Health Financing Revisited: A Practitioner’s Guide
The World Bank
May, 2006
This report provides an overview of health financing policy in developing countries. It is a primer on major health financing and fiscal issues, intended to assist policy makers and all other stakeholders in the design, implementation, and evaluation of effective health financing reforms. The health sector is an extremely complex one, and reformers must be prepared to deal with its complexities when designing and implementing health policy reforms.
Learning from high-income countries
High-income countries have a rich history of health financing reforms as their systems have evolved from community-based voluntary insurance arrangements to formal public insurance funds to social or national health insurance-based financing systems. Nearly all high-income countries, with the exception of the United States, have achieved universal or near universal health coverage. The tax-financed systems have been in place for some time, the social insurance systems more recently. Political will was critical to achieving universal coverage, along with economic growth. As most high-income countries have achieved universal coverage, recent reform activities have tended to focus on efficiency gains through purchasing arrangements, rather than on revenue collection and pooling.
Although high-income countries operate in very different contexts from low-income countries, their experiences furnish some lessons for lower-income countries:
* Economic growth is the most important factor in the move toward universal coverage.
* Improved management and administrative capacity is critical in expanding coverage, as is strong political commitment.
* For low- and middle-income countries transitioning to universal coverage, general revenues and social health insurance contributions are the two principal sources of public funding. Both accumulate public revenues into one or several pools. Because the critical issue is pooling, whether a social health insurance or national health service system is ultimately chosen is of secondary importance.
* Voluntary and community-based financing schemes can serve as tests for countries as they seek to expand the role of prepaid health coverage schemes.
* Broader risk pooling mechanisms, instead of fragmented, smaller risk pools, can contribute significantly to effective and equitable financing of health coverage.
Products and services must be evaluated for their effectiveness and cost-effectiveness within the context of particular countries’ coverage systems. To facilitate the affordability of such efforts, cooperation among similar countries should be encouraged, possibly led by one or more international organizations.
Comment:
By Don McCanne, M.D.
As developing countries design and implement their health financing policies, they can learn from high-income countries… “with the exception of the United States.”