Inke Mathauer

Health financing reform in Kenya- assessing the social health insurance proposal

Kenya has had a history of health financing policy changes since its independence in 1963. Recently, significant preparatory work was done on a new Social Health Insurance Law that, if accepted, would lead to universal health coverage in Kenya after a transition period. Questions of economic feasibility and political acceptability continue to be discussed, with stakeholders voicing concerns on design features of the new proposal submitted to the Kenyan parliament in 2004. For economic, social, political and organisational reasons a transition period will be necessary, which is likely to last more than a decade. However, important objectives such as access to health care and avoiding impoverishment due to direct health care payments should be recognised from the start so that steady progress towards effective universal coverage can be planned and achieved.

Hospital payment systems based on diagnosis-related groups: experiences in low- and middle-income countries

OBJECTIVE This paper provides a comprehensive overview of hospital payment systems based on diagnosis-related groups (DRGs) in low- and middle-income countries. It also explores design and implementation issues and the related challenges countries face. METHODS A literature research for papers on DRG-based payment systems in low- and middle-income countries was conducted in English, French and Spanish through Pubmed, the Pan American Health Organizations Regional Library of Medicine and Google. FINDINGS Twelve low- and middle-income countries have DRG-based payment systems and another 17 are in the piloting or exploratory stage. Countries have chosen from a wide range of imported and self-developed DRG models and most have adapted such models to their specific contexts. All countries have set expenditure ceilings. In general, systems were piloted before being implemented. The need to meet certain requirements in terms of coding standardization, data availability and information technology made implementation difficult. Private sector providers have not been fully integrated, but most countries have managed to delink hospital financing from public finance budgeting. CONCLUSION Although more evidence on the impact of DRG-based payment systems is needed, our findings suggest that (i) the greater portion of health-care financing should be public rather than private; (ii) it is advisable to pilot systems first and to establish expenditure ceilings; (iii) countries that import an existing variant of a DRG-based system should be mindful of the need for adaptation; and (iv) countries should promote the cooperation of providers for appropriate data generation and claims management.

The role of institutional design and organizational practice for health financing performance and universal coverage

Many low- and middle income countries heavily rely on out-of-pocket health care expenditure. The challenge for these countries is how to modify their health financing system in order to achieve universal coverage. This paper proposes an analytical framework for undertaking a systematic review of a health financing system and its performance on the basis of which to identify adequate changes to enhance the move towards universal coverage. The distinctive characteristic of this framework is the focus on institutional design and organizational practice of health financing, on which health financing performance is contingent. Institutional design is understood as formal rules, namely legal and regulatory provisions relating to health financing; organizational practice refers to the way organizational actors implement and comply with these rules. Health financing performance is operationalized into nine generic health financing performance indicators. Inadequate performance can be caused by six types of bottlenecks in institutional design and organizational practice. Accordingly, six types of improvement measures are proposed to address these bottlenecks. The institutional design and organizational practice of a health financing system can be actively developed, modified or strengthened. By understanding the incentive environment within a health financing system, the potential impacts of the proposed changes can be anticipated.

A global overview of health insurance administrative costs: what are the reasons for variations found?

OBJECTIVES Administrative costs are an important spending category in total health insurance expenditure. Yet, they have rarely been a topic outside the US and there is no cross-country comparison available. This paper provides a global overview and analysis of administrative costs for social security schemes (SSS) and private health insurance schemes (PHI). METHODS The analysis is based on data of the World Health Organization (WHO) National Health Accounts (NHA) and the Organisation for Economic Cooperation and Development (OECD) System of Health Accounts (SHA). These are the only worldwide databases on health expenditure data. Further data was retrieved from a literature search. Administrative costs are presented as a share of total health insurance costs. RESULTS Data is available for 58 countries. In high-income OECD countries, the average SSS administrative costs are 4.2%. Average PHI administrative costs are about three times higher. The shares are much higher for low- and middle-income countries. However, considerable variations across and within countries over time are revealed. DISCUSSION AND CONCLUSION Seven explanatory factors are explored to explain the variations: health financing system aspects, administrative activities undertaken, insurance design aspects, context factors, reporting format, accounting methods, and management and administrative efficiency measures. More detailed reporting of administrative costs would enhance comparability and provide benchmarks. Improved administrative efficiency could free resources to expand coverage.

