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FIJI LIVING HiT UPDATE
a
FIJI LIVING HiT UPDATE
H E A L T H S Y S T E M S I N T R A N S I T I O N 0 3 / 2 0 1 4
Chapter 3: Health Financing3.1 Section summary 1
3.2 Health expenditure 3
3.3 Sourcesofrevenueandfinancialflows 9
3.4 Overviewofthestatutoryfinancingsystem 12
Coverage:breadth,scopeanddepth 12
Collection 13
Poolingoffunds 13
3.5 Out-of-pocket payments 14
3.6 Voluntary health insurance 15
3.7 Othersourcesoffinancing 16
3.8 Payment mechanisms 16
Payingforhealthservices 16
Payinghealthworkers 16
Acknowledgments 18
References 18
FIJI LIVING HiT UPDATE
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FIJI LIVING HiT UPDATE
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3.1 Section summaryThissectiondescribesfinancingofthehealthsectorinFijiincludinganoverviewofthesystem,levelsofspending,sourcesoffinancingandpaymentmechanisms.Governmentbudgetallocationsforhealthhaveremainedrelativelyconstantdespitetheincreasingdemandandcostforhealthcare.Since1995,theGovernmentofFijihasallocatedbetween7%and10%ofitstotalexpendituretohealth;thelatestfigurebeing7.2%in2012.Inthesameperiod,governmenthealthexpenditureasaproportionofgrossdomesticproduct(GDP)hasfluctuatedbetween2.7%and3.5%,whiletotalhealthexpenditure(THE)hashoveredaround4%ofGDP;itwas4.5%in2012.TheseproportionsofGDPspentonhealtharethelowestamongPacificislandcountries.Percapitahealthexpenditurehasincreasedsteadilysince1995upuntil2009,decreasingslightlyuntil2011.
Theshareofhealthexpenditurespentoninpatientservicesdecreasedfrom35.4%in2005to26.5%in2012.In2012,governmenthealthexpenditurerepresented60%ofTHE,lowerthanallotherPacificislandcountries,butrelativelyhighwhencomparedinternationally.Privatehealthexpenditurehasincreasedandwas34%oftotalhealthexpenditurein2012.Thisincreaseislargelybecauseofout-of-pocket(OOP)expenditure,whichhasmorethandoubledovertheperiod2005(12%)to2012(27%).Apartfromgovernmentandprivatesourcesoffunds,developmentpartnersrepresent6%ofTHE.
TheFijihealthsystemhasbeenfinancedmainlythroughgeneraltaxation.OOPexpenditure,althoughrelativelylowwhencomparedwithmanycountries,isthesecondhighestsourceoffinancingforhealth.Therearenocompulsorysocialinsuranceschemes.A2012socialhealthinsurancefeasibilitystudyconcludedthatitwouldbedifficulttoachieveanadequatebaseofcontributorsforanationalhealthinsurancesystem(Rannan-Eliyaetal.,2013),andvoluntaryhealthinsuranceisuncommon(duemostlytolackofaffordability).Nevertheless,spendingpremiumsforprivatehealthinsuranceincreasedfrom2005to2012.
Publicprovisionofhealthcareisfreeoratverylowcostforallpersonsinthecountry.Userfeesarechargedforsomebasicandselectedservices,butevenatrevised2012ratestheyaremodestcomparedwiththecostsofprovidingtheseservices.Certainpopulationgroupsareexemptedfrompayinguserfees.Privatehealthspendingisnotadequatelydocumented.Privateproviderschargeuserfeesthatareconsiderablyhigherthanthoseinpublicfacilities;privatefeesarenotregulatedbytheGovernmentbuttosomeextentbymarketforces.Privateprovidersaremainlysituatedinurbanareasandtheirservicesareusedmostlybythosewhoare formally employed.
Figure3-1depictsthehealthfinancingflowsoftheFijihealthsystem.Thediagramshowswhererevenueforhealthisgenerated,thehealthprovidersthatreceivethisrevenue,andthehealthservicestheyprovidethatarefundedfromthisrevenue.
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Figure 3-1 Financial flows in the Fiji health system
Tax Office
Central Government
BudgetDonors
Ministry ofEducation
Ministry of Health
Divisional Health Offices
Population
Firms(Employers, Insurance
Companies)
Universities
Hospitals
Specialised institutions
Healthcentres
Nursing Stations
EducationR&D
Other (e.g.NGOs)
mostly to public health programs
Public health programs
Inpatient services
Private hospitals
Other private health provider clinics
Pharmacies
Outpatient services
Primary care services
Specialised services
Taxes Taxes
Revenue
Fee for service / co-payments
Bud
get A
lloca
tions
Pri
vate
sec
tor
Premiums
Source:AsiaPacificObservatoryonHealthSystemsandPolicies
ThesamegovernmenthealthservicesareavailabletoallresidentsofFiji;foreignersareentitledtotheservicesatacosttwicethatofresidentuserfees.GivenFiji’sgeography,urbanpopulationsinevitablyhavegreateraccesstohealthservicesthan rural populations. Access to specialized health services and cost of transport isamajorbarrierforthoselivinginremoteareas,andthegovernmentbudgetforemergencytransportislimited,asistheallocationforoverseasevacuationandtreatment.
