functions of health financing

functions of health financing

Health Care Financing Administration is a fast-growing industry providing support services to healthcare research, insurance companies, and self-insured entities. there is one fund for the population in that one territory. PubMed WHO. 0000001076 00000 n 0000009066 00000 n This overlap turns into duplication of service coverage particularly in big cities, with the main policy consequence being large inefficiencies in the form of excess provider capacity [15]. Here the pooling function lies with a sub-national entity, such as a state, province, or district (if managed by a level of public administration) or another entity, such as a health insurance fund, with defined responsibility for the entire population of that territory [14]. Health Care Syst Transit. In the health sector, Malaysia was to gradually move away from a policy of highly subsidized care for all population groups, encouraging the growth of the private sector in health and shifting to other financing methods, including insurance, to finance the healthcare system (Khoon, 2010). Article The result is that even where it is legally mandatory for the entire population, it is de facto voluntary coverage. Where VHI coverage is unsubsidized, only those who can afford it will benefit, and inequalities will remain. the mobilization of resources for the health sector; 2) pooling, i.e. xref 2016;15:57. Click the card to flip . Health Facilities Health facilities in the Philippines include government hospitals, private hospitals and primary . The relative reliance of the health system on the aggregate level of prepaid funds versus out-of-pocket payments (OOP) is an important driver to achieve the UHC goals. Akerlof GA. Geneva: World Health Organization; 2017. 0000003940 00000 n Manage cookies/Do not sell my data we use in the preference centre. Risk pooling in health care financing: the implications for health system performance. CAS Territorially distinct pools are found among high-income countries, including for example the United Kingdom, Spain and Denmark, as well as among low- and middle-income countries, such as Brazil. Whether this potential is actually realized will also depend on the interaction and alignment of the pooling architecture with the two other health financing functions of revenue raising and importantly purchasing. This article provides an overview of health financing reforms across countries in the Western Pacific Region as progress is made toward universal health coverage (UHC). The third function of health care financing is purchasing of services. Healthcare organizations must be able to minimize costs in order to be financially successful. Service public pro. <]>> Download and easily browse by indicator:Health Financing Indicators Reference Sheets Alternatively, in a non-competitive arrangement, people could be assigned to specific pools, with enrollment being based on explicit criteria, so that the different pools cannot compete for beneficiaries [11]. Many of those with non-contributory entitlement are paying taxes in some form, but the distinction is the absence of direct linkage between explicit contribution and entitlement. While we believe that the classifications are useful, they are not a substitute for the detailed work that is needed in any one specific country to fully understand its pooling arrangements, their links to other health financing and system functions and their implications for policy. 2001;56(3):171204. Int J Equity Health. %PDF-1.4 % Article Int J Equity Health. As a consequence of this de facto voluntary arrangement, countries such as Ghana, the Philippines and Vietnam still experience inequities between the insured and uninsured population [34, 44]. Citation 1 - Citation 3 Achieving these goals requires effective strategies coordinated across many functions of the health system including governance, regulation . Overview Health Financing Human Resources for Health Leadership and Governance for Health. Geneva: World Health Organization; 2017. Health financing is a core function of health systems that can enable progress towards universal health coverage by improving effective service coverage and financial protection. 0000001757 00000 n 1 below. 1997;41:136. Today, millions of people do not access services due to the cost. Library of Parliamentarians: Ottawa; 2011. From a system perspective, this pooling arrangement has major disadvantages with regards to redistributive capacity. 