing, both spanning the years 2008 to 2015, outline the effort to ultimately bring all health ﬁnancing mechanisms together into a single, coherent plan under stewardship of the Ministry of Health.

2 3

Worldbank (2008) Cambodia: Exempting the Poor from Hospital User Fees, Washington DC World Health Organization (2008) A Review of Health Care Financing Policies and Strategies in Cambodia, China, Laos, Mongolia, the Philippines and Vietnam, Manila

Cambodia

Health Financing Country Proﬁles 1997–2007

Chart 3 Trends in health care expenditure in Cambodia, 1997-2007 40 35 30 70 60 50 40 30 10 20 5 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 10 0 25 20 15 100 90 80

US$ (constant 2007 prices)

Real THE per capita (US$, 2007)

percentage (%)

Real GGHE per capita (US$, 2007) GGHE as % of GGE

Chart 4 Breakdown of the percentage of total expenditure on health in Cambodia by main contribution mechanisms, 1997 and 2007 100

80 65.7 60.1 60

1997 2007

40 28.529.0

20 10.9 5.8 0.0 0.0 0 General Taxation Social Health Insurance Prepaid Private Schemes Out-of-pocket payment Other 0.0 0.0

Links Annear P. (2009) Cambodia: Developing a Strategy for Social Health Protection in Cambodia, in: ESCAP (ed.) Promoting Sustainable Strategies to Improve Access to Health Care in the Asian and Paciﬁc Region, Bangkok Bigdeli M. & Annear P. (2009) Barriers to access and the purchasing function of health equity funds: lessons from Cambodia, Bulletin of the World Health Organization 87, pp. 560–564 Ministry of Health (2008) Cambodia Strategic Framework for Health Financing 2008-2015, Phnom Penh World Health Organization (2008) A Review of Health Care Financing Policies and Strategies in Cambodia, China, Laos, Mongolia, the Philippines and Vietnam, Manila. World Bank (2008) Cambodia: Exempting the Poor from Hospital User Fees, Washington DC

Cambodia

China

China is a lower middle-income country with a population of more than 1.3 billion in 2008. Gross domestic product (GDP) per capita was US$ 2484 in 2007. Out-of-pocket (OOP) payments are the predominant source of health care ﬁnancing. General government health expenditures (GGHE) are mainly ﬁnanced through social health insurance (SHI). In 2007, total health expenditure (THE) was 4.5% of GDP, equivalent to US$ 112 per capita. OOP payments made up 45.2% of THE; GGHE was 45.3% of THE. GGHE amounted to 10.3% of general government expenditure (GGE), 2.0% of GDP, and US$ 50 per capita. Charts 1, 2 and 3 show historical trends in health expenditure. OOP health expenditure has been on a downward trend since 2001, reﬂecting government policies to improve government-funded health services. Compared to 1997, OOP payment as a share of THE fell by 7.7% in 2007 and was 45.2% (see Chart 4). SHI as an important contributor to the achievement of universal coverage in China accounted for 30.0% of THE in 2007 and is organized through the following three main schemes:

Chart 1 Trends in health care expenditure in China, 1997-2007 3000 100 90 2500 80 70 2000 60 1500 50 40 1000 30 20 500 10 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 0 Other private expenditure as % of THE GGHE as % of THE Real GDP per capita (US$, 2007)

US$ (constant 2007 prices)

Percentage (%)

OOP payment as % of THE

Health Financing Country Proﬁles 1997–2007

Chart 2 Health expenditures as % of GDP in China, 1997-2007 5%

3% %

0% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

THE as % of GDP

GGHE as % of GDP

There are three major social health insurance programmes4 covering speciﬁc groups: • The New Rural Cooperative Scheme (NCMS), covering rural residents on a voluntary basis. This started in 2003, based on the old rural cooperative medical scheme that had been in place since the 1970s, with government subsidising contributions in recent years. Of a target population of approximately 840 million, some 775 million are estimated to be covered. The Urban Employees Basic Medical Insurance (UE-BMI), covering urban employees on a mandatory basis since 1998. Of a target population estimated at 300 million, 230 million were covered at the end of 2008. The Urban Residents Basic Medical Insurance (UR-BMI), covering non-working urban residents (children, students, elderly, disabled and others) on a voluntary basis since 2007. Of a target population estimated at 200 million, 110 million were covered at the end of 2008.

•

The three insurance programmes function independently and offer markedly different beneﬁt packages. For instance, the NCMS inpatient reimbursement rate averaged only 27% in 2008, as compared with an average of 65% through the UE-BMI. Moreover, these averages do not show the marked variation in ﬁnancial protection across localities and by disease conditions. In addition to these insurance programmes, there is the Medical Financial Assistance (MFA) programme funded by government. It provides ﬁnancial assistance for health care payments for the poor and vulnerable. Despite the marked expansion in population coverage by these schemes in recent years, large segments of the population do not have any protection, particularly many of the country’s estimated 200 million migrant workers as well as the unemployed. The government announced a comprehensive reform of the health sector in 2009 and is providing around US$139 billion by 2011 for its implementation. Among the plan’s priorities

Information and data on health insurance programmes comes from Barber (2009). Health insurance in China: Brieﬁng note.

China

is the expansion of SHI coverage to 90% of the population and expanding the depth of coverage through premium subsidies, with the ultimate goal to achieve universal coverage. Major investments in the rural health infrastructure are also planned, e.g. providing a clinic in each of the country’s 700 000 villages and hiring 1.37 million doctors for the rural area3. Dialogues are also underway on shifting provider payment mechanisms away from fee-forservice.

Chart 3 Trends in health care expenditure in China, 1997-2007 120 100 90 100 80 70 60 60 50 40 40 30 20 10 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 0 Real THE per capita ($US, 2007)

US$ (constant 2007 prices)

percentage (%)

Real GGHE per capita ($US, 2007) GGHE as % of GGE

Chart 1 Breakdown of the percentage of total expenditure on health in China by main contribution mechanisms, 1997 and 2007 100

60 52.9

1997 45.2 40 30.0 26.7 20 17.5 15.3 6.1 2.5 Out-of-pocket payment Other

2007

0.4 0 General Taxation Social Health Insurance

3.4

Prepaid Private Schemes

Links Hu et al. (2008) Reform of how health care is paid for in China: challenges and opportunities, Lancet 372, pp. 1846-1853 Organisation for Economic Cooperation and Development (2010) Improving China’s health care system, OECD Economics Department Working Paper 751, Paris Parry J. & Weiyuan C. (2008) Making health care affordable in China, Bulletin of the World Health Organization 86, pp. 821-823 World Health Organization (2008) A Review of Health Care Financing Policies and Strategies in Cambodia, China, Laos, Mongolia, the Philippines and Vietnam, Manila World Health Organization (2009) Health Care Financing in Rural China: New Rural Cooperative Medical Scheme, Technical Briefs for Policy-Makers, Number 3/2009, Geneva

China

Cook Islands

The Cook Islands are a self-governing territory in free association with New Zealand with a total population of about 20 200 in 2008. Gross domestic product (GDP) per capita was US$ 15 839 in 2007, although this ﬁgure reﬂects in part large ﬁnancial ﬂows from New Zealand. The predominant source of health care ﬁnancing in the Cook Islands is general government with support from external donors. In 2007, total health expenditure (THE) was 4.4% of GDP, equivalent to $695 per capita. Outof-pocket (OOP) payments made up 60.1% of THE; General government health expenditure (GGHE) was 91.7% of THE. GGHE amounted to 12.4% of general government expenditure (GGE), 4.0% of GDP, and US$ 638 per capita. Charts 1 and 2 show historical trends in health expenditure. Health care is predominantly ﬁnanced through general taxation. As such, OOP payments as share of THE are relatively low (see Chart 3). At the same time, the country’s tax base is limited and the government is considering to speciﬁcally allocate more of the revenue generated by taxes on alcohol and tobacco to the health sector. Additional public funds could contribute to deepen universal coverage, i.e. expanding the range of health care services covered.

Chart 1 Trends in health care expenditure in Cook Islands, 1997-2007 18 000 100 90 80 70 12 000 Real GDP per capita (US$, 2007)

16 000

14 000

US$ (constant 2007 prices)

10 000 50 8000 40 6000 30 4000 20 10 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Percentage (%)

GGHE as % of THE

OOP payment as % of THE

Other private expenditure as % of THE

2000

Chart 2 Health expenditures as % of GDP in Cook Islands, 1997-2007 5%

3% %

0% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

THE as % of GDP

GGHE as % of GDP

Effective, efﬁcient and equitable health ﬁnancing is aggravated by continuing incidences of communicable diseases and the rise of non-communicable diseases, especially diabetes and hypertension. Antihypertensive medication alone, for example, accounted for 20% of pharmaceutical costs in 1999/20005. Allocation of resources to promotive and preventive health care is an effective way to address this development.

Chart 3 Trends in health care expenditure in Cook Islands, 1997-2007 800 700 600 70 500 400 300 200 20 100 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 10 0 60 50 40 30 percentage (%)

100 90 80 Real THE per capita (US$, 2007) Real GGHE per capita (US$, 2007) GGHE as % of GGE

Furthermore, geographic disparities within the country lead to an inequitable provision and usage of health care by people from remote outer islands or rural areas. Like in other Paciﬁc Island countries, the dependency on imported overseas drugs and other consumables as well as the referral of patients to hospitals outside the country, increase the

World Health Organization (2003) Health Care Decision-making in the Western Paciﬁc Region: Diabetes and the Care Continuum in the Paciﬁc Island Countries, Manila

US$ (constant 2007 prices)

Cook Islands

Health Financing Country Proﬁles 1997–2007 ﬁnancial burden for the health care system. Hence, investments in the Cook Islands’ own health infrastructure will be more cost-efﬁcient in the long run.

