The Republic of Sudan: Health Financing Options Karima Saleh, PhD Senior Economist (Health), World Bank, Washington, D.C. Presented at the UHC Conference in Sudan, January 23, 2017 Khartoum, Sudan Plenary session 3: Health Financing Profile

Life expectancy of Sudan is worse than other countries of similar income, 2013

Under-5 child mortality Health Outcomes in Sudan are worse than other countries of similar income, 2013 Under-5 child mortality Maternal mortality

Public health spending in Sudan is worse than other countries of similar income Public spending on health as share of GDP Household out-of-pocket spending on health as share of total health spending – limited financial protection

Challenges in Revenue Collection for Health Does Sudan have sufficient and sustainable public financing for health? Who is bearing the burden of health care cost? Low and insufficient 2.4% of GDP (2013) 21% of total health spending (2013) Benchmark = 4-5% of GDP for UHC Fluctuations in annual budget for health From 12.4% (1998) to 11% (2013), health spending as share of total government expenditure Benchmark = 15% of government budget (Abuja Target) Inequitable health resource allocations by states Health Insurance Program (NHIF, SHI) have limited contributions Public HI = 4% of total health spending, 2011 Private HI = 1% of total health spending, 2011 Low financial protection for health Household out-of-pocket spending= 76% of total health spending, 2013 Benchmark=15-20% of total health spending

Challenges in Pooling of Resources for Health Are resources managed to equitably create pools? Are resources managed to efficiently create pools? Fragmentation of resource pools creates inefficiency Multiple pools (NHIF, SHIS, Private HIS, FMOH, SMOH) Fragmentation of resource pools creates different incentives Fixed (salary) and variable (operations) budgets are separated Vertical fund flows Limited coverage: the poor are not entirely pooled (50% covered) due to limited financing. Limited coverage: near poor not covered due to unaffordability (not subsidized). Limited pools: informal sector is not pooled, voluntary health insurance – adverse selection. Limited enforcement: Formal sector not entirely pooled despite mandatory health insurance program – weak enforcement. Regressive: flat premium rates for informal sector; the lower income groups pay as much as the high income groups.

Challenges in Purchasing of Services for Health Are resources used in an allocative efficient manner to purchase value for money? Are resources used in a technical efficient manner to purchase value for money? More public resources are spent on hospitals instead of primary health care. Significant resources are spent on fixed budgets (salaries, 60%, 2011) versus variable budgets (operations) Inequitable distribution of staff in favor of urban areas and hospitals Low investments in primary health care, thereby, patients bypass and favor hospitals over primary health care for outpatient care Limited use of generic drugs Fragmented purchasing Fee for service payment has a tendency to create more and unnecessary spending

The way forward for Sudan….. Need a structured protocol for reviewing policies to: (1) manage the benefits package; (2) manage inclusion of the poor and vulnerable groups; (3) improve efficiency in the provision of care; (4) address challenges in primary care; and (5) adjust financing mechanisms to better align incentives.

Health Policies will need to emphasize: making entitlements explicit; establishing enforceable guarantees; instituting supply side incentives aimed at improving quality of care; reducing geographical barriers to access; efforts to enhance governance and accountability.

…and to address challenges To reduce fragmentation in the financing and organization of health systems, To harmonize the scope and quality of services across subsystems, To leverage public sector financing in a more comprehensive and integrated manner, and To create incentives that promote achievement of improved health outcomes and financial protection.

Some lessons learnt from international findings on UHC larger quantities of pooled financing that focus on equity are necessary conditions to progress toward UHC; financed largely if not entirely from general revenues that prioritized or explicitly targeted populations lacking the capacity to pay; increase in public financing for health as a share of GDP; Political commitment translated not only into larger budget allocations but also into the passage of legislation that ring-fenced funding for health by establishing minimum levels of health spending, labeling or earmarking taxes for health; moved partially away from input-based, line-item budgets toward per capita transfers, sometimes derived from actuarial cost calculations. Such mechanisms are known to reduce uncertainty in financing; policies to improve the incentives and governance framework with the objective of increasing efficiency and expanding access to health care, particularly among the poor and those at risk of falling into poverty because of health care costs.

Some policy considerations for Sudan Essential Health Benefits Package (EHBP) Streamline EHBP to be financed through prepayment; To identify EHBP: Use a methodology that takes into consideration - burden of disease, cost effectiveness, equity consideration, and financial protection; Proposed Content of EHBP, for example: PHC (5 elements) Emergency service Cesarean section Selected high cost / catastrophic services (e.g. renal dialysis, cardiovascular, oncology) for selected population Cost out the EHBP. Financing Options Consider financing options for coverage of this EHBP (modify EHBP according to what finances may be available); Identify and simulate various sources of financing that are progressive and pool: budget, zakat fund, payroll contribution for formal sector workers, other copayment/ premiums for outside EHBP services and drugs (for hospitals); Consider a phased approach for coverage, and budget needs within the fiscal constraint; Prioritize coverage and financing of the poor, streamline identification mechanisms. Purchasing Options Consider service delivery readiness (HRH, investment, supply chain) and incentivize; Consider purchasing options and ways to improve efficiency and cost containment.

Summary: Leverage public financing to reach the poor A pragmatic and contextual approach to define (or not) the benefits package Increase public financing for health Reforms in the way providers are paid and managed Emphasis on primary care Tackling equalization across subsystems To achieve universal health coverage, need to provide “coverage that everybody is guaranteed to receive”

Thank You! Shukrun!