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.
Resource allocation and health financing
Tiered pricing - the concept of selling drugs and vaccines in developing countries at prices systematically lower than in industrialised countries - has received widespread global support as a way to improve access to medicines for the poor. Researchers in this study carried out case studies based on a review of international drug price developments for antiretrovirals, artemisinin combination therapies, drug-resistant tuberculosis medicines, liposomal amphotericin B (for visceral leishmaniasis), and pneumococcal vaccines. They found several critical shortcomings to tiered pricing: it is inferior to competition for achieving the lowest sustainable prices; it often involves arbitrary divisions between markets and/or countries, which can lead to very high prices for middle-income markets; and it leaves a disproportionate amount of decision-making power in the hands of sellers rather than consumers. In many developing countries, resources are often stretched so tight that affordability can only be approached by selling medicines at or near the cost of production. Policies that ‘de-link’ the financing of research and development from the price of medicines merit further attention, the authors argue, since they can reward innovation while exploiting robust competition in production to generate the lowest sustainable prices.
The advent of South Africa’s National Health Insurance (NHI) scheme opens up a political space to campaign for a health service that will best address South Africa’s health crisis and reduce the extreme inequities between poor and rich, rural and urban, and public sector and private health service users. The authors argue that such a campaign must counter powerful groups with vested interests who portray public systems as inefficient and second-best, and see the NHI as an opportunity to preserve a private health system (which is innately inequitable because of the need to profit from disease). They further argue that the NHI will not only render health care more accessible and equitable, but also create many more jobs and indirectly improve health by reducing the prevalence and depth of poverty. Rationalisation, standardisation and expansion of the skills of community-based care workers is urgently needed, as is improvement of their insecure employment conditions. The proposed ‘Re-engineering of Primary Health Care’ initiative puts forward a healthcare model that is similar to Brazil’s successful Family Health Programme, and would be substantially cheaper than the current private sector model, and more cost-effective than the current hospital-dominated public sector.
The financial transaction tax (FTT) proposed by France and Germany and due to be discussed in the November G20 Summit, could help save millions of lives if a percentage were allocated to global health, according to an issue brief released today by the international medical humanitarian organisation Medecins Sans Frontieres (MSF). MSF’s issue brief, Five Lives, outlines through five personal stories the transformative impact an FTT allocation to global health could have. The report looks at interventions that can prevent a child from becoming severely malnourished to begin with; protect children from deadly measles outbreaks; prevent a baby from acquiring HIV through childbirth; get people on life-saving tuberculosis treatment sooner; and save lives while dramatically reducing the spread of HIV through treatment. It is estimated the funds raised by an EU FTT could reach 55 billion euros per year. Even a portion of that sum would be a significant boost to tackling global health crises.
The question of how developing countries can improve domestic resource mobilisation (DRM) was one of the main topics under discussion at the latest International Tax Compact (ITC) meeting held from 12 to 14 September 2011 in Bonn, Switzerland. The communiqué identifies five main issues facing developing countries looking to improve DRM: taxation and public financial management; taxation and state-building; taxation for economic growth; extractive resource taxation; and international taxation. Although each of these has been the focus of research, the most interesting questions and issues appear to lie at the intersection of each of these, such as how to align public financial management reforms relating to tax with the objectives of promoting economic growth and state capacity. Many of the issues were touched upon during the ITC meeting, and the discussions highlighted the important research being conducted on both the nature of the challenges developing countries must overcome and the technical and governance aspects of tax reforms. Enhancing tax revenues is not an end in itself, participants emphasised, as taxation is at the centre of resilient state-society relations and must therefore be linked with governance efforts and public service delivery and should be undertaken ‘with an overarching view to make tax systems more pro-poor’.
On 12 September 2011, the European Union (EU) signed a grant for €10 million (US$14 million) with the United nations Children’s Fund (UNICEF), in support of the Essential Medicines Support Programme (EMSP) in Zimbabwe. The money will be used to buy essential drugs and medical supplies which will be distributed to health centres by Natpharm, the supply arm of the Ministry of Health and Child Welfare. Since 2008, availability of essential medicines in Zimbabwe's public health sector has improved largely due to a funding collaboration between the government, UNICEF, the EU, the United Kingdom, Australia, Canada and Ireland. Since 2008, EMSP has received US$52 million in funding, according to UNICEF. The contribution has resulted in 82.5% of the primary health care facilities having 80% of essential medicines available, meaning that there have been virtually no stock outs of essential medicines so far in 2011.
