Resource allocation and health financing

Performance-based Incentives in Mozambique: A Situational Analysis
Connor, C, Cumbi A, Borem P, Beith A, Eichler R, Charles J: Abt Associates Bethesda, MD: Health, 2011

This report presents the findings of USAID’s Health Systems 20/20 Project assessment of local interest in and capacity to implement PBIs. PBIs are reported to be legally and culturally feasible. Given the low level of health spending, limited population coverage, and estimates of unmet need in
Mozambique, the authors argue that PBIs should be designed to improve system efficiency but not be expected to reduce spending in absolute terms. Local stakeholders are repirted to be open to the PBI concept, citing CDC, USAID, and World Bank being ready to support introducing PBIs in Mozambique; however, some authorities and health worker staff express concerns about sustainability and equity of paying for performance.

Performance-based Incentives to Improve Health Status of Mothers and Newborns: What Does the Evidence Show?
Rena Eichler, Koki Agarwal, Askew I, Iriarte E, Morgan L, Watson J: Journal of Health, Population and Nutrition; 31:4: December 2013

Performance-based incentives (PBIs) aim to counteract weak providers’ performance in health systems of many developing countries by providing rewards that are directly linked to better health outcomes for mothers and their newborns. Translating funding into better health requires many actions by a large number of people. The actions span from community to the national level. While different forms of PBIs are being implemented in a number of countries to improve health outcomes, there has not been a systematic review of the evidence of their impact on the health of mothers and newborns. This paper analyzes and synthesizes the available evidence from published studies on the impact of supply-side PBIs on the quantity and quality of health services for mothers and newborns. This paper reviews evidence from published and grey literature that spans PBI for public-sector facilities, PBI in social insurance reforms, and PBI in NGO contracting. Some initiatives focus on safe deliveries, and others reward a broader package of results that include deliveries. The Evidence Review Team that focused on supply-side incentives for the US Government Evidence Summit on Enhancing Provision and Use of Maternal Health Services through Financial Incentives, reviewed published research reports and papers and added studies from additional grey literature that were deemed relevant. After collecting and reviewing 17 documents, nine studies were included in this review, three of which used before-after designs; four included comparison or control groups; one applied econometric methods to a five-year time series; and one reported results from a large-scale impact evaluation with randomly-assigned intervention and control facilities. The available evidence suggests that incentives that reward providers for institutional deliveries result in an increase in the number of institutional deliveries. There is some evidence that the content of antenatal care can improve with PBI. We found no direct evidence on the impact of PBI on neonatal health services or on mortality of mothers and newborns, although intention of the study was not to document impact on mortality. A number of studies describe approaches to rewarding quality as well as increases in the quantities of services provided, although how quality is defined and monitored is not always clear. Because incentives exist in all health systems, considering how to align the incentives of the many health workers and their supervisors so that they focus efforts on achieving health goals for mothers and newborns is critical if the health system is to perform more effectively and efficiently. A wide range of PBI models is being developed and tested, and there is still much to learn about what works best. Future studies should include a larger focus on rewarding quality and measuring its impact. Finally, more qualitative research to better understand PBI implementation and how various incentive models function in different settings is needed to help practitioners refine and improve their programmes.

Towards achieving universal health coverage in Nigeria
Business day, June 20 2014

As high out-of-pocket payment dominates Nigeria’s healthcare spending and with low priority accorded to health by state and local governments, Nigeria’s quest to attain universal health coverage by 2015 is argued in this article to be bleak. The absence of financial protection has led most Nigerians to depend on out-of-pocket payment for healthcare financing with insurance penetration, which is a measure of the relationship between premiums earned and the nation’s Gross Domestic Product, put at less than 6 percent, according to industry experts. Experts explain that achieving universal health coverage would be hard to attain without expanding the fiscal space (through increasing domestic tax revenues, expanding tax base, developing social health insurance, and getting debt relief. Analysts believe that there is need to expand contributions from large profitable companies and tax mobile phone operators to fund healthcare.
Other innovations include tobacco and alcohol exercise tax, excise tax on foods that contribute to an unhealthy diet, and additional levy on top of existing VAT rate as is in the case with countries like Chile.
Some issues to consider in evaluating each innovative method include administrative costs, magnitude of the potential revenue, political acceptability and whether such funds should go into Consolidated Government Revenues or be earmarked.

