Integrating TB/HIV into MNCH in Namibia

Challenges facing the financing of public and private health care in NamibiaDr Norbert. P. ForsterDeputy Permanent Secretary, MoHSS

Namibia Medical Society Health Economics Seminar18th April 2015Hotel ThuleWindhoek, Namibia

OUTLINEConceptual: Health System definition Universal Health Coverage & Health Financing definitions Modes of Financing their attributes Namibia: Challenges and issues in our Health Systems Financing and Management

Conclusion

2Defining HealthcareAll goods and services designed to promote health, including preventive, promotive, curative, rehabilitative and palliative interventions, whether directed to individuals or to populations.

Source: WHO (2000) World Health Report 20003Definition of a health system? A health system consists of all organisations, people and actions whose primary intent is to promote, restore, or maintain health

WHO, 20074Governance&LeadershipFinancing

(collecting, pooling and purchasing)FUNCTIONS THE SYSTEM PERFORMSGOALS / OUTCOMES OF THE SYSTEMImproved HealthSocial & Financial risk protection

Responsiveness (to peoples expectations)Creating Resources(investment inHR & training; information & knowledge; health technologies)Service Delivery

The WHO Health System FrameworkINPUTS

Efficiency

Provider PerformanceAccess&Coverage Quality & SafetySource: WHO (2007)OUT PUTS18/04/20155WHO health system framework provides a systematic approach to addressing some of these questions.

Identifies three goals and four functions of any health system

To expand:1) goals - important not forget what are trying to get health system to achieveprimary aim of any health system is to improve healthtwo other goals - apply also to other social systems

Recognising 3 goals explicitly helps to see better the trade offs that are part of all decision making

2) functions - all health systems carry out 4 functions - regardless of way health system is organised Many different ways to organise each function.

Critical point: changes to ways services are organised or paid forWhat is Universal Health Coverage?Define as:All people can use the promotive, preventive, curative, rehabilitative and palliative health services they need.

Three Key Attributes:Equity in access to health services those who need the services should get them, not only those who can pay for them.Sufficient quality and quantity of health services enough to improve the health of those receiving them.Risk protection the cost of using care should not put people into financial hardship.6The Key Components of a system of Universal Health CoverageSource of finance and volume (who pays? how? Who regulates? how?)

Financial intermediaries (who administers the funds? how? who regulates? how?)

Service providers (who spends the funds? how? who ensures cost-benefit and quality? how?)

Service recipients (who benefits? how and how much? any co-payments? what benefit-package?)7Health financing functionsSource: Schieber and Maeda 1997, The World Bank

88The figure describes the functions involved in health financing: collecting revenue, pooling resources, and purchasing goods and services. These functions often involve complex interactions.Revenue collection is the way health systems raise money from households, businesses and external sources. Pooling deals with the accumulation and management of revenues so that members of the pool share collective health risks, thereby protecting individual pool members from large, unpredictable health expenditures. Pooling (coupled with prepayments) enables the establishment of insurance and the redistribution of health spending between high- and low-risk individuals (risk subsidies) and high- and low-income individuals (equity subsidies).Purchasing refers to the mechanisms used to secure services from public and private providers.In the functioning of a health system equity and efficiency are critical aspects for all financing functions. There are three broad types of efficiency concerns: efficiency of revenue collection, allocative efficiency and technical efficiency.Health sector functions entail directly providing services; financing, regulating and mandating service provision; and providing information (Musgrove 1996)

2005 World Health Survey: Out of pocket payment

71 Countries Incl. NamibiaSource: WHO (2007)918/04/20159Significance of out-of-pocket payment for healthCatastrophic health expenditure refers to household spending on health care of >10% of total household consumption expenditure

South Africa (2009): 23% of households spend more than 10% 15% of households spend more than 15%

10Risk pooling mechanismsRisk pooling should collect and manage funds so that unpredictable individual financial risks become predictable and are distributed among all participants of the pool.

Four types of health financing are widely used to pool risks, raise revenues, purchase services and pay providers:

National/state health serviceSocial securityVoluntary private health insuranceCommunity-based health insurance

No pure mechanism, usually a mix of two or more methods

1111Different instruments for revenue collection and purchase of health services.

These organizational arrangements generate revenue and finance equity subsidies through 3 main alternatives: subsidies within a risk pool, subsidies across different risk pools, and direct public subsidies through transfers from the government.

