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

Health financing for universal coverage and health system performance: concepts and implications for policy

Abstract Unless the concept is clearly understood, “universal coverage” (or universal health coverage, UHC) can be used to justify practically any health financing reform or scheme. This paper unpacks the definition of health financing for universal coverage as used in the World Health Organization's World health report 2010 to show how UHC embodies specific health system goals and intermediate objectives and, broadly, how health financing reforms can influence these. All countries seek to improve equity in the use of health services, service quality and financial protection for their populations. Hence, the pursuit of UHC is relevant to every country. Health financing policy is an integral part of efforts to move towards UHC, but for health financing policy to be aligned with the pursuit of UHC, health system reforms need to be aimed explicitly at improving coverage and the intermediate objectives linked to it, namely, efficiency, equity in health resource distribution and transparency and accountability. The unit of analysis for goals and objectives must be the population and health system as a whole. What matters is not how a particular financing scheme affects its individual members, but rather, how it influences progress towards UHC at the population level. Concern only with specific schemes is incompatible with a universal coverage approach and may even undermine UHC, particularly in terms of equity. Conversely, if a scheme is fully oriented towards system-level goals and objectives, it can further progress towards UHC. Policy and policy analysis need to shift from the scheme to the system level