Health Financing Country Profiles

Transcription

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2 Health Financing Country Profiles

3 Health Financing Country Profiles WHO Library Cataloguing in Publication Data Health fi nancing country profi les Delivery of health care - economics. 2. Health care economics and organizations. 3. Health services accessibility - economics. 4. Health expenditures. 5. Universal coverage. 6. Asia and the Pacifi c. ISBN (NLM Classification: WA 525) World Health Organization 21 All rights reserved. Publications of the World Health Organization can be obtained from WHO Press, World Health Organization, 2 Avenue Appia, 1211 Geneva 27, Switzerland (tel.: ; fax: ; bookorders@who.int). Requests for permission to reproduce or translate WHO publications whether for sale or for noncommercial distribution should be addressed to WHO Press, at the above address (fax: ; permissions@who.int). For WHO Western Pacifi c Regional Publications, request for permission to reproduce should be addressed to the Publications Offi ce, World Health Organization, Regional Offi ce for the Western Pacifi c, P.O. Box 2932, 1, Manila, Philippines, Fax. No. (632) , publications@wpro.who.int The designations employed and the presentation of the material in this publication do not imply the expression of any opinion whatsoever on the part of the World Health Organization concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. Dotted lines on maps represent approximate border lines for which there may not yet be full agreement. The mention of specifi c companies or of certain manufacturers products does not imply that they are endorsed or recommended by the World Health Organization in preference to others of a similar nature that are not mentioned. Errors and omissions excepted, the names of proprietary products are distinguished by initial capital letters. All reasonable precautions have been taken by the World Health Organization to verify the information contained in this publication. However, the published material is being distributed without warranty of any kind, either expressed or implied. The responsibility for the interpretation and use of the material lies with the reader. In no event shall the World Health Organization be liable for damages arising from its use. ii

4 Table of Contents Foreword...v Acknowledgements...vi Introduction...vii Australia...1 Brunei Darussalam...4 Cambodia...6 China...9 Cook Islands...12 Fiji...15 Japan...18 Kiribati...21 Korea, Republic of...23 Lao People s Democratic Republic...26 Malaysia...29 Marshall Islands...32 Micronesia, Federated States of...34 Mongolia...37 Nauru...4 New Zealand...42 Niue...45 Palau...47 Papua New Guinea...5 iii

5 Philippines...53 Samoa...56 Singapore...59 Solomon Islands...62 Tonga...64 Tuvalu...67 Vanuatu...7 Viet Nam...73

6 Foreword Health fi nancing is one of the fundamental building blocks of health systems. Sound health fi nancing policies that raise adequate revenues and effi ciently allocate them are essential if countries are to achieve universal coverage, where everyone has access to quality health services at an affordable cost. Yet many people in the Asia Pacifi c region suffer severe fi nancial hardship because of the costs of health care. Many others simply go without treatment because they cannot afford to pay. In light of these concerns, an updated Health Financing Strategy for the Asia Pacifi c Region (21 215) was jointly developed by the WHO Regional Offi ces for South-East Asia and for the Western Pacifi c, and endorsed by the WHO Regional Committee for the Western Pacifi c at its sixtieth session. This strategy includes target indicators to monitor and evaluate progress towards universal coverage. These indicators relate to suffi cient spending on health, reduced reliance on out-of-pocket payments, expansion of prepayment schemes and adequate safety nets for the most vulnerable. One of the key strategic areas is to improve the monitoring and evaluation of health fi nancing policy changes. The health fi nancing country profi les presented here relate to this strategic area on monitoring and evaluation, and the associated target indicators. The profi les provide summary information about the current health fi nancing situation in 27 countries of the WHO Western Pacifi c Region. Health expenditure trends from are presented (based on national health accounts data), along with a description of the key issues, challenges and ongoing health fi nancing reforms in each country. Selected references are also provided for readers who are interested in more detailed information. These profi les can be accessed at Shin Young-soo, MD, Ph.D. WHO Regional Director for the Western Pacifi c v