Chart 4 Breakdown of the percentage of total expenditure on health in Cook Islands by main contribution mechanisms, 1997 and 2007 100 91.391.7

1997 2007

20 8.7 8.3 0.0 0.0 0 General Taxation Social Health Insurance Prepaid Private Schemes Out-of-pocket payment Other 0.0 0.0 0.0 0.0

Links World Health Organization (2003) Health Care Decision-making in the Western Paciﬁc Region: Diabetes and the Care Continuum in the Paciﬁc Island Countries, Manila World Health Organization (2008) Healthcare Financing Strategy Mid-term Review. Situation Analysis: Cook Islands, Manila WHO (2009) Western Paciﬁc Country Health Information Proﬁles 2009 Revision, Manila

Cook Islands

Fiji

Fiji is a Paciﬁc island country with a total population of about 837,000 in 2007. Gross domestic product (GDP) per capita was US$ 4,014 in 2007. The predominant source of health care ﬁnancing is general government health expenditure (GGHE) which is mainly ﬁnanced through general taxation. In 2007, total health expenditure (THE) was 3.8% of GDP, equivalent to $151 per capita. Out-of-pocket (OOP) payments made up 24.5% of THE; GGHE was 69.1% of THE. GGHE amounted to 9.1% of general government expenditure (GGE), 2.6% of GDP, and $105 per capita. Charts 1 and 2 show historical trends in health expenditure. Increasing the health budget in order to cope with rising costs resulting out of higher prevalence of communicable and non-communicable diseases such as diabetes and hypertension, constitutes one of the government’s priorities. Additional public funds could serve to deepen universal coverage, i.e. expanding the range of health care services covered. A reduction of OOP expenditure as a share of THE and an increase of public spending have already been achieved in recent years (see Chart 3). The expansion of user fees for health services is being considered. User fees might have a negative impact on the relatively low level of OOP expenditure. So far, however, no concrete work has been undertaken to explore the potential costs and outcomes of expanded user fees.

Chart 1 Trends in health care expenditure in Fiji, 1997–2007 4500 100 90 80 70 3000 Real GDP per capita (US$, 2007)

4000

3500

US$ (constant 2007 prices)

2500 50 2000 40 1500 30 1000 20 10 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Percentage (%)

GGHE as % of THE

OOP payment as % of THE

500

Other private expenditure as % of THE

Health Financing Country Proﬁles 1997–2007

Chart 2 Health expenditures as % of GDP in Fiji, 1997-2007 5%

3% %

0% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

THE as % of GDP

GGHE as % of GDP

The generation of additional health sector revenues must in any case be ﬂanked by an increased ability to manage and effectively allocate resources. No overall health ﬁnancing strategy to deal with high referral costs for treatment in hospitals abroad and the costly importation of pharmaceuticals, has been put in place yet. Investments in Fiji’s own health infrastructure, however, will be more cost-efﬁcient in the long run.

Chart 3 Trends in health care expenditure in Fiji, 1997-2007 200 180 160 100 90 80 70 60 50 40 30 20 10 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Real THE per capita (US$, 2007)

US$ (constant 2007 prices)

140 120 100 80 60 40 20 0

percentage (%)

Real GGHE per capita (US$, 2007) GGHE as % of GGE

Fĳi

Chart 4 Breakdown of the percentage of total expenditure on health in Fiji by main contribution mechanisms, 1997 and 2007 100

80 69.1 63.9 60

1997 2007

40 29.2 24.5 20 4.9 4.6 0.0 0.0 0 General Taxation Social Health Insurance Prepaid Private Schemes Out-of-pocket payment Other

1.9 1.8

Links World Health Organization (2003) Health Care Decision-making in the Western Paciﬁc Region: Diabetes and the Care Continuum in the Paciﬁc Island Countries, Manila World Health Organization (2008) Healthcare Financing Strategy Mid-term Review. Situation Analysis: Fiji, Manila WHO (2009) Western Paciﬁc Country Health Information Proﬁles 2009 Revision, Manila

Fĳi

Japan

Japan is a high-income country with a total population of 127.6 million in 2008. Gross domestic product (GDP) per capita was US$ 34 262 in 2007. The predominant source of health care ﬁnancing is general government health expenditure (GGHE) which is mainly ﬁnanced through social health insurance (SHI). In 2007, total health expenditure (THE) was 8.0% of GDP, equivalent to US$ 2751 per capita. Out-of-pocket (OOP) payments made up 15.1% of THE; GGHE was 81.3% of THE. GGHE amounted to 17.9% of general government expenditure (GGE), 6.5% of GDP, and US$ 2237 per capita. Charts 1 and 2 show historical trends in health expenditure. Comprising more than 3500 different societies, four mandatory health insurance schemes cover the Japanese population. Their contribution to THE, however, declined slightly in recent years as did the share of OOP expenditure while general taxation increased, as seen in Chart 3. The four SHI schemes include the Society-Managed Health Insurance (SMHI) for employees of large companies (more than 700 workers) and the Japan Health Insurance AssociationManaged Health Insurance (JHIAHI) for employees of small companies. Insurance premiums for both schemes are based on income and the number of dependents insured. Further, National Health Insurance (NHI) reimburses health care costs for the self-employed and retired persons while Mutual Aid Associations (MAA) covers civil servants and teachers.

Chart 1 Trends in health care expenditure in Japan, 1997-2007 40 000 100 90 80 30 000 70 60 50 40 30 10 000 20 5000 10 0 1997 1998 19992000 2001 2002 2003 20042005 2006 2007 Other private expenditure as % of THE Real GDP per capita (US$, 2007)

35 000

US$ (constant 2007 prices)

20 000

Percentage (%)

25 000

GGHE as % of THE

15 000

OOP payment as % of THE

Chart 2 Health expenditures as % of GDP in Japan, 1997-2007 10% 9% 8% 7% 6% %

5% 4% 3% 2% 1% 0% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

THE as % of GDP

GGHE as % of GDP

Private health insurance companies tend to provide lump-sum payments for services not fully covered by SHI, e.g. preventative care or normal childbirth. To cope with the rising cost of health care caused by rapid population ageing, Japan reintroduced co-payments for the elderly in 1983 and created an “equalisation fund” that transfers revenue from employee-based schemes to the NHI.

Chart 3 Trends in health care expenditure in Japan, 1997-2007 3000 100 90 2500 US$ (constant 2007 prices)

80 70 60 percentage (%)

2000

Real THE per capita (US$, 2007) Real GGHE per capita (US$, 2007) GGHE as % of GGE

1500

50 40

1000

30 20 10

500

0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Japan

Health Financing Country Proﬁles 1997–2007

Chart 4 Trends in health care expenditure in Japan, 1997-2007 3000 100 90 2500 US$ (constant 2007 prices)

80 70 60 percentage (%)

2000

Real THE per capita (US$, 2007) Real GGHE per capita (US$, 2007) GGHE as % of GGE

1500

50 40

1000

30 20 10

500

0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Links Organisation for Economic Cooperation and Development (2009) Health-care reform in Japan: controlling costs, improving quality and ensuring equity, Paris WHO (2009) Western Paciﬁc Country Health Information Proﬁles 2009 Revision, Manila

Japan

Kiribati

Kiribati is a Paciﬁc island country with a total population of about 97 200 in 2008. Gross domestic product (GDP) per capita was US$ 1067 in 2007. The predominant source of health care ﬁnancing is general government health expenditure (GGHE) which is mainly ﬁnanced through general taxation and is substantially supported by external donors. In 2007, total health expenditure (THE) was 13.0% of GDP, equivalent to US$ 139 per capita. Out-of-pocket (OOP) payments made up 12.8% of THE; General government health expenditure (GGHE) was 87.2% of THE. GGHE amounted to 7.8% of general government expenditure (GGE), 11.3% of GDP, and US$ 121 per capita. Charts 1 and 2 show historical trends in health expenditure. Since there is a comprehensive publicly funded and publicly provided health care system in place, OOP expenditure as a proportion of THE is relatively low. However, in recent years OOP payments have increased and the share of general taxation of THE dropped (see Chart 3). Revenue generated by the Ministry of Health was mostly generated from the sale of pharmaceuticals and medical supplies. Most government expenditure is on curative health services, pharmaceuticals and staff.

Chart 1 Trends in health care expenditure in Kiribati, 1997-2007 1200 100 90 1000 80 Real GDP per capita (US$, 2007)

US$ (constant 2007 prices)

70 800

600

50 40

Percentage (%)

GGHE as % of THE

OOP payment as % of THE

400 30 20 200 10 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 0 Other expenditure as % of THE

Health Financing Country Proﬁles 1997–2007

Chart 2 Health expenditures as % of GDP in Kiribati, 1997-2007 20% 18% 16% 14% 12% %

10% 8% 6% 4% 2% 0% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

THE as % of GDP

GGHE as % of GDP

Chart 3 Trends in health care expenditure in Kiribati, 1997-2007 180 160 140 100 90 80 70 60 100 50 80 40 60 40 20 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 30 20 10 0

US$ (constant 2007 prices)

120

Real THE per capita (US$, 2007)

percentage (%)

Real GGHE per capita (US$, 2007)

GGHE as % of GGE

Chart 4 Breakdown of the percentage of total expenditure on health in Kiribati by main contribution mechanisms, 1997 and 2007 100 89.9 87.2 80

60 % 1997 2007

20 12.8 10.1 0.0 0.0 0 General Taxation Social Health Insurance Prepaid Private Schemes Out-of-pocket payment Other 0.0 0.0 0.0 0.0

Links WHO (2009) Western Paciﬁc Country Health Information Proﬁles 2009 Revision, Manila

Kiribati

Korea, Republic of

The Republic of Korea is a high-income country with a total population of 48.6 million in 2008. Gross domestic product (GDP) per capita was US$ 20 014 in 2007. The predominant source of health care ﬁnancing is general government health expenditure (GGHE) which is mainly ﬁnanced through social health insurance (SHI). In 2007, total health expenditure (THE) was 6.6% of GDP, equivalent to US$ 1329 per capita. Out-of-pocket (OOP) payments made up 35.1% of THE; GGHE was 56.7% of THE. GGHE amounted to 12.5% of general government expenditure (GGE), 3.7% of GDP, and US$ 754 per capita. Charts 1 and 2 show historical trends in health expenditure. The Republic of Korea introduced mandatory SHI for industrial workers in large companies in 1977, incrementally expanded SHI to other parts of the population and achieved universal coverage in 1989. As of the end of 2008, 96.3% of the total population was covered by SHI6.