Fiscal Capacity and Aid Allocation: Domestic Resource Mobilization and Foreign Aid in Developing Countries
Bhushan A, Samy Y: UNRISD working paper number 7, 2014

In their paper on Fiscal Capacity and Aid Allocation: Domestic Resource Mobilization and Foreign Aid in Developing Countries the authors look into the interaction between fiscal performance and donor aid allocation. The analysis reveals that there is hardly any correlation between overall aid and fiscal performance and capacity. Furthermore, the authors point to gaps in terms of external funders delivering on their commitments to align with recipient country priorities and providing aid through country Public Finance Management systems - despite promises to pay greater attention to DRM efforts of recipient countries.

Africa rising? Inequalities and the essential role of fair taxation
Kumar C: Christian Aid and Tax Justice Network, February 2014

After a decade of high growth, a new narrative of optimism has taken hold about Africa and its economic prospects. Despite this, there is a broad
consensus that progress in human development has been limited given the volume of wealth created. There is growing concern that the high levels of
income inequality in sub-Saharan Africa are holding back progress. This report investigates the issue of income inequality in eight sub-Saharan African countries (Ghana, Kenya, Malawi, Nigeria, Sierra Leone, South Africa, Zambia and Zimbabwe). While there is growing public recognition that inequality is the issue for our time - both globally and in sub-Saharan Africa – there is little definitive analysis of income inequality trends on the continent. This report seeks to contribute in this area, looking at whether income inequality is, in fact, rising and in what context this is occurring. In particular, this report seeks to locate an analysis of tax systems in sub-Saharan Africa in the context of these economic inequalities, given the primary importance of national tax systems in redistributing wealth. A central contention of this report is that rising income inequality is going hand in hand with – and is ultimately caused by – the current growth model, illicit financial flows and the the inability of governments to tax the proceeds of growth, because a large part of sub-Saharan Africa’s income and wealth has escaped offshore. This report also finds many shortcomings in direct taxation in the countries studied. The personal income tax (PIT) systems lack equity as the bulk of the burden is on employees. The self-employed rarely pay tax. The visible lack of equity erodes citizens’ trust in the system. While the report notes some signs of progress, such as some mineral taxation reforms, there is also a clear gap between rhetoric and reality. There is national and international consensus that it is urgent to address issues such as tax incentives, extractives taxation, the taxation of HNWI, tax evasion and illicit financial flows. However, countries are struggling to introduce new direct taxes and to enforce tax compliance against companies and elites. Support to make such transformational changes is reported to be inadequate.

Removing financial barriers to access reproductive, maternal and newborn health services: the challenges and policy implications for human resources for health
McPake B, Witter S, Ensor T, Fustukian S, Newlands D, Martineau T, Chirwa Y: Human Resources for Health 11(46): 2013

The last decade has seen widespread retreat from user fees with the intention to reduce financial constraints to users in accessing health care and in particular improving access to reproductive, maternal and newborn health services. This has had important benefits in reducing financial barriers to access in a number of settings. If the policies work as intended, service utilization rates increase. However this increases workloads for health staff and at the same time, the loss of user fee revenues can imply that health workers lose bonuses or allowances, or that it becomes more difficult to ensure uninterrupted supplies of health care inputs. This research aimed to assess how policies reducing demand-side barriers to access to health care have affected service delivery with a particular focus on human resources for health. The authors undertook case studies in five countries (Ghana, Nepal, Sierra Leone, Zambia and Zimbabwe). In each the authors reviewed financing and HRH policies, considered the impact financing policy change had made on health service utilization rates, analysed the distribution of health staff and their actual and potential workloads, and compared remuneration terms in the public sectors. The authors question a number of common assumptions about the financing and human resource inter-relationships. The impact of fee removal on utilization levels is mostly not sustained or supported by all the evidence. Shortages of human resources for health at the national level are not universal; maldistribution within countries is the greater problem. Low salaries are not universal; most of the countries pay health workers well by national benchmarks. The interconnectedness between user fee policy and HRH situations proves difficult to assess. Many policies have been changing over the relevant period, some clearly and others possibly in response to problems identified associated with financing policy change. Other relevant variables have also changed. However, as is now well-recognised in the user fee literature, co-ordination of health financing and human resource policies is essential. This appears less well recognised in the human resources literature. This coordination involves considering user charges, resource availability at health facility level, health worker pay, terms and conditions, and recruitment in tandem. All these policies need to be effectively monitored in their processes as well as outcomes, but sufficient data are not collected for this purpose.

