WPRl200SIDHS/03IHCF(2)!2008
English Only
Report series number: RS/200S/GEI) 2(FIJ)
REPORT
wHo MEETING ON USER FEE IMPACT ON ACCESS AND EQUITY ?" AND ON LESSONS LEARNT FOR THE PACIFIC
Convened by: WORLD HEALTH ORGANIZAnON REGIONAL OFFICE FOR THE WESTERN PACIFIC Nadi, Fiji 3-5 June 200S
Not for sale Printed and distributed by: World Health Organization Regional Office for the Western pacific Manila, Philippines
August200S WROIWPRO LlBRAR¥ M' "lILA. PHILIPPINES
NOTE The views expressed in this report are those of the participants in the Meeting on User ~ee Impact on Access and Equity and on Lessons Learnt for the Paclfic and do not necessmly reflect the policies of the World Health Organization.
This report has been prepared by the World Health Organization Regional Office for the Western Pacific for governments of Members States in the Region and for those who participated in the Meeting on User Fee Impact on Access and Equity and on Lessons Learnt for the Pacific, which was held in Nadi, Fiji, from 3 to 5 June 2008.
CONTENTS
SUMMARY 1. 2. INTRODUCTION .......................................................................................... 1 PROCEEDINGS ............................................................................................. 2 2.1 Opening ceremony .............................................................................. 2 2.2 Keynote speech ................................................................................... 2 2.3 User fee policies and lessons in the Pacific ........................................ 3 2.4 User fee experiences from Africa and Asia ........................................ 4 2.5 Panel session on fiscal space ............................................................ 10 2.6 Round table discussion on policy related issues to the Pacific ......... 11 2.7 Group work ....................................................................................... 11 CONCLUSIONS .......................................................................................... 12
3.
ANNEXES: ANNEX 1 ANNEX 2 ANNEX 3 ANNEX 4 ANNEX 5 ANNEX 6 AGENDA TIMETABLE LIST OF PARTICIPANTS OPENING SPEECH OF THE WHO REGIONAL DIRECTOR PRESENTATION ON USER FEE AND OUT-OF-POCKET PAYMENT IN HEALTH CARE: THEORY AND EVIDENCE COUNTRY PRESENTATIONS PRESENTATION ON USER FEE IMPACTON ACCESS AND EQUITY: LESSONS FROM AFRICA AND ASIA LESSONS FROM AFRICA AND ASIA PRESENTATION ON PANEL SESSION ON FISCAL SPACE ROUND TABLE DISCUSSIONS ON POLICY RELATED ISSUES RELEVANT TO THE PACIFIC WORKING GROUP PRESENTATIONS II
ANNEX 7 -
ANNEX 8 ANNEX 9
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ANNEX 10 -
Keywords: Fee-for-service plans / Fees, medical! Health services accessibility - economics! fees and charges! Pacific islands
SUMMARY Health care financing is an important issue in the Pacific. In recent years, user fee policies have been utilized in many Pacific island countries as an option for alternative health financing. However, international experiences show that user fees largely undennine access, equity, coverage and population health status and health outcomes. User fees often escalate health care costs and distort the quality of care. Fee-for-service practices create negative incentives for health professionals, generate unnecessary demand to increase revenues and place financial burdens on patients seeking care. Health payments can push low-income and vulnerable populations into poverty, especially in settings that lack effective financial protection and social safety net mechanisms. Reducing out-of-pocket (OOP) payment is one of the three main targets of health financing work in the Region, as outlined in the Strategy on Health Care Financing for Countries of the Western Pacific and South-East Asia Regions (20062010). The Strategy recommends that Member States rely more on prepayment financing schemes rather than user fees and other direct OOP payments. The latest national health account estimates show that there is an increasing trend of OOP spending as a percentage of total health expenditure in many Pacific island countries. In view of this, the meeting on User Fee Impacts on Access and Equity and on Lessons Learnt for the Pacific was held in Nadi, Fiji from 3 to 5 June, 2008. The objectives of the meeting were: (1) to discuss user fee policies and practices in the Pacific island countries and their implications on access and equity; and (2) to share health financing options that increase resources in health and ensure greater equity, access, coverage and financial protection in the context of Pacific island countries. The meeting was attended by 22 participants from eight Pacific island countries. In addition, three government officials from Fiji and four from Vanuatu attended as observers. Representatives from the Asian Development Bank (ADB), United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP), and the Nossal Institute of Global Health, Australia, also attended. Mr Jameson Mokoroe, Finance Manager, Ministry of Health of Vanuatu, was
appointed as Chairperson; Ms Haumata Hoskings, Senior Finance Officer, Ministry of Health of Cook Islands as Vice Chairperson; and Mr Idrish Khan, Senior Accountant, Ministry of Health, Women and Social Welfare of Fiji as Rapporteur. Three WHO consultants assisted with the meeting namely, Professor Tuohong Zhang from the Peking University of Health Science, China; Professor Soonman Kwon from Seoul National University, Republic of Korea; and Professor Kodjo Elvo from the University of Lome, Togo. The meeting provided the first-ever opportunity to discuss user fee policies and practices in the Pacific and examine their implications on access and equity, including experiences not only from Pacific island countries but also from other countries in Africa and Asia.
1.
INTRODUCTION
Health care financing is an important issue in the Pacific. In recent years, user fee policies have been utilized in many Pacific island countries as an option for alternative health financing. However, international experiences show that user fees largely undermine access, equity, coverage and population health status and health outcomes. User fees often escalate health care costs and distort the quality of care. Fee-for-service practices create negative incentives for health professionals, generate unnecessary demand to increase revenues and place financial burdens on patients seeking care. Health payments push low-income and vulnerable populations into poverty, especially in settings that lack effective financial protection and social safety net mechanisms. Reducing out-of-pocket (OOP) payment is one of the three main targets of health financing work in the Region as outlined in the Strategy on Health Care Financing for Countries of the Western Pacific and South-East Asia Regions (2006-2010). The Strategy recommends that Member States rely more on prepayment financing schemes rather than user fees and other direct OOP payments. The latest national health account estimates show that there is an increasing trend ofOOP spending as a percentage of total health expenditure in many Pacific island countries. In view of this, the meeting on User Fee Impacts on Access and Equity and on Lessons Learnt for the Pacific was held in Nadi, Fiji, from 3 to 5 June, 2008. The objectives of the meeting were: (1) to discuss user fee policies and practices in the Pacific island countries and their implications on access and equity; and
(2) to share health financing options that increase resources in health and ensure greater equity, access, coverage and financial protection in the context of Pacific island countries. The meeting was attended by 22 participants from eight Pacific island countries. In addition, three government officials from Fiji and four from Vanuatu attended as observers. Representatives from the Asian Development Bank (ADB), the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP), and the Nossal Institute of Global Health, Australia, also attended.
Mr Jameson Mokoroe, Finance Manager, Ministry of Health of Vanuatu, was appointed as Chairperson; Ms Haumata Hoskings, Senior Finance Officer, Ministry of Health of Cook Islands as Vice Chairperson; and Mr Idrish Khan, Senior Accountant, Ministry of Health, Women and Social Welfare of Fiji as Rapporteur. Three WHO consultants assisted with the meeting namely, Professor Tuohong Zhang from the Peking University of Health Science, China; Professor Soonman Kwon from Seoul National University, Republic of Korea; and Professor Kodjo Elvo from the University of Lome, Togo. The agenda, timetable and list of participants are provided in annexes I, 2 and 3, respectively.
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2. 2.1 Opening ceremony
PROCEEDINGS
Dr Chen Ken, WHO Representative for the South Pacific, gave the opening speech on behalf of Dr Shigeru Omi, WHO Regional Director for the Western Pacific. He thanked the Government of Fiji for hosting the meeting. He noted that emerging communicable diseases, such as HIV/AIDS, and re-emerging diseases, such as tuberculosis, pose financing challenges across all countries in the Pacific. Therefore, many governments are looking at introducing user fees and co-payments in public health facilities as an option to mobilize additional revenues for the health sector. He referred to evidence that user fee financing is a highly inequitable option with many negative effects on population health improvement. Therefore, he shared WHO's concerns about the negative impacts of user fees. If Pacific governments continue to pursue user-fees policies and similar health financing arrangements, they will gradually come to rely on fees-for-service as the main mode of payment for health care. The opening speech of the Regional Director is attached in Annex 4. 2.2 Keynote speech
Professor Soonman Kwon presented the key note speech for the meeting. He addressed the theoretical framework of user fees within the health financing framework and discussed the politics, design, pattern of user fees, as well as better alternatives. He also presented empirical evidence on the impact of user fees, major problems, and their effects on household income and catastrophic incidents. User fee and OOP payments were main points of discussions. There are four major types of health care financing sources, two of which (tax and social health insurance) come from public sources, and two of which (private health insurance and OOP payment) come from private sources. Public financing for health care is a pooling mechanism covering both income and health risks as payment is based on the ability to pay but the use of health care is based on health care needs. As a result, the rich subsidize the poor, and the healthy subsidize the sick. Private health insurance is a pooling mechanism to cover health risks, but has no redistributive income effect due to risk-based premiums. Contrary to pre-payment mechanisms, such as social health insurance and private health insurance, OOP payment has no pooling effect because it is a payment at the point of service. OOP payment is regressive because it does not depend on the patient's ability to pay. As a result, the poor pay a greater proportion of income for health care, and OOP payment is a heavy financial burden on the sick or the users of health care. There are two major types of OOP payment, which are user fees and co-payment (co-insurance). User fees or "user fees for public service" are the tenninologies usually associated with a tax-based health care system in which most health care providers are in the public sector. The majority of tax-based health care systems guarantee free access to medically necessary health care services, which are provided by public health care providers. But some of those countries introduce user fees for health care in the public
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sector, which used to be free in the past, for political reasons, such pressure from intemational donors as a part of structural reform, or economic reasons such as budget constraints and a need to reduce the potential overuse of services. Co-payment (co-insurance) is used in a health insurance system. In the social health insurance system, health care delivery depends on both public and private health care providers, and patients can choose either type of provider. Rather than providing full coverage for health care costs, health insurance systems often requires the patient to pay, as a co-payment, a given percentage of the health costs at the point of service. Patients can also be required to pay out-of-pocket for those services that are not covered by a prepaid scheme. For example, social health insurance systems often do not provide benefit coverage for services for which clinical effectiveness or cost-effectiveness is questionable. Professor Kwon's presentation is attached in Annex 5. 2.3 User fee policies and lessons in the Pacific
The eight participating Pacific island countries shared their experiences with user fee policies and lessons. Country presentations addressed policy rationales for introducing user fees and co-payments; major expectations from user fee policies; referral levels where user fees and co-payments have been introduced; types of services charged; affordability of fees and co-payments; assessment and monitoring work on user fee policy implementation; and user fee impact on access and equity. User fees in Cook Islands were introduced as cost recovery measures after government reform in 1997. It is expected that the user fees will supplement the budget and, at the same time, ration demand. Currently, user fees are applied only for people aged 17 to 60 years old. In the past, user fees slightly increased revenues but administration of the fees proved to be expensive. Therefore, user fee polices were revised with proper assessment of their impact, including poverty in Cook Islands. In Fiji, the user fee concept is not new and has been applied at various levels of public health facilities. Most fees are outdated and in need of revision to reflect the real costs of services. However, affordability is a critical policy issue because Fiji lacks adequate financial protection mechanisms against user fees. Currently, the National Council for Building a Better Fiji is reviewing health sector policies including user fees.
The Federated States of Micronesia introduced user fees to sustain health care financing mechanisms by generating revenues and improving service quality, delivery and accountability. Current user fee practices have led to positive and negative impacts. The main concern is that fees affect access and equity. There is a clear tendency that people seek health care if they can afford fees or have insurance plans. Therefore, user fees require policy revisions to ensure that every one has access to services when they need them, regardless of the ability to pay. Papua New Guinea has many years of user fee experience at the health centre, district and provincial hospital levels. Despite their efforts to improve health financing with user fees, a number of issues still remained unresolved. One of them is poor
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coordination and regulation. User fee policies are being implemented in rural areas without a clear and stringent legal framework. This affects the ability of many people to access to health care. The administrative and management capacities are still too weak to collect and manage user fees in a transparent manner and invest in service quality improvement. In Samoa, user fees for public health services have been applied cautiously looking at accessibility and affordability. As a result, the cost recovery rate in Samoa is estimated to be less than 3% compared to total health expenditure. However, there is strong interest to use and revise fees schedules. Therefore, there is a need to balance political acceptance and economic viability.
