Arrangements for managing health expenditures Joint OECD/WHO Meeting on Financial Sustainability of Health Systems
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1 Arrangements fr managing health expenditures Jint OECD/WHO Meeting n Financial Sustainability f Health Systems Edwin Lau Deputy Head, Budgeting & Public Expenditures Divisin, OECD 28 June 2012
2 Publicly funded: Earmarked Publicly funded: General Tax Privately funded Institutins invlved in financial sustainability Pland Ministry f Health Ministry f Health and Legislature determine scpe f cverage NFH is invlved in negtiating cntracts AHTA is there fr evalutin purpses Lithuania Ministry f Health - Apprves the list f services and reference prices f services Cmpulsry Health Insurance Cuncil (CHIC) - Cllegiate advisry institutins NHIF- Executive institutin subrdinate t the MOH THIF - Territrial breakdwns f the health insurance funds Cratia Ministry f Health Cratian Institute fr Health Insurance Cratian Natinal Institute fr Public Health Latvia MOH - 1) Develpment f health plicy, 2) Checks perfrmance f system (using varius methds), 3) Cnducts fiscal audits Natinal Health Serice (NHS) - A subrdinate f the MOH and health minister NHS implements : 1) natinal plicy t administer state budget resurces, ensures efficient use f gvt funds, 2) Breifs MOH Slvak Republic 3 Health Insurance Cmpany where 1 is state wned and has Ministry f Health as regulatr Czech Republic Ministry f Health Cratian Institute fr Health Insurance Cratian Natinal Institute fr Public Health
3 Balancing demand fr care with ability t pay Design f health financing system Cherence & Accuntability Institutinal Framewrk C-rdinatin functin Setting healthcare expenditure levels Financial Framewrk Estimating future & current health spending needs Expenditure management Plicies & Implementatin Revenue Generatin 3
4 What is the rle fr the Ministry f Finance? Direct Rle Indirect Rle Levers Fiscal framewrk (MTEF; fiscal rules; hard vs. sft expenditure caps) Prgramme budgeting Financial management & cst mnitring Ex ante agreement f cst cntainment strategies C-rdinatin, Plicy, Oversight Regular dialgue with MOH & HIF n expenditure trends & pssible respnses Regulatry framewrk Rle n insurance bards Pricing f plicy prpsals Budget transparency Gals Fiscal discipline within realistic budget targets Fcus n utcmes Cst & benefit allcatin Cst management & financial sustainability perspective in nging management & decisin-making Mral hazard/adverse selectin cntrls Prmting market cmpetitin Favring cmpetitin & generic use Incentivizing efficient service mix (preventin & primary care; in-patient v. ut-patient) Ensuring slvency f insurance funds Cmmunicate lng-term sustainability needs 4
5 Ministries f Finance have an interest and rle t play in the fiscal sustainability f health systems It is nt t replace r secnd guess Ministries f Health r Health Insurance Funds. Need clarity (& cmplementarity) f rles Recnciling macr willingness t pay with micr preferences fr care Develping mre medium-term, sustainable frecasting systems Cunter-cyclical financing mechanisms and mre stable financing Creating incentives t achieve efficiency savings ver the lng term Hard budget cnstraints d nt lead t sustainability They may result in shrt-term savings, but ultimately result in lwer vlumes, quality & respnsiveness. This will lead t plitical pressure fr mre spending anyways. Permanent dialgue t build trust & fcus n utcmes & targets Increasing funding fr health may be plitically desireable, but shuld be accmpanied by efficient use f resurces & accuntability fr utcmes Shift frm hard t sft cnstraints is mre difficult, but creates incentives fr efficiency Fr fiscal framewrks t wrk, they require MFs t understand health systems & sectr activities; infrmatin n inputs, utputs & utcmes What MF capacity is needed fr mnitring & dialgue t take place?
6 A shared challenge A deal fr sustainability Ministries f Finance cnsider evidence-based cases fr imprving care & cverage Ministries f Health get their huse in rder by ffering up efficiencies Evidence, gd gvernance & leadership needed t accmplish this A synchrnized way f decisin-making Ex ante agreement f respnse in cases f budget verspend Shared cmmunicatin rle n bth utcmes & lng-term sustainability Sme imprtant lessns fr mving frward Shrt-term cuts d nt lead t either efficiency r sustainability Operatinal savings can cme frm stable & predictable revenues Budget cuts need t be brn by prviders and patients equally Budget transparency t shw cntingent risk & full cst f plicy cmmitments It s nt just hw much yu spend, but hw yu spend it!
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