0000002224 00000 n Mathauer I, Theisling M, Mathivet B, Vilcu I. K]NiGe(T&k,JTNeu@#KWB&@XxDXw-2^ctyc9d"E@yk3'1V-o PKW em2VK: Health financing has three key functions: revenue collection, pooling of resources, and purchasing of services. Decentralized countries often have pools organized by government administrative levels. Prakongsai P, Limwattananon S, Tangcharoensathien V. The equity impact of the universal coverage policy: lessons from Thailand. Thailand is a prominent example for this pooling arrangement. Comprehensive policy analysis for health system reform. the accumulation and management of prepaid financial resources on behalf of some or all of the population; and 3) purchasing, i.e. Baeza CC, Packard TG. On the one hand, some have argued that a multiple competitive fund setup has the advantage of offering choice to beneficiaries and may create incentives for innovations, especially for purchasing. Risk pooling effectively means that the healthy subsidize the sick, and by implication due to their lower health risks, the young subsidize the old [14]. Definition. Moreover, while they are important issues, in this paper we do not explore the source of revenues, nor the institutional-organizational details of how revenues are transferred to a pool. Fragmentation in pooling arrangements. Google Scholar. Bull World Health Organ. The eleven essential functions of health systems are based on assessing the health status of the population and ill health factors, . Various policy instruments and options exist to reduce fragmentation and increase redistributive capacity: 1) make participation compulsory to cover everybody; 2) merge different pools to increase the pool size and diversity in health risks; 3) cross-subsidize pools that have lower revenues and higher health risks; and 4) harmonize across pools, such as benefits, payment methods and rates [16]. 2014;29:71731. This entails examining the process of different parts of the business, forecasting revenues and costs and using this data to direct the company in the future. Mathauer I, Dale E, Meessen B. Revenue collection is how health systems raise money from households, businesses, and external sources. multiple competing pools with risk adjustment across the pools; and in combination with types (1.)-(6. Health financing involves the basic functions of revenue collection, pooling of resources, and purchase of interventions. HdSK0sNH{`9i SfWglvQ"{L$l$l}&j LIPX0st"$BB*4~f75HhO Z7 In 2016, VHI expenditure represented more than 20% of current health spending in only few countries with primary or duplicative coverage (Bahamas, Botswana, Brazil, Namibia, South Africa) [29]. Jowett M, Kutzin J. Meaning of terms Revenue Collection is the way health systems raise money from households (e.g. Soors W, Devadasan N, Durairaj V, Criel B. Pooling revenues and reducing fragmentation Pooling revenues and reducing fragmentation Pooling is a core function of health financing policy. Complementary insurance for health services covers benefits that are excluded from the public systems package, thereby giving access to a wider range of benefits. 0000007449 00000 n In turn, this may result in a cycle of increasing premium rates and other actions that insurers take to reduce their risks and improve their financial sustainability. 154 39 This may indirectly contribute to pro-poor equity as well, to the extent that poorer persons have greater health needs [1, 18]. poverty status) or costs of serving the population of a specific region (e.g. Gautier J. management and disbursement for financing the availment of a basic minimum package and other . Due to functional duplications, this also creates high administrative costs and inefficiencies [58]. Its main purpose is to share the financial risk associated with health . Mathauer I, Mathivet B, Kutzin J. health financing functions and objectives . Council for Medical Schemes (CMS). What are the four major services and healthcare? When coverage is compulsory or automatic for all population groups, the pool(s) have a more diverse mix of health risks. Health Financing Indicators Reference Sheets, compendium of indicators for projects supporting health financing, human resources, and governance, Health Financing Indicators Reference Sheet 2014, Health Finance and Governance (HFG) Project. The resources allocated to these different pools may come from a mix of centrally and sub-nationally raised revenues, with allocations often based on a consistent formula applied across the country. Such a pool setup creates immense scope for inequity, as it allows for enormous differences in available resources per capita across pools. A few countries combine competition among insurers with individual choice of insurer and compulsory participation. PubMed Fragmentation also occurs in the few countries (Germany, Netherlands, Chile) that allow certain population groups (e.g., the self-employed or individuals above an income threshold) to opt out from the public system and to buy mandatory private insurance [59,60,61]. arrange the three key health financing functions of revenue col-lection, risk pooling, and purchasing. Health Policy. Implementing health financing reform: lessons from countries in transition. Likewise, when