Health services in Tonga are provided free of charge, except minimal hospitalization fees, dental services and other nonessential and non-clinical services. Health system financing still relies on public funds and donor support. According to the latest national health account reports, households contribute only 11 % of total health financing. Tongan government policy requires that a patient should not be denied service even ifhe or she is unable to afford to pay. The user fee concept and practices are relatively new for Tuvalu. Starting in January 2008, fees have been charged for pharmaceuticals, laboratory tests, radiology and dental care only at the Princess Margaret Hospital. The Government approved user fee revenue levels in the budget for 2008. Currently, fees seem to be affordable by all people, including foreigners, and all revenues collected are monitored on a quarterly basis. There is a need to apply different fee schedule for foreigners visiting Tuvalu. User fees have been introduced at two referral hospitals, thee provincial hospitals and 25 health centres and 103 dispensaries of Vanuatu. However, fees are minimal, affordable and therefore do not have much impact on access and equity. A review of the impacts of user fees on access and equity is needed. Currently, the Ministry of Health is planning to develop and strengthen the revenue system and audit for better implementation of user fee policies. As a policy, user fee applications will be continued and the establishment of public or private health insurance is under discussion. The country presentations are provided in Annex 6. 2.4 User fee experiences from Africa and Asia
Professor Kodjo Elvo, University of Lome, Togo; Professor Tuohong Zhang, School of Public Health, Peking University of Health Science, China; and Dr Mar Roncarati of UNESCAP made a presentation on user fee experiences from African and Asian perspectives. Their presentations are provided in Annex 7. 2.4.1 Lessons from Africa
Various types of user fee policies are utilized in Africa. User fees were introduced in the Region in the 1980s, at a time of widespread downward pressure on public expenditures due to macroeconomic difficulties and dwindling aid flows. Governments shifted to cost sharing with the blessing of donors, among them the World Bank. The
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World Bank believed that the careful introduction of user fees, notably with the improvement of the efficiency and quality of public service provision, could help bridge the health sector resource gap. During 1980s, African governments were trying to achieve WHO's goal of Health for All (HFA) by the year 2000, through increased focus on primary health care (PHC). However, public finance difficulties resulted in inadequate funding for the implementation of PHC programmes. In response, African governments launched the Bamako Initiative in 1987, with support from WHO and UNICEF. The aim of this initiative was to generate resources for PHC through the introduction of user fees and pharmaceutical cost recovery schemes. The belief was that the initiative would provide additional resources that could help improve the quality of services and address equity Issues. The Bamako Initiative and the World Bank's influence have been instrumental in the adoption of cost sharing schemes by African countries. Despite dissenting voices in the literature, the theoretical arguments for introducing cost sharing looked quite reasonable. In addition, most countries had adopted the International Monetary Fund (IMF) and World Bank-supported Financial Stabilization Programs (FSP) and Structural Adjustment Programs (SAP) of which cost sharing appeared a natural component. In such a context, cost sharing appeared as the rule. The main arguments for introducing cost sharing policies were: raising revenue increasing efficiency increasing equity. In the context of African countries, however, there is no evidence these goals have been achieved by the programmes implemented. The most compelling argument for introducing user fees and other cost-sharing schemes in Africa was to raise revenue. It was believed that even if the fees charged were small, cost-sharing mechauisms could help raise revenue that could be channelled into the financing of health care, especially at the facility level. The World Bank initially hoped cost sharing could generate resources to finance 15%-20% of total recurrent health expenditures. However, the reality on the ground was different. User fees have generated on average about 5% of recurrent expenditures, although the revenue raised constitutes a significant share of non-salary operating costs. It is also believed that the introduction of user fees could increase efficiency by making providers and consumers behave appropriately. Fees are expected to reduce unnecessary use of services while increasing resources that could be used to increase the provision of the services. The efficiency gains are also expected as a result of increase in the productivity of the public health sector. User fees are considered as an instrument to improve the quality of the services, such as drug procurement and the provision of other consumables. Overall, however, the real impact of user fees on efficiency in African countries is not clear. On the demand side, it is not clear whether the introduction of fees has helped
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consumers behave more appropriately by refraining from overusing the services. On the supply side, as the net revenue generated by user fees is negligibl~if not negativ~the contribution of cost sharing to improvement in the productivity of the sector remains debatable. Cost sharing can be progressive, thus help increase equity if proper exemption mechanisms are in place and if the revenue collected is used to improve the quantity and quality of the services provided. Then the poor may have greater access to care of a better quality. Again, the experiences of African countries suggest the opposite. Cost sharing does not necessarily increase equity or access, as the poor who do not have the ability to pay the fees, are often prevented from using some care services. The experiences of most African countries suggest, however, that, on the one hand (demand side), exemption mechanisms often fail and, on the other hand (supply side). the real contribution of user fees to increasing productivity is insignificant, as argued above. Overall. the effects of the introduction of user fees are complicated to assess because of difficulties of disentangling the effects of price, quality of care and affordability on service utilization. However, most studies indicate that: the introduction of fees has led to significant and sometimes drastic decreases in utilization, as exemption mechanisms often fail; in the rare cases where service utilization has increased, cost sharing has created barriers to poor people accessing care; and in many cases, cost sharing has not led to significant improvement in quality that could boost access. The general impression is that the introduction of user fees has led to reduction in service utilization especially by the poor. The core equity issue is that poor people often lack ability, not willingness. to pay for care. The less than satisfactory results of user fee experiments in Africa have led to a significant change in international opinion about the issue. Beside WHO and UNICEF which have been raising the issue for some time, other voices have been heard. among which: The World Bank. "The World Bank does not support user fees for primary education and for basic health services for poor people." - World Bank Website, November 2005 Millennium Project. "Eliminate user fees for basic health services in all developing countries, financed by increased domestic and donor resources for health." - Jeffrey Sachs et al, Millennium Project Report. Quick Win No 8 United Kingdom. "The best way you can defeat poverty is through free education and free health care available to all." Gordon Brown. UK Chancellor of the Exchequer, January 2005 As a result. many African countries are considering removing user fees. This change in policy orientation is due in part to the inability of the current policies to help
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achieve the United Nations Millennium Development Goals (MOG) to which these countries have committed themselves. In particular, the search of pro-poor development policies, in pursue of these goals, calls for measures that increase the access of the poor and vulnerable to social services. Most African countries have been disappointed by the results of their cost-sharing programmes. The decision to remove user fees is made on both equity and efficiency grounds. First all, very little revenue is raised despite significant transaction costs. Second, the obvious and strong equity arguments are about increasing access for the poor. Third, the efficiency issue relates to the fact that the relevant objectives mentioned above have not been reached. Several African countries have tried to remove user fees since the mid-1990s. These include Kenya, Madagascar, South Africa and Uganda. In all cases, the removal of user fees has triggered a surge in demand. The South African experiment was conducted in two phases. First, in 1994, the Government introduced a policy to remove user fees for all children under the age of 6 years and all pregnant or lactating women. The results were impressive in the case of curative care: outpatient attendance increased by 77%. No major change was observed in the case of preventive care, where utilization rates were already high. Second, given the success of the first experiment, the Government introduced a policy of universal access to free primary health care by removing fees for everyone. The results were less spectacular than they were after the first policy change, but significant. The impact of the second policy change is less strong because an important part of the most vulnerable groups was already covered by the first policy change. In addition, the increase in utilization caused by the policy change may put increased pressure on available resources, which could affect the quality of the services provided and dampen part of the impact of the change on demand. Following a disputed presidential election in 2002, Madagascar experienced turbulent periods. In order to bring an end to the tunnoil and appease the population, the Government decided, among other measures, to temporarily abolish user fees on health care. Once services became free, there was a significant increase in the consumption of services to the extent that monthly visits in the post-crisis period almost doubled compared to the previous year. However, supply side factors made policy implementation difficult given the unstable environment in which the policy was launched. Prior to July 2004 the Government of Kenya's cost-sharing policy allowed facilities to set fees locally. Facilities were required to return 25% of revenues raised to the district level and develop a plan for spending 75% of the balance locally. This plan was approved at both district and provincial levels. In parallel, dispensaries, but also many health centres, also raised community funds, which were totally under the control of the facility. This approach although unofficial was generally tolerated by the authorities. In January 2004, the Government of Kenya decided to simplify its user fee policy by introducing a new system called the "10/20 policy" with a fee schedule set at 10
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Kenyan shillings for a visit to dispensaries and 20 Kenyan shillings for a visit to health centres. The policy was introduced on short notice, and little guidance was given on its implementation. The requirement to return funds to the district level appears to have been dropped, with resources spent as they are raised. The 10/20 policy has also effectively resulted in the abolition of community fund approach. The Govenunent did not abolish user fees; it only reduced them by introducing the 10/20 policy. The Kenyan case was examined to detennine the impact of the 10/20 user fees policy on the utilization of services in 60 health units in six different health districts. The results show that after the policy change, service utilization went up by 70% in the health districts covered by the study. This demonstrates the scale of the previously unmet demand for free health services in the population. However the graph below shows that this demand was not sustained at these much higher levels and that in the final quarter of the year, on average, utilization was 30% higher than the first half of the year. Utilization fell later on, as initial price effects played out and supply-side constraints, such as availability of drugs, played in. Uganda probably offers the best documented example of the impact of the removal of user fees on service utilization. In March 200 I, the Govenunent abolished cost sharing in public primary care facilities, while the usual community financing modes in the private-not-for-profit (PNFP) and private for-profit facilities were maintained. The Govenunent complemented the new policy by an increase in health expenditures. The decision was highly political as it came only 10 days before the presidential election, when the incumbent suddenly announced that cost sharing would be scrapped in all Govenunent health facilities, with the exception of private wings in larger hospitals. The first time that most people in the MiniStry of Health knew about this policy change was when they read it in the newspapers on the way to work. The president made the decision because he sensed that cost sharing was very unpopular. Given the sudden nature of the policy change, not surprisingly, the Ministry of Health, other ministries and local govenunents were ill-prepared for the huge surge in demand for free health services that followed. However two things enabled the policy to work effectively. First, the public health system, despite years ofunder-investrnent, had the capacity to deal with the increased demand caused by the policy change. Second, the president's personal involvement in the decision was a factor that made all stakeholders in the health system aware that they had to make the reform work. Over the following weeks and months, there was therefore an amazing acceleration of other health reforms with a focus on increasing health care inputs at the facility level. This included close collaboration between the Ministries of Health, Finance, Local Govenunent and Public Service, as well as with district officials. There is therefore very strong evidence from Uganda that rather than derailing health sector reforms, scrapping user fees can catalyze significant supply side improvements The policy change has had positive effects on service utilization. The effects of supply-side constraints were minimized by the fact that the Govenunent complemented the reduction in user fee revenue by a sustained increase in the budget of the Ministry of Health.
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In conclusion, the cases referred to above suggest that removal of user fees in the current African context shows that it is pro-poor measure that will cause increase in service utilization, access and equity. However, good results of user fee removal policies should be accompanied by increase in other sources of financing such as the government budget to fill the gap. 2.4.2 Lessons from Asia
Asia experiences show that user fees might not necessarily be a significant proportion of the household total resources, but they can push poor families into financial catastrophe. User fees largely influence equity, access and health care utilization by pushing the near-poor into poverty, decreasing health care utilization to all groups, and enlarging utilization gap between the poor and rich. User fees also constrain health care utilization. The Chinese National Household Health Survey showed that a drastic decrease of health care utilization in urban China between 1993 and 2003. The gap in utilization of services between richest and poorest in 1993 was 1.2 times but it increased to 1.5 times in 2003. In mid-I 980s, the user fee policy with full cost recovery efforts had been introduced in China. Government subsidy was drastically withdrawn and public hospitals began to operate like private hospitals that heavily relied on user fees as the main source of revenues. These measures had a drastic impact, especially in rural areas. By 1993, almost 90% of rural residents had to pay for medical services totally out-ofpocket by themselves. Because of the negative impacts, the Government has begun to abolish the free care schemes with the introduction of health insurance system with copayments both for urban and rural settlements.
The other issue is that whether user fees did promote better health system performance. Unfortunately, there is no sound evidence for improved institutional efficiency, quality of health care, and efficiency gains because of competition between public and private providers. Instead, negative outcomes were observed and arguments were raised because user fees created additional and excessive financial burdens on patients and households. The user fee also produced unexpected effects such as unethical treatment and doctor-induced demand. Nowadays, it is widely known that the governmental subsidy plays an important role in pro-poor health care strategy. But the issue of whether public policy and subsidies in low-income countries reach the poor or whether the poor get their fair share of public subsidies is still open in many Asian countries. In 1987, Viet N am introduced market-oriented renovation to the general economic setting, and introduced user fee financing in the health sector. By 1993, private out-ofpocket health expenditures amounted to 84% of total health expenditures. It is clearly that the poor pay higher proportion of their income than the non-poor. Data from household surveys in 1992, 1998 and 2002 showed that health care utilization is higher among the upper quintile.
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The situation in Japan and in the so-called Asian Tigers, including Hong Kong (China), the Republic of Korea, Singapore and in China (Province of Taiwan), is different because all these countries and areas rely on either social insurance or taxedbased health financing. Health financing in these countries is more progressive and outof-pocket payments do not playa notable role, except in Singapore. As mentioned above, financial burden for disease is a main concern in China. However, recent assessment work did not produce solid evidence that the financial burden is decreasing. The possible explanations could include that newly introduced health insurance schemes are still in their early stages and at the same time, health insurance benefit packages are limited. In addition, there are some vital administrative issues, such as lack of administrative capacity at local level and weak supervision from the Government. Currently, the Government is considering several important initiatives. These include increasing of tax-based financing for essential health care such as primary medical care, essential drugs and preventive care, introducing and improving social health insurance, developing the private sector for those people who can afford it, along with the development of private health insurance. From the experiences in Asia, we can draw the conclusion that user fees may have advantages, but they are outnumbered by the disadvantages. Both the China and Viet Nam experiences show very regressive impact from user fees in terms of access and equity. Therefore, countries with free health care system should aim to maintain rather than consider user fee options. The negative impact of user fees may undermine many important health policy objectives in attaining better health outcomes. Dr Roncarati introduced UNESCAP's recent work in health and development and presented preliminary findings of a project on promoting sustainable strategies to develop and improve universal access to basic health care in six Asian countries. Tax financing is important in ensuring universal access to basic health care. Social health insurance is one of the possibilities to increase fiscal space for health in Asia. In conclusion, sharing experiences in achieving universal coverage will strengthen health systems and enable better understanding of existing success stories in the Region. 2.5 Panel session on fiscal space
Panel session was organized to discuss fiscal issues for the Pacific. The session was moderated by Mr D. Bayarsaikhan, WHO Regional Adviser on Health Care Financing. Panellists were Ms Hayman K. Win, ADB; Dr Henk Bekedam, WHO Director for Health Sector Development in the Western Pacific; Professor Kodjo Elvo, University of Lome, Togo; Professor Tuohong Zhang, School of Public Health, Peking University of Health Science, China; and Professor Soonman Kwon, School of Public Health and Management, Seoul National University, Republic of Korea (Annex 8). Mr Bayarsaikhan introduced the topic by referring to the "fiscal space" term defined by various international agencies like lMF, UNDP and WHO. He discussed the principal ways to create fiscal space by raising revenues and prioritizing expenditures. Discussions followed on sources of fiscal space in terms of equity and access, efficiency and effectiveness of health spending in the Pacific, external flows in the health sector,
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and use of health accounts and other tools for creating and monitoring fiscal space in the Pacific context. The panel session concluded that countries need to first assess the eXlstmg financing arrangements in terms of efficiency and effectiveness of resource allocation and utilization before deciding to introduce user fees. It is estimated that most countries have opportunities to increase fiscal space from internal and external sources. Monitoring provider behaviour and practices eventually can lead to cost savings or shifting resources from curative to low-cost preventive care. Regarding external flows, countries need clear policies and plans on utilizing external funding resources. 2.6 Round-table discussion on policy related issues to the Pacific
Mr D. 8ayarsaikhan presented the three main issues to stimulate policy-related discussion in the Pacific. These included 1) health payments relative to household consumption and poverty; 2) financing universal coverage with different financing mechanisms such as taxation, social health insurance and out-of-pocket payments; and 3) health sector privatization. His presentation is attached as Annex 9.
Discussions during this session contributed to a better understanding of relationships between health payment and poverty; the impact of poverty and catastrophic incidents in Asia and the Pacific; the negative impact of user fees and outof-pocket payments on attaining universal coverage; and various forms of health sector privatization, which do not necessarily lead to better health outcomes and health system performances. 2.7 Group work
The group work session was organized to examine current policies and actions and propose different levels of activities to minimize the negative effects of user fees on access, equity and service utilization. All participants and observers formed four working groups, and each group discussed issues relevant to participating countries. Working group templates were provided to facilitate working group discussions. At the end of the session, each working group presented their findings. The working group presentations covered the following issues: major issues and lessons learnt; findings of an examination of the current user fee policies in the Pacific; findings of an examination of user fee practices in the Pacific; examination of the impact of user fees on fiscal space, access and equity; potential hurdles user fee practices pose for attaining health policy objectives; strategies for preventing the negative impact of user fees; proposed actions; implementation of the actions and monitoring of outcomes; and The role of WHO.
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Composition of group work: Group 1: Cook Islands and Fiji
Resource people:
Professor Soonman Kwon (Seoul National University) Dr Marco Roncarati (UNESCAP)
Group 2:
Federated States of Micronesia and Papua New Guinea
Resource people:
Dr Henk Bekedam (WHO) Dr Juliet Fleisch! (WHO)
Group 3:
Samoa and Tonga
Resource people: Group 4: Tuvalu and Vanuatu
Professor Kodjo Elvo (University ofLome) Dr Chen Ken (WHO) Professor Tuohong Zhang (Peking University) Mr D. Bayarsaikhan (WHO)
Resource people:
By examining user fee impact, the groups came to the conclusions that user fees do not generate sufficient revenues, but they do limit access and equity in utilizing health services. Therefore, it is advisable to revise the current user fee policies and regulations, and abolish user fees where feasible. It is advised to look for fiscal space by prioritizing and improving efficiency of current health spending and introducing or improving the existing prepayment mechanisms with a greater risk pool. Improved data and evidence on financing, user fee impact, quality of health services, and monitoring and evaluation of user fee practices, including exemptions, are needed for all Pacific countries. However, technical expertise and financial assistance also are needed. The Pacific island countries should maintain the commitments for health and provide more funds from government budgets. WHO can play an important role in providing policy advices, building capacities at country levels and sharing experiences and evidence among Pacific island countries. The group work presentations are shown in Annex 10. 3. CONCLUSIONS
The meeting provided the first ever opportunity to discuss user fee policies and practices in the Pacific and examine their implications on access and equity, with reference to experiences not only from Pacific island countries but also from countries in Africa and Asia. International evidence suggests that user fees can recover some costs if properly designed to ensure that the poor and under-privileged are not affected. Quality can be
- 13 -
improved if fees are retained and re-invested in health facilities in which they are collected. However, there is an incorrect perception that if services are paid the quality is assured. Experience also shows that if fees are high or inappropriately applied, then those in need of health care are discouraged from seeking care. Therefore, fees should not be imposed unless policy-makers have carefully examined the potential impact of the fee structure on health-seeking behaviour and on the provision of essential health care. Success can be affected by the administrative cost of implementing fees. If the cost of collecting fees is high compared to fees collected, then user fee policies are ineffective. Currently, most Pacific island countries enjoy relatively good access to health facilities due to predominant public budgetary financing. However, there is need for additional financial resources to improve health care delivery and the quality of care being delivered. User fees are one of the options to mobilize additional financial resources, and they are under consideration in many Pacific island countries. In this regard, the key messages of this meeting are as follows: (1) User fees should not reduce access, equity and utilization of services, especially by the low-income and poor people.
(2) Essential and basic health care, including primary health care, should be broadly accessible to all people-regardless of their income and employment status. Appropriate social safety nets must be in place to protect the poor and disadvantaged. In another words, all people should be protected from excessive financial burdens associated with illness, and the poor and vulnerable need to be at the forefront of consideration when looking at alternative forms of health care financing. (3) (4)
Income generation should not be the main objective in introducing user
fees. (5) Governments should not decrease their budget allocations because of revenues generated by fees. (6) Government policies should refrain from full cost recovery efforts by reflecting true costs. (7) The potential of user fees to increase the effective use of resources service quality, delivery and efficiency should be well examined. '
(~) Goo~ regulation and mechanisms are needed for effective monitoring, evaluation and reVlSlon of user fee policies. Discussions during. the meeting came to the conclusion that before introducing any form. of user fe~s, polIcy-makers have to carefully examine policies, regulations, practices. and the ~pact on access, equity, utilization and quality of services. Evidence from ASIa and Africa shows that user fees raised very little additional revenue and in most cases the cost of administering and collecting the fees was equal to or less than the revenue collected. In addition, there were negative features as the introduction of fees
- 14 -
led to significant and sometimes drastic decreases in utilization. The core equity issue for this was that poor people often lack ability, not willingness, to pay for care. The meeting recognized the importance of prepayment financing options as the most suited financing mechanism in the Pacific context to attain universal coverage that ensures equitable access by all people to comprehensive health care services at an affordable cost. In this context, the participants agreed that the most viable option for government is to create fiscal space for health by increasing budgetary allocations and improving the usage efficiency and effectiveness of existing resources rather than introducing user fees. Evidence showed that health budget allocations can be improved and re-prioritized to target those in need and to target under-funded services by taking account of vast geographical locations. Pacific countries do need to produce more evidence for public investment, improve donor coordination (increase external grants and aid effectiveness) and create greater fiscal space through prepayment mechanisms.
ANNEX 1
MEETING ON USER FEE IMPACT ON ACCESS AND EQUITY AND ON LESSONS LEARNT FOR THE PACIFIC Nadi, Fiji 3 - 5 June 2008
AGENDA
1. 2. 3. 4. 5. 6.
Opening session Conceptual issues, user fees experiences and lessons
User fee policies and lessons in the Pacific User fee impact on access and equity and lessons from Africa User fees, access and equity issues
Panel session: fiscal space
7. 8.
Round table discussion on policy related issues relevant to the Pacific Group work: to examine current policy and actions and to propose different level of activities to prevent negative effects of user fees on access, equity and service utilization
9. 10. 11.
