Feature: Investing in Healthcare – A Comparative Study in Healthcare Financing Across Countries, Lessons Help India Improve Its Health Delivery
Vrishali Shekhar and Bhavesh Jain of ACCESS Health India are featured in Business World Disrupt on lessons from a cross country study in healthcare financing to improve health delivery in India
In the context of healthcare benefits to all, political will at both the Centre and state levels is critical for implementation of various government health programs. As we compare data among countries that have been successful in achieving universal health coverage, we see several common strategies: prioritizing primary care, improving the quality of healthcare services, transitioning from incremental budgeting to a more performance and needs based budget allocation, defining the purchasing and providing split, emphasizing evidence based decision making. Moreover, across all countries, the success of universal health coverage reforms rests upon strong political commitment and leadership.
In Thailand, universal health coverage became a political priority in the 2000 elections. Reformers, civil society, and technocrats mobilized together to create a political force that led to almost full universal health coverage in a middle-income country, in seemingly record time.
This case study was discussed in detail at a recent high level policy consultation on health financing in India, hosted by the Ministry of Health and Family Welfare and the National Institute of Public Finance and Policy. Representatives from several member countries of the Organisation for Economic Co-operation and Development (OECD) attended, the conference, in addition to representatives from Thailand and the Philippines. The countries came together to share experiences in achieving successful universal health coverage The conference focused at length on health financing in the context of the many challenges and variations across India.
International and national experts debated the role of the different central ministries and state governments in healthcare financing, particularly in the context of fiscal devolution, and suggested a way forward.
Key lessons learned from various country experiences focused on five areas, which we will discuss in greater detail.
Prioritizing Primary Care
Experts unanimously emphasized the mandatory provision of free preventive and primary care as the backbone of a successful universal health coverage model. Recent experiences in Turkey and lessons from other OECD countries validated investment in essential and cost effective interventions, such as preventive and primary care activities. Investments in primary care demonstrate value for money of scarce financial and human resources. Thailand also implemented a compulsory rural health practice that was essential in ensuring the availability of primary care services to the masses.
Quality of Healthcare Services
Lessons from the OECD countries suggest that the central and state governments need to coordinate their efforts to maintain minimum quality standards of healthcare services. The central government plays a stewardship role in establishing the national level information infrastructure necessary to monitor health outcomes. A national level information infrastructure can increase the accountability of the states, which are, in return, responsible for the implementation of government sponsored health programs. The OECD experience indicates that accountability mechanisms for healthcare outcomes matter more than the degree of decentralization or type of provision. For example, even in decentralized and developed nations like Canada and Sweden, a performance measurement framework (Canada) and open comparison system (Sweden) allow easy comparison of quality of care across localities.
Performance Based Budgeting
Experiences from Brazil, Mexico, and several OECD countries demonstrated the efficacy in moving from historical or incremental budgeting to a more performance oriented and need based budget allocation. In Mexico, money was allocated based on the number of beneficiaries enrolled in the health insurance program, Seguro Popular. Brazil takes into consideration the socioeconomic characteristics of particular areas when deciding how to allocate funds. Such policies ensure that health remains a priority for states and help achieve fiscal equalization between richer and poorer states through central transfer arrangements.
The purchaser-provider split is a service delivery model in which third party payers are kept organizationally separate from service providers. This separation is fundamental to the successes in Thailand and Turkey. The National Health Security Office in Thailand and Social Security Institution in Turkey serve as the single healthcare purchasers for their respective countries. These institutions design the benefit package and provider payment methods. The provider payment methods, such as capitation in Thailand and capitation with performance based payments in Turkey, have been crucial in improving efficiency. The close end demand side capitation method of payments that pays providers based on the number of people in their care has been effective in containing costs, improving standards of health facilities, and enhancing access to high quality healthcare. The use of strategic purchasing when the purchaser and provider are separate from each other has been critical in improving efficiency, equity, and accessibility.
Evidence Based Decision Making
In Thailand, there have been concerted efforts to promote evidence based policy making, including the introduction of health technology assessments (HTA) to demonstrate value for money in health financing. Health technology assessments are used in Thailand to inform coverage decisions under the benefit package. Lessons from Thailand show that the use of scientific evidence in the decision making process has been instrumental in keeping costs low. Strict enforcement of provider payment methods and public private competition have contributed to cost control and maintaining the quality of care.
Implications for India
Although health is a state subject and the recent reform toward decentralization is a move in the right direction, the states and the central government have a shared interest in the health of the population. The Centre has equal responsibility and should be equally accountable in ensuring that all citizens receive their minimum benefits. Experts at the conference emphasized tax based funding as a means to pay for healthcare. The potential of other financing sources, such as sin taxes and health bonds, should also be explored. The states and the central government must proactively regulate the private sector and define the structure of provider payments in order to best influence the private sector to deliver the social good. Effective policies must ensure that state money goes to health. Policies must also ensure value for money by funding preventive activities, such as water and sanitation and primary care activities, rather than less cost effective but more visible, and therefore more politically attractive, interventions.
This article was originally published on bwdisrupt.businessworld.in