7 Acknowledgement These country profi les are a product of the Health Care Financing team in the WHO Western Pacifi c Region led by Dr Dorjsuren Bayarsaikhan, Regional Advisor in Health Care Financing. Ms Megumi Ohwada developed the country-specifi c analytical charts and Mr Jürgen Menze wrote brief analytical summaries, under the guidance of Dr Chris James. The team would like to thank all WHO country offi ces and WHO Western Pacifi c Regional Offi ce for their inputs and comments. Special thanks to Mr Chandika K Indikadahena from WHO Headquarters, who provided region and country-specifi c National Health Accounts data. This is the fi rst edition of health fi nancing country profi les. The team plans to issue updated profi les on a regular basis and therefore we welcome your comments and suggestions, which would help us to improve the work. vi

8 Introduction The Health Financing Strategy for the Asia Pacifi c Region (21 215) aims to assist Member States in achieving universal coverage through effective health fi nancing policies. Universal coverage means that all people have access to the full range of necessary personal and preventive health services without excessive fi nancial burden. The path to universal coverage requires both suffi cient allocation of fi nancial resources to health and their effective and effi cient use. The strategy, in support of universal coverage, proposed 8 strategic areas: 1) Increasing investments and public spending on health 2) Improving aid effectiveness for health 3) Improving effi ciency by rationalizing health expenditure 4) Increase the use of pre-payment and pooling 5) Improving provider payment methods 6) Strengthening safety-net mechanisms for the poor and vulnerable 7) Improving evidence and information for policy making 8) Improving monitoring and evaluation of policy changes. The strategy supports a strong government role in health fi nancing through taxation and/ or social health insurance to reduce fi nancial barriers in accessing health care associated with out-of-pocket payments, particularly for the poor. The strategy encourages countries to update their own health fi nancing policies and strategies to attain universal coverage in the near future. For monitoring and evaluation purpose, the strategy proposed 4 inter-related target indicators, which can be adjusted to country specifi c situations: 1) Out-of-pocket spending should not exceed 3 4 of total health expenditure 2) Total health expenditure should be at least 4 5 of GDP 3) Over 9 population is covered by prepayment and risk-pooling schemes 4) Close to 1 coverage of vulnerable populations with social assistance and safetynet programs. The health fi nancing country profi les presented in this document correspond to the four target indicators above, and the strategic area on improving monitoring and evaluation of policy changes. The health expenditure and associated macroeconomic data used in these profi les vii

9 Health Financing Country Profiles come from the WHO National Health Accounts (see for further details). Note that the data used may at times differ from country-generated data, although WHO works closely with governments to ensure consistency whenever possible. Note also that data are aggregated at the national level. Health expenditure data is supplemented by information from WHO, government and academic documents. These provide summaries of countries recent health fi nancing policies and issues. Links to more detailed country information and analysis are provided throughout. National Health Accounts defi nitional issues: Total Health Expenditure (THE) is the sum of General Government Health Expenditure and Private Health Expenditure. General Government Health Expenditure (GGHE) equals the total outlays by government entities to purchase health services and goods. These are typically spent by ministries of health and social health insurance funds, but can also be other government agencies, such as defence, education and local government agencies. It includes both recurrent and investment expenditures made during the year. Private Health Expenditure (PvtHE) equals the total outlays on health by private entities. These are often predominantly direct household out-of-pocket (OOP) payments for health services. PvtHE can also be in the form of private prepaid and risk-pooling plans (either private insurance or provision of care by private fi rms and corporations), or non-profi t institutions serving households. The revenue base of both GGHE and PvtHE can comprise multiple sources, including external as well as domestic funds. This is the fi rst edition of health fi nancing country profi les. The WHO Regional Offi ce for the Western Pacifi c plans to issue updated health fi nancing country profi les on a regular basis and, therefore, we welcome your comments and suggestions, which would help us to improve this work. Dr Henk Bekedam Director, Division of Health Sector Development Introduction viii

10 Australia Australia is a high-income country with a total population of 21.5 million in 28. Gross domestic product (GDP) was US$ in 27. The predominant source of health care fi nancing is general government health expenditure (GGHE) which is mainly fi nanced through general taxation. In 27, total health expenditure (THE) was 8.7 of GDP, equivalent to US$ Out-of-pocket (OOP) payments made up 17.9 of THE; GGHE was 68.3 of THE. GGHE amounted to 17.5 of general government expenditure (GGE), 5.9 of GDP, and US$ Charts 1, 2 and 3 show historical trends in health expenditure. Chart 1 Trends in health care expenditure in Australia, Real GDP per capita (US$, 27) US$ (constant 27 prices) Percentage () GGHE as of THE OOP payment as of THE Other private expenditure as of THE