Pooling risks in traditional national health services and social security systems is achieved through subsidies within a risk pool, whether financed through general revenues or through payroll taxes. Its goal is to generate subsidies from high- to low income individuals. These systems are effective when payroll contributions are feasible or the general revenue base is sufficient, and a large proportion of the population participates in the same risk pool.However, in a system with multiple competing public and private insurers and a fragmented risk pool, payroll contributions may increase the incentives for risk selection. In the case of national health service or social security system, financial resources might be insufficient or inappropriate for spreading the financial risks or for creating an equity subsidy, particularly if the general revenue or payroll contribution base is regressive.

National (state-funded) health care system

Characteristics: funding comes from general revenues, universal coverage, a public health delivery system

Strengths: comprehensive coverage of the population, and large scope for raising resources

Weaknesses: unstable funding; disproportionate benefits for the rich; potential inefficiency in health care delivery; and sensitivity to political pressures

1212Social health insurance (social securityCharacteristics: funding from employee and employer contributions; management through sickness funds; benefit package for all members (fully or partially cover)Strengths: more resources in the system; less dependence on budget negotiations; high redistributive dimension (cross subsidies)Weaknesses: exclusion of the poor/unemployed; negative economic impact on payroll contributions; complex and expensive to manage; escalating costs; coverage of chronic diseases and preventive care

1313Voluntary (private) health insuranceCharacteristics: affiliation is voluntary; may be primary or additional source of healthcare funding; may be the main source of health coverage, or cover services not included by the public service

Strengths: affords financial protection; enhances access; increases service capacity and promotes innovation; helps finance health care services not covered publicly (OECD, 2004)

Weaknesses: financial barriers to access; differential access to health care; high administrative costs; removes little cost pressure from public health financing

1414Community-based health insuranceCharacteristics: community membership; high community involvement in managing the system; beneficiaries are excluded from other kinds of health coverage; members strongly share a set of social values (voluntary affiliation, participation and solidarity)Strengths: better access to healthcare for low-income people; may fill the gaps of other health financing schemesWeaknesses: limited protection for members; sustainability is questionable; limited benefits to the poorer part of the population

1515Important aspects of the healthcare market to be controlledConsumer moral hazardA zero (or reduced) price at the point of use encourages a higher rate of use than would otherwise be considered efficient

Adverse selectionThe process whereby the best risk individuals are selected out of a general insurance pool

Provider moral hazard (SID)Incentives on suppliers (e.g. physicians) to provide care in excess of (or short of) that which would be arrived at by trading with fully informed consumers 1616Financing mechanisms in high-income countries

(Source: OECD 2004)1717Apart from the USA most of the countries derive the main part of their health care resources either through social security contributions or through direct and indirect tax payments in national health services. 9 out of the 25 countries in the figure finance their health care system mainly by social health insurance contributions, while 13 countries use mainly tax payments. Singapore, USA and Greece in a low degree, fit neither of these classifications since they finance more than half of their health expenditure though other mechanisms, such as voluntary insurance premiums and out-of-pocket payments. In Greece, private expenditure finances slightly less than 50% of the total.NAMIBIAS FOURTH NATIONAL DEVELOPMENT PLAN2012/13 TO 2016/17 Changing Gear Towards Vision 2030

Source: National Planning Commission (OP)(August 2012)Priority 1 is to put in place basic economic development enablers:Enabling Institutional EnvironmentImprove Education and SkillsEstablish a Quality Health System1818NAMIBIAS FOURTH NATIONAL DEVELOPMENT PLAN2012/13 TO 2016/17Where we want to be in 2030:

A prosperous and industrialised Namibia, developed by her human resources, enjoying peace, harmony and political stability.