Chart 1 Trends in health care expenditure in Korea, 1997-2007 25 000 100 90 20 000 80 70 Real GDP per capita (US$, 2007)

US$ (constant 2007 prices)

50 10 000 40 30 5000 20 10 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Percentage (%)

15 000

GGHE as % of THE

OOP payment as % of THE

Other private expenditure as % of THE

World Health Organization (2009) Western Paciﬁc Country Health Information Proﬁles 2009 Revision, Manila

Health Financing Country Proﬁles 1997–2007

Chart 2 Health expenditures as % of GDP in Korea, 1997-2007 10% 9% 8% 7% 6%

5% 4% 3% 2% 1% 0% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

THE as % of GDP

GGHE as % of GDP

In 2000, the country’s various health insurance societies were merged into one single payer, the National Health Insurance (NHI). For the formal salaried workers contribution to NHI is proportional to wage income and shared equally between the employee and employer. Since reliable information about the incomes of the self-employed is only partially available, the contribution formula for the self-employed is based on both income and property. There is a safety net for the poor in place, Medicaid. With an annual assessment of poverty status, Medicaid covered 3-5% of the total population in recent years7. It is ﬁnanced by general taxation but administered through NHI. The beneﬁt package of NHI mainly includes curative services but biannual health check ups and vaccination is also provided free of charge. For services covered by the NHI, the co-payment rate is uniformly 20% for inpatient care. For outpatient care in hospitals the copayment rate is 35-50%8. Therefore along with SHI OOP payments still constitute a main funding source for the health system, although it was steadily declining in recent years (see Chart 3). Rapid population ageing, weak incentive for physicians to provide cost-effective care under the fee for-service system, and increasing demand for health services have contributed to a higher ﬁnancial burden for the health care system.

Kwon S. (2009) Thirty years of national health insurance in South Korea: lessons for achieving universal health care coverage, Health Policy and Planning 24(1), pp. 63-71 ob.cit.

Korea, Republic of

Chart 3 Trends in health care expenditure in Korea, 1997-2007 1400 100 90 1200 80 Real THE per capita ($US, 2007)

US$ (constant 2007 prices)

1000

70 60 50

800

percentage (%)

600

Real GGHE per capita ($US, 2007) GGHE as % of GGE

40 30 20

400

200 10 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 0

Chart 4 Breakdown of the percentage of total expenditure on health in Korea by main contribution mechanisms, 1997 and 2007 100

47.7 43.9 40 33.7 35.1

1997 2007

20 12.8 9.2 3.0 3.4 0 General Taxation Social Health Insurance Prepaid Private Schemes Out-of-pocket payment Other 6.3 4.9

Links Jeong H. (2005) Health care reform and change in public–private mix of ﬁnancing: a Korean case, Health Policy 74(2), pp. 133-145 Kwon S. (2009) Thirty years of national health insurance in South Korea: lessons for achieving universal health care coverage, Health Policy and Planning 24(1), pp. 63-71 Lee J. (2010) Spectre of ageing population worries economists, Bulletin of the World Health Organization 88(3), pp. 169-170 Ruger J.P. & Kim H. (2007) Out-of-Pocket Healthcare Spending by the Poor and Chronically Ill in the Republic of Korea, American Journal of Public Health 97(5), pp. 804-811 WHO (2009) Western Paciﬁc Country Health Information Proﬁles 2009 Revision, Manila

Korea, Republic of

Lao People's Democratic Republic

The Lao People’s Democratic Republic is a low-income country with an estimated total population of 6.3 million in 20099. Gross domestic product (GDP) per capita was US$ 698 in 2007. Out-of-pocket (OOP) payments are the predominant source of health care ﬁnancing. General government health expenditures (GGHE) are ﬁnanced through general taxation, which are largely supported by external donors. In 2007, total health expenditure (THE) was 4.0% of GDP, equivalent to US$ 28 per capita. OOP payments made up 61.7% of THE; GGHE was 18.9% of THE. GGHE amounted to 3.7% of general government expenditure (GGE), 0.8% of GDP, and US$ 5 per capita. Charts 1 and 2 show historical trends in health expenditure. As shown in Chart 3, public spending as proportion of THE has declined in recent years while OOP payments have increased. Health equity funds (HEFs), ﬁnanced by bilateral donors as well as lending banks, attempt to counteract this development. These provide a safety net for the most vulnerable, by refunding user fees for identiﬁed poor households. The target is to cover more than 1.5 million potential beneﬁciaries under the various HEFs in the near future, thereby making HEFs an important component in the attainment of universal coverage.

Chart 1 Trends in health care expenditure in Lao PDR, 1997-2007 800 100 90 80 600 70 60 50 40 30 200 20 100 10 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Other expenditure as % of THE Real GDP per capita (US$, 2007)

700

US$ (constant 2007 prices)

400

Percentage (%)

500

GGHE as % of THE

300

OPP payment as % of THE

United Nations Department of Economic and Social Aﬀairs (2008) World Population Prospects: The 2008 Revision

Chart 2 Health expenditures as % of GDP in Lao PDR, 1997-2007 5%

3% %

0% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

THE as % of GDP

GGHE as % of GDP

For those employed in the formal sector, the Civil Servants’ Scheme (CSS) and the Social Security Organization (SSO) for private-sector salaried workers, partially reimburse the costs for needed health services. In the ‘informal’ sector, voluntary community-based health insurance (CBHI) is progressively being expanded with the aim to eventually cover all of the 3.5 million potential beneﬁciaries. These four non-tax ﬁnanced prepayment schemes (HEF, CSS, SSO, CBHI) added up to around 8% coverage of the total population in 200810. The government’s aim to introduce universal coverage for its population by 2020 has focused policies on the scaling up of existing social health insurance (SHI) schemes and merging them into a single institutional framework. This would replace the separate mandates of the Ministry of Labour and Social Welfare (MOLSW) and the Ministry of Health (MOH). It would also require substantial increases in government funding of health care.

Chart 3 Trends in health care expenditure in Lao PDR, 1997-2007 35 100 90 30 80 US$ (constant 2007 prices)

70 60 50 percentage (%)

Real THE per capita (US$, 2007) Real GGHE per capita (US$, 2007) GGHE as % of GGE

40 30 20

5 10 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 0

World Health Organization (2008) A Review of Health Care Financing Policies and Strategies in Cambodia, China, Laos, Mongolia, the Philippines and Vietnam, Manila

Lao People's Democratic Republic

Health Financing Country Proﬁles 1997–2007

Chart 4 Breakdown of the percentage of total expenditure on health in Lao PDR by main contribution mechanisms, 1997 and 2007 100

61.7 56.6 1997 2007

36.9

16.6 5.9 0.6 2.3 0.0 0.3 Prepaid Private Schemes Out-of-pocket payment

19.0

0 General Taxation Social Health Insurance Other

Links International Social Security Association (2009) Pursuing universal health-care provision in Lao People’s Democratic Republic Thome J.-M. & Pholsena S. (2009) Lao People’s Democratic Republic: Health Financing Reform and Challenges in Expanding the Current Social Protection Schemes, in: ESCAP (ed.) Promoting Sustainable Strategies to Improve Access to Health Care in the Asian and Paciﬁc Region, Bangkok World Health Organization (2008) A Review of Health Care Financing Policies and Strategies in Cambodia, China, Laos, Mongolia, the Philippines and Vietnam, Manila

Lao People's Democratic Republic

Malaysia

Malaysia is an upper middle-income country with a total population of 27.7 million in 2008. Gross domestic product (GDP) per capita was US$ 7027 in 2007. The predominant source of health care ﬁnancing is general government health expenditure (GGHE) which is mainly ﬁnanced through general taxation. Out-of-pocket (OOP) payments are an almost equally important source of health care funding. In 2007, total health expenditure (THE) was 4.4% of GDP, equivalent to US$ 307 per capita. OOP payments made up 40.7% of THE; GGHE was 44.4% of THE. GGHE amounted to 6.9% of general government expenditure (GGE), 2.0% of GDP, and US$ 136 per capita. Charts 1 and 2 show historical trends in health expenditure. The entire Malaysian population is served by both public and private health providers, which complement each other. The parallel existence of public and private health services permits the afﬂuent part of the population to voluntarily switch to the private health sector, while the poor remain dependent on public health services. As shown in Chart 3, the expanding sector of private health insurance contributed 8.0% of THE in 2007 while the share of general taxation dropped in recent years. The switch of the better-off to private health services has the potential to reduce demand in the public sector and cut government’s subsidies which beneﬁt the afﬂuent. Public spending could in turn be channelled to the poor who rely on the public health sector.

Chart 1 rends in health care expenditure in Malaysia, 1997-2007 8000 100 90 80 6000 70 Real GDP per capita (US$, 2007)

7000

US$ (constant 2007 prices)

4000

50 40 30

Percentage (%)

5000

GGHE as % of THE

3000

OOP payment as % of THE

2000 20 1000 10 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Other private expenditure as % of THE

Health Financing Country Proﬁles 1997–2007

Chart 2 Health expenditures as % of GDP in Malaysia, 1997-2007 5%

% 2% 1% 0% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

THE as % of GDP

GGHE as % of GDP

Since the 8th Malaysia Plan, the Ministry of Health and the Economic Planning Unit (EPU) have renewed their efforts to develop a national health care ﬁnancing mechanism (NHFM). The need for such a mechanism was further emphasized in the 9th Malaysia Plan 2006-2010. The decision to establish a NHFM was brought about by changing disease patterns, new technologies and medicines, growing expectations of consumers for high-quality care, and the expansion of the private sector.