11 Health Financing Country Profiles Chart 2 Health expenditures as of GDP in Australia, THE as of GDP GGHE as of GDP In 1984 a universal and compulsory health care system, Medicare, was introduced. As a supplement to other general taxation revenues which mainly fund the health sector the mandatory income-related Medicare levy was imposed. Australians with lower income are exempt from paying the levy. Medicare provides inpatient treatment without additional fees and on average covers 85 of outpatient care costs. For those who decide to be treated as private patients and therefore can choose their doctor Medicare covers 75 of inpatient care costs 1. Costs not covered by Medicare are either recovered by OOP payments or private health insurance which accounted for 7.5 of THE in 27, as seen in Chart 4. The government encourages people to purchase private health insurance through rebate on premiums, Medicare levy surcharge for the better-off and Lifetime Health Cover. Under Lifetime Health Cover, people who take out hospital cover earlier in life are charged lower premiums throughout their lives. About half of all Australians have private health insurance. A publicly funded safety net is in place to assist those whose OOP expenditures on health care services reach a certain threshold in a calendar year. 1 Australian Government (28) About Australia: Health Care in Australia Australia 2

12 Chart 3 Trends in health care expenditure in Australia, US$ (constant 27 prices) percentage () Real THE (US$, 27) Real GGHE (US$, 27) GGHE as of GGE Chart 4 Breakdown of the percentage of total expenditure on health in Australia by main contribution mechanisms, 1997 and General Taxation.. Social Health Insurance Prepaid Private Schemes Out-of-pocket payment Other Links Australian Department of Health and Ageing (1999- ) Occasional Papers: Health Financing Series Australian Government (28) About Australia: Health Care in Australia Li S. (26) Health Care Financing Policies of Australia, New Zealand and Singapore, Research Paper RP6/5-6 of the Hong Kong Legislative Council, Hong Kong WHO (29) Western Pacific Country Health Information Profiles 29 Revision, Manila 3 Australia

13 Brunei Darussalam Brunei Darussalam is a high-income country with a total population of 39 in 27. Gross domestic product (GDP) was US$ in 27. The predominant source of health care fi nancing is general government health expenditure (GGHE) which is mainly fi nanced through general taxation. In 27, total health expenditure (THE) was 1.9 of GDP, equivalent to US$ 618. Out-of-pocket (OOP) payments made up 22. of THE; GGHE was 77.8 of THE. GGHE amounted to 5.3 of general government expenditure (GGE), 1.5 of GDP, and US$ 481. Charts 1 and 2 show historical trends in health expenditure. The budget for health care is allocated by the Ministry of Finance and administered by the Ministry of Health. Since the Government universally provides and pays for comprehensive health care services, there is a limited market for private health insurance for citizens and permanent residents. As shown in Chart 3, OOP payments have decreased slightly in recent years while public spending has increased. Chart 1 Trends in health care expenditure in Brunei Darussalam, Real GDP per capita (US$, 27) US$ (constant 27 prices) Percentage () GGHE as of THE OOP payment as of THE Other private expenditure as of THE

14 Chart 2 Health expenditure as of GDP in Brunei Darussalam, THE as of GDP GGHE as of GDP Chart 3 Trends in health care expenditure in Brunei Darussalam, US$ (constant 27 prices) percentage () Real THE (US$, 27) Real GGHE (US$, 27) GGHE as of GGE Chart 4 Breakdown of the percentage of total expenditure on health in Brunei Darussalam by main contribution mechanisms, 1997 and General Taxation Social Health Insurance Prepaid Private Schemes Out-of-pocket payment.1.1 Other Links WHO (29) Western Pacific Country Health Information Profiles 29 Revision, Manila 5 Brunei Darussalam

