Introduction to Universal Health Coverage
and Financing
Awad MATARIA, PhD
Health Economist
World Health Organization – Eastern-Mediterranean Regional Office
Regional Workshop on Cost-Effectiveness Analysis: Tools for DecisionMaking in Health
Cairo-Egypt, 14-18 December 2014
Outline:

Part I: Heath Care Financing – Evolution and
Concepts

Part II: Universal Health Coverage – What’s in the
Name?

Part III: Social Health Insurance as Financing
Instrument for Universal Health Coverage

Concluding remarks
HCF Training Session - Kabul/Afghanistan, 24, 26 & 27 Nov 2014
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Outline:
I: Heath Care Financing –
Evolution and Concepts
 Part

Part II: Universal Health Coverage – What’s in the Name?

Part III: Social Health Insurance – History, Definition and
Evolution

Part IV: Social Health Insurance as Financing Instrument for
Universal Health Coverage

Concluding remarks
HCF Training Session - Kabul/Afghanistan, 24, 26 & 27 Nov 2014
3
Heath Care Financing in Health System Thinking
HCF Training Session - Kabul/Afghanistan, 24, 26 & 27 Nov 2014
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HEALTH SYSTEM CONCEPTUAL FRAMEWORK
SYSTEM BUILDING BLOCKS
GOALS OF HEALTH SYSTEM
Coverage
Governance
Health workforce
Financing
Financing
Service Delivery
Information Support
Responsiveness
Provider
performance
Health technology
Health
Quality &
Safety
Efficiency
Financial protection
Financial
protection
Equity
HCF Training Session - Kabul/Afghanistan, 24, 26 & 27 Nov 2014
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Health Financing: a Definition

Health Financing is the component of the
health system that is concerned with how
financial resources are generated, allocated
and used
HCF Training Session - Kabul/Afghanistan, 24, 26 & 27 Nov 2014
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The Financing Function
“Collection”
“Pooling”
“Purchasing”
World Health Organization
HCF Training Session - Kabul/Afghanistan, 24, 26 & 27 Nov 2014
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Health Financing Functions: Definitions
8
Functions
Objectives
Collection
Raise sufficient and sustainable revenues
to provide social health protection for all
Pooling
Manage the revenues collected to
equitably and efficiently pool health risks
Purchasing
Purchase right services and provide right
incentives to public and private providers
and users to behave the right way
HCF Training Session - Kabul/Afghanistan, 24, 26 & 27 Nov 2014
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What do We Mean by Pooling?
Cross-subsidy from
low-risk to high-risk
Cross-subsidy from
rich to poor
(risk subsidy)
(equity subsidy)
High
risk
Low
risk
Rich
Poor
Health risk
Cross subsidy from
productive to nonproductive part of the
life cycle
Income
HCF Training Session - Kabul/Afghanistan, 24, 26 & 27 Nov 2014
Nonproduc
tive
Produ
ctive
Age
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Health Financing Functions: Definitions
10
Functions
Objectives
Collection
Raise sufficient and sustainable revenues
to provide social health protection for all
Pooling
Manage the revenues collected to
equitably and efficiently pool health risks
Purchasing
Purchase right services and provide right
incentives to public and private providers
and users to behave the right way
HCF Training Session - Kabul/Afghanistan, 24, 26 & 27 Nov 2014
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The FOUR Questions of Purchasing:
Purchasing
Assure the purchase of health
services is strategic and both
allocatively and technically efficient
Answers FOUR Question:
1.
2.
3.
4.
What services to buy
For whom to buy
From whom to buy
How to pay
HCF Training Session - Kabul/Afghanistan, 24, 26 & 27 Nov 2014
Health Financing Options
•Direct Out-of-Pocket Payments at point of service
( e.g., prevailing system in most low income countries)

GENRAL GOVERNMENT
REVENUES (e.g. UK,
Australia, GCC
countries, Finland, Italy,
Greece, Sweden,…)

SOCIAL HEALTH
INSURANCE –
Bismarckian System
(e.g., Germany, Japan,
France, Korea, Turkey,…)
MIXED SYSTEM

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Others: Private
Insurance, Medical
Saving Accounts, etc.
HCF Training Session - Kabul/Afghanistan, 24, 26 & 27 Nov 2014
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Outline:

Part I: Heath Care Financing – Evolution and Concepts
 Part
II: Universal Health
Coverage – What’s in the Name?

