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Health financing

M. Dankyau

Feb 2024

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Outline

  • Introduction
  • Introduction to Health Systems
  • Health Care Financing
  • Health Care Financing in the context of the Health System
  • Health Financing issues in Nigeria
  • Discussion
  • Summary
  • Conclusion

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Introduction to Health systems

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Health System – What is it?

  • A health system consists of all organizations, people and actions whose primary intent is to promote, restore or maintain health.

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The 7th Building Block – People

Individuals, households, & communities as:

  • Civil society
  • Consumers
  • Patients
  • Payers
  • Producers of health through knowledge, attitudes, behaviours, and practices

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Building blocks in action interaction

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Healthcare financing

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Case Study

  • Health services for rich and poor
        • by Dr Apolos B Landa

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Health services for rich and poor 1

In our societies, healthcare often becomes a commodity.

The rich few can afford good healthcare while the vast majority of people do not have the means to pay – they have no access to healthcare as a basic human right.

Is it possible to make healthcare more equal?

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Health services for rich and poor 2

  • We at the Luke Society have been struggling with this goal for a while.
    • We work in the urban areas of Moyobamba, central Peru, and the nearby deprived jungle areas.
  • We found no organisation able to support us financially in subsidising healthcare.
  • Moved by our convictions, we committed ourselves to providing good quality, personalised health services for the poor in our communities.
  • To make it accessible, we fixed subsidised fees but also began a community and school health education programme, as well as promotional and preventative healthcare programmes.

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Predict

What do you think happened?

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Health services for rich and poor 3

  • Painful truths
  • After seven years, however, we were dismayed to discover that…
  • The majority of poor people did not use our services.
  • The poor did not appreciate a first-rate service offered at very low cost, believing low cost meant poor quality.

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Health services for rich and poor 4

  • Painful truths
  • The rich were able to take advantage of the situation.
    • Though a minority in the community, they overused our services and got good healthcare at low cost.
  • We needed increasing donations to sustain the programme and felt unhappy, even dishonest, when those donations ended up serving the rich.
  • With little finance being raised through charges, we finally faced bankruptcy and break-up.

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Health Care Financing - Definition

  • Health financing is one of the main functions of the health system.
  • Defined as the raising or collection of revenue to pay for the operations of the health system.
  • Principal functions are:
    • Revenue collection from various sources,
    • Pooling of funds and spreading of risks across larger population groups
    • Allocation or use of funds to purchase services from public and private providers of health care.

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Financing

A good health financing system…

  • Raises adequate funds for health
  • Ensure access to quality health care regardless of ability to pay
  • Protects people from financial catastrophe
  • Allocates resources and purchases good and services in ways that improve quality, equity, and efficiency.

Payment systems to reward health worker distribution and retention

Use data to allocate resources

Pro-poor financing of essential products

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HEALTH FINANCE PRACTICES: Types of Health Insurance

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Health Financing Functions

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Health financing within the health system

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Health Financing within health system

  • Financing is a “function of a health system concerned with the mobilization, accumulation and allocation of money to cover the health needs of the people, individually and collectively”
  • The purpose of health financing is “to make funding available, as well as to set the right financial incentives to providers to ensure that all individuals have access to effective public health and personal health care”

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Common Goods for health

CGH are defined as population-based functions or interventions that require public financing, regardless of whether they are delivered by public or private sector providers, and that fulfil the following conditions:

  • CGH contribute to human health and sustained economic progress over the long term.
  • Provision or preservation of CGH is subject to specific market failures, typically because they are either public goods (meaning they are non-rival and non-exclusionary, or they have large social externalities.

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Case Study

  • Health services for rich and poor
        • by Dr Apolos B Landa

​

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Health services for rich and poor 5

  • Facing the problems
  • Did we give up? NO! Over a long period we discussed and debated. We looked back at our experiences and implemented the following practices, in order to help the poor without subsidising the rich…
  • We worked out the real costs of our services and raised our fees considerably.
  • We set up a sliding fee system for the poor. The rich pay the full cost.
  • We set apart 10% of our total income for a poor relief fund. Through this fund we are able to help those who are unable to pay even the basic costs

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Health services for rich and poor 6

  • Facing the problems
  • We still apply for donations to supplement the needs of poorer patients, but we no longer depend on these.
  • We had meetings with key leaders from the civil and religious communities, to explain how our new system would operate.
  • Community health workers, volunteers, religious leaders and their immediate families were given a type of insurance.
  • We keep a register of all the fees paid, to avoid accusations of religious bias or tax evasion.

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Health services for rich and poor 7

  • Positive outcomes
  • Now we are seeing the following results…
  • Demand for health services has steadily increased.
    • We maintained the attendance of the rich and we increased the number of poor patients as they became aware of the subsidy system.
  • The rich grumbled about paying more but were satisfied because we offered high quality services.
  • The poor became our best promoters and their increased numbers made up the surplus income. We had to start limiting appointments to allow space for patients from remote villages.

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Health services for rich and poor 8

  • Positive outcomes
  • An awareness that ‘what is expensive must be worth paying for’ spread without us making any effort. And we committed ourselves to live up to that!
  • Our total income multiplied ten-fold, so we were able to pay our staff an appropriate salary and maintain our clinics to a high standard.
  • We no longer have problems with other local medical services through under-cutting local clinics.

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Health financing issues in Nigeria

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How effective are these mechanisms?

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Summary

  • Health Financing is defined as the raising or collection of revenue to pay for the operations of the health system.
  • Principal functions are:
    • Revenue collection from various sources,
    • Pooling of funds and spreading of risks across larger population groups
    • Allocation or use of funds to purchase services from public and private providers of health care.

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Conclusion

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Bibliography

  • Akande TM. (2017). Health Financing within the overall Health System
  • Gottret P, Schieber G. (2006). Health Financing Revisited: A Practitioner′s Guide.
  • Onwujekwe O et al (2019). Exploring effectiveness of different health financing mechanisms in Nigeria; what needs to change and how can it happen?
  • WHO. (2021). Financing common goods for health
  • WHO. (2020). Health Financing in Fragile and Conflict-Affected Situations: A review of the evidence