15 Cambodia Cambodia is a low-income country with a total population of 13.4 million in 28. Gross domestic product (GDP) was US$ 598 in 27. Out-of-pocket (OOP) payments are the predominant source of health care fi nancing. General government health expenditures (GGHE) are fi nanced through general taxation, which are largely supported by external donors. In 27, total health expenditure (THE) was 5.9 of GDP, equivalent to US$ 36. OOP payments made up 6.1 of THE; GGHE was 29. of THE. GGHE amounted to 11.2 of general government expenditure (GGE), 1.7 of GDP, and US$ 1. Charts 1 and 2 show historical trends in health expenditure. An offi cial user fee policy was introduced in This helped reduce under-the-table payments. However, it also deterred poor patients from seeking care. OOP payments as a share of THE reached a peak in Since then, it has been on a general downward trend and dropped by 5.6 from 1997 to 27, as can be seen in Chart 3. Chart 1 Trends in health care expenditure in Cambodia, US$ (constant 27 prices) Percentage () Real GDP per capita (US$, 27) GGHE as of THE OOP payment as of THE Other private expenditure as of THE

16 Chart 2 Health expenditures as of GDP in Cambodia, THE as of GDP GGHE as of GDP Much of the decline in OOP has been attributed to health equity funds (HEFs) which have been mainly funded by donors and constitute an important building block on Cambodia s way to universal coverage. HEFs serve as funded fee-exemption schemes. They currently cover the healthcare costs of the poor in more than half of the health districts nationwide. The percentage of the population found eligible ranged from 12 to 25 of a district s population 2. Expansion of HEFs is a key component of the Master Plan for Social Health Protection (adopted in 25 and revised in 29) which outlines the country s strategy to attain universal coverage. In addition to the expansion of HEFs, the Master Plan envisages that the informal (predominantly rural) sector shall be covered by community-based health insurance (CBHI) schemes co-sponsored by development partners. Therefore the membership of CBHIs which was around 4 persons in 28 3 is being further expanded. At the national level, the aim is to implement a compulsory social health insurance scheme for formal salaried workers. In general, the Master Plan envisions providing effective and equitable access to affordable quality of health services for all Cambodians by 215 and thereby achieving universal coverage. The Health Strategic Plan and the Strategic Framework for Health Financing, both spanning the years 28 to 215, outline the effort to ultimately bring all health fi nancing mechanisms together into a single, coherent plan under stewardship of the Ministry of Health. 2 Worldbank (28) Cambodia: Exempting the Poor from Hospital User Fees, Washington DC 3 World Health Organization (28) A Review of Health Care Financing Policies and Strategies in Cambodia, China, Laos, Mongolia, the Philippines and Vietnam, Manila 7 Cambodia

17 Health Financing Country Profiles Chart 3 Trends in health care expenditure in Cambodia, US$ (constant 27 prices) percentage () Real THE (US$, 27) Real GGHE (US$, 27) GGHE as of GGE Chart 4 Breakdown of the percentage of total expenditure on health in Cambodia by main contribution mechanisms, 1997 and General Taxation.... Social Health Insurance Prepaid Private Schemes Out-of-pocket payment Other Links Annear P. (29) Cambodia: Developing a Strategy for Social Health Protection in Cambodia, in: ESCAP (ed.) Promoting Sustainable Strategies to Improve Access to Health Care in the Asian and Pacific Region, Bangkok Bigdeli M. & Annear P. (29) Barriers to access and the purchasing function of health equity funds: lessons from Cambodia, Bulletin of the World Health Organization 87, pp Ministry of Health (28) Cambodia Strategic Framework for Health Financing , Phnom Penh World Health Organization (28) A Review of Health Care Financing Policies and Strategies in Cambodia, China, Laos, Mongolia, the Philippines and Vietnam, Manila. World Bank (28) Cambodia: Exempting the Poor from Hospital User Fees, Washington DC Cambodia 8

18 China China is a lower middle-income country with a population of more than 1.3 billion in 28. Gross domestic product (GDP) was US$ 2484 in 27. Out-of-pocket (OOP) payments are the predominant source of health care fi nancing. General government health expenditures (GGHE) are mainly fi nanced through social health insurance (SHI). In 27, total health expenditure (THE) was 4.5 of GDP, equivalent to US$ 112. OOP payments made up 45.2 of THE; GGHE was 45.3 of THE. GGHE amounted to 1.3 of general government expenditure (GGE), 2. of GDP, and US$ 5. Charts 1, 2 and 3 show historical trends in health expenditure. OOP health expenditure has been on a downward trend since 21, refl ecting government policies to improve government-funded health services. Compared to 1997, OOP payment as a share of THE fell by 7.7 in 27 and was 45.2 (see Chart 4). SHI as an important contributor to the achievement of universal coverage in China accounted for 3. of THE in 27 and is organized through the following three main schemes: Chart 1 Trends in health care expenditure in China, Real GDP per capita (US$, 27) US$ (constant 27 prices) Percentage () GGHE as of THE OOP payment as of THE Other private expenditure as of THE

