In this study, the authors argue that, in Ghana, Tanzania and South Africa, the regressivity of voluntary health insurance and out-of-pocket payments results from charging flat insurance premiums, ineffective systems to exempt poor groups and insufficient prepayment funding to cover the health care costs of the poor. The cost of health care is not the only barrier to health care access, as the authors found a wide range of affordability, availability and acceptability barriers, which affect poorer groups most severely. Changing the way in which health services are funded, particularly moving away from out-of-pocket payments and towards a greater reliance on prepayment funding mechanisms, will be necessary to address these inequities, they argue. However, explicit measures to address the full range of access barriers are also required.
Resource allocation and health financing
Encouraged by the growing number of social protection mechanisms in the Africa region delegates from the 1st Pan-African Congress on Universal Health Coverage (15-17 November 2011) have drafted and adopted a declaration to create a “Movement for Universal Coverage for Health in Africa” or MUCH in Africa. The MUCH in Africa delegation consists of representatives from ministries of health, directors general, chief executives of health insurance schemes, chief directors, principal secretaries, academics, policy experts and researchers from twenty-seven (27) African countries and multilateral, bilateral, regional, development partner and civil society organisations. In consultation with countries and development partners, the new organisation will advocate for and catalyse action through constructive engagement and advocacy and push for universal health coverage as a reform agenda in African countries. They made a number of resolutions to improve health financing, health systems and collaborative research in Africa.
Total health care financing in South Africa is progressive, as richer socio-economic groups spend more of their consumption expenditure on health care than poorer groups. In contrast, the overall distribution of both public and private sector health care benefits in South Africa is pro-rich, as poorer socio-economic groups are benefiting less from the use of health services than richer groups. The overall distribution of health care benefits is also not in line with the need for care: poorer groups that indicate poorer self-assessed health status receive fewer health care benefits compared with richer groups with higher self-assessed health status. In their final analysis the authors argue that the South African health system, considering both the delivery and financing of health care, is inequitable.
In this study, researchers developed two practical methods for measuring the affordability of medicines in developing countries. The proposed methods – catastrophic and impoverishment methods – rely on easily accessible aggregated expenditure data and take into account a country’s income distribution and absolute level of income. The catastrophic method quantifies the proportion of the population whose resources would be catastrophically reduced by spending on a given medicine; the impoverishment method estimates the proportion of the population that would be pushed below the poverty line by procuring a given medicine. The authors found that, when accurate aggregate data are available, the proposed methods offer a practical way to obtain informative and accurate estimates of affordability. Their results are very similar to those obtained with household micro-data analysis and are easily compared across countries.
This paper is the first in a special issue which presents a body of research whose overall aim was to critically evaluate existing inequities in health care financing and provision in Ghana, South Africa and Tanzania, and the extent to which health insurance mechanisms (broadly defined) could address financial protection and equity of access challenges. The authors found that insufficient emphasis has been given to analysis of equity of health care financing at the systems level. They argue that studies are needed which explore how financial protection can best be expanded by building on the mix of financing mechanisms currently found in many low- and middle-income countries. Key issues are how to reduce the share of out-of-pocket payments, provide financial protection to the informal sector, reduce the fragmentation of financing arrangements and allocate public resources more equitably.
According to the findings of this study, the current Ghanaian health care financing system is progressive, but the benefits from health services are pro-rich. Out-of-pocket payments are the most regressive component of the health financing system, yet still account for the single largest share of health care financing. National health insurance scheme contributions from those outside the formal employment sector are very regressive. The authors conclude that, if Ghana is to achieve universal coverage, it is essential to reduce out-of-pocket payments, to identify ways of providing financial protection for those outside the formal sector within the national health insurance framework, and to address actively the many access barriers to health services.
The aim of this study was to understand the trajectory of health expenditure in developing countries. The authors used panel data from 143 countries over 14 years, from 1995 to 2008 to explore the factors associated with the growth of total health expenditure as well as its main components namely, government health expenditure and out-of-pocket payments. The data show great variation across countries in health expenditure as a share of GDP, which ranges from less than 5% to 15%. Apart from income, many factors contribute to this variation, ranging from demographic factors to health system characteristics. The results suggest that health expenditure in general does not grow faster than GDP after taking other factors into consideration. The authors also found no difference in health expenditure between tax-based and insurance-based health financing mechanisms, and noted that external aid for health reduces government health spending from domestic sources.
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.
Ten years since its founding, the Global Fund is facing a serious financial shortfall, and the Fund’s board voted recently not to accept new grant requests until at least 2014. The author states that the question is not whether the Global Fund works, but how to ensure it keeps working for years to come, according to this article. There are four reasons this is imperative. First, the world needs to expand, not contract, access to health care because of the sheer burden of disease. Second, the Fund doesn’t simply give handouts: it takes the longer road of investing in and working with health ministries to build (or rebuild) local health systems. Third, the Global Fund proves how much multilateral organisations can accomplish, when one looks at the many lives it has helped save. While the usual players like the G-8 bear the greatest financial burden, the author urges some of the recipient countries to consider themselves partners of and contributors to the fund – India, Russia and China can play meaningful roles as both external funders and as recipients of grants. Fourth, a global recession is not an acceptable excuse for external funders to avoid the responsibility of meeting their financial commitments to the Fund.
External funders are concerned about how their aid is used, especially how it affects fiscal behaviour by recipient governments. This study reviews the recent evidence on the effects of aid on government spending and tax effort in recipient countries, concluding with a discussion of when (general) budget support is a fiscally efficient aid modality. Severe data limitations restrict inferences on the relationship between aid and spending, especially as the government is not aware of all the aid available to finance the provision of public goods. Three generalisations are permitted by the evidence: aid finances government spending; the extent to which aid is fungible (can be substituted with other resources) is over-stated and even where it is fungible this does not appear to make the aid less effective; and there is no systematic effect of aid on tax effort. Beyond these conclusions the fiscal effects of aid are country specific.