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Health Financing Systems in Transition – Threats and
Opportunities
Christoph Kurowski World Bank Group
Fiscal Space, Public Finance Management and Health Financing
Workshop
Montreux, December 9th to 11th, 2014
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Outline
Health financing (system) transitions
Graduation challenges – Financial barriers to sustainability
– Non-financial barriers to sustainability
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Health Financing Transition / Economic Growth
Government expenditure on
health
GNI pc
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Health Financing Transition / Economic Growth
LMIC
UMIC
HIC
LIC
GNI pc
Unmet demand
Government expenditure on
health
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Health Financing System Transitions / Economic Growth
LMIC
UMIC
HIC
LIC
GNI pc
Unmet demand
Government expenditure on
health
BasicPFM
Productivity
Cost containment
Quality of care
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Health Financing System Transitions and Broader Development
LMIC
UMIC
HIC
LIC
GNI pc
Unmet demand
Government expenditure on
health
BasicPFM
Productivity
Cost containment
Quality of care
Political, institutional and social change
Fiscal decentralization
Demographic and epidemiological change
NCD BoD Ageing
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Graduation
LMIC
UMIC
HIC
LIC
GNI pc Government
expenditure on health
Political, institutional and social change
Demographic and epidemiological change
DAH
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Graduation Challenges
1. Financial barriers to sustainability
2. Non-financial / institutional barriers to sustainability
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Global Health Initiatives /
Disease-specific programs / Financing
priority services
Graduation: Barriers to Financial Sustainability
Health: Budgeting process and structure
Finance: Budgeting process and structure
Health: Budget execution
Finance: Revenue policy
Benefits package design
Political agenda
Line-item budget
Weak tax base Redistributive
capacity Use of NRR
HRH management
Procurement
Resource allocation
Co-financing RBF/COD MoUs /
Contracts / Compacts
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Global Health Initiatives / Disease-specific programs /
Institutional innovations
Health financing
system performance
Graduation: Non-financial barriers to sustainability /
Opportunities for Institutional Innovation
+
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Efficiency (equity)
Unintended consequences
Distortions
Capacity constraints
Political economy constraints
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Sustainability Strategies
Declaration on Aid Effectiveness Align behind country objective
and use local systems
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Opportunities for Institutional Innovation
Financial management
Procurement
Supply chain management
M&E
Payment systems (RBF)
Contracting non-state providers
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Opportunities for Institutional Innovation / Classification
High
Low
Low High
Interdependencies government system
Inter-dependencies health system
Financial management
Procurement
Supply chain management
M&E
Contracting non-state providers
Payment systems (RBF)
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Global Health Initiatives /
Disease-specific programs /
Result-based financing
Graduation: Innovation Opportunity – RBF?
Health: Budget structure
Finance: Budget structure
Health: Provider autonomy
Public administration: Pay and benefit system
Line-item budget
Lack of performance rewards
Budgetary organizations
SWAp IHP + MoH/MoF
platform
Health: Market entry
Limited permissible legal status
Finance: Inter-governmental fiscal
relations
Lack of Accountability Incentives
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Health Financing and Economic Growth
LMIC
UMIC
HIC
LIC
GNI pc
Unmet demand
Government expenditure on
health
BasicPFM
Productivity
Cost containment
Quality of care
Political, institutional and social change
Fiscal decentralization
Demographic and epidemiological change
NCD BoD Ageing
Insurance
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pure inspiration
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Annex
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Health Financing during Economic Transitions / Graduation
LMIC
UMIC
HIC
LIC
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Outline
Principle Health Financing Challenges During economic
transitions
– Shift in focus – from FCS to HIC – Specific challenges LIC,
LMIC for session – RM
• Health financing transition • Redistributive capacity • Income
elasticity of THE, GHE
– Countries with natural resource driven growth – Allocation to
health – substitution effect
• Drop in donor/grant financing – ODA – DR / ODA – IDA – IBRD –
DR – Incentives for financial sustainability: co-financing /
Resource allocation models – Integration with country systems (FM,
PR, M&E)
• Efficiency – Allocative efficiency within sector / fairly
comprehensive benefits packages
» Epiidemiological transition – Supply to demand-side financing
/ Purchasing arrangements – PFM – Inter-governmental fiscal
relations / Accountability, financial incentives – Staff incentive
– civil service reform – DAH off-budget to on-budget financing –
OOP / provider distortions
• Equity – Fragmentation
» Targeting general tax revenue to the poor – Fiscal
decentralization – equity
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… in an equitable manner.
Health Financing Objectives
Resource mobilization for adequacy and sustainability
Pooling for
financial protection
Resource allocation
for efficiency
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Spare Parts
LMIC
UMIC
HIC
LIC
GNI pc Government
expenditure on health
Cost containment
Quality of care
Political, institutional and social change
Ageing
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Graduation
LMIC
UMIC
HIC
LIC
Fiscal decentralization
Demographic & epidemiological change
Unmet demand
