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.
Resource allocation and health financing
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.
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.
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.
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.
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.
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.
The author argues that social protection is the most direct tool we have to combat poverty and inequality and that implementation can begin when countries are at a relatively early stage of development. However, there are today a few countries which need the solidarity of others to close the social protection gap. This think piece puts forward eight good reasons why a global fund for social protection is needed and can easily be initiated. Here are eight good reasons why a global fund for social protection floors is needed and can easily be initiated, which the author elaborates on more fully in his think piece: there already is a global consensus on social protection floors for all, the global community has already accepted that global solidarity may be needed to achieve social protection for all, there is no need to create a new fund, there already is one that can be used, the mandate and the supervisory mechanism for the fund do not have to be invented and the fund can start modestly, the potential direct impact on poverty could be huge.
Africa has enjoyed a growth momentum since 2000 after the wasted years of the 1980s and much of the 1990s. However, eradicating poverty will require huge resources, which existing funding strategies will be unable to generate. Global commodity prices have fallen sharply; capacity to mobilise domestic revenues is waning; and aid has been insufficient in plugging funding gaps. Revenue bargains in which states extract revenues from citizens in exchange for investments that impact positively on well-being may be key to financing Africa’s development. They can substantially increase revenues, nurture effective state-citizen relations, force companies to pay correct taxes, push fragmented systems of service provision in the direction of universalism, improve policy space and make aid more effective.
Commercialisation of health care has contributed to widening inequities between the rich and the poor, especially in settings with suboptimal regulatory frameworks of the health sector. Poorly regulated fee-for-service payment systems generate inequity and initiate a vicious circle in which access to quality health care gradually deteriorates. Although the abolition of user fees is high on the international health policy agenda, the sudden removal of user fees may have disrupting effects on the health system and may not be affordable or sustainable in resource-constrained countries, such as the Democratic Republic of Congo. Between 2008 and 2011, the Belgian development aid agency (BTC) launched a set of reforms in the Kisantu district, in the province of Bas Congo, through an action-research process deemed appropriate for the implementation of change within open complex systems such as the Kisantu local health system. Moreover, the entire process contributed to strengthen the stewardship capacity of the Kisantu district management team. The reforms mainly comprised the rationalisation of resources and the regulation of health services financing. Flat fees per episode of disease were introduced as an alternative to fee-for-service payments by patients. A financial subsidy from BTC allowed to reduce the height of the flat fees. The provision of the subsidy was made conditional upon a range of measures to rationalise the use of resources. The results in terms of enhancing people access to quality health care were immediate and substantial. The Kisantu experience demonstrates that a systems approach is essential in addressing complex problems. It provides useful lessons for other districts in the country.