(Source: OP, 2004)NDP4 Desired Outcome 1 (DO1):

By the year 2017, Namibia is the most competitive economy in the SADC region, according to the standards set by the World Economic Forum.(Source: NDP4, 2012, p33)19WORLD ECONOMIC FORUM (WEF): 2013-2014 GLOBAL COMPETITIVENESS REPORT: NAMIBIA RANKING ( /148)4th Pillar: Health and primary education (25% of Basic Enablers):A. Health:1234.01Business impact of malaria1184.02Malaria incidence1014.03Business impact of tuberculosis1414.04Tuberculosis incidence1454.05Business impact of HIV/AIDS1454.06HIV prevalence1424.07Infant mortality1054.08Life expectancy119B. Primary education:4.09Quality of primary education4.10Primary education enrollment rate(WEF, Geneva, Switzerland, September 2013)

20WORLD ECONOMIC FORUM (WEF): 2013-2014 GLOBAL COMPETITIVENESS REPORT: NAMIBIA RANKING (92/148) Namibia must improve its health and educational systems. The country is ranked a low 123rd on the health sub pillar (down five places), with high infant mortality and low life expectancy the result in large part, of high rates of communicable diseases.

(WEF, Geneva, Switzerland, September 2013, pp 43-44)

21THE NAMIBIAN HEALTH SYSTEM *PEPFAR - Presidents Emergency Plan for AIDS relief ** GFATM - Global Fund for AIDS, TB and MalariaSource:Team analysis; InterviewsAccessed mostly by the middle to high income populationDriven by participation in medical aid schemesProvides care through a network of private providersPrivate healthcare system (15% of Namibian population)Accessed by the lower income populationDriven by a primary health care approach to ensure health at the local levelProvides care through a series of outreach, clinics, health centres and hospitalsPublic healthcare system (85% of Namibian population)Driven by the Anglican, Lutheran and Roman Catholic Health Services100% of operational funding from MOHSSProviders of outpatient and inpatient careMostly Northern regionsUpdated Agreement 2008Church health servicesLarge NGO focus on HIV / AIDS (over 300 HIV/AIDS NGOs); relatively small engagement in broader health;Presence of few large donors including: :PEPFAR*, GFATM**, BilateralsIncreasing South-South cooperationNGO / donor communityIndividualCommunitiesProvides fundingRecognised as an alternative source of care; no exact data on utilisationtraditional health practitionersInformal sectorProvides funding2222HIGH GINI COEFFICIENT, VAST INEQUITIES, VARIOUS CONCURRENT EPIDEMICS

Central regions: highest income per capita; high burden of poverty related and increasing NC diseases (e.g. HIV/AIDS, TB, malnutrition, diarrhoea, HT, DM etc.)The Southern regions: sparsely populated; subsistence farming; mixed disease burden : TB, NCDs, alcohol and tobacco, traumaNorthern regions: highest population density, lowest income per capita ;most cases of communicable, diseases (e.g., HIV/AIDS, TB, Malaria)Source:UNDP: Human Development Report 2007/8; Team analysisInequality in income2007-2008, Gini coefficient

5874Namibia58South Africa57Brazil43Kenya41United States33France25Sweden2323CHALLENGE: HOW TO REACH THE 2015 MDG TARGETS * Calculated**Roadmap for Accelerating the Reduction of Maternal and Newborn Morbidity and Mortality Report; MOHSSSource:WHO Core Health Indicators; World Bank Development Indicators; DHS, 2000, 2006; MOHSS Interviews

20131990199520002006201520*

201319901995200020062015

199019922000200620132015

19952000200520101990Infant Mortality# per 1 000 live birthsUnder-5 Mortality# per 1 000 live birthsLife Expectancy at BirthAge (years)Maternal Mortality# per 100, 000 live birthsNo data

692424REDUCTION IN LIFE EXPECTANCY ATTRIBUTABLE TO COMMUNICABLE DISEASESYears lost to various conditions2007, Years

0.61.18.310.02007InjuriesNon-CommunicableDiseasesCommunicableDiseases

67HIV/AIDSPerinatal Conditions**MalariaDiarrheaTBNutritional DeficienciesOtherCommunicableEstimated DALYs* by cause (000)2004, Percent *DALY - Disability Adjusted Life Year **Low birth-weight, asphyxia, and birth traumaSource: WHO Statistical Database; WHO DALY by Region database 2004

10100% = 6472525ACCESS TO CARE: OVER 40% LIVE FURTHER THAN 5 KM FROM A HEALTH FACILITY (2007)26

41Distribution of waiting times in health facilitiesPercent (N=659)

1212Kunene109Khomas1326Oshikoto2240Oshana27Kavango09Hardap10

1324NamibiaPopulation living greater than 5 km from a health facilityPercent>3 hours2-3 hours1-2 hours