Chart 3 Trends in health care expenditure in Malaysia, 1997-2007 350 100 90 300 80 Real THE per capita (US$, 2007)

US$ (constant 2007 prices)

250

70 60 50

200

percentage (%)

150

Real GGHE per capita (US$, 2007) GGHE as % of GGE

40 30 20

100

50 10 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 0

Malaysia

Chart 4 Breakdown of the percentage of total expenditure on health in Malaysia by main contribution mechanisms, 1997 and 2007 100

60 49.1 44.0 40 40.7 38.8

1997 2007

20 5.1 0.2 0.4 0 General Taxation Social Health Insurance Prepaid Private Schemes Out-of-pocket payment Other 8.0 6.8 6.9

Links WHO (2009) Western Paciﬁc Country Health Information Proﬁles 2009 Revision, Manila Yu C. (2008) Equity in health care ﬁnancing: The case of Malaysia, International Journal for Equity in Health 7(15)

Malaysia

Marshall Islands

The Marshall Islands are a Paciﬁc island country with a total population of about 53 200 in 2008. Gross domestic product (GDP) per capita was US$ 2517 in 2007, although this ﬁgure reﬂects in part large ﬁnancial ﬂows from the United States of America. The predominant source of health care ﬁnancing in the Marshall Islands is general government with support from external donors. In 2007, total health expenditure (THE) was 14.7% of GDP, equivalent to US$ 371 per capita. Out-of-pocket (OOP) payments made up 2.6% of THE; General government health expenditure (GGHE) was 97.4% of THE. GGHE amounted to 14.6% of general government expenditure (GGE), 14.3% of GDP, and US$ 361 per capita. Charts 1 and 2 show historical trends in health expenditure. Since there is a comprehensive publicly funded health care system in place OOP payment as a proportion of THE remained low while the share of general taxation rose by 16.2% from 1997 to 2007 (see Chart 3). Additional public funds could contribute to deepen universal coverage, i.e. expanding the range of health care services covered. Geographic disparities within the country lead to an inequitable provision and usage of health care by people from remote outer islands or rural areas. In line with its mission statement, the Ministry of Health continues to explore avenues to provide the best quality health care possible to the population despite its meagre funding and limited human and capital resources.

Chart 1 rends in health care expenditure in Marshall Islands, 1997-2007 3000 100 90 2500 80 70 2000 60 1500 50 40 1000 30 20 500 10 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 0 Other private expenditure as % of THE Real GDP per capita (US$, 2007)

US$ (constant 2007 prices)

Percentage (%)

GGHE as % of THE

OOP payment as % of THE

Chart 2 Health expenditures as % of GDP in Marshall Islands, 1997-2007 20% 18% 16% 14% 12%

10% 8% 6% 4% 2% 0% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

THE as % of GDP

GGHE as % of GDP

Chart 3 Trends in health care expenditure in Marshall Islands, 1997-2007 500 450 400 100 90 80 70 60 50 40 30 20 10 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Real THE per capita ($US, 2007)

US$ (constant 2007 prices)

350 300 250 200 150 100 50 0

percentage (%)

Real GGHE per capita ($US, 2007)

GGHE as % of GGE

Chart 4 Breakdown of the percentage of total expenditure on health in Marshall Islands by main contribution mechanisms, 1997 and 2007 100 85.4 80 69.2

60 % 1997 2007

40 28.5

20 12.0 0.0 0.0 0 General Taxation Social Health Insurance Prepaid Private Schemes Out-of-pocket payment Other 2.2 2.6 0.0 0.0

Links World Health Organization (2003) Health Care Decision-making in the Western Paciﬁc Region: Diabetes and the Care Continuum in the Paciﬁc Island Countries, Manila WHO (2009) Western Paciﬁc Country Health Information Proﬁles 2009 Revision, Manila

Marshall Islands

Micronesia, Federated States of

The Federated States of Micronesia are a Paciﬁc island country with a total population of about 108 000 in 2008. Gross domestic product (GDP) per capita was US$ 2123 in 2007, although this ﬁgure reﬂects in part large ﬁnancial ﬂows from the United States of America. The predominant source of health care ﬁnancing is general government health expenditure (GGHE) which is mainly ﬁnanced through general taxation and is substantially supported by external donors. In 2007, total health expenditure (THE) was 13.3% of GDP, equivalent to US$ 282 per capita. Out-of-pocket (OOP) payments made up 4.2% of THE; GGHE was 95.8% of THE. GGHE amounted to 18.9% of general government expenditure (GGE), 12.7% of GDP, and US$ 270 per capita. Charts 1 and 2 show historical trends in health expenditure. The social health insurance (SHI) scheme MiCARE serves as a prepayment mechanism to protect parts of the population against catastrophic health expenditures. MiCARE covers public servants on a compulsory basis but is also open for voluntary membership. As shown in Chart 3, the SHI proportion of THE has more than doubled from 1997 to 2007.

Chart 1 Trends in health care expenditure in Micronesia, Federated States of 1997-2007 3500 100 90 2500 80 70 2500 Real GDP per capita (US$, 2007)

US$ (constant 2007 prices)

1500

50 40

Percentage (%)

GGHE as % of THE

OOP payment as % of THE

1500 30 20 500 10 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 0 Other private expenditure as % of THE

Chart 2 Health expenditures as % of GDP in Micronesia, Federated States of, 1997-2007 20% 18% 16% 14% 12% %

10% 8% 6% 4% 2% 0% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

THE as % of GDP

GGHE as % of GDP

There are ongoing discussions on scaling up SHI, with the aim of achieving universal coverage. Patients insured by SHI get 90% of their medical charges reimbursed with a 10% copayment11. The country’s health care system carries a high ﬁnancial burden due to the costs of overseasreferrals accounting for 11.7% of THE in 200512, as well as due to the costly treatment of non-communicable diseases and tuberculosis. The health care system is also largely dependent on imported drugs and consumables. Hence, investments in the Federated States of Micronesia’s own health infrastructure will be more cost-efﬁcient in the long term.

Chart 3 Trends in health care expenditure in Micronesia, Federated States of, 1997-2007 350 100 90 300 80 Real THE per capita (US$, 2007)

US$ (constant 2007 prices)

250

70 60 50

200

percentage (%)

150

Real GGHE per capita (US$, 2007) GGHE as % of GGE

40 30 20

100

50 10 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 0

World Health Organization (2008) Healthcare Financing Strategy Mid-term Review. Situation Analysis: Federated States of Micronesia, Manila op. cit.

Micronesia, Federated States of

Health Financing Country Proﬁles 1997–2007

Chart 4 Breakdown of the percentage of total expenditure on health in Micronesia, Federated States of by main contribution mechanisms, 1997 and 2007 100

83.7 80 74.5

60 % 1997 2007

21.3 20 10.1 6.2 0.0 0.0 0 General Taxation Social Health Insurance Prepaid Private Schemes Out-of-pocket payment Other 4.2 0.0 0.0

Links World Health Organization (2003) Health Care Decision-making in the Western Paciﬁc Region: Diabetes and the Care Continuum in the Paciﬁc Island Countries, Manila World Health Organization (2008) Healthcare Financing Strategy Mid-term Review. Situation Analysis: Federated States of Micronesia, Manila WHO (2009) Western Paciﬁc Country Health Information Proﬁles 2009 Revision, Manila

Micronesia, Federated States of

Mongolia Mongolia is a lower middle-income country with a total population of 2.7 million in 2008. Gross domestic product (GDP) per capita was US$ 1481 in 2007. General government health expenditures (GGHE) which are equally ﬁnanced through general taxation and social health insurance (SHI) are the predominant source of health care ﬁnancing. In 2007, total health expenditure (THE) was 6.2% of GDP, equivalent to US$ 91 per capita. OOP payments made up 10.7% of THE; GGHE was 75.7% of THE. GGHE amounted to 12.2% of general government expenditure (GGE), 4.7% of GDP, and US$ 69 per capita. Charts 1 and 2 show historical trends in health expenditure. As part of the country’s comprehensive socioeconomic reforms in the 1990s, compulsory SHI was introduced in 1994 and almost led to universal coverage by 1997. However, SHI coverage has been continuously falling over the last years and accounted for 77.3% in 2007. The main reason for this decline is that in 1999 the government stopped subsidizing SHI membership for students and self-employed including herders who then opted out of the scheme. Other factors affecting SHI coverage rate are difﬁculties in reaching non-salaried workers, the inability or unwillingness to pay insurance premiums and the high levels of internal migration. However, SHI remains a main contributor to THE, accounting for 37.8% in 200713(see Chart 3), and the most promising health ﬁnancing mechanism for achieving universal coverage in Mongolia.

Chart 1 Trends in health care expenditure in Mongolia of 1997-2007 1600 100 90 80 1200 70 Real GDP per capita (US$, 2007)

1400

US$ (constant 2007 prices)

800

50 40 30

Percentage (%)

1000

GGHE as % of THE

600

OOP payment as % of THE

400 20 200 10 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Other private expenditure as % of THE

World Health Organization (2008) A Review of Health Care Financing Policies and Strategies in Cambodia, China, Laos, Mongolia, the Philippines and Vietnam, Manila

Health Financing Country Proﬁles 1997–2007

Chart 2 Health expenditures as % of GDP in Mongolia, 1997-2007 10% 9% 8% 7% 6%

5% 4% 3% 2% 1% 0% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

THE as % of GDP

GGHE as % of GDP

Key stakeholders within the public health ﬁnancing system comprise the MOH which develops budgets for the health sector, the State Social Insurance General Ofﬁce (SSIGO) which is responsible for premium collection and monitoring of healthcare service quality as well as the Social Insurance National Council (SINC) which monitors usage and expenses.

Chart 3 Trends in health care expenditure in Mongolia, 1997-2007 100 90 80 US$ (constant 2007 prices)

100 90 80 70 60 50 40 30 20 10 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 percentage (%)

70 60 50 40 30 20 10 0

Real THE per capita (US$, 2007) Real GGHE per capita (US$, 2007) GGHE as % of GGE

Mongolia

Chart 4 Breakdown of the percentage of total expenditure on health in Mongolia by main contribution mechanisms, 1997 and 2007

60 52.4

1997 2007 37.8 26.6

37.8

15.4 10.7 5.5 0.0 0.0

13.6

0 General Taxation Social Health Insurance Prepaid Private Schemes Out-of-pocket payment Other

Links Tumendemberel N. (2009) Mongolia: Promoting Sustainable Financing and Universal Coverage through Social Health Insurance, in: ESCAP (ed.) Promoting Sustainable Strategies to Improve Access to Health Care in the Asian and Paciﬁc Region, Bangkok World Bank (2007) The Mongolian Health System at a Crossroads: An Incomplete Transition to a Post-Semashko Model, Washington DC World Health Organization (2007) Mongolia: Health system review, Health Systems in Transition 9(4), Copenhagen World Health Organization (2008) A Review of Health Care Financing Policies and Strategies in Cambodia, China, Laos, Mongolia, the Philippines and Vietnam, Manila

Mongolia

Nauru

Nauru is a Paciﬁc island country with a total population of about 10 100 in 2008. Gross domestic product (GDP) per capita was US$ 4458 in 2007. The predominant source of health care ﬁnancing in Nauru is general government with support from external donors. In 2007, total health expenditure (THE) was 15.1% of GDP, equivalent to US$ 673 per capita. Out-of-pocket (OOP) payments made up 24.6% of THE; General government health expenditure (GGHE) was 70.9% of THE. GGHE amounted to 38.1% of general government expenditure (GGE), 10.7% of GDP, and US$ 477 per capita. Charts 1 and 2 show historical trends in health expenditure. As seen in Chart 3, public spending for health as a proportion of THE remained around 70% in recent years while the share of OOP payment more than quadrupled in the period from 1997 to 2007. A further increase is likely to pose barriers to the ﬁnancial access of health care services for the poor and should be prevented by effective, efﬁcient and equitable measures.