Panel session: group work presentations Panel session: improving health financing policy, strategy and actions in each participating country Summary of the meeting and closing
ANNEX 2 MEETING ON USER FEE IMP ACI' ON ACCESS AND EQUITY AND ON LESSONS LEARNT FOR THE PACIFIC 3 -5 June 2008, Nadi, Fiji TIMETABLE
Time 08:3009:0009:30 Registration
03 June (Tue)
Time 09:0009:40
04 June (Wed) 5. Lessons from Asia
Time 08:3010:30
05 June (Thu) Continuation of group work and finalization of proposals for presentation
I. Opening ceremony - Speech of the Regional Director - Introduction of participants - Election of Chairperson and Rapporteur - Group photo 2. Key note speech: Conceptual issues, user fees experiences and lessons (prof S. Kwon)
- user fee access and equity issues (Mr M. Roncarati, UNESCAP) - use fee impact on access and equity (profT. Zhang)
09:4010:30
Discussion
09:3010:00 10:0010:30
Coffee Break
10:30 11 :00
Coffee Break
10:3011 :20 11 :2012:30 12:3014:00 14:0014:50 14:50 15:30 15:3016:00 16:0016:40 16:4017:30 18:3019:30
3. User fee policies and lessons in the Pacific: experiences from Cook Island, Fiji, Federated States of Micronesia and Papua New Guinea
11 :0012:30
6. Panel session: fiscal space to be moderated by Mr D. Bayarsaikhan (panelists: Dr H. Bekedam; ProfS. Kwon; ProfT. Zhang, ProfK. Evlo, Ms H.K. Win)
11 :0012:30
9. Panel session: group work presentations and expert comments on 4 working group fmdings
Discussion Lunch User fee policies and lessons in the Pacific: experiences from Samoa, Tonga, Tuvalu and Vanuatu 14:0015:15 15: 1515:30 7. Round table discussion on policy related issues relevant to the Pacific 14:0015:30 10. Panel session: improving health financing policy, strategy and actions in each participating country
Discussion
Introduction to group work Coffee break
4. User fee impact on access and equity and lessons from Africa (profK. Evlo)
16:0017:30
8. Group work: examine the current policy and actions and propose different level of activities to
16:0016:30
I I . Summary of the meeting and closing
Discussion WHO reception
prevent negative effects of user fees on access, equity and service utilization
ANNEX 3 MEETING ON USER FEE IMP ACT ON ACCESS AND EQUITY AND ON LESSONS LEARNT FOR THE PACIFIC Nadi, Fiji 3 - 5 June 2008
LIST OF PARTICIPANTS, CONSULTANTS REPRESENTATIVES/OBSERVERS, AND SECRETARIAT
I.
PARTICIPANTS
COOK ISLANDS
Ms Haumata HOSKING Senior Finance Officer, Ministry of Health, Rarotonga Tel no. 682-29664 Fax no. 682-23109 Email: h.hosking@health.gov.ck Ms Tangi MATAJO Administration Officer, Ministry of Health, Rarotonga Tel no. 682-22664 Fax no. 682-23109; 22670 Email: t.mataio@healthgo.ck Ms Heather WEBBER Director of Hospital Health Services, Ministry of Health, Rarotonga Tel no. 682-29664 Fax no. 682-23109
FIJI
Ms Sereima BULONIWASA Principal Economic Planning Officer Ministry of Health, Women and Social Welfare P.O. Box 2212, Goverument Buildings, Suva Tel no. 3222145 Fax no. 3308096 Email: sbuloniwasa@govnet.gov.fj Mr Idrish KHAN Ministry of Health, Women and Social Welfare Dinem House, Toorak, Suva Ms Salote RADRODRO General Manager, Executive Support Unit Ministry of Health, Women and Social Welfare P.O. Box 2223, Goverument Bnildings, Suva Tel no. 32212438 Fax no. 3306163 Email: sradrodro@health.gov.fj
Annex 3 MICRONESIA, FEDERATED STATES OF Mr Dwight EDWARDS Pohnpei State Hospital Administrator Department of Health and Social Affairs FSM National Govermnent, Palikir, , Pohnpei 96941 Tel no. 691-320261 Fax no. 691-320-5263 Mr Ben JESSE FSM National Govermnent, Palikir, Pohnpei 96941 Tel no. 691-320261 Fax no. 691-320-5263 PAPUA NEW GUiNEA Mr Lazarus ENKER Assistant Secretary - Provincial Budgets Department of Treasury P.O. Box 754, Waigani, NCD Tel no. 675-3128739 Fax no. 675-3128806 Email: lazarus_enicer@treasury.gov.pg MrNavyMULOU Health Economist - Policy Planning Branch Department of Health, P.O. Box 807, Waigani, NCD Tel no. 675-3013638 Fax no. 675-3239670 Email: navLmulou@health.gov.pg Mr Samuel PET AU Assistant Secretary - Social Services Department of National Planning and Monitoring P.O. Box 631, Waigani, NCD Tel no. 675-3288260; 3288371 Fax no. 675-3288399 Email: Samuelyetau@planning.gov.pg SAMOA Ms Foketi IMO EV ALU Principal Budget Officer, Ministry of Finance Private Bag, Apia Tel no. (685) 343320 Fax no. (685) 21312 Email: faoketi.imo@mof.gov.ws Ms Angharad TOMA Policy Analyst Officer, Ministry of Health Private Mail Bag, Apia Tel no. 685-6812168106 Email: angharadt@health.gov.ws
Annex 3 Mr Rama Lemuria Kilipati VA' A NCEO Corporate Service, Ministry of Health P.O. Box 1227, Apia Tel no. 685-24797; 68107 Fax no. 685-26553 Email: RamaV@health.gov.ws TONGA Mr Tu'akoi AHIO Principal Health Administrator, Ministry of Health P.O. Box 59, Nuku'alofa Tel no. 676-21270 Fax no. 676-24291 Email: tahio@heaJth.gov.to Ms Mafi HUFANGA Financial Analyst, Ministry of Health, Box 59, Nuku'alofa Tel no. 676-28233 Fax no. 676-24291 Email: msikalu@health.gov.to Ms Lasini SINAMONI Principal Accounting Officer, Ministry of Health P.O. Box 59, Nuku'alofa Tel no. 676-28233 Fax no. 676-24291 Email: Isinamoni@health.gov.com TUVALU Mr Hamoa HOLONA Acting Assistant Secretary of Health Ministry of Health, Private Mail Bag, Funafuti Tel no. 688-20416 Fax no. 688-20832 Email: h_holona@yahoo.com Mr Nalano ELISALA Pharmacist, Ministry of Health Private Mail Bag, Funafuti Tel no. 688-20765 Fax no. 688-20832 Email: pharmacyintuvalu@yahoo.com Ms Etila MORlKAO Adviser, Planning & Budget Department Ministry of Finance, Private Mail Bag, Funafuti Tel no. 688-20231 Fax no. 688-20210 VANUATU Mr Morking STEVENS IATIKA Minister of Health, Ministry of Health Private Mail Bag 9042, Port Vila Tel no. 678-22545 Fax no. 678-26113
Annex 3 Mr Jameson MOKOROE Finance Manager Ministry of Health Private Mail Bag 9042, Port Vila Tel no. 678-25141 Fax no: 678-26204 Email: jmokoroe@vanautu.gov.vn Ms Flora KALSARIA Health Sector Analyst Department of Economic and Sector Planning Private Mail Bag 9008, Port Vila Tel no. 678-22605 Email: fkalsaria@vanuatu.gov.vn
2.
CONSULTANTS
Professor Tuohong ZHANG School of Public Health Peking University Health Science Center Public Health Building, No. 38 Xueyuan Road Haidian District, Beijing 100083, China Tel no. 86-10-82802144 Fax no. 86-1082802642 Email: tzhang@bjmu.edu.cn Professor Soonman KWON Professor and Chair Department of Health Policy and Management School of Public Health, Seoul National University 28 Yonkon-dong, Chongno-gu Seoul 110-799, Republic of Korea Tel no. 822-740-8875 Fax no. 822-745-9104 Email .kwons@snu.ac.kr Professor Kodjo ELVO Director - University Property and General Maintenance Administration, University of Lome B.P. 3237, Lome, Togo Tel no: 228-2268614; 228-90\5958 Email: koevlo@tg.refer.org;kodjo_evlo@yahoo.com
Annex 3
3.
REPRESENTATIVES AND OBSERVERS
Asian Development Bank (ADB)
Ms Hayman K. WIN
Young Professional, Pacific Operations Division Area "B", Pacific Department Regional and Sustainable Development Department Gender, Social Development, and Civil Society Division Asian Development Bank 6 ADB Avenue, Mandaluyong City 1550 Metro Manila, Philippines Tel no. 632-6324427 Fax no. 632-6362409 Email: hwin@adb.org
Nossal Institnte of Global Health
Mr Abmer AKHTAR Manager, Health Policy and Finance Hub Health Systems Strengthening Unit Nossallnstitute of Global Health University of Melbourne Melbourne, Australia Email: akhtar.abmer@gmail.com Dr Marco RONCARATI Social Affairs Officer Health and Development Section Emerging Social Issues Division United Nations Economic and Social Commission for Asia and the Pacific The United Nations Building Rajadanmem Nok Avenue Bangkok 10200, Thailand Tel no. 662-2881565 Fax no. 622-2881502 Email: roncarati@un.org Mr Sisa OTEALAGI Ministry of Health, Women and Social Welfare P.O. Box 2212, Govemment Buildings, Suva Ms Makereta BROWN Ministry of Health, Women and Social Welfare P.O. Box 2212, Government Buildings, Suva Ms Dhan LAKSHMI Ministry of Health, Women and Social Welfare P.O. Box 2212, Government Buildings, Suva
United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP)
Ministry of Health of FIJI
Annex 3 Ministry of Health of V ANUATU Ms Hellen W AI' Finance and Administration Officer T afea Health Services, Ministry of Health Private Mail Bag 042, Port Vila, Vanuatu Tel no. 678-22545 Fax no. 678-26113 Ms Rona T AURARIPU clo Ministry of Health, Private Mail Bag 9042, Port Vila Tel no. 678-27451 Ms Marie LEPON clo Ministry of Health, Private Mail Bag 9042, Port Vila Tel no. 678-27451 Ms Jane IATIKA clo Ministry of Health, Private Mail Bag 9042, Port Vila Tel no. 678-27451 FRESBOUT CONSULTING PTY LTD Ms Carol Beaver 7 May Terrace, Kensington Park, SA 6058, Australia Email: carolbeaver@fresbout.com
4.
SECRETARIAT
WHO
Dr Henk BEKEDAM
Director, Division of Health Sector Development Regional Office for the Western Pacific United Nations Avenue, P.O. Box 2932 1000 Manila, Philippines Tel no. 632-5289951 Fax no. 632-5211036 Email: bekedanth@wpro.who.int Mr DOIjsnren BAYARSAIKHAN (Responsible Officer) Regional Adviser, Health Care Financing Division of Health Sector Development Regional Office for the Western Pacific United Nations Avenue, P.O. Box 2932 1000 Manila, Philippines Tel no. 632-5289808 Fax no. 632-5211036 Email: bayarsaikhand@wpro.who.int
Annex 3 Dr Ken CHEN WHO Representative in the South Pacific Level 4, Provident Plaza I, Downtown Boulevard 33 Ellery Street, P.O. Box 113, Suva, Fiji Tel no. (679) 3304600 Fax no. (679) 3300462 or 3311530 Email: chenk@sp.wpro.who.int Dr Juliet FLEISCHL Technical Officer in Human Resources and Health Systems c/o WHO Office in the South Pacific Level 4, Provident Plaza One, Downtown Boulevard 33 Ellery Street, P.O. Box 113, Suva, Fiji Tel no. (679) 3304 4100; 3234107 Fax no. (679) 3300 4177 Email: fleischij@sp.wpro.who.int
ANNEX 4 OPENING SPEECH OF DR SHIGERU OMI WHO REGIONAL DIRECTOR FOR THE WESTERN PACIFIC AT THE MEETING ON USER FEE IMPACTS ON ACCESS AND EQUITY AND LESSONS LEARNT FOR THE PACIFIC NADI, FIJI 3-5 JUNE 2008 (delivered by Dr Chen Ken, WHO Representative for the South Pacific)
DISTINGUISHED P ARTICIPANTS, LADIES AND GENTLEMEN, First of all, I would like to thank the Government of Fiji for hosting this international event. [also would like to thank all the participants for coming to Nadi for this important meeting. [am grateful that our partner agencies - the Asian Development Bank, the Nossal Institute for Global Health, the United Nations Economic and Social Commission for Asia and the Pacific, and the World Bank will also participate in this meeting. Health care financing is an important issue globally in the Pacific because of increasing demand for health care and limitations in generating revenues from traditional sources. The epidemiological trend of communicable and noncommunicable diseases suggests that the pressure on resource need will further continue. Treatment of some chronic noncommunicable diseases is expensive and it can consume alone most of the health budget. Emerging communicable diseases such as HIV/AIDS and re-emerging diseases like TB tuberculosis continue to be serious challenges across all countries in the Region including the Pacific. In this situation, many governments are looking at introducing user fees and copayments in public health facilities as an option to mobilize additional revenues for the health sector. Similar efforts have been exerted before in Africa and Asia - known as cost recovery and cost-sharing initiatives that applied user fees and other forms of participation of individuals in financing health services. Most transition economies also introduced fees and charges for publicly provided services in public health facilities. Recent evidence shows that user fee financing is a highly inequitable option with many negative effects on population health improvement. User fees largely undermine access, equity, coverage and health outcomes especially in developing countries that lack effective fmancial protection and social safety net mechanisms. User fees set at provider level not only escalate health care costs but also distort the quality of care and professional ethics, generating unnecessary demand to increase revenues and placing financial burdens on sick patients seeking care. Many studies show that health payments push low-income and vulnerable population into poverty because of inadequate financial risk protection and risk pools. The largest number of people suffer from health payment in the WHO Western Pacific Region among all other WHO regions. These people have been excluded from many social benefits, including health services. Poverty is high where out-of pocket payments dominate in financing health care and health payments are catastrophic when available health services require user fees. WHO's health fmancing work in the Region is guided by the Regional Strategy on Health Care Financing, which was approved by the Regional Committee at its fifty-sixth session held in New Caledonia in 2005. Since then, WHO together with its Member States is working closely to implement the strategic directions to improve health fmancing arrangements in the Region. There is ongoing review of the implementation of the Strategy in the Region including the Pacific. Currently, the countries in the Region finance their health systems in several different ways. Taxation, health insurance, user fees, community financing and external funding are the most common. However, there is clear evidence that health such systems funded predominantly from user fees often fail to struggle to ensure equitable access to health services for the poor and vulnerable.
Annex 4 When the share of private fmancing increases, many individual households face severe problems, User fees also result in people delaying seeking care, so more intensive and expensive care is required when and if they eventually do seek care. Therefore, reducing out-of-pocket payment is one of the core health financing targets in the Region. It can be achieved with increased role of prepayment fmancing schemes and sufficient financial risk protections through taxation and social health insurance. If patients are to be charged, there must be social safety nets in place and that these must be functioning well, so the poor and disadvantaged are protected and can obtain timely access to health services to meet their needs. Apparently, the user fee practices in the Pacific may seem affordable without imposing sigrtificant fmancial burden on sick patients and their household. The latest national health account estimates show that private health spending as a percentage of total health expenditure is gradually increasing in many countries of the Pacific. Therefore, WHO is concerned about the negative impacts of user fees in the near future in the Pacific, if governments will continue to pursue user-fees policies and health fmancing arrangements will gradually rely on fee-for-service as the main mode of payment for health care. In view of this, the meeting on user fee impacts on access and equity and on lessons learnt for the
Pacific aims to discuss user-fee policies, practices and sbare bealth fmancing experiences and options that increase resources in health and ensure greater equity. access, coverage and financial protection in the context of Pacific island countries. Tbe participants will also bave the opportunity to learn from user-fee policies, practices and lessons from Africa and Asia. We expect that the discussions are relevant to all participating countries in the review and improvement of their health fmancing policies and deemphasizing of user fees.
Ladies and gentlemen, on behalf of our Regional Director, let me express once again our deep appreciation to all governments and partner agencies for their excellent collaboration in organizing this important event. I wish you success in your discussions. Thank you.