The crowd of health issues jostling for a share of Kenya's inadequate health budget is expanding, with activists calling for an increase in resources for the management of non-communicable diseases (NCDs), which account for more than 50% of hospital deaths and admissions, according to Plus News. At the same time, against a backdrop of two consecutive rejections for funding by the Global Fund to fight AIDS, Tuberculosis and Malaria and flat-lined funding from the United States President's Emergency Plan for AIDS Relief, Kenyan AIDS activists worry that any move to increase funding for NCDs could mean less for HIV and AIDS. Just 440,000 out of 1.5 million HIV-positive Kenyans have access to treatment, and more than 100,000 new HIV infections occur annually. Activists have identified the problem as a combination of scarce resources and a lack of political will by the country’s leadership. They claim that the government pays lip service to the global health issues in vogue – last year it was maternal health, while this year it is NCDs – without any significant improvements in health services. The medical superintendent of Mbagathi District Hospital in Nairobi says government has policies and guidelines in place for the management of NCDs, but there is a lack of strategic focus on operational implementation.
While the Global Fund to Fight HIV/AIDS, Tuberculosis and Malaria has recently come under scrutiny about how well it tracks the money it disburses, the author of this article argues that the Fund represents one of the better examples of global funding initiatives for health. He believes that its high level of transparency sets it apart from other bilateral and multilateral institutions, and it is precisely this transparency and accountability that means that any problems in this regard tend to be widely reported. In early 2011, the Fund commissioned an independent panel to evaluate how it can improve its operations and effectiveness. The panel’s recommendations, which were in line with the Global Fund’s own reform agenda, were met by the Global Fund Board’s commitment in October 2011 to deliver on the recommendations and to continue to adjust practices to use its resources as efficiently as possible. Still, some feel that the Fund isn’t going far enough, saying that even very small amounts of money that cannot be accounted for should be grounds for cutting off that country’s grant monies from the Fund. Yet the author argues here that global funding bodies all face some degree of risk from irregularities and, although the Fund should continue to aspire to the highest degrees of effective stewardship of resources and accountability, a perfect score card is not a practical possibility. He cautions that, in pursuit of such rigorous policies, external funders should be careful of unwittingly stifling innovation and new approaches and ultimately reducing impact on health outcomes.
This document was prepared as a follow-up to the United Nations Summit on Non-communicable Diseases, held in September 2011. It proposes a micro-levy on tobacco products – the Solidarity Tobacco Contribution (STC) – that can be used to generate revenue for Health Ministries. The STC concept builds on and is additional to existing national taxes on tobacco products and broader World Health Organisation (WHO) recommendations for countries to raise their tobacco taxes for public health goals. It does not replace existing national tobacco excise taxes nor does it exclude the need to increase them to WHO‐recommended levels. It is intended to achieve three simultaneous benefits: public health benefits by reducing tobacco consumption and saving lives; a source of revenue to support health; and financial support for international health efforts in developing countries. WHO has conducted an economic feasibility study and has determined that potential revenue from the STC, if applied in 43 countries (G20+), could generate between US$5.5 billion and US$16 billion each year.
Rwanda’s mutuelle health insurance scheme has been consistently held up as an example of how community health insurance can be scaled up to achieve large scale improvements in access and health outcomes. However, the author argues that the role of the mutuelle scheme in achieving recent health improvements in Rwanda has not considered other important factors, particularly the five-fold increase in health spending. The author draws a number of conclusions. First, premiums and co-payments, while less harmful than traditional point-of-service fees, remain a financial barrier without whose removal true universal access to healthcare cannot be achieved. Second, even with high enrollment, the mutuelle generates minimal financing. In order to increase the funds collected, Rwanda is now introducing higher premiums. Third, Rwanda has made unparalleled progress in health by doing what its leadership has felt best for the country and its people. The author indicates that it is important for all aspects of Rwanda’s success to be acknowledged and studied for broader adaptation and, in particular, its increasing and strategic investments in health, strong economic performance, uniquely effective public administration, and popular buy-in to government initiatives, as these factors are part of the reason why the mutuelle as a programme has been as successful as it has.