PL05 - Sustainable Health Financing

Chair Andrew Jack, Pharmaceuticals Correspondent for The Financial Times, United Kingdom opened the session on health economics, introducing four well-established speakers: Mr. Ariel Pablos-Mendez, Managing Director of the Rockefeller Foundation, USA; Dr. Bernice Dahn, Deputy Minister and Chief Medical Officer of the Ministry of Health and Social Welfare, Liberia; Mr. David Evans, Director for the Department of Health Systems Financing for the World Health Organization, Switzerland; and, Ms. Allyson Pollock, Assistant Principal, International Health Policy, Professor of International Public Health Policy, Centre for International Public Health Policy, University of Edinburg, United Kingdom.

Mr. Pablos-Mendez introduced the topic of health financing by emphasizing the current dependence on overseas development agencies (ODA). In fact, 83.2 percent of private capital flows are to developing countries, yet a significant number of out-of-pocket spending is still visible. A new set of health financing issues exists with three key difficulties:

• Availability: limited access, global human resources crisis and uneven distribution of resources;
• Affordability: high out-of-pocket expenditures, impoverishment and undeveloped health insurance;
• Quality: long lines of fatal mistakes, lack of quality standards and varying provider-incentive structures.

Mr. Pablos-Mendez stated that two aspects are required to contribute to good health at low cost: health equity and an economic transition of health. The Rockefeller Foundation aims to promote, maintain and restore health. The Foundation has concentrated efforts in South Asia on gathering more evidence and information since he feels more research is needed.

Mr. Pablos-Mendez also pointed out the need for improvement in the performance of health systems. Factors such as research, economic transition and Gross Domestic Production (GDP) cause variances among countries in system performances. There exists, he emphasized, a direct correlation between total health spending and GDP. The method of reining in health spending through cost control measures does not work, and he suggests accepting the paradigm, but investing the growth in equity and quality of health services, placing special emphasis on performance improvement. The Rockefeller Foundation exploratory initiatives for 2008 foster this outlook through capacity-building, technology, and policy.

Dr. Bernice Dahn addressed the question of public health services in Liberia, being only for the poorer population. She highlighted that in fact more equipment exists for public facilities than for private ones, and yet private services are used by the majority of the population. The low access to healthcare in developing countries, such as Liberia is due to many factors: brain drain, damaged or destroyed infrastructures, poor road conditions, lack of essential drugs and supplies, low salaries and incentives for staff, and health worker migration. Ongoing efforts by the government, NGOs, the public and private sector are crucial for implementing a sustainable plan.

Years of conflict disrupted health care delivery throughout Liberia. At one time, a Ministry of Health did not exist at all. But now that the hostilities have ended, several major health policies have been adopted by Liberia's innovative new government.

Addressing the duties of health financing systems, Mr. David Evans pointed out that interaction exists between revenue collection, pooling and purchasing/providing services, and this determines whether or not the financial system will be equitable and sustainable.

Several difficulties are linked to financing in general: (1) the need for fund-raising; (2) raising funds in a manner that permits global access; and (3) ensuring that the funds are used efficiently and equitably to provide services. Mr. Evans insisted that more funds must be raised. In fact, about 100 US dollars per capita is required to finance minimum access to health services; but in a total of 43 low-income countries, per capita spending is less than three dollars per year. Higher revenues can come from increased health budgets at the government level and funds can come from external sources.

Healthcare that is not dispensed at low cost to its users has a detrimental effect. A way to overcome this would be to pursue stages of coverage, from an absence of financing to intermediate stages of coverage, and, ultimately, to universal coverage. By implementing prepayment through insurance or taxes, countries can work towards universal coverage. But to do this Mr. Evans states is to instigate policies in favor of the poor.

Strategies towards better health services include:

• A combination of external and internal funding
• The creation of domestic financing institutions and capacities
• To move away from out-of-pocket financing to forms of prepayment and pooling
• to ensure inflows of external resources to strengthen the process

Ms. Allyson Pollock disagreed with David Evans, however, on the need to raise additional funds. For her, goals for health financing include:

• Universal healthcare for all
• Comprehensive coverage
• Equal access
• Free at point of delivery

She stated that to achieve these goals, mechanisms must be designed carefully to allow a fair and equitable redistribution of funding, with social solidarity as a primary function and without risk-pooling segmentation. (Risk-pool segmentation is a consumer-directed health plan (CDHP) which offers enrollees lower monthly premiums in exchange for higher cost-sharing when care is received.) Regarding the Pay for Performance Program (PPP), Ms. Pollock asked, "Where is the money really going?"

Furthermore, she noted that the delivery of healthcare as a service should be well-done. "Data is the primary building block and we must not lose sight of this in the needs-based planning process". The total process of delivery involves three main aspects:

• Ensure that no groups are excluded
• Use needs-based planning and develop better data systems
• Adhere to public accounting and government control over resources via direct regulation

Uncoordinated diverse agendas exist and the issues regarding PPP must be brought to light. "It is time to begin a much more open and honest debate," she concluded, challenging organizations such as The Rockefeller Foundation to not think narrowly, as "free marketeers", but instead to change its direction and promote real integrated health, which requires giving up control and allowing others to become a part of the process.