TheGovernmentoperatesaconsolidatedfundinwhichtaxationrevenuesanduserfeesarepooled.MinistryofHealth(MoH)officialssubmitbudgetproposalstotheGovernmentbasedonnational-,regional-andlocal-levelsubmissions,andtheycompetewithotherministriesfortheirfinancing.Allocationsareusuallybasedonhistoricalbudgetsandtherulinggovernment’sannualpriorities.Externalsourcesoffundingincludecontributionsfrommultilateralandbilateraldevelopmentagencies,andnongovernmentorganizations–anestimated6%ofTHEin2012.
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Paymentmechanismsforhealth-careprovidersarerelativelystraightforward,astheGovernmentbothfinancesandprovidesthemajorityofservices.TheMoHreceivesitsbudget(finances)accordingtoresourceinputssuchashumanresources,services,capitalinvestments,andpurchaseofpharmaceuticalsandmedicalequipment,andusesasimilarprocessindistributingthesefundsacrossvariousgovernment-ownedhealthfacilities.ThemajorityofhealthworkersinthecountryaresalariedstaffoftheMoHorgovernmentwage-earners.Someservicesareoutsourcedsuchascleaningandsecurity,andthereareplanstooutsourceotherssuchaslaundryandfoodcatering.Privategeneralpractitionersreceiveafee-for-servicepayment,andsomearecontractedtoprivateorganizationstoprovide employee health care. Private insurers can either cover all health service costsupfrontorreimbursepatientsonprovisionofreceipts.Pharmaceuticalsandothermedicalgoodsareimportedbythegovernment-fundedFijiPharmaceutical&BiomedicalServicesCentre,whichsuppliesallgovernmenthealthfacilities.PrivatepharmaciescanchoosetopurchasefromtheCentrewithallowablewholesaleandretailmark-upssetbytheFijiPricesandIncomesBoardandtheFijiCommerce Commission.
3.2 Health expenditureThehealth-caresysteminFijiisfinancedmainlythroughgeneraltaxation.TheothermajorsourceoffinancingisOOPpayments,whicharemostlygeneratedintheprivatehealthsector.Privatehealthinsuranceanddonororganizationscontributesmalleramountsoffinancing.
Governmentbudgetallocationsforhealthhaveremainedrelativelyconstantdespitetheincreasingdemandforandcostofhealthcare.Overthedecade1995–2004,theGovernmentallocatedbetween9%and11%ofitstotalannualpublicexpenditurestohealth,exceptin1999,whentheallocatedpercentagewasitslowestat7.6%.
Figure 3-2 Total government budget and health budget (in constant 1995 FJ$)
1200
1000
800
600
400
200
0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Govt budget 1995 constant MoH budget 1995 constant
Mill
ions
Source:Azzam(2007)
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Thetotalgovernmentbudgetshowedaslightincreaseovertheperiod2005to2012.TotalgovernmentexpenditureamountedtoFJ$1424.5millionin2005(33%ofGDP).By2012,ithadrisentoFJ$2077.9million(34%ofGDP).Howeverhealthexpenditureasapercentageoftotalgovernmentexpenditurehasdecreasedasapercentagesharefrom9.6%in2005to7.4%in2012.Overtheperiod2005to2012,healthexpenditurehasaveraged8.8%ofgovernmentexpenditure.
Figure 3-3 Total government budget and health budget (constant 2005 FJ$)
1800
1600
1400
1200
1000
800
600
400
200
02005 2006 2007 2008 2009 2010 2011 2012
Govt budget 2005 constant MoH budget 2005 constant
FJ$
Mill
ions
Sources:MinistryofHealth(2005,2006,2007,2008,2009,2010,2011and2012a).
Table3-1summarizesinformationobtainedfromFijiHealthAccountsreportsfor2005to2012andWHOdata.1Since1995,governmenthealthexpenditureasaproportionofgrossdomesticproduct(GDP)hashoveredbetween2.7%and3.5%.ThisisoneofthelowestratesamongPacificislandcountries(seeFig.3-3),despitethefactthatFijiismoreeconomicallydeveloped.
1 CautionisadvisedincomparingthesefiguressinceitisprobablethattheestimationmethodologiesusedinNationalHealthAccounts(NHA)reportsdifferfromthoseusedintheWorldHealthOrganization(WHO)report.Thefiguresfor1995to2005arefromWHO,whilethefiguresfor2007to2012arefromFijiNHAreports.
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Table 3-1 Trends in health expenditure in FijiExpenditure 1995a 2000a 2005b 2007c 2008c 2009d 2010d 2011d 2012d
Total health expenditure (THE)inUS$percapita
125.4 166.7 170.1 170.7 168.5 198.7 193.8 182.9 -
THEas%ofGDP 3.9 4.7 4.1 4.3 4.2 4.9 4.8 4.4 4.5
Publicexpenditureonhealthas%ofTHE
58.2 69.0 72.0 71.2 69.6 62.9 60.8 61.7 60.3
Private expenditure on healthas%ofTHE
- - 24.0 25.4 24.5 31.0 30.4 33.4 33.8
MeanannualrealgrowthrateinGDP
- –1.7 3.6 –6.6 0.2 –1.3 –0.2 2.1 2.5
Totalgovernmentspendingas%ofGDP
34.9 35.1 31.4 33.2 35.2 33.9 32.0 33.7 37.4
Government health spendingas%oftotalgovernmentspending
8.6 9.8 9.6 10.0 8.2 9.3 9.2 8.1 7.2
Government health spendingas%ofGDP
3.0 3.5 3.2 3.3 2.9 3.1 2.9 2.7 2.7
Out-of-pocket payments as%ofTHE
- - 11.9 15.4 15.5 22.5 20.0 27.2 26.8
Sources:(a)WorldHealthOrganization(2013)foryears1995and2000;(b)Azzam(2007)foryear2005;and(c)FijiHealthAccounts(2007,2008,2009,2010,2011and2012)
Figure3-4showsthatwhilethegovernmentbudgetasapercentageofGDPhasfluctuated,ithasremainedrelativelyconstantbetween30and35.However,thegovernmenthealthbudgetasapercentageofGDPshowsagradualdecreasefromapproximately11%in2005toapproximately8%in2012.