Pay-for-Performance Debate: Not Seeing the Forest for the Trees

The Potential Health System Benefits of P4P Concerns Around the Current P4P Debate Moving Forward References Over the past 10 to 15 years, results-based financing (RBF) has gained increased prominence in global health. Though the term RBF encompasses a variety of demandand supplyside incentives to increase output or enhance access and quality, the focus of this special issue and our commentary is on incentives that target service providers. In high-income countries including the UK, France, and the United States these types of incentives are typically referred to as pay-for-performance (P4P), defined as financial incentives to hospitals, physicians, and other health care providers “aimed at improving the quality, efficiency, and overall value of health care.” The term performance-based financing (PBF) has acquired a wider use in lowand middle-income countries (LMICs) and refers to supply-side financial incentives where payment depends explicitly on quantity of services delivered and “on the degree to which services are of approved quality, as specified by protocols for processes and outcomes.” PBF may not only target health facilities but also include ministries of health, local governments, provincial and district health teams, and central medical stores. Though terminologies may differ, at their core, PBF or P4P is a provider payment mechanism, which uses information on provider activities and the health needs of the population they serve to drive resource allocation in order to maximize societal objectives. For purposes of this commentary, we will use the term P4P to refer to this mechanism. In this commentary, we argue that it is crucial to pay greater attention to the “forest”—that is, overall health system reforms and how provider payment arrangements interact with these to influence health outcomes, as opposed to looking almost solely and more narrowly at the “trees”—that is, the details and impact of a P4P mechanism divorced from the underlying health system. P4P is a category of strategic purchasing, the effectiveness of which depends critically on its connections with the wider environment of purchaser– provider relations. In the following paragraphs, we unpack the potential health system benefits of P4P. Next, we briefly Received 28 January 2017; revised 1 March 2017; accepted 2 March 2017. *Correspondence to: Elina Dale; Email: dalee@who.int 2017 World Health Organization. Published by Taylor & Francis. This is an Open Access article distributed under the terms of the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 IGO License, which permits non-commercial re-use, distribution, and reproduction in any medium, provided the original work is properly cited, and is not altered, transformed, or built upon in any way. This article shall not be used or reproduced in association with the promotion of commercial products, services or any entity. There should be no suggestion that the World Health Organization (WHO) endorses any specific organization, products or services. The use of the WHO logo is not permitted. This notice should be preserved along with the article’s original URL.

Erratum to: State budget transfers to Health Insurance Funds for universal health coverage: institutional design patterns and challenges of covering those outside the formal sector in Eastern European high-income countries.

Introduction Many countries from the European region, which moved from a government financed and provided health system to social health insurance, would have had the risk of moving away from universal health coverage if they had followed a “traditional” approach. The Eastern European high-income countries studied in this paper managed to avoid this potential pitfall by using state budget revenues to explicitly pay health insurance contributions on behalf of certain (vulnerable) population groups who have difficulties to pay these contributions themselves. The institutional design aspects of their government revenue transfer arrangements are analysed, as well as their impact on universal health coverage progress.

Is universal coverage via social health insurance financially feasible in Swaziland

