Overview

Basic functions  Revenue collection  Pooling of resources  Purchasing of services

Health Financing Models  National Health Service Systems  Social Health Insurance  Private Health Insurance  Community Based Health Insurance  Direct purchases by consumers

Three basic principles 1. Raise enough revenues to provide individuals with a basic package of essential services and financial protection against catastrophic health expenditure 2. Manage these revenues to pool health risks equitably and efficiently 3. Ensure the purchase of health services in ways that are allocatively and technically efficient.

Patterns and effectiveness of current health spending  10% of Global GDP is spent on health 12% of this is spent in LIC and MIC 78% is spent in HIC  In LIC 50% of spending is from Out of Pocket Payment  Public share of total health expenditure: LIC 30% MIC 50% HIC 65%

Patterns and effectiveness cont  Social health insurance institutions: LIC; 2% MIC; 15% HIC; 30%  External sources: LIC; 8% (In 12 countries in SSA external sources finance more than 30% of health expenditure) MIC; >1%

How effective is health spending for outcome?  Greater improvements in health outcomes are associated with stronger institutions and higher investments in other health related sectors, such as education and infrastructure.  Impact of government health spending on maternal mortality and child mortality  Impact of external funding on maternal mortality and child mortality

Health financing functions and sources of revenues  Collecting revenues LIC, about 18% of GDP  Risk pooling Pooling of risk in LIC is weak and fragmented  Resource allocation and purchasing Implications for cost, access, quality, and consumer satisfaction

Fiscal space The budgetary room that allows a government to provide resources for a desired purpose.  Increasing taxes  Reallocations within the budget  Borrowing resources  Receive grants from external sources

Health spending and health policy  Poverty Reduction Strategy Papers; PRSP  Medium Term Expenditure Framework; MTEF  Public Expenditure Tracking Study and Public Expenditure Review; PETS/PER

Health Financing Challenges in LIC  Mobilizing domestic resources  Securing more external funding  Improving risk pooling  Increasing efficiency and equity of public spending