Figure 3-4 Government and Ministry of Health (MoH) budget as a share (%) of GDP, 2005–2012
40.0%
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
2005 2006 2007 2008 2009 2010 2011 2012
Government budget as a percentage of GDP constant (2005 prices)
MoH budget as a percentage of GDP constant (2005 prices)
Sources: MinistryofHealth(2005,2006,2007,2008,2009,2010,2011and2012).
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EstimatesfromFijiHealthAccountsreportsshowaslightincreaseinTHEasapercentageofGDP,from4.1%in2005to4.5%in2012.Thisindicatoriswithinthe4–5%rangerecommendedbytheWorldHealthOrganization(WHO)regionalstrategyonhealthfinancing(WHO,2009).TheincreaseislargelydrivenbyinvestmentsintheprivatesectorsincegovernmenthealthspendingasapercentageofGDPhasdecreasedfrom3.2%in2005to2.7%in2012.
Figure 3-5 Total health expenditure as a share (%) of GDP, WHO Western Pacific Region, 2011
Brunei DarussalamLao People’s Democratic Republic
MalaysiaFiji
PhilippinesVanuatu
Papua New GuineaSingapore
ChinaMongolia
TongaCook Islands
CambodiaViet Nam
SamoaRepublic of KoreaSolomon Islands
AustraliaJapanNauru
KiribatiNew Zealand
PalauFederated States of Micronesia
NiueMarshall Islands
Tuvalu
2.5%2.8%
3.6%3.8%
4.1%4.1%4.3%
4.6%5.2%5.3%5.3%
5.5%5.7%
6.8%7.0%7.2%
8.8%9.0%9.3%
9.8%10.1%10.1%
10.6%13.4%
14.6%16.5%
17.3%
Note:No2011valuesareavailableforAmericanSamoa,FrenchPolynesia,Guam,HongKong(China),Macao(China),NewCaledonia,NorthernMarianaIslands,Tokelau,WallisandFutuna.
Source:WHO(2013)
Table3-1showsthatprivatehealthexpenditureasapercentageofTHEincreasedfrom24%in2005to34%in2012.ThisincreasewaslargelyaresultofOOPexpenditurewhichmorethandoubledoverthesameperiod.OOPexpenditureasapercentageofTHEincreasedfrom11.9%in2005to26.8%in2012.
TherewasasteadyupwardtrendingovernmentpercapitahealthexpenditurefromUS$62.72in1995toUS$124.23in2007(seeFig.3-6).Howeverin2008,therewasadecreasetoUS$101.63duetoareductioningovernmenthealthexpenditure.Thereafterfrom2008to2011,governmenthealthexpenditurehasremained fairly constant.
FIJI LIVING HiT UPDATE
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Figure 3-6 Government health expenditure per capita
140
120
100
80
60
40
20
0
Am
ount
in U
S$
Years
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
62.72
124.23
101.63
106.54
Sources:MinistryofFinance(1995,1996,1997,1998,1999,2000,2001,2002,2003,2004,2005,2006,2007,2008,2009,2010,2011,2012)
InFigure3-7thepercapitahealthexpenditureofFijiiscomparedwiththatofothercountriesintheregionfortheyear2011.WiththeexceptionofPapuaNewGuinea,FijispendsmuchlesspercapitaonhealththanotherPacificislandcountries.
Figure 3-7 Total expenditure on health per capita at PPP international dollars, WHO Western Pacific Region, 2011
Lao People’s Democratic RepublicPapua New Guinea
CambodiaPhilippines
FijiVanuatu
Viet NamNauruTonga
MongoliaKiribati
Solomon IslandsSamoa
Marshall IslandsChina
Federated States of MicronesiaTuvalu
Cook IslandsMalaysia
Brunei DarussalamPalau
Republic of KoreaSingapore
New ZealandNiue
JapanAustralia
78115135169183191231240245251255260321
383432461469495
5591295
16002181
27873033
31633174
3692
Note:No2011valuesareavailableforAmericanSamoa,FrenchPolynesia,Guam,HongKong(China),Macao(China),NewCaledonia,NorthernMarianaIslands,Tokelau,WallisandFutuna. Source:WHO(2013)
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Inpatientandoutpatientservicestogetheraccountformorethan50%ofTHEintheyears2005to2010.Howeverin2011and2012,withtheadoptionofthenewSystemofHealthAccounts(SHA)methodology2(OECD,2011),combinedinpatientandoutpatientexpenditureaccountforlessthan40%ofTHE.Table3-2showstheproportionofTHEforoutpatientservicesasrelativelyunchangingovertheperiod2005–2010.Inpatientservices,ontheotherhand,experiencedsomefluctuationwithanincreaseto49.2%ofTHEin2008followedbyadecreaseto36.4%in2010.Dentaloutpatientexpenditureincreasedfrom0.3%ofTHEin2005to4.3%in2010,asaresultoftheexpansionofpublicsectordentalservices.Publichealthandpreventionremainedrelativelyconstantovertheperiod2005–2010.From2007to2010thecategory‘Allotherhealthservices’(whichreferstohealtheducationandtraining,healthresearchanddevelopment,andnon-profitinstitutionsservinghouseholds)hasshownasteadyincrease.