ANNEX 5
User Fee and Out-of-Pocket Payment in Health Care: Theory and Evidence Meeting on user fee impact on access lind equity lind on lessons leamt for the PacIfic
~
Outline
Nae!!, fiji )-5 lune ~008
Soonman KWON, Ph.D. Professor Department of Health Policy & Ma.nagement School of Public Heafth Seoul National University Republic of Korea
I. Theoretical framework of user fee (OOP) 1. Types of health care finanang sources 2. Impact of user fee 3. Politics of user fee 4. Better altemative to user fee 5. Design/pattem of user fee
II. Empirical evidence on the impact of OOP
1. Types of health care financing sources (1) Public (tax, SHI) • pooling over income and health risk • redistributive (progressive for income tax, proportional for SHI contribution, regressiVe for consumption tax) • risk pooling between the sick and the healthy
I. Theoretical framework of user fee (out-of-pocket payment)
2. Private (PHI, user fee) • regressive (no pooling over income): the poor tend
to be sicker and pay higher (risk~based) premium of PHI ~
risk poo1lng between the sick and healthy in the case of PHI, but no pooling for health risks in the
case of user fee
2. Impact of user fee/OOP
(2) Problems of user fee
(1) Potential advantages of user fee »COntrol demand-side moral hazard (reduce the utilization of un-necessary care or reduce medical care with low benefits/value for health improvement) );>
a. inequitable and regressive: high financial burden on the poor or unhealthy (tax on the poor and sick) ~> need ceiling on (wmulative) user fee per period, income-related co-payment (lower user fee for the poor), or exemption of user fee for vulnerable groups exemption for the poor frequenttv fails in low~income
Saving/reduction in health expenditure Additional resources: revenue from user fee can be used to improve fadlity, quality of care, compensation/incentive to
~>
);>
providers, etc. );>
countries (due to politics, limited administrative capacity, perverse incentive/behavior of providers.,.) b. patient's imperfect information on the benefits of medical care: user fee can make patients reduce not only unnecessary care but also necessary care -> negative effects on access to care or health outcomes
Formal user fee can be more transparent than infonnal pay
Annex 5
(2) Problem. of user fee (cont'd) c. ineffident and limited effect on cost containment
(2) Problem. of user fee (cont'd) d. mixed evidence on the substitution of formal user charge for informal/under-the-table payment: informal pay frequently continues even after the introduction of user fee e. administratiVe feasibility or capacity -> nontrMal cost of administering user fees -> local participation/ownership of user fees is not realized in many cases
price elasticity of demand for medical care is low: utilization of medical care responds to price change to a small extent -> only the poor may reduce utilization providers have better information and greater influences on medical utiljzatlon than patients have (e.g. physldans can substitute services with no user fee mr those with high user fee) -> controlling provider mor~1 hazard through provider cost sharing (e.g., prospective payment system) is more effective than user fee
3. Politics of user fee
4. Better alternative to user fee
» »
Once use fee is introduced or increased, tt is rarely decreased Politics and stakeholders providers, administrators: user fee as an alternative source of (discretionary) fund/income - private insurance: the greater the user tee, the greater the potential market for private health insurance - Ministry of Rnance: concemed more about the short-term effect on government budget, than about the flnandal burden on patients and the effect on access and health outcomes supporters of market-based approach and individual responsibility for health and health care
» ~
Introduction or increasing the role of PREPAYMENT SCHEME is much better than user fee
User fee: no payment when heatthy, but huge payment when sick Prepayment: small payment when healthy, and small/no
»
payment when sick -> Income smoothing and risk protection -> more effident and equitable health care resource allocation than user fee
5. Pattern/ design of user fee ). Should be exemptions for vulnerable population (based on transparent and measurable criteria): e.g., poor, children, elderly
5. Pattern/design of user fee (cont'd)
»
» Path dependency (in developed countries) - user fee as a politicallV sensitive issue - reluctant to introduce user fee for core areas of health care tend to Introduce user fee for dental care, pharmaceutiCals, and long-term care
Differential cost sharing based on service characteristics potential of moral hazard (unnecessary utilization): e.g., outpatient vs. inpatient care (if moral hazard Is less likely in inpatient care, reduce user fee for Inpatient care)
- concern on access: e.g., GP vs. specialists (if access to primary care is more Important, reduce user fee for GP service) effectiveness: e.g., types of pharmaceuticals (reduce user fee for more cost-effective meclidnes)
Annex 5
5. Pattem/design of user fee (cont'd) )0
Differential cost sharing based on service characteristics (conrd) - referral system: higher user fee in case of non-compliance with the referral chain • non-essential or non-dinical service: higher user fees for hospital meals, private rooms
II.
Empirical evidence on the impact
ot out-ot-pocket payment
<References> EQUITAP studies O'Donnell, 0., Van Doorslaer, E., et aI., 2008, "Who pays for health care in Asia?," Journal of Health Economics 27, 460--475 Van Doorslaer, E., O'Donnell, 0., et aI., 2006. "Effect of health payments on poverty estimates in 11 counbies in Asia: an analysis of househDtd survey data," The lancet 368 (14), 1357-1364
OOP and tax as % of total health expenditure ,~
,<~
~.
TA ~~ ~.
-' ~.
40'!. ,lO'\. ~
Van Doorslaer, E., O'Donnell, 0., et aI., 2007, " catastrophic payments for health care in Asia,n Heahh Economics 16 (11),
10".
" '0"_ 11M.
~~
115!H184
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lot...
OOP .. %ofTF.U SoIne: O. 0'0<IrtIeII1!I: af(2OOll)
~
Effect of OOP on household
Incidence of catastrophic payments relative to total and to non-fOod expenditure
OOP payments for health care absorb more than one quarter of household resources net of food costs in at least 10% of all households in Bangladesh, China, India, and Viet Nam sacrifice of current consumption accumulation of debt spending of savings and assets -> impoverishment due to illness
• !
,~ l~
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Annex 5
Relationship between OOP and catastrophic effect (OOP>250f0 of non-food expenditure)
Change in poverty head counts due to OOP for health care 1'0,,.,,.. ,, I' ,,_ "I •. ,',1 ';""11,,,·."1, (J'''M .(~. n7'~
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Relationship between OOP and impoverishment due to iIIne" ($1 poverty line) ~.
> Effect of OOP on health care utilization In most of the low-/middle~income countries, high OOP payment for health care (with little role of prepayment scheme) meanS that health care is like a market commodity the better-off pay greater DQP for health care to obtain higher quality care, whereas the poor cannot afford to pay and may give up treatment
t I ~ ~
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~ ~ ]
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-> health care utilization is skewed toward the rich in the low-/mlddle-income countries, which rely heavily on OOP
Health care delivery (utilization) concentration curve
Concentration Indices for health care utilization Hospital inpatient publk: HOSpital outpatient Pu~~
T.....".,
,..... 1,,,,, ~'"('D".'" ., "".. ..,., .. ,<
1_ Ind~
Banoladesh Gansu-China HellongjlangChina Hong Kong
0.3174 0.2963 0.3824 -0.4347 0.2458 0.3745 -0.0553* -0.0335*
P"",Ie 0.362
Total
Private
Total
0.3361
0.0987 -0.0174 0.0446* 0.182
0.0649
Sri Lankll Thailand
0.2074 -0.3814 -0.4333 0.4730 0.3605 0.1311 0.4953 0.4243 0.312 0.3767 0.0109* -0.0709 0.5963 0.0720* -O.DiM
0.0893* -0.3231 0.1652 0.1504 0.3813 0.3416 0.1267 -0.0'114 0.2638 0.0838
(~) Indocatfll; tfIItJIlOC< IS not Sj~ dlrterentfICItII zen> at 5%. Soo.IQ!: 0"DarYIeII, et ill. (2008)
Annex 5
OOP and concentration indices for hospital inpatient care
OOP and concentration indices for hosplQl outpatient care ." \ • Indonesia
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II
I I I
ANNEX 6
User Fee Impact on Access and Equity and on Lesson Learnt for the Pacific
Nedi, FIJI 3-5 June 2008
f':!~"!l
User fee policies and practices in the COOK ISLANDS Heather Webber Aitu Haumata Hosking Tangi Mataio
M ......
The Cook Islands' is an authentic and refined Pacific experience encased in a lifestyle that exudes warmth, happiness and respect We are a proud people with a rich culture and a lush tapestry of traditions that entwine with our daily lives.
The Cook Islands consist of 15 islands with a total population of approximately 19,000. scattered over some 2 million square kilometres of the Pacific Ocean. They lie in the centre of the Polynesian Triangle, flanked to the west by the Kingdom of Tonga and the Samoas and to the east by Tahiti and the islands of French Polynesia.
As part of our welcome to you, we would be honoured if you would share our customs and culture, and in this way, become one of us
G.. ' Ii'~. \ .' . ';\1.1 '.o' , ....
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1. Policy rationales for introducing user fees and co-payments User fees in the Cook Islands were introduced as a cost recovery measure after the
2. Major expectations from user fee policy To use the fees collected to supplement the budget
government reforms in 1997 on the main island of Rarotonga only. There are 15 islands in the Cooks however Rarotonga is home to 58% of population. Part of the justification was that even if the payment was small it would make the health service more appreciated if people had to pay.
That patients would use the health services more wisely if they had to pay.
Annex 6
Resident population by income range (NZS) 2001
3.
Referral levels where user fees and co-payments are introduced
On the Island of Rarotonga, user fees are introduced at age 17 and cease at age 60 Resident Cook Islanders and Permanent Residents $7.00 per consultation which includes laboratory investigation, radiology and prescription charges All outer island general medical and hospital services are free for residents TOT..... e.. 8031
n02
1,008
Note: 62'!6oflhe Coak I.lands I'opulatlOJl tams I", than SlOKannually
-""---"-~-"""--
All visitors and tourists fay a fee to access Rarotonga and outer island medica services
4. Types of health services charged in Rarotonga For adult non-residents, contract workers. visitors and tourists the consultation fees are $40 per visit plus additional laboratory, radiology and pharmaceutical charges. For children $20 plus additional charges Dental
5. Affordability of fees and co-payments The minimum hourly wage in the Cook Islands is $5 per hour, so at $7 per visit it would seem that a doctors consultation is affordable. However the resident annual unpaid user charges debt increases by $24K annually. 10% of the current users do not pay their consultation fees
Alcohol related consultations have an extra surcharge for both residents and non-Residents alike Medical. police and insurance reports Minor and major surgery
Hospital overnight stays VisitinJ;! specialist visits
Cook Islands residents consultations 2007 Re"ntC~
6. Assessment and monitoring work on user fee policy implementation Some of the issues surrounding resident debt collection: 1
COOK ISLANDS 2D07
3Ol,OOQ r----~~-;;;------------------
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There are only a few families that have a postal address, e.g. a post office box number Contact by telephone is problematic as many have cell phones which number change on a regular basis, making debt collection calling time often being problematic as the hospital number comes up on the caller ID and patients who owe will not answer their phone.
- -:: -:'o;i: -~: ~ ~: ~: ---------
2.
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=
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3.
The cost of phone calls and hiring a debt collection agent is often cost prohibitive.
Annex 6
4.
Many go off island not returning remaining uncontactable
Cook Islands welfare benefits
5. Large bills are acquired when there has been an alcobol related admission and the patient is off work for months recovering with no income. 6.
I
There has been little poverty analysis however the benefits pay $60 a month for under 17 year aids, $120 a month for the over 60's infirmed and destitute.
<~ ..~ ,.~ ,.~ ,.~
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ISLANPS
"" - - - ~~ ~-- - - -U?ENSIONErul Cf-ILD BENEFITS INFIRM
7. Currently 2007 there are 1400 over 60 year aids on pensions, 3500, child beneficiaries and 240 infirmed or destitute beneficiaries total 5140 in a the Rarotonga population of 11,000.
-as- --
OESl1TUlE
7. Assessment and monitoring work continue Monitoring of debt is carried out on a monthly basis
Public are made aware via TV slots of the current user charges
n:\IIH[
OK~
The MedTech 32 IT system used, highlights in red on the screen the amount owing for every patient when they visit
User pay guide is published
Iff j
G' R~flotU9it$
Staff training is given using non-offensive language to collect consultation payments and direct debit installment payments are sometimes set up with the bank.
Notices in outpatients clearly indicate user pay charges
110"PI1,1'( Dewl
rs[R (HARGES
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~~~U~~~~~~~9~~~~~~g~~~~~ TAAMAAU, Mr M ..... (25175.1)
8. User fee impacts on access and equity Not paying off old debt often makes people reluctant to seek medical attention when it is necessary It restricts patient access to some services because of lack of funding User pays has brought aggression and animosity directed at reception and clinical staff. As the public is expected to pay for health care, they become more critical of perceived inadequacies in the delivery of quality and appropriate health care. The focus on customer service and public relations on the part of medical. nursing. allied and administrative personnel also becomes important
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Annex 6
Outer Islanders when they arrive at Rarotonga secondary hospital still expect free health care
9. Issues There are issues around the two private doctors sending their patients up for reduced payment of doctors services after hours. Private doctors charge $40 per visit in regular hours and their patients expect to see a hospital doctor for $7 per visit after hours. Overseas based Cook Islanders returning home for visits who carry no insurance to pay for medical care
Patients know that legally they cannot be turned away if sick, even if they have no money
There is no sense of waiting times for urgent and non urgent consultations as all patients wait in the same area
Getting visitors and tourists and non residents to pay appropriately for health services used
Because children and older people have free access uptake using medical services is high
a pm and before 8 am.
Increasing fees for residents for non urgent consultations after
Information to Outer Island patients in regards to Rarotonga Hospital user charges
10. Conclusion Users pay slightly increases finances, but the monitoring and recover of debt is time consuming and expensive Collection of user fees needs to occur at the time of
consultation The interpretation of fee application sometimes differs conSiderably, depending on the interpretation of user charges of the person who is preparing the bill Clear user charge policy need to be in place with no anomalies Further assessment and monitoring needs to be undertaken to take into account poverty indicators and to further assess Vllhat the user charge should be and if people can really afford it
We, the custodians of the present. have a duty to future generations of Cook Islanders to preserve now for the benefit which identifies us from other peoples and which will give them pride in their country and their heritage: Sir Geoffrey Henry KBE Former PH Cook Islands
Annex 6
Us.r Faa Impact on Access and Equity and on Leason Leamt for the Pacific
Nadl, FIJI 3-5 June 2008
Policy rationales for introducing user fees and co-payments The affordability of essential services like health care has become a critical poli9' issue in many developing countries (like in Fiji) because people are expected to contribute more from their own pockets as a result of health sector financing reforms, e.g. user fee In Fiji, the concept is not new and is implemented at various levels in public hospitalS. But outdated and have not been reviewed for last decades. Do not reflect real cost of services
User Fee Policies and Practices in the Pacific FIJI
Major expectations from user fee policy By Government • People's ability or affordability to pay (ATP) versus willingness to pay (WTP) • Understanding the impact of health service and other charges on households' limited budgets, their expenditure priorities, their consumption and investment patterns Cost sharing - shift costs to consumers Effective use of financial resources - capital works Improved service delivery - demand driven Problem of fee collection - unable I inability to pay -exercise exemption? By the common people Affordability limits access and equity Added financial burden Delayed treatment
Referral levels where user fee and co-payments are introduced Patients from private doctors to public hospitals • Services include - X ray, laboratory, request for medical reports Fees charged very minimal
Types of health services charged Dental Refer slide no.5 Private ward • Ambulance • Very minimal fees
Annex 6
Affordability of fees and co-payments Public Health services mainly free Main beneficiary - general public • Out of pocket payment is increasing (people demand for better service ) • Question: What is the accepted definition of "affordable"? How is "affordability" defined in the Fiji context?
Assessment and monitoring work on user fee policy implementation Ministry of Finance reviewing all Government's fees, fines and charges (exclude Statutory Authorities
and Government Commercial Companies) • 2008 Ministry's deliverables - include review of fees • National Council for Building a Better Fiji (NCBBF)-
user fee included in the Health Working Group
User fee impact on access and equity • Who? The poor - become more marginalized • How? - Delayed treatment - wait home to die Added financial burden Inability to pay - exemption?
Annex 6
User Fee Impact on Access and Equity and on Lasson Leamt fur the Pacific Nadi, FIJI
Federated Stat.. of Microneaia . Map
3·5 June 2008
Federated. States of Micronesia ""r'~
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Baaie Data 0. FSU Population:
116,900 (2007 est.)
User Fee policies and practices in the Federated States of Micronesia Policies and practices vary due to: Four state hospitals (manage differently) Established fee schedules differ from state to state One or two states set up revolving fund accounts from user fee collections specific for purchasing essential drugs and medical supplies (in some cases food for inpatient)
704.6 SQ. km land area: Number of islands: 607 islands Four island states: (Yap, Chuuk, Pohnpei and Kosrae) life expectancy: 70.35 years (2007 est.) Crude birth rate: 25.1 (2005 est) Crude death rate: 4.87 (2005 est) Infant mortaUty rate: 26.8/1000 (2007) Age distribution (2007 est): • , • 0-14 yea.,. 15-64 years 65+ yean. and fNet" 37.4%
..% 3....
Population growth rate:
0.5% (2006-2010 est)
1. Policy rationales for introducing user fees and co-payments Sustaining health care financing mechanism in all four states of the Federated States of Micronesia - generate revenue - quality health care services - to shift the total burden of costs from government (share costs) standardization of fee schedules - improving service delivery and accountability
2. Major expectations from user fee policy • To make the patients responsible about their health • Employers to be responsible for the health of their workers Develop a sustainable health care finance mechanism Improve capacity and accountability systems
Annex 6
3. Referral levels where user fees and co-payments are introduced Primary health care level (dispensary & CHC- reduced fee) • Secondary health care level (hospitals) • Tertiary health care level (referral) (public and off island health care facilities)
4. Types of health services charged • OPD services • Inpatient services • Laboratory services
• X-ray services • Dental health • Public health clinics (some)
• Surgery • Delivery services • Referrals (public, private, out-of-country) Morgue services • Physical therapy services
5. Affordability of fees and co-payments • Not everyone is covered through a health insurance plan • Fee schedules (generous) established for affordability to everyone • Some people refuse to pay • In-kind payments (local produces) • Installments in some states (referrals)
6. Assessment and monitoring work on user fee policy implementation Percentage of enrollees in an insurance plan
increase Total amount of insurance payments collected by the hospital increased/decreased Total amount of out-of-pocket payments collected by the hospital Number of out-of-country medical referrals using sector grant will be decreased Average cost per off-island referral Total cost of out-of-country referrals
• • • •
7. User fee impacts on access and equity • Yes, user fee impacts access and equity • Patients wait until last minute to seek health care services (access) • Insured patients pay 90% medical charges and 10% co-payment (out-of-pocket) • Only those who can afford or have insurance plan access to health care services • However, the policy is not to deny health care services to anyone due to inability to pay • Both have
Conclusion User fees and co-payments exist in FSM pos~ive
and negative impacts
• Useful to sustain health care delivery systems • To resolve the difficulty of user fee and co-payment the government is looking to establish a social health insurance system that will cover the entire population
Annex 6
MEETING ON USE FEE IMPACTS ON ACCESS AND EQUTTY AND ON LESSONS 1..EARt<lrFOR 'l1-IE PACIFIC
NADI, FUI
3-5 JUNE 2008
1. Policy rationales for introducing user fees and co-payments Government budgetary constraint, e.g. health sector component of the national government budget is declining not only in % terms but also in real terms ' Improve efficiency in the health services Equity consideration User fees signal to patients/clientele that there are costs involved in the provision of health services (nothing is free) User fees enhance the national health referral system
User fee poli= and practices in the Pacific PNG Navy Mulou Samuel Petau Lazarus Enker
2. Major expectations from use fee policy Helps to improve the govemment budgetary shortfalls or constraints Ensures that clientele become more responsible in terms of maintaining their personal health
3. Referral levels where uses fees and co-payments are introduced Health centers District hospitals • Provincial hospitals
4. Types of health services charged Aid-posts/urban clinics - ambulatory services Health centre - ambulatory services - limited range of in-patient services District hospitals - ambulatory services - increased but still limited scope of in-patient services Provincial hospitals ambulatory or outpatient services including ME services, consultations both public & intermediate wide or comprehensive range of in-patient services
Types of health services chargedcontinued Provincial hospitals In-patient e.g. admissions, lab tests, X-rays, surgical operations, dental exams & dental extractions medical reports, dental reports, drugs, . deliveries, use of government facilities by private practitioners like labor ward, ante/post natal & gynae care, theatre, anaesthesiologist, sterilization, issue of birth certificates, medical examinations, physio-theraphies, plaster work, eye glasses, crutches, vaccinations for travelors, post mortem exams & reports, etc
Annex 6
5. Affordability of fees and co-payments The level of fees charged at public hospitals and public rural health facilities does not reflect the true costs of providing health services in the country. Health services in PNG is heavily subsidized by the state. It is minimal. Therefore most clientele are able to afford the fees imposed. Almost 50% of clientele in PNG are exempted from paying fees. since they fall under the exemption criteria. Therefore affordability is not an issue here.
