Resource allocation and health financing

Pooling of resources for NHI could lower cost of universal access.
Nkosi S: Health E-news, June 2016

In June 2016, South African Minister of Health Dr Aaron Motsoaledi addressed the media to respond to criticism over the high cost associated with rolling out universal health care in South Africa. “The National Health Insurance (NHI) scheme is the only way to ensure that everyone is not excluded to quality health because of their socio-economic status, ” said Motsoaledi. The NHI White Paper was released last year and plans to reform both public and private health sectors by combining all South Africans into one purchasing pool. The cost of NHI has been estimated to be R256-billion by 2025, which is higher than the current national budget allocation toward healthcare. But according to Motsoaledi, the figure is a projection and could change with the process. Arguing the benefit of pooling resources, he stated that in 2002, the department of health combined all South Africans into one purchasing pool and were able to lower the costs of antiretroviral treatment.

Africa Health Budget Network & International Budget Partnership - Transparency and Participation Scorecard
Africa Health Budget Network & International Budget Partnership, 2016

This scorecard can help one see at a glance how a country is doing on the areas of budget transparency and participation most relevant for the health sector. All the information in the scorecard comes from the Open Budget Survey 2015. The information collected by the Open Budget Survey is not health specific, but the authors have selected the indicators most relevant to the health sector. Budget documents in different countries display how much will be spent on what priorities in different ways, with more or less detail. For citizens and civil society to understand what is being spent on their health, a high level of detail is required: one doesn’t just need to see the amount as classified by Ministry (e.g. what is allocated to the Ministry of Health) but also by function (e.g. primary healthcare), by economic classification (e.g. how much is spent on health workers’ salaries) or by programme (e.g. how much is spent on free healthcare for pregnant women). There is also an indicator which measures whether budget documents explicitly make the link between money spent, intended health outcomes, and actual results. Information is not enough for accountability. Civil society and citizens also need entry points to influence decisions during the budget process: this is what participation in budgeting provides. There are many ways to facilitate this, from releasing the budget timetable so that Civil Society organisations can get ready for important meetings or information release, to holding formal hearings at different stages in the budget process for the public to feed in their priorities. The scorecard is available in English and French.

How can health ministries present persuasive investment plans for women’s, children’s and adolescents’ health?
Anderson I; Maliqi B; Axelson H; Ostergren M: Bulletin of the World Health Organisation 94(6) 468-474, 2016

Most low- and middle-income countries face financing pressures if they are to adequately address the recommendations of the Global Strategy for Women’s, Children’s and Adolescent’s Health. Negotiations between government ministries of health and finance are a key determinant of the level and effectiveness of public expenditure in the health sector. Yet ministries of health in low- and middle-income countries do not always have a good record in obtaining additional resources from key decision-making institutions. This is despite the strong evidence about the affordability and cost–effectiveness of many public health interventions and of the economic returns of investing in health. This article sets out 10 attributes of effective budget requests that can address the analytical needs and perspectives of ministries of finance and other financial decision-makers. The authors developed the list based on accepted economic principles, a literature review and a workshop in June 2015 involving government officials and other key stakeholders from low- and middle-income countries. The aim is to support ministries of health to present a more strategic and compelling plan for investments in the health of women, children and adolescents.

Assessing equitable health financing for universal health coverage: a case study of South Africa
Ataguba J: Applied Economics, 3 February 2016, doi: 10.1080/00036846.2015.1137549

This article argues that an assessment of progressivity over time can provide an indication of progress towards a ‘more’ progressive or a ‘less’ regressive health financing system and can be useful to policymakers. It introduces a framework to characterize ‘shifts’ in progressivity in health financing between two time periods using the popularly known Kakwani index of progressivity and other associated indices. It also decomposes the ‘shifts’ in progressivity into the relative contributions of the changes in income distribution and the changes in the distribution of health payments. Further, it proposes graphics that statistically analyses how the ‘shifts’ in progressivity vary along the distribution of income. A pro-poor (pro-rich) shift implies that the health financing mechanism is becoming more (less) progressive or less (more) regressive between two time periods. A proportional shift means that progressivity is constant between the two periods. This framework is applied to nationally representative household data from South Africa. It emerged that such characterization is a very useful tool for policy in assessing progress towards equitable health financing.

Equity in Health Care Financing in Low- and Middle-Income Countries: A Systematic Review of Evidence from Studies Using Benefit and Financing Incidence Analyses
Asante A; Price J; Hayen A; Jan S; Wiseman V: PLoS One11(4) e0152866, 2016

Health financing reforms in low- and middle- income countries (LMICs) over the past decades have focused on achieving equity in financing of health care delivery through universal health coverage. This systematic review assesses progress towards equity in health care financing in LMICs through the use of benefit incidence analysis (BIA) and financing incidence analysis (FIA). A total of 512 records were obtained and 24 were judged appropriate for inclusion. Twelve of the 24 studies originated from sub-Saharan Africa. The evidence points to a pro-rich distribution of total health care benefits and progressive financing in sub-Saharan Africa. In the majority of cases, the distribution of benefits at the primary health care level favoured the poor while hospital level services benefit the better-off. Studies evaluated in this systematic review indicate that health care financing in LMICs benefits the rich more than the poor but the burden of financing also falls more on the rich. There is some evidence that primary health care is pro-poor suggesting a greater investment in such services and removal of barriers to care can enhance equity. The results overall suggest that there are impediments to making health care more accessible to the poor and this must be addressed if universal health coverage is to be a reality.

