How health insurance affects the delivery of health care in developing countries

Financial crisis is a common state of affairs in the government health sector of many developing countries, and an increasing number are considering implementing user charges and insurance programs to shift some of the financial burden for health services away from direct budget allocations by a health ministry. Although they are often implemented as ways of mobilizing additional resources, prices and insurance also affect the allocation of health resources by changing the signals sent to producers and consumers of health services. Changes in incentives engendered by these alternative financing programs, therefore, have implications for the efficiency and equity of health services delivery, in addition to their more obvious impact on revenues. This paper examines institutional aspects of insurance programs in four developing countries - Brazil, China, Korea, and Zaire - and assesses the impact of each on the efficiency and equity of the health sector. Much attention is given to insurance reimbursement of hospitals because these represent the largest component of national health expenditures and are the focal point for much of the activity in the sector. The case study countries were selected because their hospitals are financed largely, and in descriptions of their health financing systems exit. Understanding how alternative financing programs have distorted the allocation of health resources and how these distortions might be mitigated is important for these countries and others considering changes to their present system of health care financing.Health Systems Development&Reform,Health Monitoring&Evaluation,Housing&Human Habitats,Insurance&Risk Mitigation,Health Economics&Finance

Pooling financial resources for universal health coverage: options for reform.

Universal health coverage (UHC) means that all people can access health services of good quality without experiencing financial hardship. Three health financing functions - revenue raising, pooling of funds and purchasing health services - are vital for UHC. This article focuses on pooling: the accumulation and management of prepaid financial resources. Pooling creates opportunities for redistribution of resources to support equitable access to needed services and greater financial protection even if additional revenues for UHC cannot be raised. However, in many countries pooling arrangements are very fragmented, which create barriers to redistribution. The purpose of this article is to provide an overview of pooling reform options to support countries who are exploring ways to enhance redistribution of funds. We outline four broad types of pooling reforms and discuss their potential and challenges in addressing fragmentation of health financing: (i) shifting to compulsory or automatic coverage for everybody; (ii) merging different pools to increase the number of pool members and the diversity of pool members' health needs and risks; (iii) cross-subsidization of pools that have members with lower revenues and higher health risks; and (iv) harmonization across pools, such as benefits, payment methods and rates. Countries can combine several reform elements. Whether the potential for redistribution is actually realized through a pooling reform also depends on the alignment of the pooling structure with revenue raising and purchasing arrangements. Finally, the scope for reform is constrained by institutional and political feasibility, and the political economy around pooling reforms needs to be anticipated and managed

The administrative costs of community-based health insurance: a case study of the community health fund in Tanzania.

Community-based health insurance expansion has been proposed as a financing solution for the sizable informal sector in low-income settings. However, there is limited evidence of the administrative costs of such schemes. We assessed annual facility and district-level costs of running the Community Health Fund (CHF), a voluntary health insurance scheme for the informal sector in a rural and an urban district from the same region in Tanzania. Information on resource use, CHF membership and revenue was obtained from district managers and health workers from two facilities in each district. The administrative cost per CHF member household and the cost to revenue ratio were estimated. Revenue collection was the most costly activity at facility level (78% of total costs), followed by stewardship and management (13%) and pooling of funds (10%). Stewardship and management was the main activity at district level. The administration cost per CHF member household ranged from USD 3.33 to USD 12.12 per year. The cost to revenue ratio ranged from 50% to 364%. The cost of administering the CHF was high relative to revenue generated. Similar studies from other settings should be encouraged

Performance-based financing as a health system reform : mapping the key dimensions for monitoring and evaluation

Peer reviewedPublisher PD

Analysis of multi drug resistant tuberculosis (MDR-TB) financial protection policy : MDR-TB health insurance schemes, in Chhattisgarh state, India

INTRODUCTION: There are significant financial barriers to access treatment for multi drug resistant tuberculosis (MDR-TB) in India. To address these challenges, Chhattisgarh state in India has established a MDR-TB financial protection policy by creating MDR-TB benefit packages as part of the universal health insurance scheme that the state has rolled out in their effort towards attaining Universal Health Coverage for all its residents. In these schemes the state purchases health insurance against set packages of services from third party health insurance agencies on behalf of all its residents. Provider payment reform by strategic purchasing through output based payments (lump sum fee is reimbursed as per the MDR-TB benefit package rates) to the providers - both public and private health facilities empanelled under the insurance scheme was the key intervention. AIM: To understand the implementation gap between policy and practice of the benefit packages with respect to equity in utilization of package claims by the poor patients in public and private sector. METHODS: Data from primary health insurance claims from January 2013 to December 2015, were analysed using an extension of 'Kingdon's multiple streams for policy implementation framework' to explain the implementation gap between policy and practice of the MDR-TB benefit packages. RESULTS: The total number of claims for MDR-TB benefit packages increased over the study period mainly from poor patients treated in public facilities, particularly for the pre-treatment evaluation and hospital stay packages. Variations and inequities in utilizing the packages were observed between poor and non-poor beneficiaries in public and private sector. Private providers participation in the new MDR-TB financial protection mechanism through the universal health insurance scheme was observed to be much lower than might be expected given their share of healthcare provision overall in India. CONCLUSION: Our findings suggest that there may be an implementation gap due to weak coupling between the problem and the policy streams, reflecting weak coordination between state nodal agency and the state TB department. There is a pressing need to build strong institutional capacity of the public and private sector for improving service delivery to MDR-TB patients through this new health insurance mechanism

Promoting Universal Financial Protection: Evidence from Seven Low- and Middle-Income Countries on Factors Facilitating or Hindering Progress.

Although universal health coverage (UHC) is a global health policy priority, there remains limited evidence on UHC reforms in low- and middle-income countries (LMICs). This paper provides an overview of key insights from case studies in this thematic series, undertaken in seven LMICs (Costa Rica, Georgia, India, Malawi, Nigeria, Tanzania, and Thailand) at very different stages in the transition to UHC.These studies highlight the importance of increasing pre-payment funding through tax funding and sometimes mandatory insurance contributions when trying to improve financial protection by reducing out-of-pocket payments. Increased tax funding is particularly important if efforts are being made to extend financial protection to those outside formal-sector employment, raising questions about the value of pursuing contributory insurance schemes for this group. The prioritisation of insurance scheme coverage for civil servants in the first instance in some LMICs also raises questions about the most appropriate use of limited government funds.The diverse reforms in these countries provide some insights into experiences with policies targeted at the poor compared with universalist reform approaches. Countries that have made the greatest progress to UHC, such as Costa Rica and Thailand, made an explicit commitment to ensuring financial protection and access to needed care for the entire population as soon as possible, while this was not necessarily the case in countries adopting targeted reforms. There also tends to be less fragmentation in funding pools in countries adopting a universalist rather than targeting approach. Apart from limiting cross-subsidies, fragmentation of pools has contributed to differential benefit packages, leading to inequities in access to needed care and financial protection across population groups; once such differentials are entrenched, they are difficult to overcome. Capacity constraints, particularly in purchasing organisations, are a pervasive problem in LMICs. The case studies also highlighted the critical role of high-level political leadership in pursuing UHC policies and citizen support in sustaining these policies.This series demonstrates the value of promoting greater sharing of experiences on UHC reforms across LMICs. It also identifies key areas of future research on health care financing in LMICs that would support progress towards UHC