their sizes differ across the country, they could turn out to have unequal redistributive capacities [14]. Frenk J. Fragmentation in pooling is a particular challenge for UHC objectives. The explicit nature of the coverage schemes puts greater focus on the equally explicit inequities in the levels of public funding per capita for the formal and informal sector populations. As you can see, out-of-pocket or fee-for-service, government budget, or insurance agencies are all means of purchasing health care from providers. In the case of supplementary coverage (access to the private sector), there are also system effects such as skewed public spending and staff migration to the private health provider sector [41]. Territorially distinct pools have much in common with a single national pool. The three basic functions of any health financing system are revenue col-lection, risk pooling, and purchasing of services. The quest for universal health coverage: achieving social protection for all in Mexico. the mobilization of resources for the health sector; 2) pooling, i.e. Health financing is a core function of health systems that can enable progress towards universal health coverage by improving effective service coverage and financial protection. It serves multiple purposes, e.g. https://doi.org/10.1186/s12939-019-1088-x, DOI: https://doi.org/10.1186/s12939-019-1088-x. (accessed 5 February 2019)]. For illustration we provide various country examples. For example, the pool from which the national capital city funds its city hospitals, and the pool from which the central government funds national tertiary facilities are not territorially distinct, particularly when as is often the case the national tertiary hospital is also an important provider of more basic services for the local population. Sometimes, these arrangements include a purchaser-provider split. 2018;122:45772. Sparkes S, Durn A, Kutzin J. SMG 1117A.641 (02/09/2022) 1 . Preker A, Langenbrunner J. What are the types of health care financing? Key facts Many others receive poor quality of services even when they pay out-of-pocket. Multiple funds imply multiple information systems linked to each pool/purchaser that in turn may entail the need for more administrative staff at the level of providers. Conversely, pools with higher health risks are more likely to restrict benefits (if this is legally allowed), face financial difficulties or else run deficits. This is commonly referred to as a competitive social health insurance arrangement. Part of Such a pool provides compulsory or automatic coverage for the entire population, usually for a defined package of services. While different schemes for different population groups remain, there is a critical modification to the setup discussed in the previous section, which is why we consider it as a separate pooling arrangement. is the health system function whereby collected health revenues are transferred to purchasing organizations. The classification, such as the one we are proposing is simply meant to facilitate the reflecting around a response. In any country, prepaid health revenues may be held, i.e. 0000002548 00000 n In: Kutzin J, Cashin C, Jakab M, editors. Q J Econ. There are two forms of institutional setup found for this pooling arrangement. Financial Management Functions. They also contribute to system-wide inefficiencies arising from the duplication of responsibilities for managing different pools (with purchasingoften linked to that). Annual report 20152016. Smith P. The role of markets and competition. 2013;91(8):60211. All authors have read and approved the final manuscript. Countries need to focus not on generic models but on. Mexicos Seguro Popular also shifted to this principle of automatic coverage of all people who are not part of an insurance scheme for formal sector employees [47, 48]. This is the case in many countries where, for example, a contributory scheme with statutory enrolment exist for formal sector employees, and separate health coverage schemes for other population groups, e.g. endstream endobj 788 0 obj <>/Metadata 86 0 R/OCProperties<>/OCGs[800 0 R]>>/Outlines 125 0 R/PageLayout/SinglePage/Pages 783 0 R/StructTreeRoot 156 0 R/Type/Catalog>> endobj 789 0 obj <>/ExtGState<>/Font<>/Properties<>/XObject<>>>/Rotate 0/StructParents 0/Tabs/S/Type/Page>> endobj 790 0 obj <>stream Health financing policy is key to the health system, as it determines: i) the sources of fund, and therefore how much is available to the sector; ii) how health risks are pooled; iii) who controls the funds and how they are allocated; iv) The equity of the sector funding, and hence indirectly, how many people will fall into poverty (or not) as a Are revenue col-lection, risk pooling, i.e due to the cost this pooling arrangement proposing is meant! 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