6. Assessment and monitoring work on user fee policy implementation In the public health sector hospitals are supposed to generate at least 15% of their operating costs through user fees alone per annum. In practice this is not the case. Monitoring of hospitals performance in terms of revenue generation shows that hospitals on average are only able to generate about 7% of their operating costs through user fees per annum.
• Hospitals are required to send their revenue reports through user fees to the NOOH every month. In practice this is not the case. In other words. it is irregular. • In rural areas government health facilities do not report at all on the revenues they generate through user fees. It is a management & administrative issue that needs to be resolved.
7. User fee impacts on access and equity • Volume of patients attending one government district hospital dropped as a direct impact of introducing user fees. This is an accessibility issue. • This means that those who could afford were the only ones who were using the services. Those who could not afford were turned away. This is an equity issue.
Conclusion • The user fee policy in the context of the health sector is being implemented as a policy instrument, and not as a policy objective. especially in the hospital setting. In other words, the aim is not to maximize profit. The level of fees charged are minimal and clientele are able to afford the fees. • Therefore the issues of accessibility and equity are not are major concern.
In the rural setting however, the OPPOSite holds, especially in poor districts in PNG. User fee policy is being implemented in the health sector in rural areas without a legal framework. Because of this segments of people in rural areas who cannot afford to pay the fees do not have access to health services. Thus user fee policy has impacted on both accessibility as well as equity in terms of health services.
Annex 6
Meeting on User Fee Impact on Access and Equity and Lessons Learnt for the Pacific Nadi, Fiji
3-5 June 2008
I. Policy rationales for introducing user fees and co-payments Public health services have traditionally been provided at a very minimal monetary cost to the general public in Samoa Consultation fees have steadily rose from 50 cents,
'User Fee' Policy and Practices in Samoa
$2 and now $5 in the last 5 years
A token amount has traditionally been paid by the general public for publicly funded health services, this is to ensure some sort of appreciation from the general public of the value of the services they receive
A public health service offered for free carries the risk of over utilization and misuse, i.e. frequent unnecessary visits to the hospital putting strain on limited public resources
2. Major expectations from user fee policy Public health services has traditionally been heavily subsidized by the local government, and offered as a primary social service and obligation to its citizens. The role of insurance and employer payment is very low in Samoa. So families must pay 'out of pocket' for almost all costs of accessing services. This is why 'government financing' of health services is so crucial to 'access' and 'affordability' of public health services by the general public.
Generally, 'user fees' for public health services have been applied cautiously in Samoa, with the main objective of ensuring 'accessibility' and 'affordability' for wlnerable groups (relatively low income earDer-s). (Samoa Health Sector Plan 20082018, Strategic Objective 2). Public health spending has always been considered a 'social service' to the general public and is heavily subsidized by the 10cal government The annual health budget usuaUy ranges from 15%-18% of the total annual government budget.
The low user fee policy of Samoa has at times been exploited by non-Samoan residents visiting from overseas. - locals rm;iding in NZ, AUST, US gain from the exceptionally low prices for quality specialized health services, when they visit the local bospitals compared to what is being paid elsewhere in the world, e.g. public dental services, dialysis unit - NKFS The current U!.ef fee policy is primarily des.igned to benefit the local tax paying citizens and population. As such, there is a need to distinguish between certain clients of the public health system, so as to ensure a fair and equitable system of user charging.
3(.) Types of health services charged and referral levels where user fees are charged (in Samoan Tala) 1'apDa T•• I.ese' Copm!taDon fg
Nllioaal Belltb Services Vser Fee ChuJes IUld IlIteli N.tIo_ Hospltll, VpobI
_toan.
The current structure and rates of different 'user fees' within the public bealth services have been designed to achieve the Strategic Objective 2 !If the HSP 2008-2018, as well as to cater for non-Samoa Residence (Samoans res.iding overseas) and overneas non-residence (visitors).
• $5 loca1loverseas Iloll-residence $20 p!wmaceutjca! (drugs) As pel" mcdicaI prescription • Diabcti.cJb.)'pcrtensioD & heart disease patients pay $1 for aU pharmaccubcals • Free pharmaccutiub & druas - pensioners Ora! and dental !JraJtb znrim Gold lOath - $200 • Dentures· $150 • Partial upperllowe:r • $80 per ODe • Putial upperllower • $88 per two immjpon medical ciynmce services X-n.y(medieal imlgiDg) - $10 • l..abawory costs - $)0
Annex 6
3(b) Types of health services charged and referral levels where user fees are charged Patient admission • $4 ward per night (includes 5 meals a day) • $12· private room per night (includes S meals II day) •
3(c) Types of health services charged and referral levels where user fees are charged Maljma lanum,n!; II Homita! Savaj'j
ConsultatioQ rec:: $51oca1loversw Don-residence $20 Paneot admission fee: $4 (as many nights as required) NatioQl' Kidney FQl]ndatjoQ of Samoa CNKFSl charges Samoan citizeo - $10 per dialysis treatment NOQ,S8D101D residence· $500 pel'" dialysis trwment
Surgery selVices • Charged by patient admission, as above Gcncnll health services Family piaDning visits - 52 Birth certificate confmnationldocumenls - $5 Death certificates - $5 Medical reports (death) - $25 Mortuary rates - $5 per night - $25 preservative fluids Ambulance charges Depending on distance of patient, $100 airport to Moto' otua bospital. Ambulance rented out to Medceo hospital, $100 a trip and depending
• Nop-Samoan citize:a - SIOOO per dialysis treatmeDt • Dialysis treatment is usuaJ\y4-5 hours pc:rsessiOD (stBie 5 diabetes) Private sector: Me4ceD & gepcnl practitioDCJ$ GP's consultation fees: $20 - $35 per visit Medical dcanmcereports for American Samoa travels: $100 - S120 Medcen consultation fee (private hospilal) - $34 pervisit Difficultto unify privalc sector chqes due: to diff=t quality health services offered by OP'S to the public (AssOCiate Minister ofHea.IthDr Leao Tuitama.)
on distance
4. Affordability of fees and co-payments Annu.1 H..1Ih &pandlturev. Annu" H.. 1th Revenu. Publicly funded beattb services ~ beavily subsidized and th~fOre are very affordable to all membcn of the genc:ral public, and especially vulDmlble groups in Samoa Table 1 below, sbows the levels arlotal public health expenditul'(l and reveaues earned by publicly funded health institutions from 2001102 through to 5O.Wl.000 015.000,000 40,000,000 :JIi,OOO,OOO
-
2006107
,-,-'--
T_, ~-".
Arll'lual Public 200112002
31.'.'.501 g12,_ o~
"'- ,.,3Il.532.452 1,~21.G04 1.2~,3Il7
I-\e8Ith ExperKItlxe YS Annual PWIic Health Revenue ~. ~,I!O!i,11111
i
!
30,000,000 25,000,000 2O,IXIl,OOO
/
15,000.000 ~ .7,~,30$
200II12007 '7.513.177 1.413,51)0
10,000,000 5,000,000 200112002 2OO2J2OO3 200312004 2004/2005 2005/200& 2000/2007
37,150.513
-
U33,B3$
1,391._
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oro
o.ro
.~
5. Assessment and monitoring work on user fee policy implementation Currently there is a National Committee assigned to review and assess the whole 'user fee' policy for the NHS (main public health service provider). Work is currently underway to adopt the most appropriate 'user fee' policy for the NHS.
The NHS would like to see a target of20% recovery costs in the generation of revenue in the Ions: term. However, this ambitious goal is politically sensmve, especially as the public health service is regarded as a primary 'social service' to the general public, There is strong government support to keep 'user fees' for
health services at an affordable level to ensure 'accessibility' and 'affordability' by the citizens of the COWltry,
There is a need to review and assess the current generation of operational revenue to cover cunent and future operating costs. Presently, operational revenues have only covered 0.03% of total health expenditures in the local budget for the last 6 Y""'·
As such, it is difficult to see the NHS (main public heahh service provider) become financially independent in the provision of public bealth services, in the near future or long term,
Annex 6
6. User fee impacts on access and equity Current Use fee charges are quite reasonable and fair, especially from an 'access' and 'affordability' point of view for the general public. The current rates ensures that public health services can be provided to all members of the local commWlity. The current rates are low enough to be a small proportion of 'inpatient' and 'outpatient' costs incurred by the average family. The current user fee policy also ensures that special rates are
Conclusion The current 'user fee' structure aod rales for the provision of public health services in Samoa is based on the principles and embedded bclicfofthe need
to ensure 'a=sibllil)" and 'affordability' ofmese services by the local ieneral public and "pccially vulnerable groups (low incotne earners)
The Health Sector Plan 2008-2018 promoteS the uodmtanding that 'health' is a bWll8ll rights issue, and as such will coDtinue to be a primary social service to be heavily subridi2ed by the local government budget in the near future and long tenD. In Beoeral, there is usually a strong commibDent from the local goverwnent to keep 'user fees' (for the public provisiOD ofheaitb services) at an affordable rate, so 11$ to enswe accessibility to all citiuos of the country.
applied to Non·Samoan residence and Non-Samoan citizens to ensure they make a token contnbution into the local health
system. In regards to health care financing options, 'medical insurance' is an option that is currently being explored and analysed for its
However, there is a pced for balance iollle generatioll ofreveuue ill the Public HealIlI Sector, to ensure what is 'potitkally aeceptable' is also 'ecoltDmieaIIy viable'
appropriate utilization in the coun1Iy for the future.
Annex 6
User Fee Impact on Access and Equity and on las.on Leamt for the Pacific
Content of presentation 1. Background Information
Nadl. FIJI 3-5 June 2008
2. Health care finance policies 3. Public issues
User Fee Policies and Practices Tonga Experience
••
Existing exemption mechanism
5. Proposed mechanism 6. Monitoring & evaluation 7. Conclusion
1. Background information 1.1 Geographic Location
1.2 Fees schedule Health services are provided free of charge except: ~ Minimal hospitalization fee
, Passport & immigration services
s ..........
-
}> Health certifICate for employment
, Dental services (prosthetic)
-.Health Status P""" PGR.
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~
Re-issuing of death and birth certificates
Existing fees schedule was established in 1977 and Revised in 2000 LEo.., 70u..1a
101.900 (2008) 0.;T'IIo
CSA COR
26.5% 5.0'lI0
Lb;1· 72Fama_ THE per cap:S196 Imm...w.tk>I\~.1'11o
New fee SChedule to be enforced on 1st July, 2008
1.3 NHA reports 2001/2002 & 2003/2004 & 2005/2006 Sources Public Fund (MOF)
2. Health care finance policy 2.1 CD No. 1277, 14th December, 2005 &. HSSP, Health Care Finance
2001102 45% 32.6% 23%
2003104 53.5% 33.8%
2005/06 52%
1. -rhat the prefelT8d options with recommended strategy for health financing in Tonga be approved. That IS • Immediate - medium term (1 - 2yrs). starts >Mth andlor increasing user fees 10 coincide with Il"1e infrastructure Investment in VaiOla Hospital • Medium -long term (2 .5yrs) for the Introduction of SOCial insurance for civil servants with the view to extend to the formal sectOl". 2. That petlding the approval of (1) abo ....e. the Mnistry of Health is approved to proceed with the details of \he approved preferred options including the implemantation plan with the view to develop the require(! Legal Framework and to report bse;k to Cabinet accordingly."
Donor Household
34% 11%
12.2%
Heavy reliance on public funds and donor support
Annex 6
2.2 Rationales for introducing user fees and co-payments To provide the Tongan health system with an efficient and effective financial management system: )0
2.3 Major expectations from user fee policy Increase revenue conection
Encourage health conscious Increase public contribution Reduce relies on donor support
)0 );>
new hospital needs funding for operational cost private sector development-using public facilities by private providers rising costs of delivering health services Stepping stone for introducing social health insurance
3. Public issue Quality service be maintained Social protection for the vulnerable groups Affordability Assessment of poverty and vulnerable group
Affordability of fees and co-payments Share OfTOng8 Househ~ ~ POII8I'ty LII'I.
Poverty Line
Tonga(%) Nuku'alot. (%)
I.
;ut 2e.o
of Tongahlpu ('"
Outer tslands (%,
Food Poverty Uoe(FPL)
6.7 23.0
4.1
18.7
7.0 228
Basic Neecls Poverty line (BNPL)
19.1
Note: FPL .. US $1 per person per dey BNPL
= US $2 per person per de,
. ,.-. .-. :.:-. . - .. :? :-, "'. ::: r - .::::.... = .' . . .. . · . · · , . . . ,-, Low Income n. I 'I
Template for the identification of vulnerable groups for exemption
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• Health status
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Annex 6
4. Existing mechanism for exemption Children below 12yrs Over 70yrs old Mental Patients Infectious Patients (until clinically deared) Hospitalization for more than 14 days (chronically/disable patients)
5.
Proposed exemption mechanism Children over 14 yrs old Confirmed mental patients
Confirmed infections patients (list provided) Hospitalization for more than 14 days Confinned chronic patients Consultation fee be deferred until the new OPO completes Health centres and outer island hospitals continue to receive free consultation
6.
Implementation and evaluation Implementation plan develop Political mapping and extensive public consultation and awareness Monthly and quarterly review
7. Conclusion
• Patient will not be denied if not able to pay the due fee
» )0
utilization rate health status
Annex 6
Meeting on user fee impact on access and equity and on lessons learnt for the Pacific Nadi, Fiji 3-5 June 2008
Introduction • • • • Eight islands Population - 10k LDC - low GDP per capita Main employee: GoT, seafarers, private business
User fee polices and practices in the Pacific TUVALU
• Common diseases (NCD) - diabetes, hypertension, CCF (lifestyles)
1. Policy rationales for introducing user fees and co-payments • Need - a health care system that offers good health outcomes, affordable services, satisfied consumers and providers, and medical and financial equity Revenue generations: -j Cost: pharmaceuticals, renewable medical supplies, X-ray films, laboratory reagents, dental supplies etc. Government of the day decides to collect other revenues to subsidies/contribute to purchasing of medical supplies, health budget.
2. Major expectations from user fee policy Assist with MoH budget or government's fiscal status over all • Funds collected from UPS, will also assist government achieve Tuvalu's national vision stipulated in Te Kakeega IITuvalu's National Strategy Plan: ' ... we will have achieved a healthy, educated, peaceful and prosperous Tuvalu'
3. Referral levels where user fees and co-payments are introduced Introduced only at the hospital - Princess Margaret Hospital, Funafuti, Tuvalu • Dental (minimal), laboratory, and radiography departments only available in the Princess Margaret Hospttal • Most medicines are also available in the outer islands. However, UPS introduced only in the main hospital .. foreigners visiting the outer islands? (the way fwd)
4, Types of health services charged Charges differ: local vs foreigner 1. Pharmaceutical charges
2. Laboratory charges 3. Administration fees 4. Dental fees S. Radiology fees Local charges apply ONLY on those requiring medical checks for overseas visas ... etc
Annex 6
5. Affordability of fees and co-payments • Mechanisms to promote affordability: - sale of generic drugs
6. Assessment and monitoring work on user fee policy implementation • Ministry of Health in collaboration with the Ministry of Finance - monitor collection of revenues against budgeted figures approved in 2008 national budget • All revenue collected by govt are usually monitored on a quarterly basis
- sales based on wholesale price - control/fixed professional fees Local fees are affordable % Pop affected: low
Charges low compared to overseas countries
7. User fee impacts on access and equity • Concepts still in its early days Foreseeable future: promising. Fees that could help
Conclusion • Newly endorsed policy, cabinet approved & effective Jan 2008 • Health services still affordable to citizens as well as foreigners • Health services charges: pharmaceutical, administration fee, radiography, laboratory, dental • Impact to access to medical service: minimal
purchasing much needed medical supplies ... • Impact: minimal collateral damage for now • Impending impact: minimal • Expectations: minimal impacts to a local citizens. Foreigner? • Citizens not affected by somewhat compared to foreigners visiting Tuvalu • Policy ensures contributions/fees charged are based on ability to pay to prevent poverty
Annex 6
Meeting on use fee impact on access and equity and on lessons learnt for the Pacific
Map of the Pacific
Nadi, Fiji 03-5 June 2008
Welcome to the Republic of Vanuatu the paradise of the South Pacific
Map of the Republic of Vanuatu
Country profile Geography: Vanuatu has a land mass of 11,830 SG KM.4,568 .sq. miles) archipelago of 83 islands 2007 Population of 218 Annual growth rate (2007 est) 2% Ethnic groups: 94% ni-Vanuatu; 4% European; 2% Other Pacific Islander Religion: Predominantly Christian Languages: Balsam (pidgin), English(official), French(official). over 100 tribal languages
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The national health care system ONE OF THE GOALS OF VANUATU MINISTRY OF HEALTH IS TO NATiONALLY IMPROVE THE HEALTH STATUS OF ALL CITIZENS VIA A HEALTH SYSTEM THAT ASSURES GLOBAL COVERAGE OF THE POPULATiON. THIS WILL BE ACCOUMPLISHED BY IMPROVING THE BASIC COVERAGE PAKAGE OF HEALTH SYSTEM BASED ON THE PRINCIPLES OF EQUITY. EFFICIENCY,QUALITY, AFFORDABILITY, SUSTINABILITY AND CLIENT SATISFACTION.