Chart 1 Trends in health care expenditure in Nauru of 1997-2007 8000 100 90 80 6000 70 Real GDP per capita (US$, 2007)

7000

US$ (constant 2007 prices)

4000

50 40 30

Percentage (%)

5000

GGHE as % of THE

3000

OOP payment as % of THE

2000 20 1000 10 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Other private expenditure as % of THE

Chart 2 Health expenditures as % of GDP in Nauru, 1997-2007 20% 18% 16% 14% 12%

10% 8% 6% 4% 2% 0% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

THE as % of GDP

GGHE as % of GDP

Chart 3 Trends in health care expenditure in Nauru, 1997-2007 1,000 900 800 100 90 80 70 60 50 40 30 20 10 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

US$ (constant 2007 prices)

700 600 500 400 300 200 100 0

Real THE per capita (US$, 2007)

percentage (%)

Real GGHE per capita (US$, 2007) GGHE as % of GGE

Chart 4 Breakdown of the percentage of total expenditure on health in Nauru by main contribution mechanisms, 1997 and 2007 100

80 71.370.9

1997 2007 40 24.6 20 5.8 0.0 0.0 0 General Taxation Social Health Insurance Prepaid Private Schemes Out-of-pocket payment Other 0.0 0.0 4.5

22.9

Links WHO (2009) Western Paciﬁc Country Health Information Proﬁles 2009 Revision, Manila

Nauru

New Zealand

New Zealand is a high-income country with a total population of 4.2 million in 2008. Gross domestic product (GDP) per capita was US$ 30 878 in 2007. The predominant source of health care ﬁnancing is general government health expenditure (GGHE) which is mainly ﬁnanced through general taxation. In 2007, total health expenditure (THE) was 8.9% of GDP, equivalent to US$ 2763 per capita. Out-of-pocket (OOP) payments made up 17.4% of THE; GGHE was 77.0% of THE. GGHE amounted to 17.4% of general government expenditure (GGE), 6.9% of GDP, and US$ 2128 per capita. Charts 1 and 2 show historical trends in health expenditure. Of THE, around two thirds is currently coming from tax-funded Vote Health, which pays for core health services such as hospitals, primary care, public health care, mental health care, addiction services, and care for older people. The remaining public funds which are equivalent to around 10% of THE are from the Accident Compensation Corporation (ACC), which pays for accident and injury prevention and treatment14. As shown in Chart 3, in recent years public spending on health has decreased while OOP expenditure has risen.

Chart 1 Trends in health care expenditure in New Zealand of 1997-2007 35 000 100 90 30 000 80 25 000 70 Real GDP per capita (US$, 2007)

US$ (constant 2007 prices)

20 000 50 15 000 40 30 20 5000 10 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Percentage (%)

GGHE as % of THE

OOP payment as % of THE

10 000

Other private expenditure as % of THE

World Health Organization (2009) Western Paciﬁc Country Health Information Proﬁles 2009 Revision, Manila

Chart 2 Health expenditures as % of GDP in New Zealand, 1997-2007 10% 9% 8% 7% 6%

5% 4% 3% 2% 1% 0% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

THE as % of GDP

GGHE as % of GDP

District health boards (DHBs) formed in 2001 take a leading role in the delivery of health care services within their geographical areas through their own hospitals or purchased services from other hospitals. Each DHB is allocated an annual budget by central government based on the number of people living in each region, their age structure, and other population characteristics that affect the need for health and disability services. Private health insurance companies insure people against supplementary costs, rather than providing a comprehensive health cover. Prepaid private schemes accounted for 4.6% of THE in 2007 (see Chart 3). While patients may be required to pay partially or fully for health care services or medicines received, the government has set up a safety net to support those who cannot afford the payments.

Chart 3 Trends in health care expenditure in New Zealand, 1997-2007 3000 100 90 2500 80 70 60 1500 50 40 1000 30 20 10 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 0

US$ (constant 2007 prices)

2000

Real THE per capita ($US, 2007)

percentage (%)

Real GGHE per capita ($US, 2007) GGHE as % of GGE

500

New Zealand

Health Financing Country Proﬁles 1997–2007

Chart 4 Breakdown of the percentage of total expenditure on health in New Zealand by main contribution mechanisms, 1997 and 2007 100

78.577.0

1997 2007 40

20 6.4 4.6 0.0 0.0 0 General Taxation Social Health Insurance Prepaid Private Schemes

17.4 14.8

0.3 0.9 Out-of-pocket payment Other

Links Li S. (2006) Health Care Financing Policies of Australia, New Zealand and Singapore, Research Paper RP06/05-06 of the Hong Kong Legislative Council, Hong Kong WHO (2009) Western Paciﬁc Country Health Information Proﬁles 2009 Revision, Manila

New Zealand

Niue

Niue is a self-governing territory in free association with New Zealand with a total population of 1549 in 2008. Gross domestic product (GDP) per capita was US$ 9228 in 2007, although this ﬁgure reﬂects in part large ﬁnancial ﬂows from New Zealand. The predominant source of health care ﬁnancing in Niue is general government with substantial support from external donors. In 2007, total health expenditure (THE) was 13.6% of GDP, equivalent to US$ 1258 per capita. Out-of-pocket (OOP) payments made up 1.4% of THE; General government health expenditure (GGHE) was 98.6% of THE. GGHE amounted to 10.8% of general government expenditure (GGE), 13.4% of GDP, and US$ 1240 per capita. Charts 1 and 2 show historical trends in health expenditure. Since there is a comprehensive publicly funded health care system in place, OOP expenditure as a proportion of THE is very low and even decreased further in the period from 1997 to 2007, as shown in Chart 3. However, the depth of universal coverage, i.e. the range of health care services covered, remains an issue to be addressed.

Chart 1 Trends in health care expenditure in Niue of 1997-2007 10 000 9000 8000 7000 6000 5000 4000 3000 2000 1000 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 100 90 80 70

Real GDP per capita (US$, 2007)

US$ (constant 2007 prices)

50 40 30 20 10 0

Percentage (%)

GGHE as % of THE

OOP payment as % of THE

Other private expenditure as % of THE

Health Financing Country Proﬁles 1997–2007

Chart 2 Health expenditures as % of GDP in Niue, 1997-2007 40% 35% 30% 25% %

20% 15% 10% 5% 0% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

THE as % of GDP

GGHE as % of GDP

Chart 3 Trends in health care expenditure in Niue, 1997-2007 3500 100 90 3000 80 US$ (constant 2007 prices)

2500

70 60 50 percentage (%)

Real THE per capita (US$, 2007) Real GGHE per capita (US$, 2007)

2000

1500

40 30 20

1000

GGHE as % of GGE

500 10 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 0

Chart 4 Breakdown of the percentage of total expenditure on health in Niue by main contribution mechanisms, 1997 and 2007 100 97.098.6

1997 2007 40

0.0 0.0 0 General Taxation Social Health Insurance

0.0 0.0 Prepaid Private Schemes

3.0 1.4 Out-of-pocket payment

0.0 0.0 Other

Links WHO (2009) Western Paciﬁc Country Health Information Proﬁles 2009 Revision, Manila

Niue

Palau

Palau is a Paciﬁc island country with a total population of about 20 700 in 2008. Gross domestic product (GDP) per capita was US$ 8087 in 2007, although this ﬁgure reﬂects in part large ﬁnancial ﬂows from the United States of America. The predominant source of health care ﬁnancing in Palau is general government with support from external donors. In 2007, total health expenditure (THE) was 10.8% of GDP, equivalent to US$ 873 per capita. Out-of-pocket (OOP) payments made up 8.7% of THE; General government health expenditure (GGHE) was 78.4% of THE. GGHE amounted to 12.7% of general government expenditure (GGE), 8.5% of GDP, and US$ 685 per capita. Charts 1 and 2 show historical trends in health expenditure. Increased user fees for hospital services as well as copayments of 55% for ofﬁcial overseas medical referrals have reduced the ﬁnancial burden of the country’s health sector15. Consequently, public spending on health as a proportion of THE dropped by 13.2% in the period from 1997 to 2007 (see Chart 3). However, these measures potentially affect the utilization of health facilities by poor patients who are forgoing medical care because of unaffordable OOP payments at the point of service.

Chart 1 Trends in health care expenditure in Palau 1997-2007 9000 100 90 80 70 6000 Percentage (%)

8000

7000 US$ (constant 2007 prices)

Real GDP per capita (US$, 2007)

60 5000 50 4000 40 3000 30 2000 20 10 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

GGHE as % of THE

OOP payment as % of THE

1000

Other private expenditure as % of THE

Asian Development Bank (2008) Palau: Development of a Sustainable Health Financing Scheme, Manila

Health Financing Country Proﬁles 1997–2007

Chart 2 Health expenditures as % of GDP in Palau, 1997-2007 20% 18% 16% 14% 12%

10% 8% 6% 4% 2% 0% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

THE as % of GDP

GGHE as % of GDP

Palau has been working on the development of a national SHI since 1995 with the aim to achieve universal coverage of its population in the near future. In January 2008, the National Healthcare Coverage and Savings Act was passed which envisages the establishment of a national health savings plan (NHSP) in the ﬁrst phase, and a national group health insurance plan in the second phase. The NHSP is to be ﬁnanced by individual medical savings accounts (MSAs) with contributions from employers and employees, as well as possible donor funding. Only few Palauans are currently covered by private health insurance, usually as part of company schemes. The country’s aging population and the trend toward a higher prevalence of noncommunicable diseases such as diabetes and hypertension will increase the need for effective, efﬁcient and equitable health ﬁnancing.