Part III: Social Health Insurance as Financing Instrument for
Universal Health Coverage

Concluding remarks
HCF Training Session - Kabul/Afghanistan, 24, 26 & 27 Nov 2014
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Universal Health Coverage – a Renewed Commitment

A World Health Assembly Resolution in 2005 urged
countries to develop their health financing systems to:
 Ensure all people have access to needed services
without the risk of financial hardship linked to
paying for care

Aspiration to attain UHC was in WHO's constitutions of
1948; in the Alma-Ata declaration of 1978
HCF Training Session - Kabul/Afghanistan, 24, 26 & 27 Nov 2014
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The Three Dimensions of UHC
Reduce out-of-pocket
payment
Extend to non-covered
Pooled funds
Include
other
services
Financial
Protection
(% direct cost
covered)
Depth and Quality
(% services covered)
Breadth (% population covered)
HCF Training Session - Kabul/Afghanistan, 24, 26 & 27 Nov 2014
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Achieving UHC – Realistic? Possible?
Total health expenditure
for UHC
% Direct cost
covered
Pooled funds
Depth and Quality
(services covered)
Breadth (% population covered)
HCF Training Session - Kabul/Afghanistan, 24, 26 & 27 Nov 2014
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Universal coverage to be understood as: covering
all, for most services, at reasonable cost
Total health expenditure
% Direct cost
covered
Pooled funds
Depth and Quality
(services covered)
Breadth (% population covered)
HCF Training Session - Kabul/Afghanistan, 24, 26 & 27 Nov 2014
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Health Expenditure: the World and in EMR



In 2011, the World spent US$ 6,97 trillion on Health
– more than double 2001 (US$ 3.05 trillion)
In 2011, EMR spent US$ 124.1 billion on Health –
more than 2.5 times than in 2001 (US$ 49.3 billion)
Nevertheless:




1.3 billion poor with no access to needed services worldwide
150 million individuals face financial hardship & 100 million
push in poverty because of out-of-pocket worldwide
20-40% of health resources wasted worldwide
In EMR, 17.5 and 6.5 million individuals face financial hardship
and are impoverished annually, respectively.
HCF Training Session - Kabul/Afghanistan, 24, 26 & 27 Nov 2014
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Distribution of World
Health Expenditures (US$
7 trillion) by Financing
Scheme 2011
Others
6%
OOP
18%
PrvHI
16%
GGHE
(exc.
SHI)
23%
Distribution of EMR Health
Expenditures (US$ 124
billion) by Financing
Scheme 2011
Others
2%
GGHE
(exc.
SHI)
48%
OOP
40%
SHI
37%
SHI
7%
PrvHI
3%
HCF Training Session - Kabul/Afghanistan, 24, 26 & 27 Nov 2014
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Group 3
US$ 35–130
Group 2
US$ 105–600
Group 1
US$ 700–2000
HCF Training Session - Kabul/Afghanistan, 24, 26 & 27 Nov 2014
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Group 3
40–75%
Group 2
22–60%
HCF Training Session - Kabul/Afghanistan, 24, 26 & 27 Nov 2014
Group 1
8–20%
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Outline:

Part I: Heath Care Financing – Some Related Terms

Part II: Universal Health Coverage – What’s in the
Name?
 Part
III: Social Health Insurance
as Financing Instrument for
Universal Health Coverage

Concluding remarks
HCF Training Session - Kabul/Afghanistan, 24, 26 & 27 Nov 2014
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Social Health Insurance – a Definition

From prepayment-based not-for-profit schemes to a pure
Bismarckian system

Bismarkian System is a system of national social security
introduced in the 19e by the German empire under the then
Chancellor Bismarck

… a legally mandatory system the covers the majority or
the entire population through health insurance run by a
designated third-party payer, and involves non-risk related
contributions that are kept separate from taxes
(European Observatory on Health Systems
and Policies, 2005)
HCF Training Session - Kabul/Afghanistan, 24, 26 & 27 Nov 2014
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Social Health Insurance – a Pragmatic
Definition

Concentration on common features/elements:
 Concept of social solidarity is essential
 Publicly mandated membership for a designated population
 Reliance on compulsory earmarked payroll contributions,
with possible subsidization from governments and donors
 Clear linkage between contributions and a set of defined
rights for the insured population
 Presence of an independent or quasi-independent funds
 Management involves some degree of autonomy from the
government
 Open enrollment – nobody can be denied coverage
HCF Training Session - Kabul/Afghanistan, 24, 26 & 27 Nov 2014
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Some Conducive Features of SHI for UHC

Effective way to raise additional resources for health:
 Individuals are more willing to be taxed if associated with specific
entitlements (a benefit tax)
 Protected from budget negotiations
 Unutilized funds not returned to MOF at the end of the year

Many technical and managerial features that enhance
financial protection – mandatory prepayment for salaried
populations with explicit policies to fund coverage for the nonsalaried population

Improve efficiency compared to tax-based financing systems
(Beveridgean system); e.g., Jamaica, Kenya and Malaysia
HCF Training Session - Kabul/Afghanistan, 24, 26 & 27 Nov 2014
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Outline:

Part I: Heath Care Financing – Evolution and Concepts

Part II: Universal Health Coverage – What’s in the Name?

Part III: Social Health Insurance – History, Definition and
Evolution

Part IV: Social Health Insurance as Financing Instrument for
Universal Health Coverage
 Concluding
remarks
HCF Training Session - Kabul/Afghanistan, 24, 26 & 27 Nov 2014
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Concluding remarks

UHC calls for ensuring that “all people” are
covered by the two dimensions of financial risk
protection and services

Several approaches to pursue the goal of UHC
exist

SHI has many features that facilitate the Move
towards UHC
HCF Training Session - Kabul/Afghanistan, 24, 26 & 27 Nov 2014
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Thank you