Toward UHC: Challenges in Asia
Indonesia Health Economic Association July 30, 2016
Soonman KWON, PhD
Chief of Health Sector Group (Tech Advisor) Asian Development Bank
Former Dean
S Kwon : UHC Asia 2
I. Resource Generation
Health Expenditure as % of GDP (Asia),
2013
Source: WHO Global Health Expenditure Database (accessed 23 March, 2016)
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THE: Total Health Expenditure, SHI: Social Health Insurance
Public Financing (Mix) for Health
Care, 2013
1. Challenges of Tax-based Financing
Direct tax in low-income countries is not as progressive as in high-income countries (due to tax evasion)
- Indirect tax in low-income countries is not as
regressive as in high-income countries (e.g., Ghana)
Equity of tax-based health care financing in low-income countries depends on
- Availability: public delivery system in
disadvantaged areas
- Quality and responsiveness of the public
delivery system
2. Challenges of SHI (Social Health
Insurance)
Problem of income assessment and premium collection for the self-employed or informal sector
- Informal sector is big -> Covering the formal sector first and extending to the informal sector faces challenges
Majority of the formal sector is small business -> Due to mandate of employer contribution,
compliance is a challenge even in the formal sector (e.g., Vietnam)
3. How to Cover the Informal Sector?
Realistic model for LMICs?: Mix of SHI and Tax
a. Full subsidy for the poor, Full contribution for formal sector (covering dependents too), but how to cover the informal sector?
b. Tax financing/subsidy for primary care (self targeting) and SHI for hospital care? (e.g., Mongolia)
Pure contribution model for the informal sector rarely works (e.g., Philippines vs. China)
- Need government (full or partial) subsidy:
e.g., Full subsidy model in Thailand
S Kwon : UHC Asia 8
II. Resource Pooling
1. Single Pool (Scheme) vs. Multiple pools
Efficiency of Single Pool: higher capacity for risk pooling, lower administrative costs, greater bargaining power of the purchaser relative to providers
Equity of Single Pool: Larger scale cross-subsidy from the better-off to the poor, Same benefits coverage for all people
e.g., Indonesia, Korea, Philippines
Context matters
- Political culture of decentralization, challenge of
geographic coverage
- Equity in service delivery and utilization: prerequisite
2. Multiple pools with Pooling Capacity
Multiple schemes (pools) but with uniform statutory (essential) benefits coverage (or minimum differences in benefit package among pools) and uniform provider payment system
-> Function as a virtual single pool in terms of purchasing
Risk adjustment across schemes (pools), considering the enrollee characteristics/risks (gender, age) and fiscal capacity of schemes
e.g., Japan and Germany
Fiscal Federalism for health care
1. Purchaser
Who purchases which services from which providers for which payment and quality
-> Financial leverage to discipline (public & private) providers
Who should be the purchaser
- Separation of purchasing and provision
- MoH: service provider or purchaser?
- Ideal model: Independent agency specializing in
purchasing with close coordination with MoH
e.g., Coordination problem between Social Security agency (or MoL) and MoH for the governance of health care financing (e.g., China, Mongolia, Vietnam)
2. Purchasing and Payment System
For effective purchasing, public providers should be given fiscal autonomy: Optimal degree of autonomy?
Financial incentives for health care providers have crucial effects on quality and cost
- Level of pay: Low pay leads to dual practice - No balance billing
- Method of pay: FFS vs. Prospective payment
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3. Benefits (Service) Coverage
Decisions on which services to cover should be based
on objective criteria thru transparent process
- Priority setting: Need both evidence (cost
effectiveness by experts) and value judgment (citizen/community participation)
Potential Tradeoffs among population coverage, benefit coverage, and financial protection
- Generous benefits and high premium deter the extension of population coverage with negative effect on sustainability
- Limited benefit coverage leads to limited financial
protection
* Challenges of Population AGING
Health care financing based on payroll tax or formal labor market faces challenges of financial
sustainability
- Expand contribution base: for all types of income
- Consider consumption tax
Ageing and health expenditure: healthy ageing, compression of morbidity, proximity of death
Coordination and Continuum of Care for financial sustainability and quality of care
- Primary care and gatekeeping
- Health care and long-term care (LTC)
- Institutionalized LTC and community-based care