Chart 3 Trends in health care expenditure in Palau, 1997-2007 1000 900 800 US$ (constant 2007 prices)

100 90 80 70 60 50 40 30 20 10 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 percentage (%)

700 600 500 400 300 200 100 0

Real THE per capita (US$, 2007) Real GGHE per capita (US$, 2007) GGHE as % of GGE

Palau

Chart 4 Breakdown of the percentage of total expenditure on health in Palau by main contribution mechanisms, 1997 and 2007 100 91.6

78.4

1997 2007

20 9.4 0.0 0.0 0 General Taxation Social Health Insurance Prepaid Private Schemes Out-of-pocket payment Other 0.0 8.4 8.7 3.5 0.0

Links Asian Development Bank (2008) Palau: Development of a Sustainable Health Financing Scheme, Manila WHO (2009) Western Paciﬁc Country Health Information Proﬁles 2009 Revision, Manila

Palau

Papua New Guinea

Papua New Guinea is a lower middle-income country with a total population of 6.5 million in 2008. Gross domestic product (GDP) per capita was US$ 988 in 2007. The predominant source of health care ﬁnancing is general government health expenditure (GGHE) which is mainly ﬁnanced through general taxation and is substantially supported by external donors. In 2007, total health expenditure (THE) was 3.2% of GDP, equivalent to US$ 31 per capita. Out-of-pocket (OOP) payments made up 7.7% of THE; GGHE was 81.8% of THE. GGHE amounted to 7.3% of general government expenditure (GGE), 2.6% of GDP, and US$ 26 per capita. Charts 1 and 2 show historical trends in health expenditure. Since a comprehensive publicly funded health care system is in place OOP payments are low and further decreased in recent years, as shown in Chart 3. Theoretically health care is free of charge but in most provinces small fees are charged for outpatient services. To deepen universal coverage in Papua New Guinea and expand the range of health care services covered increased public spending is crucial.

Chart 1 Trends in health care expenditure in Papua New Guinea of 1997-2007 1200 100 90 1000 80 70 800 Percentage (%)

Real GDP per capita (US$, 2007)

US$ (constant 2007 prices)

60 600 50 40 400 30 20 200 10 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 0

GGHE as % of THE

OOP payment as % of THE

Other private expenditure as % of THE

Chart 2 Health expenditures as % of GDP in Papua New Guinea, 1997-2007 5%

% 2% 1% 0% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

THE as % of GDP

GGHE as % of GDP

The high incidence of communicable diseases and the rise of non-communicable diseases led to an escalation in health care costs. Allocation of resources to promotive and preventive health care is an effective way to address this development. Over 80% of recurrent health budgets were allocated exclusively to salaries in 2006, leaving little for maintenance, goods and services16. Due to the geographical disparities in the distribution of health services people in rural areas are most disadvantaged in accessing needed medical services. Following a recent review of ﬁscal space for health by the National Economic and Fiscal Commission, reforms are being initiated to increase essential service delivery through a new inter-governmental ﬁnancing system. It is planned to replace the previous per capita based provincial block grants with functional grants based on health needs.

Chart 3 Trends in health care expenditure in Papua New Guinea, 1997-2007 45 40 35 US$ (constant 2007 prices)

100 90 80 70 60 percentage (%)

30 25

Real THE per capita (US$, 2007) Real GGHE per capita (US$, 2007) GGHE as % of GGE

50 20 40 15 10 5 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 30 20 10 0

World Health Organization (2009) Western Paciﬁc Country Health Information Proﬁles 2009 Revision, Manila

Papua New Guinea

Health Financing Country Proﬁles 1997–2007

Chart 4 Breakdown of the percentage of total expenditure on health in Papua New Guinea by main contribution mechanisms, 1997 and 2007 100

81.181.8 80

1997 2007

20 9.6 0.0 0.0 0 General Taxation Social Health Insurance Prepaid Private Schemes Out-of-pocket payment Other 0.2 1.1 7.7 9.2 9.4

Links World Health Organization (2008) Healthcare Financing Strategy Mid-term Review. Situation Analysis: Papua New Guinea, Manila WHO (2009) Western Paciﬁc Country Health Information Proﬁles 2009 Revision, Manila

Papua New Guinea

Philippines

The Philippines is a lower middle-income country with a total population of 88.6 million in 2007. Gross domestic product (GDP) per capita was US$ 1638 in 2007. Out-of-pocket (OOP) payments are the predominant source of health care ﬁnancing. General government health expenditures (GGHE) are largely ﬁnanced through general taxation. In 2007, total health expenditure (THE) was 3.9% of GDP, equivalent to US$ 63 per capita. OOP payments made up 54.5% of THE; GGHE was 34.9% of THE. GGHE amounted to 6.8% of general government expenditure (GGE), 1.4% of GDP, and US$ 22 per capita. Charts 1 and 2 show historical trends in health expenditure. Responsibility for public health service delivery and ﬁnancing is divided between the national Department of Health (DOH) and local government units. PhilHealth, the country’s social health insurance (SHI) scheme, covers a relatively high proportion of the population, estimated as 77% in 2008 . The further expansion of PhilHealth to an even bigger part of the population is crucial for the attainment of universal coverage in the country. However, the depth of ﬁnancial protection for PhilHealth members is limited, with its contribution to THE only 8.0% in 2007 (see Chart 3).

Chart 1 Trends in health care expenditure in Philippines, 1997-2007 1800 100 90 80 70 1200 Real GDP per capita (US$, 2007)

1600

1400

US$ (constant 2007 prices)

1000 50 800 40 600 30 400 20 10 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Percentage (%)

GGHE as % of THE

OOP payment as % of THE

200

Other private expenditure as % of THE

Health Financing Country Proﬁles 1997–2007

Chart 2 Health expenditures as % of GDP in Philippines, 1997-2007 5%

% 2% 1% 0% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

THE as % of GDP

GGHE as % of GDP

PhilHealth also have a Sponsored Program for the poor, where premiums are subsidized. In 2009, 72% of the 4.7 million indigent families were enrolled in the Sponsored Program. There is a concern, however, that many of them are not making use of their membership due to a fear of stigmatization17. Much of health providers’ incomes are based on fee-for-service payments, with associated concerns related to over-provision of care. Discussions in recent years have explored the possibility of moving away from fee-for-service reimbursement of providers.

Chart 3 Trends in health care expenditure in Philippines, 1997-2007 70 100 90 60 80 US$ (constant 2007 prices)

70 60 50 percentage (%)

Real THE per capita (US$, 2007) Real GGHE per capita (US$, 2007) GGHE as % of GGE

40 30 20

10 10 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 0

ob. cit.

Philippines

Chart 4 Breakdown of the percentage of total expenditure on health in Philippines by main contribution mechanisms, 1997 and 2007 100

54.5 46.5

1997 2007

38.0 26.9

20 5.1 0 General Taxation Social Health Insurance Prepaid Private Schemes Out-of-pocket payment Other 8.0 4.4 6.4 6.1

4.2

Links Obermann K. et al. (2006) Social health insurance in a developing country: The case of the Philippines, Social Science & Medicine 62, pp. 3177-3185 World Health Organization (2008) A Review of Health Care Financing Policies and Strategies in Cambodia, China, Laos, Mongolia, the Philippines and Vietnam, Manila

Philippines

Samoa

Samoa is a Paciﬁc island country with a total population of about 188 400 in 2008. Gross domestic product (GDP) per capita was US$ 2716 in 2007. The predominant source of health care ﬁnancing is general government health expenditure (GGHE) which is mainly ﬁnanced through general taxation and is substantially supported by external donors. In 2007, total health expenditure (THE) was 5.4% of GDP, equivalent to US$ 146 per capita. Out-of-pocket (OOP) payments made up 11.8% of THE; GGHE was 84.5% of THE. GGHE amounted to 10.5% of general government expenditure (GGE), 4.6% of GDP, and US$ 123 per capita. Charts 1 and 2 show historical trends in health expenditure. All Samoans have ﬁnancial access to health services at no extra costs or in some cases low user fees. User fees for health services have been applied cautiously in order to not jeopardize accessibility and affordability for vulnerable groups. Therefore OOP expenditure as a proportion of THE is low and has fallen in recent years while public spending on health has risen (see Chart 3). Additional public funds could contribute to deepen universal coverage, i.e. expanding the range of health care services covered.

Chart 1 Trends in health care expenditure in Samoa, 1997-2007 3000 100 90 2500 80 70 2000 Real GDP per capita (US$, 2007)

US$ (constant 2007 prices)

1500

50 40

Percentage (%)

GGHE as % of THE

OOP payment as % of THE

1000 30 20 500 10 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 0 Other private expenditure as % of THE

Chart 2 Health expenditures as % of GDP in Samoa, 1997-2007

9% 8% 7% 6%

5% 4% 3% 2% 1% 0% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

THE as % of GDP

GGHE as % of GDP

A comprehensive tax-based ﬁnanced health system is in place. However, a SHI law was adopted whose implementation is currently delayed. Public servants can already contribute to the National Provident Fund which accounted for 0.6% of THE in 2007. Like in other Paciﬁc island countries, the dependency on imported overseas drugs and other consumables as well as the referral of patients to hospitals outside the country, increase the ﬁnancial burden for the health care system. Inequity of access to overseas care remains a challenge. Hence, investments in Samoa’s own health infrastructure will be more costefﬁcient in the long term.