User fee polices and practices in the Pacific
Annex 6
1. Policy rationales for introducing user fees and co-payments 1. HEALTH SERVICE DELIVERY IS A PRIORITY AREA UNDER THE COMPRENCHIVE REFORM ROGRAMME THAT WAS INTRODUCED IN 1998. IT IS A NOTION THAT FOR ANY COUNTRY TO MOVE FORWARD IN ITS DEVELOPMENT STAGES IT NEEDS A HEALTHY POPULATION AND THUS HEALTHY ECONOMY. 2. APART FROM RESPECTIVE INPATIENT FEES. THE GOVERNMENT ENDORSES THE INTRODUCTION OF OUTPATIENT FEES AT VANUATU PUBLIC HOSPITAlS AND THAT REVENUE GENERATED FROM THIS BE MADE AVAILABLE TO THE MINISTRY TO IMPROVE THE DELIVERY OF SERVICES. 2. 3.
2. Major expectations from user fee policy THE ESTABLISHMENT AND UPGRADING OF HEALTH FACILITIES AROUND THE COUNTRY AS A SUBSIDY TO THE GOVERNMENT'S NATIONAL BUDGET. TO FUND THE REPLACEMENT AND RUNNING COSTS OF THE TRANSPORT AND COMU!JNICAnON. TO PAY FOR TREATMENT COSTS RELATING TO TOBACCO.
ALCHOLE AND DRUGS AND TO PROVIDE HEALTH PROMOTION AND EDUCATION TO REDUCE THEIR USAGES. TRAUMA AND TO PROVIDE FOR HEAlTH PROMOTION AND EDUCATION TO REDUCE PEDSTRIAN AND TRAFFIC ACCIDENT
4.
TO PAY FOR TREATMENT COSTS RELATING TO RESULTANT ROAD
4.
THECOLlECnON QF USER FEES AT HEAlTH CENTRESANO DISPENSARIES ARE MANAGED BY THE HEAlTH COMMITTEE. THE INPATIENTS FEES COlleCTED AT HOSPITAl HANDLED OVER TO
NATIONAL TREASURY
3. Referral levels where uses fees and co-payments are introduced
4. Types of health services charged OUTPATIENT MEDICAL SERVICE CHARGES FOR CITIZENS. INPATIENT MEDICAL SERVICE CHARGES FOR ZITIZENS.
2 REFERAL HOSPITALS 3 PROVINCIAL HOSPITALS 25 HEALTH CENTERS 103 DISPENSARIES
OUTPATIENT MEDICAL SERVICE CHARGES FOR NONCITIZENS. INPATIENT MEDICAL SERVICE CHARGES FOR NON- ZITIZENS. OUTPATIENT REFERRAL MEDICAL SERVICE PRIVATE INPATIENT SURGERY MRDICAL SERVICES DENTAL TREATMENT CHARGES FOR CITIZENS DENTAL TREATMENT CHARGES FOR NON-CITIZENS
5. Affordability of fees and co-payments THE USER FEES FOR THE HEALTH FACILITY ARE SET AT THE VERY LOW RATE
6. Assessment and monitoring work on user fee policy implementation THE AUDIT REPORT REVEAlED THAT THE fEES COI.l.ECTEO AT THE HEALTH FACILITIES SUCH AS HEALTH CENTRES AKJ DISPENSARIEs ARE NOT FORWARDED TO THE GOVERN.ENT~Y BECAUSE. OF THi LACK OF w.NPOWiWR RESOURCES TO FOllOW UP T1iE FEES BEEN COl.1.ECTEf) THi MINISTRY OF HEALTH IS INTROOuce:O 1l£ FINANCIAl. PRDCeO'-*IES AND THIS YEAR 2008 TO BE MAlNTAINiD AT 1l£ HEALTH CENTERS ANO DlSPiNSARliS. THIS IS TO ADHERE WITH THE INTENTION Of THi HEALTH COMMITTEi ACT NO.34 OF 2005. THE ACT PROVIDES FOR THE HEALTH ~ES TO CHo\RGE FEES AND TO USE OR SPENO UOIIEY RECEIVED 8Y WAY OF HEALTH FEES FOR THE OVERAU MAINTENANCE OF THE HEALTH FACIUTIes AND SANITATION OF THE COMMUNITIES WITHIN THE RElEVANT HEALTH AREA THE MINISTER OF HEALTH APPROVED Tf£ CONSUL TAnON FEES (OUT-PATIENT FEES) TO BE ACCOUNTED FOR AND USE OR SPiNO MONEY RECEIVeD BY WAY OF CONSUL TATION FEES FOR THE OVERALL MAINTENANCE OF THE HOSPITALS THE HOSPITAL INPATIENT FEES ARE FORWARDED TO THE MINISTRY OF FINANCE ANO ARE INCLUOED IN THE NATIONAL BUDGET.
THE USER FEES PAY FOR THE CONSULTATION AND MEDICINES 200 VATU(US$2.00). THERE ARE EXEMPTIONS FOR THE CRONIC DISEASES AND OTHER
Annex 6
7. User fee impacts on access and equity
Conclusion THE MINISTRY OF HEALTH IS TO DEVELOP AND STRENGTHEN THE REVENUE SYSTEM AND AUDIT MEASURES FOR SOUND IMPLEMENTATION OF THE USER FEE POLICY COLLECTION AT THE HEALTH CENTERS AND DISPENSARIES AND CONSULTATION FEES COLLECTED AND USED AT ALL HOSPITALS.
THERE IS NOT MUCH IMPACTS. BECAUSE THE USER FEES ARE AFFORDABLE
THE RATE OF INPATIENT FEES NEED TO BE RECONSIDERED TO BE COMMENSURATE WITH THE ECONOMICAL MEANS WITHIN THE COMMUNITY.
TO REVIEW THE IMPAC TOF FEES ON ACCESS.
Recommendation • THE USER FEES SHOULD CONTINUE REVIEW THE USER FEES POLICY TO ESTABLISH PUBLIC HEALTH INSURANCE • TO ESTABLISH PRIVATE HEALTH INSURANCE IN VANUATU
ANNEX?
WHO Meetingo!l. user fee impact on access and equity and lessons learnt for the Pacific Nadi, Fiji 3-5 June 2008
1.
The state of the African health sector The African health sector is characterized by
User fee impact on access and equity: Lessons from Africa Professor Kodjo Evlo Universite de lome
poor endowment in resources severe impact of economic and political difficulties poor governance inability of implemented programs and policies to deliver expected results - high prevalence of preventable diseases - major health indicators below the average of developing countries - strong evidence that most health-related MDGs will not be achieved by 2015
-
1.1
Poor endowment in resources (a) Health Personnel Density per 1000 population Physicians Nurses 0.93 4.88 0.81 7.43 1.11 1.70 Dentists 0.03 1.05 0.06 0.52 0.16 0.17 0.29 0.21 1.94 0.52 3.20 0.74 1.10 1.23
1.2 Poor endowment in resources (b) Financial Resource Ratios ('Yo) H &pi
AFR AMR SEAR EUR EMR WPR Worl'
GOP
Gov HExpf Total HExp 0.93 4.88 0.81 7.43 1.11 1.70 2.56
Share of H in GovExp 0.03 1.05 0.06 0.52 0.16 0.17 0.29
2.'"
AFR AMR SEAR EUR EMR WPR World
0.21 1.94 0.52 3.20 0.74 1.10 1.23
1.3 Economic and political difficulties African countries have had poor economic periormance over the last three decades labor productivity is twelve times ICMler than in developed countries GOP gn:wtn rate is half d developing COUntries' average
1.4 Poor governance in the health sector Despite generally good strategic vision, improvements are needed in areas such as participation and consensus orientation, regulatory environment transparency, equity and indusiveness accountability, intelligence ethics
~~~~te:..~~:s~=,:: ·9% In AfTIca, +38% in GOP per capita: $700 In Africa, $1,500 for developing counbies' .".".. GOP per capita > $1.000 1/1 Oflly a dozen countries 34 d the 49 least developed countries are in Africa 44% afthe population (51% in SSA) lives belcw poverty line
:~~~I=of~th respect 10 UNOP's human
Conflicts and political instability nurt progress in many parts of the continent
Efforts to improve political and economic governance are still a long way to overcome social issues such as corruption
Annex 7
1.5 Inability of health programs and policies to deliver expected results African countries have adopted and implemented internationally agreed programs and poliCIes induding _ WHO's HFA 2000 and Bamako Initiative _ programs developed by REGs and the African Union _ ~:ms defined with multilateral and bilateral donor agencies and
1.6 High prevalence of preventable diseases About 80% of deaths in children under the age of five years in Africa are caused by preventable diseases 90% of children who die from malaria in the world are from Sub-Saharan Africa Prevalence of infectious diseases is highest in the world
In particular, user fee policies have not delivered expected results whlcl1lndude _ Increasing flnancia' resources to !he sector _ ,ncreasing efficiency
Prevalence of HIV/AIDS is highest in the world Rate of immunization is lowest in the world
- ,ocreasing access Ind eqllity
1.7 Major health indicators below the average of developing countries LE (years)
u5MR /1000 165
IMR /1000 99 20 51 16 66 23 51
MMR 1100,000
AFR AMR SEAR
49 75 64
910
2. 68 19 90 28 74
140 460 39
EUR EMR WPR World
7. 63 73
SoUfC'l! World H8.0111 $\IItlslicf; 2007
"
460 80 '00
1.7 Evidence that most health-related MDGs will not be achieved by 2015 Significant differences among sub-regions, especially between Nortl'1 Africa and Sub-Saharan Africa (SSA) - North Africa 1$ generaUy on track to reach MDGs - Progress is slow In SLlb·Saharan Afric;a wili'1 respect to all t-.ealth MOG. As 8 whole. SSA Is not on track with respect 10 Iny MOO
2. User fee policies in Africa Various types of user fees are in existence in the African health sector User fees were introduced in most part in the
.~~5th~~ ~I~ ;~in8others
- milternal mortality rate is tligtl and has not significanlly in !he $ub-f'egion as " ~ - HIV ptevaIence rate has fallen in 18 countries but lias
=.:: g~1~~fam ~l~~u~=
1980s with the advent of the SAPs Currently. practically all Sub-Saharan African countries apply user fees at all levels of health
care Overall, results to date are mixed, giving increasing support to calls for the abolition of user fees at least at the primary care level
- prevalence d malaria and related deaths are nign, especially in Wll$tAfrica
- ~=~ot:~:t"I~~~rg~~~!:~~~7~41% in 2004
Annex 7
2.1 Arguments for user fees in Africa Raise revenue and increase financial resources for the health ,eel", • Bridge the health sec10r re$OUi'Ce 981' Increase financial sustainablilty of the: health sector tn resourcepoor ermronments
2.2 Introduction of cost-sharing Cost-sharing introduced in most African countries in the mid to late 1980s as a result of - inability of govemments to adequately fund public health services due to macroeconomic difficulties - adoption of IMF and the World Bank-supported structural adjustment programs (of which cost-sharing constitutes a component) - adoption by African States in 1987 of the Bamako Initiative (developed by WHO and UNICEF)
services
Increase efficiency in tI1e prov;sion and utilization of heal\tl Increased resources may lead to increase in quarrtlty and quality
of the services proVIded D,seourBge Ullllecess.ary use of s.eMees Shift del.very of care tOoYard cost-effective and pliarit)' Improve governance and accountllibility
lrea~
-
Increase equity •
Make care close to population increase access: for the poor
2.3 Overall assessment of user fee policy in Africa Fees have raised very little additional revenue in most cases ~
Importance of user fee revenue Countries Zambia Uganda Rwanda Guinea Bissau Senegal Mali Benin Guinea % of Non.salary recurrent Expenditures
Less than 5% of IIle total reclJlTenl hNllh system expenditures (exclusive ofttle cost of collecting the fees) _ Pllrformance beJON Warlel' Bank hope of 15-20% of ~ditu'es
10-15 14-59
Cost of administrating user fees is almos! equal to the revenue
collected User fees are often blamed for widespread problems with misappropriation of revenue by heallli personnel Fee levels have been $ufficJently high to ~uppr~s demand from the poor, as exefl'1ltion schemes have been Ineffective User fees are also criticized for discouraging the use of preventive services and early treatment of diseases It is debatable whether introduction of fees have had positive effects on efficiency No evidence introduction of fees has raised quality of services
"
32 50
"
43-58
·52
ORe (some districts Guinea
197 More than 100
3.
Effects of user fees on equity Effects are complicated to assess because of difficulties of disentangling the effects of price. quality of care and affordability on service utilization. However. most studies indicate that - Introduction of fees has led to significant and $Ometimes drastic decreases in utilization, as exemption mechanisms often fail - In the rare cases where service utilization has Increased, cost shanng has created bania'S to poor people accessing care _ In many cases, cost sharing has 1'Iot led to sig1'lificant improveme1'lt in quality that could boost access - The core equity issue is that poor people often lack. ability, nol willingness, to pay for care
3.1
Shift in international opinion about user fees The less than satisfactory results of user fee experiments in Africa have led to a sign~cant change in international opinion about the issue. Beside WHO and UNICEF whlctJ have been raising the Issue for some lime, other VQices have been heard, among wIlictr - ~ "The Wor1d Bank does nat support user fees for primary edueation and for basic health setl'Vlces for poor people" - World Bank Website Novembei 2005
- Umtnn/tlm projtc:t. 'Ellminatt user fees for bas~ heaUh sllfVlees in all dilllltlloping counlrie$. financed by increased 00rnestJc and dong{ resQlJrces for tlealth' - Jeffrey Sactls et ai, Millennium Project Report auLok. Win No 8 - ~. "The !>est way you UU\ defeat povl!llty is through fr!!e education and free elllIh cart 81181111b1e to all: GI)fdon B~. UK C~ancellor
of tile
~ctlequer
January 2005
Annex 7
3.2 Recent African experiences in removing user fees Most African countries have been disappointed by the results of ther cost sharing programs
(a)
South Africa 1994: Removal of fee for _ all ctuldren under the age of six yea~ of age - all pregnant or lactating women The results were impressive in the case of curative care: outpatient attendances increased by n% (Wilkinson et at, 1997, 2001)
Decision to remove user lees are made on bottl equity and efficiency grounds _ first all, very litUe reve!'1U8 IS raIsed In spite of significant transaction costs _ the obViOUS and strong eQuity arguments are about Increasing act::8SS for the poor - Ihe effiCIency issue relates to the fact that the relevant objectives have not been reached Several African countries have tried to remove user fees since the rnid·1990s. These indude South Africa, Madagsscar, Kenya and Uganda. In all cases, removal of UHI' f6&& has tngger&d surge In demand.
1997: Introduction of a policy of universal access to free primary health care by removal of fees for everyone - the results were less spectacular (than \hey were after the first poJlcy !:hange), but significant
(b)
Madagascar 2002: Temporary removal of user fees caused doubling in consumption of health services (Fafchamps and Minten, 2003). Supply side factors made policy implementation difficult given the unstable environment in which the policy was launched.
(c)
Kenya January 2004: Change in user fee policy conSisting in reducing fees by introduction of a Simplified fee system called 10/20 policy - 10 K 5h althe dispensary - 20 K Sh at the health CMter
service utilization went up by 70% in six months in the health districts covered by the study (Pearson 2005) utilization fell later on as initial price effects played out and supply-side constraints such as availability of drugs became played in
Kenya (cont'd) Total Number OJ! New Vosb and Re-Atllloo.ncet In Study Fac;:ilitlea oUMg2004
(d)
Uganda Uganda probably offers the best documented example of the impact of the removal of user fees on service utilization March 2001: the Government abolished cost sharing in public primary care facilities, while the usual community financing modes in the private-not -for profit (PNFP) and private for profit were maintained. The govemment complemented the new policy by an increase in health expenditures The results were spectacular, Service utilization surged (Yates, 2005)
1--
Annex 7
Effect of abolition user fees on attendance c.w .......... .t" U.... ru. ....I prn..te No' &or ~. 0 ..11lI. VW 0.90
Allure I, Utili .. dOA Role ofN"", Oo>tpatiOllt Attendlll .... ill
Now 0101"'11 .... AU ... d .... co. III Gov.-limen' of Uganda ODd Priv.te Not for PrnfitB.. lIbUIIJII
Effects on preventive care
The situation in the Kisoro District
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Concluding Note The cases referred to above suggest that removal of user fees in the current African context will - cause Increase in service utilization - be pro-poor - have litue effect on effiCiency
- cost the health system minimal revenue loss
However, to produce good results, user fee removal poliCies should be accompanied by increase in other sources of financing 91!9R
.'"