Financial accessibility and user fee reforms for maternal- health care in five sub-Saharan countries: a quasi-experimental analysis
Leone T; Cetorelli V; Neal S; Matthews Z: BMJ Open 6(1), e009692, 2016

This paper aimed to measure the impact of user fee reforms on the probability of giving birth in an institution or receiving a caesarean section (CS) in Ghana, Burkina Faso, Zambia, Cameroon and Nigeria for the poorest strata of the population. The authors analysed data from consecutive surveys in five countries: two case countries that experienced reforms (Ghana and Burkina Faso) in contrast to three that did not experience reforms (Zambia, Cameroon, Nigeria). User fee reforms are associated with a significant percentage of the increase in access to facility births (27 percentage points) and to a much lesser extent to CS (0.7 percentage points). Poor (but not the poorest) and non-educated women and those in rural areas benefited the most from the reforms. Findings show a clear positive impact on access when user fees are removed but limited evidence for improved availability of CS for those most in need. More women from rural areas and from lower socioeconomic backgrounds give birth in health facilities after fee reform.

Tracking implementation and (un)intended consequences: a process evaluation of an innovative peripheral health facility financing mechanism in Kenya.
Waweru E; Goodman C; Kedenge S; Tsofa B; Molyneux S: Health Policy and Planning 31(2) 137-47, 2015

The authors describe early implementation of an innovative national health financing intervention in Kenya; the health sector services fund (HSSF). In HSSF, central funds are credited directly into a facility's bank account quarterly, and facility funds are managed by health facility management committees (HFMCs) including community representatives. The authors conducted a process evaluation of HSSF implementation. Methods included interviews at national, district and facility levels, facility record reviews, a structured exit survey and a document review. They found impressive achievements: HSSF funds were reaching facilities; funds were being overseen and used in a way that strengthened transparency and community involvement; and health workers' motivation and patient satisfaction improved. Challenges or unintended outcomes included: complex and centralized accounting requirements undermining efficiency; interactions between HSSF and user fees leading to difficulties in accessing crucial user fee funds; and some relationship problems between key players. Although user fees charged had not increased, national reduction policies were still not being adhered to. Finance mechanisms can have a strong positive impact on peripheral facilities, and HFMCs can play a valuable role in managing facilities. Although fiduciary oversight is essential, mechanisms should allow for local decision-making and ensure that unmanageable paperwork is avoided. There are also limits to what can be achieved with relatively small funds in contexts of enormous need.

Modelling the impact of raising tobacco taxes on public health and finance
Goodchild M; Perucic AM; Nargis N: Bulletin of the World Health Organisation 94(4), 233-308

This study investigated the potential for tobacco taxes to contribute to the 2030 agenda for sustainable development by reducing tobacco use, saving lives and generating tax revenues. A model of the global cigarette market in 2014 – developed using data for 181 countries – was used to quantify the impact of raising cigarette excise in each country by one international dollar (I$) per 20-cigarette pack. All currencies were converted into I$ using purchasing power parity exchange rates. The results were summarized by income group and region. According to the study model, the tax increase would lead the mean retail price of cigarettes to increase by 42% – from 3.20 to 4.55 I$ per 20-cigarette pack. The prevalence of daily smoking would fall by 9% – from 14.1% to 12.9% of adults – resulting in 66 million fewer smokers and 15 million fewer smoking-attributable deaths among the adults who were alive in 2014. Cigarette excise revenue would increase by 47% – from 402 billion to 593 billion I$ – giving an extra 190 billion I$s in revenue. This, in turn, could help create the fiscal space required to finance development priorities. For example, if the extra revenue was allocated to health budgets, public expenditure on health could increase by 4% globally. The authors argue that tobacco taxation can prevent millions of smoking-attributable deaths and create the fiscal space needed to finance development, particularly in low- and middle-income countries.

#FeesMustFall and the campaign for universal health coverage
Doherty J; McInytre D: The South African Medical Journal 105(12), 1014-1015, 2015

This article reflects on how #FeesMustFall highlighted the political and social upheaval that results from extreme income inequity and inequitable access, problems that beset the health sector as well. It presents data showing how per capita health expenditure declined for a decade after 1994, despite the burgeoning HIV/AIDS epidemic, a blow from which the health system is still trying to recover. The underlying reason for this was a macroeconomic policy that placed constraints on taxation and government expenditure on social services. The article shows how South Africa (SA)'s tax-to-GDP ratio is much lower than other middle-income countries, and argues that raising this limit is essential for development. Spending on health and education should be seen as an investment in the SA economy. The authors suggest that the Department of Health needs to argue this case in Cabinet and demonstrate the effectiveness of health spending through efficient service delivery and fighting corruption.

White paper: National Health Insurance for South Africa
Department of Health, Republic of South Africa, December 2015

This white paper outlines South Africa’s path to universal health coverage over 14 years and proposes dramatic changes in the role of private medical aid among others. Released on the 10th of December 2015, the long awaited white paper begins by providing the background and justification of the country’s moves to join other countries like the Brazil, the United Kingdom and Thailand in introducing universal healthcare coverage. The document notes that healthcare in South Africa is comprised of a two-tiered system divided along socio-economic lines. The private medical aid sector is comprised of 83 medical aid schemes that fund healthcare services for about 16 percent of the population. The paper noted that spending through medical schemes in South Africa is the highest in the world and is six times higher than in Organisation for Economic Co-operation and Development (OECD) countries. The paper argues that this two-tiered system has led to fragmented funding and risk pools in healthcare and posits that the creation of a National Health Insurance (NHI) will improve healthcare equity by combining fragmented private and public health funding pools and eliminating out-of-pocket payments.The paper notes that the NHI will ultimately deliver a comprehensive package of health services that include services such as rehabilitation and palliative care, mental health care including that related to substance abuse and maternal and child health care. The paper is made available to call for stakeholder feedback.