Chart 3 Trends in health care expenditure in Samoa, 1997-2007 160 140 120 70 60 50 40 30 40 20 20 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 10 0 percentage (%)

100 90 80

US$ (constant 2007 prices)

Real THE per capita (US$, 2007) Real GGHE per capita (US$, 2007) GGHE as % of GGE

100 80 60

Samoa

Health Financing Country Proﬁles 1997–2007

Chart 4 Breakdown of the percentage of total expenditure on health in Samoa by main contribution mechanisms, 1997 and 2007 100

83.9 80 72.9

1997 2007 40

20.4 20 11.8 6.2 0.5 0.6 0 General Taxation Social Health Insurance Prepaid Private Schemes Out-of-pocket payment Other 0.0 0.0 3.7

Links World Health Organization (2003) Health Care Decision-making in the Western Paciﬁc Region: Diabetes and the Care Continuum in the Paciﬁc Island Countries, Manila World Health Organization (2008) Healthcare Financing Strategy Mid-term Review. Situation Analysis: Samoa, Manila WHO (2009) Western Paciﬁc Country Health Information Proﬁles 2009 Revision, Manila

Samoa

Singapore

Singapore is a high-income country with a total population of 3.6 million in 2008. Gross domestic product (GDP) per capita was US$ 36 370 in 2007. Since the country’s health care ﬁnancing system is a private yet publicly supported medical savings account (MSA) system out-of-pocket (OOP) payments are the predominant funding source for health care. In 2007, total health expenditure (THE) was 3.2% of GDP, equivalent to US$ 1161 per capita. OOP payments made up 63.3% of THE; General government health expenditure (GGHE) was 32.6% of THE. GGHE amounted to 7.2% of general government expenditure (GGE), 1.0% of GDP, and US$ 379 per capita. Charts 1 and 2 show historical trends in health expenditure. Singapore has a mixed health ﬁnancing system with multiple tiers of protection in case of illness including strong government support as well as innovative complementary programs designed to promote individual responsibility. Therefore OOP payments as a share of THE went up in recent years while public spending declined (see Chart 3).

Chart 1 Trends in health care expenditure in Singapore, 1997-2007 40 000 100 90 80 30 000 70 60 50 40 30 10 000 20 5000 10 0 1997 1998 1999 2000 2001 20022003 2004 2005 2006 2007 Other private expenditure as % of THE Real GDP per capita (US$, 2007)

35 000

US$ (constant 2007 prices)

20 000

Percentage (%)

25 000

GGHE as % of THE

15 000

OOP payment as % of THE

Health Financing Country Proﬁles 1997–2007

Chart 2 Health expenditures as % of GDP in Singapore, 1997-2007 5%

% 2% 1% 0% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

THE as % of GDP

GGHE as % of GDP

Introduced in 1984, Medisave is a national savings scheme to which employees are required to make mandatory contributions of 6.5% to 9.0% of his or her income depending on their age, while employers make a matching contribution 18. Individuals can use their MSA to pay hospital expenses incurred by themselves or their immediate family. In order to prevent individuals exhausting their MSAs before retirement, the government sets limits on the use of Medisave. MediShield is a low-cost, catastrophic illness insurance scheme set up in 1990 and designed to help members meet the medical expenses from major or prolonged illnesses, for which their MSA balance would not be sufﬁcient. Annual premiums for MediShield can be paid from the individual’s MSA. There are also private supplementary insurance products offering additional coverage. These are integrated with MediShield to provide a national risk pool for basic coverage. Medifund is an endowment fund set up by the Government as a safety net to cover health service costs for Singaporeans who are unable to pay for them. In 2007, part of Medifund was speciﬁcally set aside to be dedicated to needy, elderly patients (65 years and above). ElderShield is a severe-disability insurance scheme, designed to provide Singaporeans with basic ﬁnancial protection against expenses required in the event of severe disability, especially in old age. Introduced in 2002, it was further reformed in 2007 to improve its beneﬁts, and private insurers are now allowed to provide supplementary products with higher coverage.

Li S. (2006) Health Care Financing Policies of Australia, New Zealand and Singapore, Research Paper RP06/05-06 of the Hong Kong Legislative Council, Hong Kong

Singapore

Chart 3 Trends in health care expenditure in Singapore, 1997-2007 1400 100 90 1200 80 US$ (constant 2007 prices)

1000

70 60 50 percentage (%)

Real THE per capita (US$, 2007) Real GGHE per capita (US$, 2007) GGHE as % of GGE

800

600

40 30 20

400

200 10 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 0

Chart 4 Breakdown of the percentage of total expenditure on health in Singapore by main contribution mechanisms, 1997 and 2007 100

63.2 58.7

1997 2007 40 38.0 27.7 20 5.0 1.7 0 General Taxation Social Health Insurance Prepaid Private Schemes Out-of-pocket payment Other 0.0

1.9

1.6 2.2

Links Li S. (2006) Health Care Financing Policies of Australia, New Zealand and Singapore, Research Paper RP06/05-06 of the Hong Kong Legislative Council, Hong Kong Singaporean Ministry of Health (2008) Singapore’s Healthcare Financing System, Singapore World Bank (2003) Financing Health Care: Singapore’s Innovative Approach, Washington DC WHO (2009) Western Paciﬁc Country Health Information Proﬁles 2009 Revision, Manila

Singapore

Solomon Islands

The Solomon Islands are a Paciﬁc island country with a total population of about 535 000 in 2008. Gross domestic product (GDP) per capita was US$ 1074 in 2007. The predominant source of health care ﬁnancing in the Solomon Islands is general government with support from external donors. In 2007, total health expenditure (THE) was 5.1% of GDP, equivalent to US$ 55 per capita. Out-of-pocket (OOP) payments made up 5.1% of THE; General government health expenditure (GGHE) was 92.4% of THE. GGHE amounted to 15.4% of general government expenditure (GGE), 4.7% of GDP, and US$ 50 per capita. Charts 1 and 2 show historical trends in health expenditure. Since there is a comprehensive publicly funded health care system in place, OOP expenditure as a proportion of THE is very low and even decreased further in the period from 1997 to 2007, as shown in Chart 3. However, the depth of universal coverage, i.e. the range of health care services covered, remains an issue to be addressed.

Chart 1 Trends in health care expenditure in Solomon Islands, 1997-2007 1200 100 90 1000 80 70 800 Real GDP per capita (US$, 2007)

US$ (constant 2007 prices)

600

50 40

Percentage (%)

GGHE as % of THE

OOP payment as % of THE

400 30 20 200 10 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 0 Other private expenditure as % of THE

Chart 2 Health expenditures as % of GDP in Solomon Islands, 1997-2007 10% 9% 8% 7% 6%

5% 4% 3% 2% 1% 0% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

THE as % of GDP

GGHE as % of GDP

Chart 3 Trends in health care expenditure in Solomon Islands, 1997-2007 60 100 90 50 80 70 60 30 50 40 20 30 20 10 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 0 percentage (%)

40 US$, 2007

Real THE per capita (US$, 2007) Real GGHE per capita (US$, 2007) GGHE as % of GGE

Chart 4 Breakdown of the percentage of total expenditure on health in Solomon Islands by main contribution mechanisms, 1997 and 2007 100 92.4 89.0

1997 2007

20 7.8 0.0 0.0 0 General Taxation Social Health Insurance Prepaid Private Schemes Out-of-pocket payment Other 0.0 0.0 5.1

3.2 2.5

Links WHO (2009) Western Paciﬁc Country Health Information Proﬁles 2009 Revision, Manila

Solomon Islands

Tonga

Tonga is a Paciﬁc island country with a total population of about 102,700 in 2008. Gross domestic product (GDP) per capita was US$ 2515 in 2007. The predominant source of health care ﬁnancing is general government health expenditure (GGHE) which is mainly ﬁnanced through general taxation and is substantially supported by external donors. In 2007, total health expenditure (THE) was 4.9% of GDP, equivalent to US$ 124 per capita. Out-of-pocket (OOP) payments made up 22.0% of THE; GGHE was 74.0% of THE. GGHE amounted to 11.7% of general government expenditure (GGE), 3.6% of GDP, and US$ 92 per capita. Charts 1 and 2 show historical trends in health expenditure. The increasing prevalence of non-communicable diseases (NCDs) such as diabetes and hypertension have lead to an increasing cost of services for NCDs related complications and associated high cost overseas referrals. Also the demographical change with an ageing population favours chronic high cost diseases. Allocation of resources to promotive and preventive health care is an effective way to address this development. The dependency on imported overseas drugs and other consumables further increase the ﬁnancial burden for the health care system.

Chart 1 Trends in health care expenditure in Tonga, 1997-2007 3000 100 90 2500 80 70 2000 Percentage (%)

Real GDP per capita (US$, 2007)

US$ (constant 2007 prices)

60 1500 50 40 1000 30 20 500 10 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 0

GGHE as % of THE

OOP payment as % of THE

Other private expenditure as % of THE

Chart 2 Health expenditures as % of GDP in Tonga, 1997-2007 10% 9% 8% 7% 6%

5% 4% 3% 2% 1% 0% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

THE as % of GDP

GGHE as % of GDP

A government priority is the reduction of OOP payments by enhancing the ﬁnancial protection for the poor and vulnerable. As seen in Chart 3, OOP expenditure as a share of THE has already been brought down successfully in recent years. The government is considering at the introduction of social health insurance (SHI) for civil servants with the view to extend it to workers employed in the formal sector within the next years. This constitutes an important step on Tonga’s way to universal coverage of its population. However, there is concern that the formal sector might be too small to support a SHI scheme. Geographic disparities within the country lead to an inequitable provision and usage of health care by people from outer islands or rural areas. They have limited access to curative services.

