The Tanzanian health care financing system is marginally progressive while benefits are fairly evenly distributed across socio-economic groups, the authors of this study found. However, out-of-pocket payments and voluntary contributions to community health insurance are regressive. The poorest segment of the population receives a lower share of health care benefits relative to their share of need, whereas other population segments receive a greater share of benefits relative to their share of need. The authors conclude that health financing reforms can improve equity, so long as integration of health insurance schemes is promoted along with cross-subsidisation and greater reliance on general taxation to finance health care for the poorest.
Resource allocation and health financing
Equity in health care entails payment for health services according to the capacity to pay and the receipt of benefits according to need. In Uganda, as in many African countries, although equity is extolled in government policy documents, not much is known about who pays for, and who benefits from, health services. This paper assesses both equity in the financing and distribution of health care benefits in Uganda. Data are drawn from the most recent nationally representative Uganda National Household Survey 2009/10. Equity in health financing is assessed considering the main domestic health financing sources (i.e., taxes and direct out-of-pocket payments). This is achieved using bar charts and standard concentration and Kakwani indices. Benefit incidence analysis is used to assess the distribution of health services for both public and non-public providers across socio-economic groups and the need for care. Need is assessed using limitations in functional ability while socioeconomic groups are created using per adult equivalent consumption expenditure. Overall, health financing in Uganda is marginally progressive; the rich pay more as a proportion of their income than the poor. The various taxes are more progressive than out-of-pocket payments. However, taxes are a much smaller proportion of total health sector financing compared with out-of-pocket payments. The distribution of total health sector services benefits is pro-rich. The richest quintile receives 19.2% of total benefits compared to the 17.9% received by the poorest quintile. The rich also receive a much higher share of benefits relative to their need. Benefits from public health units are pro-poor while hospital based care, in both public and non-public sectors are pro-rich.
Financial protection against the cost of unforeseen ill health has become a global concern as expressed in the 2005 World Health Assembly resolution (WHA58.33), which urges its member states to "plan the transition to universal coverage of their citizens". An important element of financial risk protection is to distribute health care financing fairly in relation to ability to pay. The distribution of health care financing burden across socio-economic groups has been estimated for European countries, the USA and Asia. Until recently there was no such analysis in Africa and this paper seeks to contribute to filling this gap. It presents the first comprehensive analysis of the distribution of health care financing in relation to ability to pay in Ghana.
This paper presents the first comprehensive analysis of the distribution of health care financing in relation to ability to pay in Ghana. Secondary data from the Ghana Living Standard Survey (GLSS) 2005/2006 were used, triangulated with data from the Ministry of Finance and other relevant sources, and further complemented with primary household data collected in six districts. Results showed that Ghana's health care financing system is generally progressive. The progressivity of health financing is driven largely by the overall progressivity of taxes, which account for close to 50% of health care funding. The national health insurance (NHI) levy (part of VAT) is mildly progressive and formal sector NHI payroll deductions are also progressive. However, informal sector NHI contributions were found to be regressive. Out-of-pocket payments, which account for 45% of funding, are regressive form of health payment to households. For Ghana to attain adequate financial risk protection and ultimately achieve universal coverage, it needs to extend pre-payment cover to all in the informal sector, possibly through funding their contributions entirely from tax, and address other issues affecting the expansion of the National Health Insurance. Furthermore, the pre-payment funding pool for health care needs to grow so budgetary allocation to the health sector can be enhanced.
This information sheet provides basic facts about financing of health care in South Africa. Health care financing is based on tax, which, in South Africa, is relatively progressive. Tax revenue is the only funding in South Africa that is used for health services that benefit all. Out-of-pocket payments or direct payments to health care providers are regressive. Medical scheme contributions are the biggest single share of health care financing in South Africa. Lower income medical scheme members contribute a higher percentage of their income than higher income medical scheme members. The greatest burden of funding health services rests on medical scheme members, particularly the lowest income scheme members, and the largest part of this burden takes the form of medical scheme contributions.
This fact sheet notes that donor funding and general tax revenue are the main sources of health financing in Tanzania. Funding for health care may be progressive or regressive. Tax revenue in Tanzania is relatively progressive. Income tax is the most progressive, but Value Added Tax (VAT), import and excise tax are also marginally progressive. VAT contributes the most to tax revenue. About 10% of tax revenue goes to health care. Regressive payments include out-of-pocket payments, or direct payments to health care providers, represent a significant share of total health care financing and over half of household contributions to health care. Health insurance contributions are still a relatively small share of total health financing due to the limited coverage of insurance (less than 10% of the population). Contributions to the National Health Insurance Fund are progressive as members are concentrated among higher income groups and contributions are proportional to income. The Community Health Fund is regressive as membership is concentrated among lower income groups and the contribution is a flat rate irrespective of income.
Estimated funding needs for the implementation of the World Health Organization strategy on global public health and intellectual property total more than US$2 billion for the years 2009 to 2015 in order to build capacity to innovate and to deliver health products, engage in technology transfer and in the application and management of intellectual property, promote new research and development and sustainable financing mechanisms for that research and development (R&D), and establish monitoring systems. It also budgets an additional US$147 billion for the actual cost of research, including education of researchers and infrastructure building, noting that this number is difficult to determine ahead of time.
According to this study, a major challenge in the governance of research funding is agenda-setting, given that the priorities of funding bodies largely dictate what health issues and diseases are studied. The challenge of agenda-setting is a consequence of a larger phenomenon in global health, namely “multi-bi financing.” Multi-bi financing refers to the practice of external funders choosing to route non-core funding - earmarked for specific sectors, themes, countries, or regions - through multilateral agencies such as the World Health Organisation (WHO) and the World Bank and to the emergence of new multistakeholder initiatives such as the Global Fund to Fight AIDS, Tuberculosis and Malaria and the GAVI Alliance. These new multistakeholder initiatives have five distinct characteristics: a wider set of stakeholders that include non-state institutions, narrower problem-based mandates, financing based on voluntary contributions, no country presence, and legitimacy based on effectiveness, not process. The author concludes that this shift to multi-bi financing likely reflects a desire by participating governments, and others, to control international agencies more tightly.
In this article, the authors compare domestic resource mobilisation (DRM) with foreign direct investment (FDI), arguing that developing countries, like those in Asia, that have achieved and sustained high rates of growth have typically done so largely through the DRM, and not through FDI. DRM at a significant level is essential to solidify ownership over development strategy and to strengthen the bonds of accountability between governments and their citizens. In effect, it provides ‘policy space’ to developing countries, which is often constrained under the terms and conditions of external funders. In contrast, FDI tends to be pro-cyclical and volatile, particularly affecting African countries with smaller economies, and typically flows into sectors and projects dictated by the commercial interests of the foreign investors, like natural resource extraction. While external funding or trade and investment opportunities can make significant contributions to development, they alone will not be sufficient for Sub-Saharan Africa to achieve sustainable, equitable growth and poverty reduction, the authors conclude. As happened in the 90s with Malaysia, South Korea and the other ‘Asian Tigers’, development success depends primarily on the efforts of developing countries themselves, which ultimately means enhancing their ability to mobilise their own human and financial resources.
The author of this book argues that, along with its many benefits, government aid to Africa has often meant more poverty, more hungry people, worse basic services and damage to already precarious democratic institutions. The author proposes that calls for more aid are drowning out pressure for action that would really make a difference for Africa’s poor. Rather than doubling aid to Africa, it is suggested in the book that it is time to reduce the continent's aid dependency.