OBJECTIVE The Government of Swaziland decided to explore the feasibility of social health insurance (SHI) in order to enhance universal access to health services. We assess the financial feasibility of a possible SHI scheme in Swaziland. The SHI scenario presented is one that mobilises resources additional to the maintained Ministry of Health and Social Welfare (MOHSW) budget. It is designed to increase prepayment, enhance overall health financing equity, finance quality improvements in health care, and eventually cover the entire population. METHODS The financial feasibility assessment consists of calculating and projecting revenues and expenditures of the SHI scheme from 2008 to 2018. SimIns, a health insurance simulation software, was used. Quantitative data from government and other sources and qualitative data from discussions with health financing stakeholders were gathered. Policy assumptions were jointly developed with and agreed upon by a MOHSW team. RESULTS AND CONCLUSION SHI would take up an increasing proportion of total health expenditure over the simulation period and become the dominant health financing mechanism. In principle, and on the basis of the assumed policy variables, universal coverage could be reached within 6 years through the implementation of an SHI scheme based on a mix of contributory and tax financing. Contribution rates for formal sector employees would amount to 7% of salaries and the Ministry of Health and Social Welfare budget would need to be maintained. Government health expenditure including social health insurance would increase from 6% in 2008 to 11% in 2018.

Subsidized health insurance coverage of people in the informal sector and vulnerable population groups: trends in institutional design in Asia

BackgroundMany low- and middle-income countries with a social health insurance system face challenges on their road towards universal health coverage (UHC), especially for people in the informal sector and vulnerable population groups or the informally employed. One way to address this is to subsidize their contributions through general government revenue transfers to the health insurance fund.This paper provides an overview of such health financing arrangements in Asian low- and middle-income countries. The purpose is to assess the institutional design features of government subsidized health insurance type arrangements for vulnerable and informally employed population groups and to explore how these features contribute to UHC progress.MethodsThis regional study is based on a literature search to collect country information on the specific institutional design features of such subsidization arrangements and data related to UHC progress indicators, i.e. population coverage, financial protection and access to care. The institutional design analysis focuses on eligibility rules, targeting and enrolment procedures; financing arrangements; the pooling architecture; and benefit entitlements.ResultsSuch financing arrangements currently exist in 8 countries with a total of 14 subsidization schemes. The most frequent groups covered are the poor, older persons and children. Membership in these arrangements is mostly mandatory as is full subsidization. An integrated pool for both the subsidized and the contributors exists in half of the countries, which is one of the most decisive features for equitable access and financial protection. Nonetheless, in most schemes, utilization rates of the subsidized are higher compared to the uninsured, but still lower compared to insured formal sector employees. Total population coverage rates, as well as a higher share of the subsidized in the total insured population are related with broader eligibility criteria.ConclusionsOverall, government subsidized health insurance type arrangements can be effective mechanism to help countries progress towards UHC, yet there is potential to improve on institutional design features as well as implementation.

Reaching universal coverage by means of social health insurance in Lesotho? Results and implications from a financial feasibility assessment

This article discusses the process, results and implications of a financial feasibility assessment of social health insurance (SHI), as one part of Lesothos exploration of how to move towards achieving universal health care coverage. Quantitative data from government and other sources, and qualitative data from discussions with stakeholders, were entered into SimIns, a health insurance simulation software, through which SHI revenue and expenditure for 11 years was projected. In principle, the assessment reveals that through a mix of tax financing and SHI contributions, all citizens of Lesotho could be covered with a defined benefit package of health services under the defined policy assumptions. Such a financing scheme would provide financial risk protection and enhance equity in access and health financing.

Setting health insurance remuneration rates of private providers in Kenya: the role of costing, challenges and implications†

Successful health financing depends on prudent design of resource collection, pooling and purchasing. One of the critical purchasing design issues is the provider payment mechanism and the remuneration rates, which need to set appropriate incentives to health providers. In order to set remuneration rates, cost information is required, but this is not known in many developing countries. This paper illuminates the role of costing and the challenges of resetting health insurance remuneration rates for private hospitals in Kenya and discusses the implications and lessons. The results and proceedings of costing studies from Kenya are reviewed, which reveals methodological and practical challenges as to revising remuneration rates. The costing results are characterized by high variability, which is, among other factors, due to suboptimal resource use at some hospitals and provider payment mechanisms that incentivise over-provision. In such a context, hospital-specific remuneration rates are advisable. In conclusion, remuneration rate setting is not just about translating costing results into a price tag, but other factors have to be considered in a low-income country context in order to balance out health sector objectives and provider interests. Inclusion of providers in developing the costing methodology proves important to increase acceptability of results.