Chart 3 Trends in health care expenditure in Tonga, 1997-2007 180 160 140 120 US$, 2007

100 90 80 70 60 percentage (%)

Real THE per capita (US$, 2007) Real GGHE per capita (US$, 2007) GGHE as % of GGE

100 50 80 40 60 40 20 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 30 20 10 0

Tonga

Health Financing Country Proﬁles 1997–2007

Chart 4 Breakdown of the percentage of total expenditure on health in Tonga by main contribution mechanisms, 1997 and 2007 100

74.0 70.4

1997 2007 40 26.7 22.0 20

0.0 0.0 0 General Taxation Social Health Insurance*

2.0 1.0 Prepaid Private Schemes Out-of-pocket payment

0.8

3.1

Other

Links World Health Organization (2003) Health Care Decision-making in the Western Paciﬁc Region: Diabetes and the Care Continuum in the Paciﬁc Island Countries, Manila World Health Organization (2008) Healthcare Financing Strategy Mid-term Review. Situation Analysis: Tonga, Manila WHO (2009) Western Paciﬁc Country Health Information Proﬁles 2009 Revision, Manila

Tonga

Tuvalu

Tuvalu is a Paciﬁc island country with a total population of about 9700 in 2008. Gross domestic product (GDP) per capita was US$ 2788 in 2007. The predominant source of health care ﬁnancing is general government health expenditure (GGHE) which is mainly ﬁnanced through general taxation and is supported by external donors. In 2007, total health expenditure (THE) was 10.6% of GDP, equivalent to US$ 296 per capita. Out-of-pocket (OOP) payments made up 1.3% of THE; GGHE was 92.0% of THE. GGHE amounted to 16.1% of general government expenditure (GGE), 9.8% of GDP, and US$ 272 per capita. Charts 1 and 2 show historical trends in health expenditure. In general, all health services are provided free of charge through the Ministry of Health and legislation prevents the operation of private medical practice. User fees, however, have been introduced for selected items such as laboratory services or dental fees but OOP expenditure as a proportion of THE remained on a stable and low level in recent years (see Chart 3). To deepen universal coverage in Tuvalu and expand the range of health care services covered increased public spending is crucial.

Chart 1 Trends in health care expenditure in Tuvalu, 1997-2007 3000 100 90 2500 80 70 2000 Real GDP per capita (US$, 2007)

US$ (constant 2007 prices)

1500

50 40

Percentage (%)

GGHE as % of THE

OOP payment as % of THE

1000 30 20 500 10 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 0 Other private expenditure as % of THE

Health Financing Country Proﬁles 1997–2007

Chart 2 Health expenditures as % of GDP in Tuvalu, 1997-2007 20% 18% 16% 14% 12%

10% 8% 6% 4% 2% 0% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

THE as % of GDP

GGHE as % of GDP

Non-communicable diseases are seen as the major health challenge for the country and their long-term, high-cost complications are placing a strain on the limited health sector budget. Allocation of resources to promotive and preventive health care is an effective way to address this development. The country faces a problem ﬁnancing and delivering essential services locally. However, the overseas medical treatment scheme (MTS) could be used more equitably and efﬁciently. The long distance from overseas suppliers of drugs and consumables results in high costs and often causes shortages.

Chart 3 Trends in health care expenditure in Tuvalu, 1997-2007 350 100 90 300 80 250 70 60 50 150 40 30 20 50 10 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 0 percentage (%)

Real THE per capita (US$, 2007) Real GGHE per capita (US$, 2007) GGHE as % of GGE

US$, 2007

200

100

Tuvalu

Chart 4 Breakdown of the percentage of total expenditure on health in Tuvalu by main contribution mechanisms, 1997 and 2007 100 92.0 89.0

1997 2007

20 10.0 6.8 0.0 0.0 0 General Taxation Social Health Insurance Prepaid Private Schemes Out-of-pocket payment Other 0.0 0.0 1.0 1.3

Links World Health Organization (2008) Healthcare Financing Strategy Mid-term Review. Situation Analysis: Tuvalu, Manila WHO (2009) Western Paciﬁc Country Health Information Proﬁles 2009 Revision, Manila

Tuvalu

Vanuatu

Vanuatu is a Paciﬁc island country with a total population of about 233 000 in 2008. Gross domestic product (GDP) per capita was US$ 1859 in 2007. The predominant source of health care ﬁnancing is general government health expenditure (GGHE) which is mainly ﬁnanced through general taxation and is supported by external donors. In 2007, total health expenditure (THE) was 4.7% of GDP, equivalent to US$ 88 per capita. Out-of-pocket (OOP) payments made up 15.4% of THE; GGHE was 69.3% of THE. GGHE amounted to 11.4% of general government expenditure (GGE), 3.3% of GDP, and US$ 61 per capita. Charts 1 and 2 show historical trends in health expenditure. As seen in Chart 3, OOP payments as a proportion of THE were reduced by 3.9% over the period from 1997 to 2007 while public spending on health rose by 7.8%. In theory there is equal access to public health services although in reality people in outer islands may have less access to some services and access to overseas curative care is limited due to the high costs. To deepen universal coverage in Vanuatu and expand the range of health care services covered increased public spending is crucial.

Chart 1 Trends in health care expenditure in Vanuatu, 1997-2007 2500 100 90 2000 80 70 Real GDP per capita (US$, 2007)

US$ (constant 2007 prices)

50 1000 40 30 500 20 10 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 0

Percentage (%)

1500

GGHE as % of THE

OOP payment as % of THE

Other private institutions as % of THE

Chart 2 Health expenditures as % of GDP in Vanuatu, 1997-2007 5%

% 2% 1% 0% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

THE as % of GDP

GGHE as % of GDP

The long distance from overseas suppliers of drugs and consumables results in high costs and often causes shortages. The country is facing an increasing prevalence of high cost chronic diseases. Allocation of resources to promotive and preventive health care is an effective way to address this development.

Chart 3 Trends in health care expenditure in Vanuatu, 1997-2007 100 90 80 70 US$, 2007

100 90 80 70 60 50 40 30 20 10 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 percentage (%)

Real THE per capita (US$, 2007) Real GGHE per capita (US$, 2007) GGHE as % of GGE

60 50 40 30 20 10 0

Vanuatu

Health Financing Country Proﬁles 1997–2007

Chart 4 Breakdown of the percentage of total expenditure on health in Vanuatu by main contribution mechanisms, 1997 and 2007 100

80 69.3 61.5 60

1997 2007 40

19.3 15.4

16.3 13.1

0.0 0.0 0 General Taxation Social Health Insurance

2.9 2.3 Prepaid Private Schemes Out-of-pocket payment Other

Links World Health Organization (2008) Healthcare Financing Strategy Mid-term Review. Situation Analysis: Vanuatu, Manila WHO (2009) Western Paciﬁc Country Health Information Proﬁles 2009 Revision, Manila

Vanuatu

Viet Nam

Viet Nam is a low-income country with a total population of 85.2 million in 2007. Gross domestic product (GDP) per capita was US$ 809 in 2007. Out-of-pocket (OOP) payments are the predominant source of health care ﬁnancing. General government health expenditures (GGHE) are ﬁnanced mainly through general taxation. In 2007, total health expenditure (THE) was 7.1% of GDP, equivalent to US$ 57 per capita. OOP payments made up 54.8% of THE; GGHE was 39.3% of THE. GGHE amounted to 8.7% of general government expenditure (GGE), 2.8% of GDP, and US$ 23 per capita. Charts 1 and 2 show historical trends in health expenditure. The expansion of user fees in the 1990s helped to relieve the ﬁnancial burden on the government. At the same time user fees had a negative impact on service utilization among the poor, widening the poverty gap and contributing to higher OOP payment19.

Chart 1 Trends in health care expenditure in Viet Nam, 1997-2007 900 100 90 80 70 600 Percentage (%)

800

700 US$ (constant 2007 prices)

Real GDP per capita (US$, 2007)

60 500 50 400 40 300 30 200 20 10 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

GGHE as % of THE

OOP payment as % of THE

Other privat expenditure as % of THE

100

Dao H.T. et al. (2008) User fees and health service utilization Vietnam: How to protect the poor?, Public Health 122, pp. 1068-1078

Health Financing Country Proﬁles 1997–2007

Chart 2 Health expenditures as % of GDP in Viet Nam, 1997-2007 10% 9% 8% 7% 6%

5% 4% 3% 2% 1% 0% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

THE as % of GDP

GGHE as % of GDP

The population covered by social health insurance (SHI) has been increasing, accounting for 42.0% of the total population in 200620, although there is still potential to further strengthen the ﬁnancial protection offered by SHI. As one of the policies to increase coverage and ultimately achieve universal coverage, a Health Care Fund for the Poor (HCFP) was established in 2002. This has led to substantial increases in public spending on health, since it subsidizes all people identiﬁed as poor and has already led to a reduction of OOP expenditure within the group of HCFP beneﬁciaries. Chart 3 shows the decline of OOP payments as a share of THE by 10.7% in the period from 1997 to 2007. Another important step towards universal coverage was the enforcement of a Health Insurance Law in July 2009 that guarantees equal access to health care services for the 17 million poor.

Chart 3 Trends in health care expenditure in Viet Nam, 1997-2007 70 100 90 60 80 US$ (constant 2007 prices)

70 60 50 percentage (%)

Real THE per capita (US$, 2007) Real GGHE per capita (US$, 2007) GGHE as % of GGE

40 30 20

10 10 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 0

World Health Organization (2008) A Review of Health Care Financing Policies and Strategies in Cambodia, China, Laos, Mongolia, the Philippines and Vietnam, Manila

Viet Nam

Chart 4 Breakdown of the percentage of total expenditure on health in Viet Nam by main contribution mechanisms, 1997 and 2007 100

80 65.5 60 54.8 1997 2007

% 40 26.426.6 20 12.7 3.9 0 General Taxation Social Health Insurance Prepaid Private Schemes Out-of-pocket payment Other 2.5 1.6 1.6 4.3

Links Axelson H. et al. (2009) Health ﬁnancing for the poor produces promising short-term effects on utilization and out-of-pocket expenditure: evidence from Vietnam, Int Journal for Equity in Health 8:20 Dao H et al. (2008) User fees and health service utilization: how to protect the poor?, Public Health 122 Ekman B. et al. (2008) Health insurance reform in Vietnam: a review of recent developments and future challenges, Health Policy and Planning 23, pp. 252–263 Ministry of Health Vietnam & Health Partnership Group (2008) Joint Annual Health Review 2008, Hanoi Phuong N. (2009) Viet Nam: Review of Financing of Health Care in: ESCAP (ed.) Promoting Sustainable Strategies to Improve Access to Health Care in the Asian and Paciﬁc Region World Health Organization (2008) A Review of Health Care Financing Policies and Strategies in Cambodia, China, Laos, Mongolia, the Philippines and Vietnam, Manila

Viet Nam

Основные сведения

Организация Всемирная организация здравоохранения (ВОЗ / WHO)

Тип документа Publications

Дата принятия 31 декабря 2010 г.

Источник Всемирная организация здравоохранения