Table 3-2 Health expenditure by function (service programme)
Expenditure % of total expenditure on health
% of current expenditure on
health2005 2007 2008 2009 2010 2011 2012
Health services
Inpatientcare 35.4 48.7 49.2 38.5 36.4 19.5 18.5
Outpatient/ambulatoryphysician services
22.0 20.8 21.1 21.8 22.4 16.9 17.4
Outpatient/ambulatorydental services
0.3 4.9 3.3 4.8 4.3 3.8 3.8
Ancillary services 1.2 1.5 1.0 2.2 2.6 10.5 9.5
Traditional healers 1.2 0.8 0.8 0.3 0.4 - -
Pharmaceuticals and medicalnondurables
13.0 5.2 5.7 12.2 10.9 18.3 17.7
Publichealthandprevention
4.6 5.4 5.3 4.7 4.2 11.4 13.9
Health administration 8.3 9.6 7.8 7.6 9.9 17.1 17.2
All other health services 14.0 3.1 5.8 7.9 8.9 2.5 2.0
Note:Theyears2005–2010useSHA1methodologywhile2011–2012usesSHA2011 Sources:Azzam(2007);FijiHealthAccounts(2007,2008,2009,2010,2012)
Intermsofexpenditurebyserviceinputs,governmenthealthfundingspentthemajorityofitsfundsonhumanresourcesforhealth(Fig.3-7).From2000
2 Cautioniswarrantedincomparisonofthefiguresbetweentheyears2005and2010againstthefiguresfortheyears2011to2012.Thisisbecausedatafor2005to2010usetheSHA1methodologywhiledatafor2011and2012usetheSHA2011methodology.
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to2012,governmenthealthhumanresourceshaveaveraged53%oftotalgovernmenthealthexpenditure.Operationsaveraged32%overthesameperiodandincludeexpenditureformedicinesanddurablemedicalgoods.Theremaining15%issharedbetweencapitalinvestments(mostlyinfrastructureandmedicalequipment)andvalueaddedtaxes(taxespaidonhealthservicesandproducts).
Figure 3-8 Government health expenditure by service input (% of TGHE expenditure)
Human Resources Operations Capital Tax-VAT70%
60%
50%
40%
30%
20%
10%
0%2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Sources:MinistryofFinance(1995,1996,1997,1998,1999,2000,2001,2002,2003,2004,2005,2006,2007,2008,2009,2010,2011,2012and2013)
3.3 Sources of revenue and financial flowsFiji’shealthserviceshavebeenhistoricallyandpredominantlyfinancedbytheGovernment.Financingofhealthcareisstilllargelyreliantonpublicfundingfromgeneraltaxation.Successivegovernmentshaveassessedthatthelowsocioeconomic status of much of the population precluded the introduction of costrecoverythroughuserfeesand/orthatsuchamovewouldbeunpopular.Therefore,publicprovisionofhealthcareismostlyfreeoravailableatverylowcostforallpersonsinthecountry.Modestuserfeesarechargedforsomeselectedservicesprovidedbythepublicsystem.Therevenuegeneratedfromuserfeesamountedtoanaverageof1.6%ofhealthexpenditureovertheperiod2003–2012(Table3-3).Revenueincreasedslightlyinrecentyears(2010–2012)andthiswasaresultofarevisionofuserfeesin2010andagainin2012.
In2012,theGovernmentinitiatedastudytolookintothefeasibilityofimplementingaSocialHealthInsurance(SHI)scheme(Rannan-Eliyaetal.,2013),withtheobjectiveofincreasingfinancingforhealth.Recommendationsarisingfromthatreportsuggesteditwouldbedifficulttoachieveasignificantcontributionbasegiventhelargesizeoftheinformalsector.Therewasalsoaneedtofirstdevelopstrongmanagerial,administrativeandtechnicalcapacity,aswellasregulatoryoversightbeforeimplementingsuchascheme.
Voluntaryhealthinsuranceschemesarenotwidelyusedbythepopulation.OOPexpenditure,althougharelativelysmallproportionofexpenditurecomparedwith
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manycountries,isthesecondlargestcontributoraftergovernmentfunding.Whilepublicsectorexpenditureiswell-documentedinannualgovernmentreports,thecontributionmadebyprivatefinancingortheamountspentthroughtheprivatehealth sector is only estimated in national health accounts reports.