Fiscal Space for Domestic Funding of Health and Other Social Services
McIntyre D and Meheus F: Chatham House working paper 5, March 2014

There is a need to increase government expenditure on health and other social services in many countries in order to achieve universal health coverage (UHC) and promote inclusive social and economic development. Individual governments have an obligation to allocate the maximum available resources from domestic sources, and not simply rely on international assistance, in order to achieve the progressive realization of fundamental human rights. Ultimately, this requires adequate levels of government expenditure on a range of social services. While government expenditure as a percentage of GDP is on average higher in ‘advanced economies’ than in other countries, there is no strong correlation between levels of government spending and economic development across individual countries (i.e., the size of a country’s GDP does not ‘predetermine’ or dictate government spending levels).Government revenue generation is the strongest determinant of government expenditure levels within individual countries; hence, emphasis should be on increasing government revenue. The report outlines progressive options for achieving this.

Investing in health
Yates R, Dhillon R: The Lancet, Volume 383, Issue 9921, 949 - 950, 15 March 2014

Public financing is the path to universal health coverage (UHC). UHC is rapidly becoming the overarching goal for national health systems and two recent events mark a new consensus that public financing is the way to get there. The Lancet Commission on Investing in Health2 focused on public financing mechanisms (including aid) in reaching UHC and explicitly rejected the 1993 World Development Report's emphasis on private health financing, including user fees. Similarly all 11 countries that presented at the Global Conference on UHC (Dec 6, 2013, Tokyo, Japan) hosted by the World Bank and Government of Japan, highlighted their use of public financing to increase service coverage and improve financial protection. None had used private voluntary financing to any significant extent. What is the basis for this consensus? UHC is fundamentally about rights and equity. It requires that the healthy and wealthy subsidise health services for the sick and poor. This cannot happen through private market-based systems of user fees and private insurance, including voluntary community-based schemes.Across the world, countries are instead realising that the only way to secure the cross-subsidies needed for UHC is through compulsory contributions into redistributive risk pools. In particular, tax financing is proving essential to close coverage gaps for households in the informal sector. Since only the state can mandate progressive payments and ensure that benefits are allocated according to need, only public financing systems can achieve the combination of universality, equity, and financial protection needed for UHC. Many of the governments that have learnt these lessons are now the ones leading the charge for UHC to be included in the post-2015 agenda. As noted by the World Bank President, one of these countries, Thailand, achieved UHC by rejecting the advice of the World Bank in the 1993 World Development Report to not rely on public financing. These countries represent the new consensus on health financing: universal coverage can only be accomplished through public financing systems in which the state plays a leading part in raising revenues, pooling funds, and purchasing services.

Trends in national and provincial health and HIV/ AIDS budgeting and spending in South Africa
Ndlovu N, Vilakazi M, Majozi M, Sithole F, Mbatha K, Guthrie T: Centre for Economic Governance and AIDS in Africa, CEGAA Occasional Paper 2013-1, 2013

This paper provides an analysis of trends in health and HIV/AIDS budgeting and spending, as well as trends in some related spending areas that are important for effective HIV and AIDS management in South Africa. The 2013/14 national and provincial budget statements indicated that there is still strong public commitment to fund HIV and AIDS within the health sector demonstrated by increasing health HIV and AIDS allocations within a shrinking health budget in real terms.

Feasibility of introducing compulsory community health fund in low resource countries: views from the communities in Liwale district of Tanzania
Marwa B, Njau B, Kessy J and Mushi D: BMC Health Services Research 13(298): 8 August 2013

In 1995, Tanzania introduced the voluntary Community Health Fund (CHF) with the aim of ensuring universal health coverage by increasing financial investment in the health sector. The uptake of the CHF is low, with an enrolment of only 6% compared to the national target of 75%. Mandatory models of community health financing have been suggested to increase enrolment and financial capacity. This study explores communities’ views on the introduction of a mandatory model, the Compulsory Community Health Fund (CCHF) in the Liwale district of Tanzania. A cross-sectional study which involved 387 participants in a structured face to face survey and 33 in qualitative interviews (26 in focus group discussions (FGD) and 7 in in-depth interviews (IDI). Structured survey data were analyzed using SPSS version 16 to produce descriptive statistics. Qualitative data were analyzed using content analysis. 387 people completed a survey (58% males), mean age 38 years. Most participants (347, 89.7%) were poor subsistence farmers and 229 (59.2%) had never subscribed to any form of health insurance scheme. The idea of a CCHF was accepted by 221 (57%) survey participants. Reasons for accepting the CCHF included: reduced out of pocket expenditure, improved quality of health care and the removal of stigma for those who receive waivers at health care delivery points. The major reason for not accepting the CCHF was the poor quality of health care services currently offered. Participants suggested that enrolment to the CCHF be done after harvesting when the population were more likely to have disposable income, and that the quality care of care and benefits package be improved.