Implementing health sector reforms and addressing public financing constraints: can they go hand in hand? Irina Smirnov, Economist, The World Bank

Constitutional provisions in Health Insurance and Care system State BiH Republika Srpska Federation BiH Canton ACanton BCanton C Brčko District

Republika Srpska Health System Central Government Ministry of Health Institute for Public Health Public Health Insurance Fund Resource base: contributions, other payments by contributors and other sources Primary health care assigned to the local government level

Federation Health System Canton A Min. of Health PHFHIF Wide variations accross cantons in access to health services

Health Spending in BiH Health care financing and delivery systems are fragile and not sustainable Ongoing reforms are both broader and in a more advanced state than in other social sectors, yet need to be deepened to ensure sustainability and improve the efficiency, equity and quality Besides that, 4.7 % GDP in private payments Besides that, 4.7 % GDP in private payments

Health Spending in BiH (2) Financing of health care scores poorly on equity and efficiency, despite the good intentions of the system’s designers Fragmentation of the system – no economies of scale and no risk-sharing Information systems are under-developed and there is no information exchange Barriers hinder access to health care underfunding results in rationing arrears in insurance contribution payments makes access uncertain Cross-border care (Entities, cantons) coordination, portability of insurance

Most available health indicators in BiH are acceptable for low-income countries; but, BiH’s health sector, like others in Eastern Europe, under-emphasizes health promotion and disease prevention Fragmentation and weak management of the system – lack of coordination and inefficient use of specialized skills Limited resources and role of PHIs in FBiH in planning, analysis and informed decision-making Health Spending in BiH (3)

Health Spending in BiH (4) Public dissatisfaction with health care in BiH Wrong mix of primary, secondary, and tertiary levels of care and facilities Shortages of materials and equipment and uneven knowledge of medical protocols A physician-dominated health care system that does not utilize the potential for nurses and other health professionals

Health Reforms are needed... The challenge: reintegrating the system to better exploit economies of scale in the delivery, financing, and administration of health care Improve financial sustainability/discipline, flexibility and equity enforcing revenue collection and broader coverage assigning function with positive externalities to the FBiH government (primary health care) implementing hard budget constraints establishing global budgets for health care facilities higher level of co-payments, with exemptions for the needy Pursuing better coordination through the State government

The challenge also includes... Introducing clear rules for the administration of private payments: Health Reforms are needed... prohibiting receipt of private payments by publicly employed doctors for services provided as part of their normal duties, allowing private payments to non-publicly- employed doctors if they are transparent and do not conflict with related public policies, levying charges set at cost-recovery levels for the use of publicly owned facilities by doctors who are practicing privately

Strengthening Effectiveness of Delivery Systems Rationalizing the network of health facilities Coordinating health care and rationalizing facility capabilities across Entity borders, and, in the Federation, across cantonal borders to avoid duplication of services Assessing the overall effectiveness and efficiency with which pharmaceuticals are procured and used in BiH Strengthen procurement processes for equipment and materials Health Reforms are needed... And last but not the least...

And the main question is still un- answered... Public spending on health in BiH will NOT grow over medium term However, reforms must continue, efficiency, equity and quality need to improve