Table 3-3 Government financial expenditure on health and user-fee collection (FJ$)
YearActual health
expenditure (‘000)
Government revenue from health services
(‘000)
Revenue as percentage of expenditure (%)
2003 124 423 270 0.2
2004 130149 1410 1.1
2005 130756 1336 1.0
2006 149312 971 0.7
2007 137779 1650 1.2
2008 127 656 1111 0.9
2009 155 838 1719 1.1
2010 153830 2732 1.8
2011 149784 6172 4.1
2012 158 348 6071 3.8
Sources:FijiHealthAccounts(2007,2008);MinistryofHealth(2009,2010,2011and2012a)
UserfeeswerefirstlegislatedforinthePublicHospitalsandDispensariesAct1955toprovideaddedrevenuetotheGovernment,butwerenotintroduceduntiltheearly1960s.Despitethefactthatthefeeswerebasedoncostsinthe1940s,theyremainedlargelyunchangeduntilsomeminormodificationsweremadeintheearly1980sandlaterinthelate1990s.In2000outpatientfeesatpublichealthfacilitiesweresuspendedbytheGovernmentbutwerelaterreintroduced.Table3-4summarizesthechargesrevisedin1983,in2010and2012.Theuserfeesmandatedinthe2012revisionandwhichiscurrentlyinusearemodestincomparisonwiththecostsofserviceprovision.The2012feerevisionwasreducedfromthe2010revisionwhenadeclineinuseofhealthserviceswasnoted.Somefeesweredroppedalltogether,suchasthosechargedatoutpatientclinics.
AllcollectedrevenuesreceivedatpublichealthfacilitiesarepaidintotheGovernment’sconsolidatedfundaccountandarenotdirectlyavailable(nordotheyhaveauthority)forusebytheMoH.PersonsexemptfromuserfeesincludemembersoftheRepublicofFijiMilitaryForces,PoliceForceandRoyalNavy,officersoftheprisonsservice,personsdetainedinhospitalsunderanystatutoryauthority,andchildrenundertheageof15.Servicesprovidedinthegeneralinterestofpublichealtharealsoexcluded.
Privateprovidersofhealth-careservices(e.g.generalpractitioners,eyecarespecialists,dentists,privatehospitalsandpharmacies)chargefeesfortheirservicesthatareoftenconsiderablyhigherthantheamountschargedinpublic
FIJI LIVING HiT UPDATE
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healthfacilities.Thesemaybefourtofivetimesthepublicchargeor,insomecases,substantiallyhigher.Forexample,atoothextractionthatcostsFJ$5(2012revisedfees)ingovernmentfacilitiesmaycostanywherebetweenFJ$25andFJ$50ataprivatedentalpractitioner.Currentlythereisnoregulationgoverningfee-settingformostprivatehealthfacilities;userfeesvarywidelyacrossprivatepractitioners.In2012theFijiCommerceCommissionsetthepricesfor75essentialdrugitemsinthepharmaceuticalmarket.Suchregulationisenvisionedtoincreaseacrossotherprivatehealthsectorservices,withtheFijiCommerceCommissionandtheFijiConsumerCouncilbeingstrongadvocatesandtheregulatorsforsuchinterventions.Theobjectiveoftheseinterventionsisfairtradeandpricing,aswellasincreasedaffordabilitytoconsumers.
Table 3-4 User fees for selected services at public health facilities
Services at public health facilities Cost / day residents (1983 amendment)
Cost / day residents
(2010)
Cost / day residents
(2012)Privatesuite(perday) 25 115 115Privatewardsinglebed(perday) 10 46 46Semi-privatewards2beds(perday) 6 34.5 34.5Generalpayingward(perday) 4 23 23Outpatientclinic(divisionalhospitals) 0.5 0.6 0Outpatientclinic(otherfacilities) 0.2 0.2 0Special clinics 2 2.3 0Consultant clinics <8.0 0.6 0Minor operation <30.0 <230.0 <230.0Intermediateoperation <60.0 <690.0 <690.0Majoroperation <150.0 <2875.0 <2875.0Useofdeliveryroomsbyprivatedoctor 50 230 150.0Dentalexamination 1 5.8 3.0Dentaltoothextraction 2 5.8 5.0DentalX-ray 2 5.8–9.2 5.0–8.0Conservativedentistry(e.g.amalgam) 3.0–8.0 3.5–230.0 3.0–120.0Oralsurgery 5.0–30.0 23.0–103.5 10.0–90.0Prosthetics-F/Fdentures 1.0–60.0 3.0–200.0 3.0–150.0Periodontics 1.0–24.0 3.5–230.0 3.0–50.0Orthodontics 20.0–100.0 115.0–460.0 100.0–390.0X-rays(immigration,employment,etc.) 10 23 23X-rays(variousotherprocedures) 8.0–40.0 23.0–460.0 23.0–460.0Laboratorytests 1.0–10.0 8.1–115.0 8.0–115.0CathlabchargesInsuredpatients 3450 3450Uninsuredpatientsearning>15k 1725 1725Patientsearning<15k 575 575
Note:Feesfornon-residentsareusuallydoublethosechargedtoresidents;“<”means“lessthan”Sources:PublicHospitalsandDispensariesAct(1983and2010amendment);MinistryofHealth(2012b)
FIJI LIVING HiT UPDATE
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Privatehealthserviceprovidersaremainlylocatedinurbanlocationsandareusedlargelybythoseinformalemployment.RevenuesofprivateproviderswereestimatedatFJ$80millionin2011andFJ$87millionin2012(FijiHealthAccounts,2013).Inboth2011and2012,Fiji’sprivatepharmaceuticalindustry(mostlyretailoutlets)accountedforapproximately50%ofthatrevenue.
