Universal health coverage: Financing healthcare

Muhammad Abdul Mazid | Published: April 07, 2015 00:00:00 | Updated: November 30, 2024 06:01:00

Three interrelated areas are critical for achieving universal health coverage. These are:
* raising funds for health;
* reducing financial barriers to access through prepayment and subsequent pooling of funds in preference to direct out-of-pocket payments; and
* allocating or using funds in a way that promotes efficiency and equity.
The healthcare financing is, therefore, a process of mobilisation of funds for healthcare, allocation of funds to the regions and population groups and for specific types of healthcare and mechanisms for payment of healthcare activities (Hsaio, W and Liu, Y, 2001).
Developments in these areas will determine whether health services exist and are available for everyone and whether people can afford to use health services when they need them. Universal coverage, or universal health coverage, is defined as ensuring that all people can use the promotive, preventive, curative, rehabilitative and palliative health services they need, of sufficient quality to be effective, while also ensuring that the use of these services does not expose the user to financial hardships.
Only in late 1970s voluntary community-based health insurance attracted considerable attention and in the 1980's financing of healthcare moved high on the agenda of the discussions on health policy. It became a recurring theme in Executive Board Meeting of the WHO in 1986 and World Health Assembly and the Commonwealth Health Ministers Conference in 1986. User charges dominating the policy debates of 1970s and 1990s and again pulled the attention back on community based health insurance. In fact, the problem is containing the cost of healthcare in developed countries. Problem that has arisen in some developing countries refers to maintaining health spending and achieving "health for all" initiative. Health services financed broadly through private expenditure or public expenditure or external aid became the focal issue. It was argued that public expenditure includes all expenditure on health services by both central and local government funds spent by state-owned and parastatal enterprises as well as government and social insurance contributions where services are paid in the form of taxes, or compulsory health insurance contributions either by employers or insured persons or both, is considered as public expenditure. It was found that voluntary payments by individuals or employers are private expenditures and external sources referred to the external aid which comes through bilateral aid programmes or international non-governmental organizations.
Mechanism for healthcare financing dictates the ownership of the facilities used by government, social insurance agencies, non-profit organisations, private companies or individuals. General revenue or earmarked taxes, social insurance contributions, private insurance premiums, community financing, direct out of pocket payments are not relevant in this case. Each method distributes the financial burdens and benefits in different manners and each method affects the process of determining as to who will have access to healthcare and financial protection.
General revenue is the most traditional way of financing a major portion of healthcare (especially in low income countries). However, social insurance could be compulsory. Everyone in the eligible group must enroll and pay a specific premium contribution in exchange of a set of benefits. Social insurance premiums and benefits are described in social compacts established through legislation. Premiums or benefits can be altered only through a formal political process.
Health service financing source could be health services financed broadly through private expenditure or public expenditure or external aid. Public expenditure includes all expenditure on health services by central and local government funds spent by state-owned and parastatal enterprises as well as government and social insurance contributions, where services are paid for by taxes, or compulsory health insurance contributions either by employers or insured persons or both.
Community-based financing refers to schemes based on three principles: community cooperation, local self-reliance and pre-payment. Factors for success of community financing, technical strength and institutional capacity of the local group, financial control as part of the broader strategy in local management and control of healthcare services, support received from outside organisations and individuals links with other local organisations, diversity of funding, responding to other (non-health) development needs of the community, ability to adapt to a changing environment.
Since health is considered a public good and government needs to actively participate in this sector to avoid market failures, in countries like Bangladesh, the challenge is to increase the funding available for healthcare so that people are able to enjoy and have access to, the needed set of health services of sufficient quality - namely treatment, prevention, promotion and rehabilitation. Bangladesh is following a positive trend to cover levels of health expenditure that have been defined as critical minimums for providing at least a minimal set of health services. For richer countries, the challenge is to protect the current levels of health expenditure while responding to the challenge of ageing populations (with implications for both revenues and costs) and cost pressure from technological advantages. Countries could raise additional domestic funds for health or diversify their funding sources if they wish to. Options include governments giving higher priority to health in their budget allocations, collecting taxes more efficiently, including compulsory insurance contributions, and raising additional funds through various types of innovative funding mechanisms. Taxes on harmful products such as tobacco and alcohol are one such option. These taxes reduce consumption thereby improving health and increasing the resources governments can spend on health.Â A ministry of health cannot, on its own, implement measures to increase funding, but it has the responsibility to try and influence the rest of the government. This calls for more and better dialogue between the health policy makers, ministries of finance, the wider private actors and local government institutions.
The necessity to ascertain health financing mechanism for common people and people with low income like industrial workers, was conducted through a pilot project. Bangladesh economy is dominated by textile and garments industry, where majority of workers are women and this presents a unique situation where approximately 10 per cent of female workers become pregnant between 19 and 25 years of age. The Comprehensive Healthcare for Garments Workers through Micro Health Insurance Programme is aimed at extending healthcare financing through health insurance mechanism at micro-level in order to provide basic healthcare services including essential hospitalization coverage for garments workers (male and female) through scalable premium based on income dimensions. The overall objective of the 2-year project is to increase comprehensive and universal health services coverage with improved disease prevention, immediate access to health information and services and efficient cost control through a structured healthcare financing plan by introducing and testing the economic viability of a (group) health micro-insurance scheme for (garment) industry workers in Bangladesh.
According to the project, the Diabetic Association of Bangladesh (BADAS) will provide comprehensive health coverage except following the high ends, congenital infirmity, alcoholism or narcotic addiction, cosmetic or plastic treatment, termination of pregnancy, radiotherapy, chemotherapy, prostheses, AIDS and HIV-related diseases, special procedures like transplantation, cardiac, neuro surgery, faco surgery, dialysis etc. All insured will be provided health promotion and disease prevention education to reduce healthcare costs. To reduce overall cost, extensive use of telemedicine, a support through its mobile health infrastructure for electronic registration, medical call center platform with electronic prescription and mobile health applications for patient management. Major players in the program is BADAS, United Insurance Company Limited (UIC), The New Asia Group which has four sister companies with a total employee strength of 6860. The corporation has committed to participate in the MHI scheme for all its employees, TRCL and The Swiss Micro Insurance Consultancy Group associated with the Swiss Tropical and Public Health Institute has specialists in insurance medicine, health economics, actuarial sciences and insurance law. The group submitted the project to SDC for funding. It provided technical assistance and guidance to the Bangladeshi partners and is responsible for the project vis-Ã -vis SDC.
Expected outcomes (and outputs) of the project are: (1) services to the target group: 6000-7000 garment industry workers have improved access to and make use of preventive and curative health services. The workers appreciate and understand both the health services offered and used the insurance mechanism as a risk management tool of their households; (2) a tested institutional model for health and insurance service provision; (3) knowledge management and policy work: A key constraint for the development of a health insurance system in Bangladesh is the almost total lack of relevant data for a poor clientele. Key outputs during the planned duration of the project will, therefore, be documentation, analytical reports, studies, articles (in Bangladesh and international journals) and a national learning platform to share the experiences and lessons of the project; (4) replicationsÂ by the members of the Garments Manufacturers AssociationÂ and policy changes willÂ be expected to occur.
Dr Muhammad Abdul Mazid, a former Secretary to the Government, is currently Chief Coordinator, Diabetic Association of Bangladesh and Chairman, Chittagong
Stock Exchange.
mazid.muhammad@gmail.com