Universal health coverage Policy options

DR SAMLEE PLIANBANGCHANG

Nepal is currently reviewing policy options for financing universal health coverage.

The country now faces challenges such as high and impoverishing out-of-pocket health spending; an increasing burden of high-cost noncommunicable diseases superimposed on an unfinished health agenda of preventable and communicable diseases; dominant private provision in service delivery; and, the overall context of a large informal sector in hard-to-reach areas.

Equity must be at the centre of the universal health coverage (UHC) effort. Countries are using different definitions as they phase in UHC based on three strategy choices: (a) priority populations to be covered; (b) essential or basic package of services to be delivered; and, (c) cost subsidies to be provided. In Nepal, the ‘first phase’ is delivering an essential maternal and child service package free for the entire population. On the other hand, Sri Lanka is at a more advanced phase and is now providing a more comprehensive package including prevention and control of noncommunicable diseases.

Out-of-pocket spending (OOP) to access health care is the main driver of inequities in health as well as a leading cause of household poverty. OOP is in fact the most regressive way to finance health. In South-East Asia, out-of-pocket spending contributes over 60% of total health spending and is the cause of one-third of annual new poverty. Countries that have made progress towards universal health coverage have reduced out-of-pocket spending to less than 30% of total health expenditure and increased government spending to over 4% of GDP. Tackling avoidable inequities by shifting away from out-of-pocket spending would bring quick gains for universal health coverage.

Countries are therefore reviewing their health financing strategies as a lead area of UHC reform. Experience has shown that there are inequities that may be avoided by pre-payments and social pooling of resources - general government revenues are the most equitable form of health financing with mandatory and contributory social insurance the next best option. Where there is limited scope to increase fiscal space for health and where the formal sector too is limited, a practical way forward is to improve efficiency in the current use of public resources; use innovative financing in the short-term for targeted population/services; and, initiate contributory schemes as a supplementary measure.

Importantly, experience shows that progress on universal health coverage may be made in relatively low income settings. Thailand and Costa Rica were both recognized as having established sustainable universal health coverage at about $5000 GDP per capita at purchase power parity and classified as low-middle income countries. The practical approach implemented by these countries to advance on universal health coverage was two-pronged, prioritizing elimination of avoidable inequities and inefficiencies. In South-East Asia, a major proportion of out-of-pocket spending goes for the purchase of medicines. Tackling these could help in rapidly accelerating the universal health care efforts.

In Sri Lanka, the foundation of universal health coverage has been cost-effective primary health care, focusing on provision of quality public health care and addressing the health needs of the poor. An important supporting factor was the simultaneous progress on education which made prevention and promotion activities more effective.

Indonesia has a decentralized administrative system with provincial and district authorities playing an important role in planning and implementing health activities. Equity in distribution of resources for health at these sub-national levels has been secured through a needs-based formula for budgeting that has made financing responsive to both local health needs as well as social, economic and geographic determinants of health. This is further complemented by strengthening primary services as first level of contact for households including correcting the skill-mix in human resources, away from specialists and towards community health workers.

In Thailand, strengthening the purchasing role of government backed up by strong regulation has improved systems performance. Overall systems costs have been contained through better procurement, pricing and distribution and rational use of medicines and technologies. Shifting away from fee-for-service to capitation and case mix payments methods has improved provider performance in the public sector and also aligned the private sector to universal health care effort.

The critical role of government and institutional capacity however, must not be under-emphasized in the path to universal coverage. Health systems are becoming increasingly complex with multiple stakeholders and influences from factors outside the sector, climate change for example. The process of universal health coverage strategy development and implementation will require strong government leadership.

Dr Plianbangchang is

Regional Director, WHO South-East Asia