There are no compulsory social insurance schemes. The supply of voluntary privatehealthinsuranceislimitedandaffordableonlyforthoseearningrelativelyhighincomes(seesection3.6).Theproportionofthepopulationcoveredbyvoluntaryhealthinsuranceisunknown,butisthoughttobeconcentratedintownsandurbanareas,andamongtheformalworkingsector.TheproportionofTHEfundedthroughprivatehealthinsurancecontinuestoincreasefrom4.9%in2005to7%in2008and9%in2012(FijiHealthAccounts,2013).Thisincreaseisassumedtobedrivenbyboththeincreasedcostsofhealthinsurancepackagesandincreasingmemberships.
3.4 Overview of the statutory financing system
Coverage: breadth, scope and depthThestatutorypublic(government)healthsystemoffersthesameservicestoalllegalresidentsofFiji.Nonresidentsareentitledtoaccesstheseservices,butattwicethecostofuser-fees,whenfeesarecharged.Healthfacilities,whichareorganizedinathreetierarrangement(i.e.hospitals,healthcentresandnursingstations),providearangeofhealthservicesaccordingtotheirroleandfunctioninthesystem.Pharmaceuticalsontheessentialdrugslistareprovidedfreeofchargeatgovernmenthealthfacilities.Somehealthservicesarenotavailablewithinthecountryduetoinadequateresources,whetherhuman,physicalorfinancial.ThepopulationofFijiisdispersedacrossmanysmallislands,andthisposesasignificantchallengetothedeliveryofhealthservices.Urbanpopulationshavegreateraccesstohealthservices(particularlyspecializedhealth-caretreatment)thanthoseinruralandremoteareas.Privatehealth-carefacilities,whichareconcentratedinurbanareas,provideservicesatacosttoanyonewhoisabletopay. These services are mainly outpatient services.
Accesstospecializedhealthservicesandtransportcostsaremajorbarrierstoaccess,especiallyforthoselivinginremoteareas.TheMoHallocatesabudgetforemergencytransport,includingairflights,butthisserviceisrationedasthebudgetallocatedtoitislimited.Restrictionsalsoapplyregardingaccesstooverseasevacuationofpersonsrequiringhealthtreatmentthatcannotbeprovidedwithinthecountry.Expenditureonemergencydomestictravelandoverseastreatmentvariesconsiderablyfromoneyeartoanother.ItwasaroundFJ$3.5millionin2007,felltoaroundFJ$1millionin2008(FijiHealthAccounts,2010)androseagaintoapproximatelyFJ$2.5millionin2012(FijiHealthAccounts,2013).In2012thisexpenditurewasdistributedequallybetweendomesticandinternationaltreatment(andtravel)referrals.
FIJI LIVING HiT UPDATE
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CollectionGovernmentrevenuecollectedbytheFijiInlandRevenue&CustomsAuthoritythroughtaxationisusedtofinancethepublichealthsystem.Taxesrepresentedapproximately85%oftotalgovernmentrevenuein2012(MinistryofFinance,1995–2013).Taxrevenuesaccruemainlyfromindirecttaxessuchasvalueaddedtax(29%)andcustomstaxes(16%),andthroughdirecttaxviaincometaxes(19%).Incometaxesaccrueprimarilyfromtheformalemploymentsector.
Pooling of fundsAsmosthealthcareisfundedfromgovernmentrevenuesthroughtheallocationofabudgettotheMoH,thereisahighlevelofpoolingoffinancesforhealth.TheGovernmentoperatesaconsolidatedfund,whichincludestaxationrevenuesanduserfees.MoHofficialssubmitbudgetproposalstotheGovernmentbasedonnational-,regional-andlocal-levelsubmissions,andtheymustcompetewithothergovernmentministriesfortheirfinancing.Thesizeandcontentoftheallocatedbudgetisusuallybasedonhistoricaltrendsofpreviousresourceinputs,whetherthepastyearhasreportedanoveruseorunderuseoffundallocationandgovernmentpriorities.InthepasttheMoHhasgenerallymanagedtooperatewithinitsassignedbudget;however,therehavebeenoccasionswheretheMoHhasneededmorefundsfollowingnationaldisasters,suchascyclonesandfloods.Inthesesituations,supplementarybudgetallocationsaremadeavailableuponrequestfromtheMoH.
Figure 3-9 Government budget allocation for health
180
160
140
120
100
80
60
40
20
0
Mill
ions
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Mill
ions
Years
Sources: MinistryofFinance,1995–2013
FIJI LIVING HiT UPDATE
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TheFijiGovernment’sbudgetallocationforhealthhasincreasedfairlysteadilyfrom1995to2009inrealterms(SeeFig.3-8).Governmentexpenditurewas68%oftotalhealthexpenditurein2008andthisdecreasedslightlyto60%in2012.Althoughgovernmentfinancingconstitutesarelativelyhighproportionoffunding,itisstilllowerwhencomparedwithallotherPacificislandcountries(Fig.3-9).