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Supply side issues should be addressed effectively
Annex 7
WHO Meeong on user fee impact on access and equity and lessons learnt for the Pacific Nadi,Fiji 3-5 ]W1e 2008
Mean OOPs as percentage of total household resources by country(%) Country 0/0 5.49 5.10
User Fee Impact on Access and Equity: Lessons from Asia Professor Tuohong ZHANG Department of Health Policy & Management Peking University School of Public Health
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Kyrgyz Rep.
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India China
4." 4.11
2.n 2.40 2.11 1.94 1.83 1.37 """". E
Sri Lanka Philippines Indonesia Malaysia
v 0.-.100<, Lu.c. •. :!006
Impact of user fee
Catastrophic spending: headcounts of households with OOP payments exceeding a threshold as share of total hh spending (Van Ooorslaer, O'Donnell et ai, HE, 2007)
1. Throw the near-poor into poor (poverty trap)
2. Decrease health care utilization to all groups 3. Increase utilization gap between the poor and rich
I ;, , l ;
Poverty headcount (at $1) increase by OOP share
Outpatient use by income quintile in China, 1993 & 2003 (%)
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Conclusion: 1, DnomaDC de.:reue of O1ItpaDeDl care uti1ization, cspt:ciaDy iII urbaa areas 2, Gap bctwcea pam mel rich enlarged ClOP . . . . . 01 ........................
Annex 7
Inpatient use by income quintile in China, 1993 & 2003 (%) '"W
Why it happens? Abolish of free care and Introduce of user fee by the end of 1980& : BMI ( Basic Medical Insurance for urban employee) with Premium contrtbute by employer (80%)& employee(20%) Co-payment: 20% Deductible and ceiling for the reimbursement No government fiscal subsidy anymore Benefit package focus on catastrophic disease or Inpatient
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CoDcb>~{]l~._1 1, Dramatic decrease ofiDpatient care in urbaa auas, etlpeciaUy forme poorest, although 110 big difrcn:u.ce was fonDd ill 1993 wall found in ruta.I areas
2, No difft:re:ll~
- By 2003, urban residents wtthOl.lt any health Insurance Increased to 45% Abolish RCMS (Rural Cooperattve Medical Scheme) by mid·1980s and Introduce 100% user fee for 90% of rural residents by 1993
"'
.
Percentage of urban patient who haven't been hospitalized when they needed. 1993 & 2003, by income quintile
For those who are uninsured Outpatient attendance failure: - 7.9% for insured vs. 13.0% uninsured
Reason for failure: no money - 15% for insured vs. 54% uninsured
101993.20031
User fee impact on preventive care Tuberculosis control in China - anti- TB drugs are free for smear positive patients only - patients free for anti-TB drugs shoukt bear financial burden of other f •• , such as laboratory test, X-ray,
Age-adjusted odds ratios (with 95% confidence intervals) for TB suspects seeking professional care by sex and socioeconomic group, rural China, 2003
,,L_ Medium Education
OR
•••
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"%CI
OR
I'%CI (O.se - 0.91) (0.63 -1.21)
addlHonal treatment and transportation fee - patients eligible for free drug use only when they receive treatment In TB dispensary (only 1 In a county wtth 100 k to 1 m. pop.) • which Is In CDC other than in hospital and clinics ( which is more than 100)
1l1Ho"Primary
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.... •." '.00 0.93
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0.75
(0.56 _ 0.91) (0.61 _1.10)
(0.42.0.8') (0.46 - a.SC)
.... '.00 '.00 '.00 0.81 0.711
0.7e 0.87
(0.51 - 1.26) (0.53 - 1.25)
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(0.66 _ 1.331 I
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Annex 7
Annual household medical costs as percentage of annual household expenditure and annual household income for TB suspects and diagnosed TB patients in 2002, by income group
Does user fee promote something? No evidence for - improvement of institutional efficiency - improvement of quality - stopping people 'doctor shopping' and 'over~ use of medication and laboratory test' - stopping over-use of tertiary specialist care instead of primary care - good competition between public & private providers
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Unexpected negative outcomes Extra financial burden to the patients - under-the-table payment continue 'Red Envelope' - formal user fee 'fee for selected doctor'
Government drastic withdraw from public hospital lead the public into 'private' which heavily rely on user fee as the main revenue resources (60%) Moral hazard: doctor induced demand - medical arm race - inner-industrial concentration of tertiary hospital (70% of outpatient attendance and 90% of inpatient care) - higher charge and higher co-payment with insurance
Governmental subsidy play important role in pro-poor
BIA of public health subsidy - Asia (O'Donnell, Van Doorslaer et ai, WBER, 2007)
Cross-country dominance results - Asia (O'Donnell, Van Doorslaer et ai, WBER, 2007)
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• Very pro-poor: Hong Kong • Mildly pro-poor: Malaysia, Thailand. Sri Lanka • Mildly pro-rich: Viet Nam • Very pro-rich: Bangladesh, Indonesia, India. China and Nepal
Annex 7
Two questions Does public policy fall In low-income countries where poor do not even get their fair (pop) share of public subsidy? Subsidy still narrows rich-poor gap, and poor may benefit more from same subsidy. Why Is public health subsidy more pro-poor in Malaysia, Thailand, Sri Lanka (and Vietnam)? All three emphasize universality. minimize user c harges , seek to exempt the poor and spend more. And private sector offering attractive alternative seems to lead to better targeting and redistribution.
Case: Viet Nam Market-oriented renovation in 1987 with introduction of OOP f inanCing. By 1993, private OOP expenditures amounted to 84% of total expenditures. Poor pay higher proportion of their Income than the non-poor. Oata from household surveys in 1992,1998 and 2002 showed - health care utillz.atlon is higher amon g the upper qulntl le but the Incidence of Illness Is lower In 1992 and 1998. - OOP payment negativel y associated with health In . urance In 1998 but positively ~Iated with heallh In l urance In 2002, s howing decrease of regres.lvl ty, with heal th inl urance participa ti ng rale Increased.
Case: Japan & Asian Tigers Co untry /D Istrict Hong Hong
Health financing sources
Health Sp ending
Financi ng
Start Year ~
Source TBF
iGOP (%) 5. 7
1960 196 1
Japan Korea Singapore Taiwan
7.8 5.1 3.9 6.0
SH I SHI MSA SHI
1989 1984
f
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1995
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Trend of OOPs share by year
Burden for health finance
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Annex 7
Case: China SARS outbreak as political opportunity Health reform assessment as a trigger - WHO sponsored ORe report 'Chinese health reform has been a failure' International and domestic pressure - neo-liberalism (market-oriented health care) was widely criticized and user fee was abandoned in the Africa and several Asian countries - rapid enlarged rich-poor gap of hearth outcome and health care utilization - emer.gent call for 'harmonious society' for government stability and sustainabUity
Introduction of government subsidy Rural NCMS Premium paid mainly by government ( 50 Yuan, 20 from central government, 20 from local government and 10 from rural resident I per capita per year) Limited benefit package covered mainly catastrophic inpatient care Free public health services: immunization, health education, infectious disease control, hygiene Partly free maternal and children's health, chronic disease control
Zero-profit for essential medicine Target 100% counties by 2008 and 100% population by 2010
Introduction of govemment subsidy UMI ( urban resident medical insurance) premium paid by the government (with dominant share) and the urban residents (share varied by district) pilot in several cities since 2008 cover catastrophic inpatient care with deductible and ceilings focus on vulnerable group, e.g. un-employed, disabled, elderly and children Introduction of government subsidy poverty Medical Care Aid (MeA) identify the poorest with health care problem subsidy covered premium of social insurance, public health service and part of co-payment
Impact of NCMS Outpatient care use - 21.8% insured vs. 17.7% uninsured
",,-------10
Narrow down the gap between rich and poor for outpatient care use With special program of Poverty Medical Aid. the poorest access improved
10 insured IllIIinsuredl
Financial burden of disease? No evidence shows decrease of financial burden Reasons - initial stage for the social insurance - benefit package is very limited - complicated design with different reimburse rate at different level of providers, of different total spending - administrative issues: lack of capacity at local level - low reimburse rate: < 30% - weak supervision from the government, therefore induce trust issue
Further considerations Increase tax-based financing for essential health care such as - primary medical care - essential drugs - preventive care Improve SHI Private sector development for those affordable, plus private insurance development
Annex 7
Highlights from the experiences in Asia User fee might have advantages and disadvantages However, in both China and Viet Nam it showed great regressive impact For the countries where previously socialist with free health care, introduction of user fee should be very careful Intense analysis is needed before the user fee was introduced - as soon as it was introduced, it runs by itself and might lost control Effective provider behavior control strategy is most difficult
ANNEX 8
Panel Session on Fiscal Space Panelists: Ms Hayman K. Win. ADB Dr Henk Bekedam. WHO Professor Kodjo ElvD, Togo Professor Tuohong Zhang, China Professor 500nman Kwan, Korea Moderator: Mr D. Bayarsaikhan. WHO
Panel session Part 1. Short discussions about fiscal space among panellists Questions and answers between participants and panellists Comments and suggestions from participants
Part 2.
Part 3.
Part 1. Fiscal space IMF: The capacity of govemment to provide additional budgetary resources for a desired purpose without any prejudice to the sustainability of its financial position. UNDP: The financing that is available to government as a result of concrete policy actions for a specified set of development objective. WHO: The outcome of the overaU level of government spending, the health share of total government spending and the effICiency of the spending.
Creating fiscal space In principle, governments can create fiscal space; 1. Raising revenue - increase taxes. improve tax administration - borrow monies and relief debt - receive grants 2. Re-prioritizing expenditure reduce unproductive expenditure revise subsidies ensure effective spending
Discussion focus (1)
Discussions focus (2) )- Efficiency and effectiveness of health spending is part of efforts to create fiscal space for health. )- Re-prioritizing government expenditure can create fiscal space for health within domestic resources. ). Efficiency improvements through cost/budgetary savings, elimination of wastes and reallocation of resources can also create fiscal space for specific health interventions within the health sector. Comments on efflclency and effectiveness of health spending in Pacific settings?
» Fiscal space is an important concept for financing health care. Efforts in creating fiscal space aim to ensure adequate financial resources to fund the required spending on health. }>
Health financing policy and actions can raise domestic resources for health by increasing taxes, introducing of earmarked taxes, social health insurance and user fees. Comments on sources of fiscal space in terms of equity and access'
Annex 8
Discussions focus (3)
Discussions focus (4)
» Borrowing temporarily creates fiscal space, until It has to be repaid. External grants from development partners and sources like GFATM is a real transfer of financial resources to a country. };> External inflows can play an important role in improving health and developing health systems. They are additional resources to a country. Comments on external flows in health as one of the sources of fiscal space for health?
» Fiscal space for health and the changes in the level of health spending need to be measured, monitored, assessed and explained > National health accounts (NHA) is a tool to track and report health expenditures by sources, financing agents, service providers and functions }> Public expenditure review (PER) is a tool to analyse the allocation and management of public expenditure as a whole government expenditure or a few priority sectors such as education and health Comments on use of NHA and PER data and estimates for creating fiscal space 1
ANNEX 9
Issues Round table discussions on policy related issues relevant to the Pacific :Mr v. 'Bayarsaifdian VV:HO 1i.e8ionaf.i1.aviser in :Heaftfi Care :financine
• Health payment • Universal coverage • Privatization
Health payment and poverty How are resources mobilited, who lJa~ and how much is paid for health care are Impartant questlone of health finance. Funding constraint versus in~ing costs is a commOtl challenge for all CO\.Jntries. But it can be considered In terms of basic health needs and services. Mobilization of additional funds is advisable to be complemented and supported by an analysis of the entire health financing in terms of financial access, eqUity, and effectiVeness. Government bUd~ is nol always spent effectively Of benefJted equally across geographical regions or population segments. Some funds raised OIl'll available only for specific poplIlation groups. Private financing mcluding out-of-pocket payment is increasingly known as most regressive and inequitable form of financing. FinancialllSk protectiOn is another Important dimenSIOn. Effective protecbon and coverege can be achieved when all sources ,of finance brought together and analysed along with national health policy objectives.
:J-feaCtfi payments
C"""",klon of health spending 2005 Bastd on Inlern_tlona! dol••xpenditur.. 100%
Oul of pocket payments as %of THE in 12 selec1ed countries
I
60% 41)%
r- r- f--
~
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-
r--
lI-
..... .."'" Il'IIlIlIlU
OSociIl1.a'I
-
e-r- r'--
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211%
r- '-
-
I-- I·1.. I.d.. g~cn •• " .. " ..
100 bng in<! lao· cam 80 ~'" 60 40 I-- I-I-- ~ 20 I-- I-I-0 ~
SiR IUS ~
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tha
Kl- Hf m= ., ~
#i,/J1 I'
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v'b~ G'~ 'Q~ .~~ ,<8'
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~~ ~~ ~'b $'
Annex 9
EMR
~
o impoverishment • catastrophic
AFR i--1 EUR --,
'UniversaC cO'Veraee
., 30 60 90
f'<Jmber of people (rrillion)
Equity, access and financial protection WHO Resolution on sustainable health financing, universal coverage and social health insurance (WHA 58.33. May 2005) Universal coverage is defined as access to effective preventive, curative and rehabilitative seNices (personal and non-personal care) for all people at an affordable cost.
Attainment of universal coverage Organizational and financial mechanisms are needed to attain universal coverage. Collection of revenues from available sources, their pooling and purchasing of necessary health services. Financing mechanisms that support universal coverage: - tax based financing (TBF) social health insurance (SHI) - mixed financing systems (MFS)
» Equity in access that secures services to anyone when they
» »
need them. Equity in financing that implies households to contribute on the basis of ability to pay. Financial protection that prevents people 10 fall into poverty because of H\ness and poor health status.
Health financing in DECO countries 15 Health systems dominated by SHI, e.g .. Australia. Czech, France, Germany, Hungary, Japan, Korea, Netherlands, Switzerland 13 Health systems dominated by TBF, e.g., Canada, Denmark, Italy, New Zealand. Spain, UK • 3 health systems have MFS (Austria. USA. Mexico)
Universal coverage in DECO countries Policy objectives Universal cOVElrage EqtJity in finaflcing
Sltullition Is OECD COUntri.. High population coverage is actlleved Nan'CIW gaps between rich and poor
Access to seMces FinanCIal proIacbon
Good quality sef'llices are generally accessible
j ~ate finanCial protectioo is provided
These policy objectives in DECD countries have achieved mainly with social health insurance (SHI) and tax based financing (TBF).
Annex 9
Health sector privatization Health sector privatization may have a wider meaning. The health sector can be increasingly privatized in the following situations:
Literature review Literature suggests that it is a subject of continuing debate. There are different views: ). Private sector provides efficient & quality care ). Private sector is not superior in quality or efficiency ). Neither public and nor private providers solve problems on their own,
Transfer ownership (sale of institutions) Adopt managerial practices (corporatization) Entrust management (management privatization)
Fund private providers (purchasing services) Persuade private provk:lers (replacement of public providers)
The extent to which the health sector services the goals of public health, effK:ient and effective use of public funds to ensure greater equity and access to needed health care services by all people.
Health sector privatization
The private sector in LMIC 110ft?
AdmiDillratiocl """ CIimeaI(4iq_lob cwt&cue)
Nou-<:lmal(....... . .--.-.ol
-
Sfr1'kn?
(-"tli? Primary UI"
Pro\'kkn? GcoIenIJ'Qctiu"""" ud Fomily Docton
-~
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'-= ~mll publit :r:J;
-, ...... 11 :0:
s.:~~~~= Prov.de 1Illllll<l",y (~OII)
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11 Politi,u1I I.Cgal1 Ecunomic
PrivateID._ ... d ....bluhlDCllt
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14
Equity
IErliden~) :0: 00II1II"'""1
:r:J; I MIItd _ _
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All providers who exist outside the public sector and whose aim is to treat illness or prevent diseases Flexible access, shorter waiting, greater confidentiality and sensitivity It competes with public provider for trained human resources It is cheap and can be adjusted to the purchasing power of the client More expensive care is unaffordable by low income. Considerably overlap between the public and private sectors
I..·............c, policy makcn. k'psiIlIln, hc;dtb, fillillcial cr.pcru UId
Assessment of private health care in DC Support
Health sector privatization in transition economies
• Offer consumer greater choices • Increase competition • Reduce state responsibility for service provision Concerns Private sector regulation is weak Quality of services is often poor Poor people spend a greater proportion of their income compared to the Private providers are often staffed with less qualified and untrained professionals Conduslons Situations are a result of interactions between consumetS and providers Efforts should aim to Influence demand and supply side Improve overall environment including ragulation of health carll provision Widen access, improva quality and ensure non-exploitativa prices Suppor1 multi-faced interventions involving policy makers. providers and consum8fS
s...... Choice, competition, and change of government's role in provision and regulation • Strengthening health systems with privata sector participation • Enhance individual's responsibility and participation in financing heaHh 00..
C.........
"",""",
Costs of health care is widening by imposing additional financial burden • limited capacity of public finance to cover these additional costs (OOP) • Discrepancy between user's expectations and capability of health providers Conclusions Strengthen legal framework. for provision of health cara with clear lines of responSibility, accountabilty and eooperation • Improve consumer protection and education by publicising relevant information, service standards, registration, accreditation, quality and
·
price. !:~
medical professional systematically to update their knowledge and
Annex 9
Pooling is essential May debate on whien type is the best, but it is important that high proportion of household contributions are pre-paid and pooled. DECO country experiences show that the ratio between pooled prepayment and non-pooled private (out-of-pocket) payment is averaged as 80% and 20%.
