Health Sector Reforms

1
Health Sector Reforms

• Professor dr JW Björkman
• Institute of Social Studies Leiden University
• The Netherlands
• 12th World Congress of Public Health
• Istanbul, Turkey
• 27 April 1 May 2009

2
Overview of Paper

• Introductory issues
• Generations of reform
• Historical trajectory of models
• Capacity constraints
• Models of funding and contracting
• Types and strategies of health reforms

3
Basic Goals in Health Policy

• Universal access to health services
• Equity in sharing financial burdens
• Good quality health care
• Efficiency and cost control
• Satisfaction of patients
• Autonomy of professionals

4
Terms and Targets

• Reform modify current arrangements
• Re-form seeks to change form
• Target-issues in the health sector
• 1) access to health services
• 2) cost of health services
• 3) quality of health services

5
Pressures for Policy Change

• Proliferation of cross-national comparison
• Faulty assumption that policy as stated in law is
  the same as policy implemented
• Spending-Services cliché
• Reform shifts in decision-making power over
  allocation of resources and risks
• Shifts intergovernmental, inter-personal

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Generations of Reforms

• First cut public expenditures and revive the
  public sector
• Second improve efficiency effectiveness of
  public administration
• Third improve service delivery through
  sector-wide approaches

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Repetoire of Policy Instruments

• Establish autonomous organizations
• Introduce user-fees (pay for service)
• Contract out of service delivery
• Enable regulate the private sector

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Historical Antecedents

• 1883 Germanys mandatory social health insurance
  for workers their families (employment-based
  scheme of premiums)
• 1948 Britains national health service for entire
  population (population-based scheme paid out of
  general taxation)

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21st Century Hybrids

• Worldwide reality
• Employment-based arrangements for certain
  categories of workers are combined with
  population-wide and tax-based universal schemes.

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Retrenchment in 1970s

• Oil crises and economic stagnation
• High unemployment, declining state revenue,
  rising public expenditures
• Demographic shifts
• Ideologies about the role of the state
• Policy alternatives of competition and market
  choice

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Recognition of Private Sector

• Extensive private sector for health care in
  (almost) all countries
• Primarily out-of-pocket payments
• Largely un-regulated and dominated by medical
  professionals
• Public-Private Partnerships due to declining
  government budgets

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Capacity Constraints (i)

• Limited implementation of policies
• Time needed for proper assessment
• The smaller the capacity, the greater the
  ambition and vice-versa
• Staff features (numbers, skills, motivation)
• Organizational culture
• Patronage and favoritism

13
Capacity Constraints (ii)

• Management information systems
• Incentive structures
• Lack of feedback
• Poor coordination
• Limited extent of the private sector

14
Five Sources of Funding

• General taxation
• Public and private insurance
• Direct payments by patients
• Voluntary contributions
• External aid from donors

15
Three Contracting Models

• Integrated model funding and ownership under
  same (public or private) agency
• Contracting model governments or third-party
  payers negotiate long-term contracts with health
  care providers
• Reimbursement model patient pays the provider,
  then seeks reimbursement from his/her insurance
  agency

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Health Care Reform Bottom-line

• Combinations of core elements funding,
  contracting (including payment modes) and
  ownership determine the allocation of financial
  risks and decision-making power among the main
  players in the health care sector.

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Types of Health Reform (i)

• Structural Adjustment in disguise (primarily
  cost-cutting)
• Market-oriented reforms
• Assumes perfect information choice
• Assumption markets create efficiency
• But profits from unnecessary care
• But transaction costs

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Types of Health Reform (ii)

• Public health and public financing
• (the Cinderella of all options for reform)
• Note nothing is inherently wrong with
  market-based reforms, provided they
• work for greater efficiency and equity
• receive no government subsidies
• comply with regulations

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Strategies of Reform (i)

• Ensure minimum care for all citizens
• Because people always pay who is to pay more
  and who is to pay less?
• Centrality of the central level
• Replace regressive fee-for-service with
  prepayment schemes

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Strategies of Reform (ii)

• Progressive taxes are the best revenue for public
  health and insurance
• Rationalize resources by reallocating personnel
  and mobilizing for outreach
• Political will choice and commitment
• Health systems help people get well when they
  are sick, keep people healthy stop people
  becoming sick

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Conclusions about Reforms

• Health inequalities are rooted in socio-economic
  structures
• Greater socio-economic equity is vital to tackle
  the challenge of health
• The human right to health requires political
  commitment at all levels
• Action is needed in all social policies

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Health Sector Reforms

• Thank you
• for your attention!