Figure 3-10 TGHE as a share (%) of total health expenditure, WHO Western Pacific Region, 2011
CambodiaSingapore
PhilippinesViet NamMalaysia
Lao People’s Democratic RepublicChina
MongoliaRepublic of Korea
FijiAustralia
PalauPapua New Guinea
JapanKiribati
New ZealandMarshall Islands
TongaBrunei Darussalam
NauruVanuatu
SamoaFederated States of Micronesia
Cook IslandsSolomon Islands
NiueTuvalu
22.4%31.0%
33.3%40.4%
45.7%49.3%
55.9%57.3%57.3%
68.1%68.5%
74.7%79.0%80.0%80.0%
83.2%83.3%83.6%85.0%86.7%87.9%
89.0%90.8%
92.5%94.8%
99.2%99.9%
Note:No2011valuesareavailableforAmericanSamoa,FrenchPolynesia,Guam,HongKong(China),Macao(China),NewCaledonia,NorthernMarianaIslands,Tokelau,WallisandFutuna. Source:WHO(2013)
3.5 Out-of-pocket paymentsOut-of-pocketpaymentsconstitutethesecondlargestsourceoffinanceforhealthservices,aftergovernmentexpenditure.FijiisinthemiddlerangeofrelianceonOOPexpenditureinWHOWesternPacificRegioncountries(Fig.3-10).Asapercentageoftotalhealthexpenditure,OOPpaymentsincreasedfrom12%in2005to21%in2011.In2005,OOPpaymentstotalledFJ$21.7million;by2011,OOPhadrisentoFJ$67.8million.Inthesametimeperiodbothpublicfinancingandemployerfundingforhealthdecreased.MostOOPpaymentswereforprivatehealthservices,mainlyprescriptions,over-the-countermedicationsandoutpatientservices.TheriseinOOPexpendituremayreflectanincreaseintheuseoftheprivatesectorhealthservices.AhealthequityanalysisofOOPreportedinFiji’sHouseholdIncomeandExpenditureSurveyshowthatmostOOPisgeneratedfromwealthierhouseholdsinurbanareas.
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Figure 3-11 OOP expenditure as a share (%) of total health expenditure, WHO Western Pacific Region, 2011
TuvaluNiue
KiribatiSolomon Islands
VanuatuSamoa
Cook IslandsNauru
Federated States of MicronesiaNew Zealand
TongaPalau
Papua New GuineaMarshall Islands
Brunei DarussalamJapan
AustraliaFiji
Republic of KoreaChina
Lao People’s Democratic RepublicMongoliaMalaysiaViet Nam
PhilippinesCambodiaSingapore
0.0%0.8%1.3%
3.0%6.9%7.1%7.5%7.8%
9.0%10.5%
11.1%11.6%11.7%
12.6%14.8%
16.4%19.8%
21.0%32.9%
34.8%39.7%39.7%
41.7%55.7%55.9%56.9%
60.4%
Note:No2011valuesareavailableforAmericanSamoa,FrenchPolynesia,Guam,HongKong(China),Macao(China),NewCaledonia,NorthernMarianaIslands,Tokelau,WallisandFutuna. Source:WHO(2013)
OOPpaymentsmaybeintheformofcashbutcanalsobein-kind,especiallyinruralareasandfortheservicesoftraditionalhealers.ItisestimatedthatexpendituresontraditionalhealersamountedtoFJ$2.1millionin2005,FJ$1.6millionin2007andFJ$1.7millionin2008.In2008,thisamountedto0.8%ofTHE.Thesefiguresarelikelytobeunderestimationssincemosttraditionalhealersarepaidin-kindanditisdifficulttoputadollarvalueonsuchpayments.
3.6 Voluntary health insuranceInFijithecoverageofvoluntaryhealthinsuranceisuncommonandaffordableonlybytheformallyemployed.Mostcoverageisthroughemployer-basedschemesthatprovideaccidentandinjurycoverage,aswellasco-paymentforgeneralmedicalinsurance.Atotalof10companiesoperateacrosstheinsurancesectorinFijibutonly4operatevoluntaryhealthinsuranceschemes.Healthinsuranceaccountedforonly0.3%oftheinsurancemarketpremiumpaymentsin2009(ReserveBankofFiji,2009)andthisremainedconstantin2012.
Companiescontractmostlywithinsurancefirmsandbrokers(ratherthanhospitalsandindividualpractitioners)toprovidetreatmenttotheirclients(mostlytheiremployees)andtocoverrelatedcostsatbothpublicandprivatehealth facilities. Some schemes also cover overseas medical evacuation and treatment.
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AccordingtoFijiHealthAccountsreports,healthinsuranceexpenditurebybothindividualsandorganizationswasFJ$8.9millionin2005,FJ$14millionin2008andFJ$24.8millionin2012(FijiHealthAccounts,2012).Thisincreaseismainlyduetohigherenrolment,aswellasagrowingnumberofmembershipsfromorganizationsandindividualsthathasresultedinincreasedpremiums.The2012ReserveBankofFijiInsuranceAnnualReport(2012)statesthatgrouppoliciesformedicalschemeshaveincreasedfrom429in2011to491in2012.