Regional strategy WHO Regional Committee for Western
Pacific approved the Regional Strategy on Health Care Financing (WPRlRC56.R6, 2005). Main strategic targets are:
I • .~ f
L, ~~
..
• I ~~"
j
4
~%.
~%
Prep_on rMIo"
~-~ I . , ~-
00-
,.
, .
Develop and eJPMd prepayment schemes including social health insurance. Increee health investments and public spending on health (create fIScal space) Reduce out-of-pocket health spending (monitor it around 20%)
""
~".
Transition to Universal Coverage
Universal coverage in Pacific isiand countries
~I I ..
I
. . .iUl .. billa..' " ~
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Universal coverage scenarios t . .lU1 ~p. ""... 6qully acce_!O oomp....nai\Ia ......ao. alan ,ftordabloo
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2. KNIth ..Mea. not ,..,...ib. by INjori\y ~P'~CII"" of U .... IFDId.~ CON and rJllln"'l wn1e11l
- 6,. - ili,., ''''-
3. Mode....111 accesa with mixad (on''''''"g" but ..Me....... otilll\C\ acce.Alble and allord,b .. by iow ,noom' popul8lkm
..
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-
-~
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n,.d 'uo"'"," Ie pro"'" ecmp.. hen ..... al'ld qu,IIIYI;II..·
I
-- A,.,
dominant P\lbUc fiN"cr.g. but .till
Annex 9
Contracting Changes in health system organization, diversification of service providers and separation offunctions need appropriate relationships among all players Contracting seeks to establish relations between interested
Contracting experiences in LMIC Expectatioo. Lowers costs, reducas a burden on managers and increases flexibility • Introduces new services and improves services in undefS&rved areas because of difficulties In organizing public provision of health ~~
actors. Rerations under contracting buHd on negotiations, a9reem~nt
by accepting rules among independent actors rather
hierarchical These relations are more prevalent in the private sector, therefore, it can support privatization. However, the aim of contracting cannot be to increase the number of private players Major types of contractual relations: Delegation of responsibility from one actor to another Act of purchase that supports the provision of services rather than their production Co-operation that corresponds to a long term agreements between organizations based on pooled interests and resources
» >
»
Design Md implementation • Cost, quality and distr1:ru\ion of risks between parties • Degree of competition • Responsibilityfor approval and monitoring Conclusions Contracts are capable to deliver non.-clinical seMCes at lower costs Service quality of contracted clinical services are usually bett8T but contract price is an Important factor. Low prices may result in low quality of work Contracting for non-clinical services presents fewer difficulties and experiences can be gamed Factors that affect contracting should be examined. These Include capacities of private sector and governments
Mobilization of additional resources u_ fe •• option: Uaer fees ahould not reduce access, eqlity and ulWlUtIon of serviCes especially by the low income and poor people Prepayment options: Increase government spending and investment In health (fISCal spaca)
~=:,te~~J:~~~be Income genervtlon should not \he objective of Ifltmducing fees Refrain from fuJI cost rewvery efforts by rallecting true costs_ Avoid to charge essential or PHC PoIentiaIs of IJ58I" fees III increase effective '-"t of resources, service quallt)', delllIffy and efficiency stw:luld be well examlnEld GovemmMl budget should not be declined becIIuse of revenues g&n&ratecl by fea Good raguJalion iIIld mechanisms for mOnllOr1l'1\l. evalutJtlOn and revislOrlS
:f~:llt~~~ allocation and use $8I'Yh;;8$ for pnortty flllding. Identify priorities .and essentials Invest inlo ~eted areas in terms of services. poplMlion and Iocations_ Reveal under fI.Ilded services for additional investment Produce more evidence for public Investment
be
prepayment mechilllisms
Create fiscal space through other
=~=~~~~~.
ANNEX 10
Meeting on use fee impacts on access and equity and on lessons learnt for the Pacific Nadi. Fiji 3-5 June 2008
Cook Island health financing overview
Working Group No. 1 Countries: Cook Islands Fiji Resource persons: Professor Soonman Kwon. Seoul National University Dr Marco Roncarati. UNESCAP
. .
Total population-19,000 (2005) Per capita GDP- 9,069 US$ (2005) y= 2000 2006
Basic 1';HA Dala 1. To,,", bcalth expenditure (THE) as % ofODP 2. Per capita health expenditure., USS 3. Government health expenditllre as % ofniE 4. Out ofpockel: health expenditure as % of TIlE 5. Compulsory health insurance as % of THE
6.1 574 90.8
4.5
•. 3
658 91.3 8.7
$ _ WHO. 2007
Fiji health financing overview
1. Major issues and lessons learnt Costs of recovery Treatment of staff Inability to pay Legal framework Review of system (Fiji) Political driven (administrative interface)
· ·
Total population- 833,000 (2006) Per capita GDP- 5,960 US$ (2005) y= 2000 2006 4.0
Basic NHA. Data 1. Total health cl(pcodituTc (THE) as % of GOP 2. Per capita health cl(pecdirul1:. US$ 3. Government health expendituTc as % of THE 4. Out of pocket health expendituTc as % of THE 5. Other private health el(pcOOituTc as % ofODP 6. Compulsory health iosulVlcc as % oCTIlE
'4.7 208
258 70.9
69.0
24.4 6.6
23.0 6.1
$""<011: WHO. 2007
2. Findings of examination of the current user fee policies in the Pacific Fiji do not have any policy in place but due to political pressure there may be one
3. Findings of examination of user fee practices in the Pacific Fiji do not any practices in place Dental - minimal collection Cooks have practices in place - revenue collection -100 % remain unpaid - Types of revenue collected - hospital, dental, GP. ambulance, surgical cases, visiting medical teams (specialists)
• Cooks have a policy in place
Annex 10
4. Examination of impacts of user fees on fiscal space, access and equity Cook Islands • 3.74% revenue very small
5. Potential threats of user fee practices for attaining health policy objectives • Private doctors • No monitoring of excess overtime • International policy objectives wont be achieved • Access to remote health facilities for sectoral population
• Fiscal space • Access is not a problem Constraints of infrastructure • Queuing space
Fiji • Very minimal fee • No fiscal space • Access is not a problem
6. Strategies preventing from negatives impacts of user fees • Exemptions - age - infirm/destitute
7. Proposed actions Cook Islands • Abolish user pay fee with the exception of dental
fees Fiscal space
Independent analysis (propose to WHO) Monitoring and evaluation
Introduce prepayment mechanism Contribution Improve efficiency
Fiji
• To implement user pay fee
8. How to implement the actions and monitor the outcomes • • • • Independent analysis - Cook Islands Baseline survey - Fiji Use civil society Talk to Ministry of Finance about tax on tobacco • Government to subside on healthy foods items/goods • Government to increase tax heavily on health hazard items/goods
9. Role of WHO
• Technical expertise • Financial assistance • Invite WHO to conduct a workshops or briefing to health ministers • Further links to donors
Annex 10
Meeting on use fee Impacts on access and equity and on lessona learnt for the Pacific Nadi,Fljl 3-5 June 2008
FSM health financing overview
Working Group No.2 Countries: Federated States of Micronesia Papua New GUinea Resource persons: Dr Henk Bekedam, WHO Or Juliet Fleischl, WHO
. .
Total population-111 ,000 (2006) Per capita GDP- 2,254 US$ (2006) Y'm 2000 2006
BMic NHA Dati I. Total bealth cxpcodinrre (THE) as % ofGDP 2. Per capita bcalth expenditure, US$ 3. Government health expenditure as % ofTHE 4. OJI afpocket health expeoditure as % afTFfE 5. Other pnvate bealth expenditure as % ofODP 6. Compulsary bealth illSUl1IlIce as % afTHE
9.0 183
112.0
266 81.0
!75.4
5.7 6.7 12.2
4.4 6.1
'.4 S""",," WHO 2007
PNG health financing overview
1_ Major issues and lessons learnt user fee ,. Advantage - limited top up of recurrent budget
. .
Total population- 6,202,000 (2006) Per capita GDP- 2,370 US$ (2005)
Basic NHA Da.la I. Tow health e){pc:nditure (THE) as % ofGDP 2. Per capita health e:tpeoditure. USS 3. Government health e){penditure as % of THE 4. Out of pocket health expenditure IS % of THE
I 2000 13 .6
Y=
2006
Negative - does not generate sufficient revenue for the inputs; Limits access Need to work out exemptions • Ask the questions: Is the budget sufficient? Does the budget reach the point of delivery? • Examine the effiCiency of the system
3.2
172 161 .7 : 10.2
88 82.7 7 .3 1 1
s. OIber pnvate bealth e~penditure as % ofGDP 6. Compulsory bCllth insurance as % ofTHE
18 .1
10 .0
1-
!So"",. WHO. <liar
2, Findings of examination of the current user fee poliCies in the Pacific Generates limited revenue No impact assessment of user fees undertaken Debt collection issues Policies also includes exemptions No systematic assessment of the policy
3, Findings of examination of user fee practices in the Pacific People refuse to pay (FSM 60% refuse to pay) No systematic assessment of the user fee practices - access, cost, equity In PNG the health facility retains the fees collected
Annex 10
4. Examination of impacts of user fees on fiscal space, access and equity • Less than 5% of total health budget
5. Potential threats of user fee practices for attaining health policy objectives Driving people into poverty • Against MDG goals
• No estimation of the cost • Access and equity • Politically sensitive
6. Strategies preventing from negatives impacts of user fees Exemptions Safety net
7. Proposed actions • If it's not broken don't fix It Abolish user fees Systematically assess fiscal space at the country level including looking at inefficiencies Make an assessment of the formal sector
SHI Efficiency - standardize treatments - drugs etc. Decentralization - Transport; money; health priorities at the province level
Abolish user fee • Fiscal sustainability - risk pooling; cost recovery
SHI schemes - community based; voluntary vs compulsory (higher risk pool) - slow process to establish and manage properly capacity building and costs involved - any insurance scheme the state needs to be involved Private voluntary health insurance
8. How to implement the actions and monitor the outcomes • Assessment of fiscal space and inefficiencies in the system Baseline on impact of user fees on access. equity and poverty
9. Role of WHO • Work with other partners to provide technical support
If it's not broken don't fix it
Annex 10
Meeting on user fee impacts on access and equity and on I.&&on$ learnt for the Pacific, Nadi, Fiji 3-5 June 2008
Samoa health financing overview population-185,OOO (2006) . Total Per capita GDP- 6,480 US$ (2005) BlSSie NHA Data
.
Working Group No, 3
Y'm 2000 2006
Countries: Samoa Tonga Resource parsons: Professor Kodjo Elvo, University of Lome Or Ken Chen, WHO Representative
I. Total health expenditure (THE) as % orGDP
6.2 26' ' 72.4 21.1
6.0 345
2. Per capita health cxpendilul"c, USS 3 Government bealth cxpe!ldirure as % of THE 4. Out of pocket health expenditure as % of THE ~.
n.' 17.1
Other pnvate health expenditure as % ofGDP
6.1 0.4
4.5 0.5 SOU". W ... O 2OQ7
6. Compulsory health insurance as % of THE
Tonga health financing overview
1, Major issues and lessons learnt MAJOR ISSUES Increasing costs of health services Private vs. social insurance, Le. informal sector in Samoa Health payment - limited funding from government and revenue collected not directly allocated for Health Private GPs use public facilities for free LESSONS LEARNT Shared experiences of other PIGs User fee impact of induced demand
. .
Total population-100,OOO (2006) Per capita GDP- 8,040 US$ (2005) Y=
Basic NHA DaIa 2000 I. Total bealth elCpeoditure (THE) as % ofGDP
' 2006 '7.0
6.3 167 74.8 20.1 4.9
2. Per capita bwth cxpcudilul"c, USS J. Goveromeot bwth expendilul"c lIS % of THE 4. Out ofpocket bcai!b expendirure as % ofTHE
1320 ' 80.8 16.0
5. Olber priviue bealth expeodirure as % ofGDP
3.1
6 Compulsory be.llb IOSlirance as % of THE SOUICtIo WHO, 2001
2, Findings of examination of the current user fee policies in the Pacific Health services heavily subsidized across PICs Exemptions for various groups from payment, e.g. pensioners Low recovery rate of user fees Introducing user fees as a pre-payment mechanism Using user fees to generate more revenue for the health sector
3. Findings of examination of user fee practices in the Pacific Affordability of user fees a problem in some PICs, e.g. PNG Low recovery rates in most PIGs Under the table payments Administrative costs exceed revenue collected from user fees Provider behavior a problem to create more revenue
Annex 10
4. Examination of impacts of user fees on fiscal space, access and equity Minimal impact of user fees recovery on government revenue
5. Potential threats of user fee practices for attaining health policy objectives Minimize over-utilization of health services in the absence of user fees. Provider induced demand (moral hazard) especially in the private sector Discourages utilization of health services
• Re-assess the impact of imposing user fees
6. Strategies preventing from negatives impacts of user fees Strengthen the regulatory role of the Ministry of Health Identify vulnerable groups Put in place proper mechanisms to find out the vulnerable groups Increase public awareness programs on user fee schedules Use user fees to improve quality
7. Proposed actions Establish exemption mechanism Standardized treatment Strengthen regulatory roles of the Ministry of Health to maintain ~safety and quality" Re-prioritize expenditure to improve fiscal space Ensure effectiveness, efficiency and quality of the service providers
8. How to implement the actions and monitor the outcomes Make a readily available list of exemptions Monthly assessment of utilization Document the treatment guidelines Collaboration and cooperation of all the health sector partners and central government authorities, e.g. Treasury & PSC Regular performance audits Regular consultations with the stakeholders and general public Performance Indicators to be developed for monitoring outcomes
9. Role of WHO Provide capacity building programs for the region and at the country level
Annex 10
Meeting on use fea Impact on access and equity and on lessons learnt for the Pacific Nadl, Fiji 3-5 June 2008 Working Group No.4 Countries: TuvaluNanuatu
Tuvalu health financing overview • Total population-11,000 (2006) • Per capita GDP- 1,139 US$ (2002) Basic NHA Data 2000 I. Tolal heahh expenditure (THE) as·. orODP
y=
13.4
2006 11.4 92.3 1.6 16. 1
Members: Ahmer Akhtar: Etlta Morikao; Flora Kalsarla; Jameson Mokoroe; Hamoa Holona: Helen Wapi Natano Ellsala; Marie Lepon; Rona Taurarlpu Resource persons: Professor Tuohong Zhang, Peking University Mr Oorjsuren Bayarsaikhan. WHO
2. Per capita health expenditure, US$
275 92.4 0.9 6.7
3. G{ll"emmenl health expendilure as·. of THE 4. Out of pocket health expernIiture as % of THE
'"
5. Other privale health expenditure as % ofGDP 6. Compulsory health josurance as % of THE
Source' WHO. 2007
Vanuatu health financing overview • Total population- 221 ,000 (2006) • Per capita GDP- 3,170 US$ (2005) BasicNHADiIta 2000 1, T{JI~I
1. Major issues and lessons learnt Issues • Lack of financial resources • Lack of political will to drive HCF • Lack of data and information on health financing • Policy implementation - needs to be revised and improved • Affordability of user fees in the future
y= 2006
hClilth
",,,pendlt~
rl'lrE)
a.~".
.-
"fGOP
4.4 7,177 67.9 16.4 15.7
4.2 7,496
2. Per capita health expcruliture, US$ 3, Government heallh expenwture as % of THE
4, 0111 nf""d,c:1 health c'rendilure as
o.
64.7 17.7 : 17.6
of TIlE
S. Olherprivate health expenditure as % of GOP 6. Compulsory health illSlmUtce as % of THE
-
1Source, WHO. 2007
Lessons learnt • Government commitment in financing health care plays an important role • Thus, equity and access - not an issue • Quality of services (people go to the private sector) • Analysis prior to the implementation of user fee poliCies
2. Findings of examination of the current user fee policies in the Pacific • Country experiences from Africa and Asia show that they tend to reduce or abolish user fees 2. Findings of examination of the current user fee pol~es
in tha Pacific
• User fee policies are still new and under development stages in the Pacific
Annex 10
3. Findings of examination of user fee practices in the Pacific • Wide range of clinical and non-clinical services are charged (e.g. x-rays, lab, ambulances) • If cash is not available, then payment made by in-kind is accepted • Patients can be turned away if they cannot pay (PNG) • Exemption mechanism is needed
4. Examination of impacts of user fees on fiscal space, access and equity • Lack of evidence on user fee impacts • User fee impacts need to be assessed • Fiscal space is new and needs to be examined and increased as appropriate • Access and equity should not be affected by user fees • Political will that supports user fees • Budget constraints • Lack of HR • Accessibility by the low income pop.learner
6. Strategies preventing from negative impacts of user fees • Exemption for the vulnerable group
8. How to implement the actions and monitor the outcomes • Technical assistance to assist in developing the national health financing strategy • Consultation with stakeholders on health financing strategy • Establish a Steering Committee • Collect data in health financing • Examine the current financing system to increase fiscal space • Monitoring and evaluation mechanism in place
• Continuously reviewing of existing policies • Evaluation and monitoring • Public awareness of the negative impact
• Controlling providers behaviour • Revenue received must retain for operational
costs, etc ... ? • Analyse existing health and financial policies
9. Role of WHO • Maintain the commitments of health financing in the Pacific • Provide funding and technical assistance • Provide policy advise • Supporting information and experience sharing, producing evidence in the Pacific • Coordinating international assistance and collaboration in health financing in the Pacific