3.7 Other sources of financingTheremainingsourceoffinanceforhealthcareisfromexternalsources,includingmultilateralandbilateraldevelopmentagenciesandnongovernmentalorganizations.InFiji,theseincludeUnitedNationsagencies(WHO,UNICEF,UNDP,UNFPA,UNAIDS),theGovernmentsofAustralia(throughAusAID),NewZealand(throughNZAID),China,Japan(throughJICA)andtheGlobalFundtoFightAIDS,TBandMalaria(GlobalFund).In2005,donoragencies’contributionstohealthamountedtoFJ$9.5millionor5.3%oftotalhealthexpenditure.In2007,itdecreasedtoFJ$6.9million(3.4%ofTHE)followingthecoupd’étatofDecember2006,andthenroseagainby2012toFJ$15.3million(6%ofTHE).GlobalFundsupporttoFijilargelycontributedtotheincreaseindonorfundsfrom2010onwards;however,itmayceasein2014becausetheWorldBankhaselevatedFiji’sstatusfromalower-middle-incomecountrytoanupper-middle-incomecountry.ExternalsupporttotheMoHisnotyetwellharmonizedtoachieveamoreeffectiveuseofthedonorfundsavailable.
3.8 Payment mechanismsPayment mechanisms for providers of health services are relatively straightforwardsincetheGovernmentbothfinancesandprovidesthemajorityofservices.
Paying for health servicesThesizeoftheannualgovernmenthealthbudgetisreliantontheavailablegovernmentrevenueandnegotiationsonbudgetsubmissionsbetweentheMoHandtheMoF.TheMoHreceivesallocationstoresourceinputlineitems,suchashumanresources,services,capitalinvestments,andpurchaseofmedicalandnonmedicalequipment.TheMoHusesthissameapproachwhenallocatingfinancestovariousgovernment-ownedhealthfacilities(includinghospitals,healthcentresandnursingstations).
Paying health workersThemajorityofhealthworkersinthecountryaresalariedstaffoftheMoH,dividedintotwocategories:establishedstaffandunestablishedstaff.EstablishedstaffaregovernedbythePublicServiceActwhiletheconditionsandrulesforunestablishedstaffarestatedintheJointIndustrialCouncilagreement.Project,
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cleaningandcasualpositionsarecommonlyunestablished.Privatehealth-careprovidersmaybecontractedbytheGovernmentandpaidonanoutputbasisaccordingtothetermsofindividualcontracts.
SalariesofgovernmentstaffaresetindetailednationalpayscalesdrawnupbythePublicServiceCommission.Thepercentageofhealthexpenditurespentonthecompensationofhumanresourceswas61%in2011and60%in2012(FijiHealthAccounts,2013).Therearenoincentivepaymentsforthenumberofpatientsseenorproceduresperformed,orpaymentaccordingtoresults.SalariedstaffmoveupthesalaryscaleaccordingtotheiryearsofexperiencewithintheMoH(thispracticeisslowlychanging),levelofeducationandrolewithintheorganization.Itisgenerallyconsideredthatunder-the-tablepaymentstohealthworkersareinfrequent;thishasnotbeenhighlightedasaproblembythoseinthepublicwhohave used the complaints procedures.
Employeeassociationsandtradeunionsrepresentworkers’interestsandoftennegotiatesalaryandworkingconditionsontheirbehalf.In2007,theFijiNursingAssociationwasvocalonissuespertainingtosalariesandemploymentconditionsfornurses,butwasunabletomakegains.Severalindustrialstrikeshavebeenunsuccessfulandhaveleftstafffeelingundervalued,whichhascontributedtoemigration.
General practitioners in private practice receive payment from individuals for healthservicesrendered.Thereisnolegislatedceilingforfeeschargedbyprivatepractitioners,sotheycanchargeattheirdiscretionwithinmarketconstraints.CurrentconsultationfeesrangefromaboutFJ$30toFJ$50,excludingthecostofmedications,whichareobtainedthroughprivatesectorpharmacies.Averysmallnumberofgeneralpractitionersenterintocontractswithprivateorganizationstoprovidecareforemployees,andprivateinsurersrefundsomeofpatients’healthexpenditure.
Healthworkersintheprivatesectormayworkinhospitals,clinicsandprivatesurgeriesthatarelegallyestablishedasprivatecorporations.Theyaregovernedbytherulesofthesecorporationsandusuallyreceiveafortnightlysalary.TheFijiEmploymentRelationsBill2006(MoLIRE,2006)setscertainworkterms,minimum salaries and conditions.
Pharmaceuticalsareimportedbythegovernment-fundedFijiPharmaceutical&BiomedicalServicesCentre,whichsuppliesallgovernmenthealthfacilities.In2011pharmaceuticalsaccountedfor9.2%oftotalgovernmentspendingonhealth,andin2012thisdecreasedto7.1%.PrivatepharmaciescanalsopurchasemedicineanddrugsfromtheCentre.Thereareapproximately55privateretailpharmacieslocatedinFiji.Privategeneralpractitionersarelegallyentitledtodispenseandsupplymedicinesaslongastheyarenotlocatedwithinfivekilometresofaprivatepharmacy,inwhichcasechargesformedicinesareaddedtopatients’consultationandtreatmentfees.Whendrugsareoutofstockatgovernmentpharmacies,patientshavetopurchasemedicinesattheirown
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expensefromprivatepharmacies.TheFijiPricesandIncomeBoard,togetherwiththeFijiCommerceCommission,controlthepricesinthemarketbysettingpercentagemark-upsforbothwholesalersandretailers.
AcknowledgmentsThisLivingHiTUpdatewaswrittenbyWayneIravaandRoneshPrasad.
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