19 Health Financing Country Profiles Chart 2 5 Health expenditures as of GDP in China, THE as of GDP GGHE as of GDP There are three major social health insurance programmes 4 covering specifi c groups: The New Rural Cooperative Scheme (NCMS), covering rural residents on a voluntary basis. This started in 23, based on the old rural cooperative medical scheme that had been in place since the 197s, with government subsidising contributions in recent years. Of a target population of approximately 84 million, some 775 million are estimated to be covered. The Urban Employees Basic Medical Insurance (UE-BMI), covering urban employees on a mandatory basis since Of a target population estimated at 3 million, 23 million were covered at the end of 28. The Urban Residents Basic Medical Insurance (UR-BMI), covering non-working urban residents (children, students, elderly, disabled and others) on a voluntary basis since 27. Of a target population estimated at 2 million, 11 million were covered at the end of 28. The three insurance programmes function independently and offer markedly different benefi t packages. For instance, the NCMS inpatient reimbursement rate averaged only 27 in 28, as compared with an average of 65 through the UE-BMI. Moreover, these averages do not show the marked variation in fi nancial protection across localities and by disease conditions. In addition to these insurance programmes, there is the Medical Financial Assistance (MFA) programme funded by government. It provides fi nancial assistance for health care payments for the poor and vulnerable. Despite the marked expansion in population coverage by these schemes in recent years, large segments of the population do not have any protection, particularly many of the country s estimated 2 million migrant workers as well as the unemployed. The government announced a comprehensive reform of the health sector in 29 and is providing around US$139 billion by 211 for its implementation. Among the plan s priorities 4 Information and data on health insurance programmes comes from Barber (29). Health insurance in China: Briefing note. China 1

20 is the expansion of SHI coverage to 9 of the population and expanding the depth of coverage through premium subsidies, with the ultimate goal to achieve universal coverage. Major investments in the rural health infrastructure are also planned, e.g. providing a clinic in each of the country s 7 villages and hiring 1.37 million doctors for the rural area 3. Dialogues are also underway on shifting provider payment mechanisms away from fee-forservice. Chart 3 Trends in health care expenditure in China, US$ (constant 27 prices) percentage () Real THE ($US, 27) Real GGHE ($US, 27) GGHE as of GGE Chart 1 Breakdown of the percentage of total expenditure on health in China by main contribution mechanisms, 1997 and General Taxation Social Health Insurance Prepaid Private Schemes Out-of-pocket payment Other Links Hu et al. (28) Reform of how health care is paid for in China: challenges and opportunities, Lancet 372, pp Organisation for Economic Cooperation and Development (21) Improving China s health care system, OECD Economics Department Working Paper 751, Paris Parry J. & Weiyuan C. (28) Making health care affordable in China, Bulletin of the World Health Organization 86, pp World Health Organization (28) A Review of Health Care Financing Policies and Strategies in Cambodia, China, Laos, Mongolia, the Philippines and Vietnam, Manila World Health Organization (29) Health Care Financing in Rural China: New Rural Cooperative Medical Scheme, Technical Briefs for Policy-Makers, Number 3/29, Geneva 11 China

21 Cook Islands The Cook Islands are a self-governing territory in free association with New Zealand with a total population of about 2 2 in 28. Gross domestic product (GDP) was US$ in 27, although this fi gure refl ects in part large fi nancial fl ows from New Zealand. The predominant source of health care fi nancing in the Cook Islands is general government with support from external donors. In 27, total health expenditure (THE) was 4.4 of GDP, equivalent to $695. Outof-pocket (OOP) payments made up 6.1 of THE; General government health expenditure (GGHE) was 91.7 of THE. GGHE amounted to 12.4 of general government expenditure (GGE), 4. of GDP, and US$ 638. Charts 1 and 2 show historical trends in health expenditure. Health care is predominantly fi nanced through general taxation. As such, OOP payments as share of THE are relatively low (see Chart 3). At the same time, the country s tax base is limited and the government is considering to specifi cally allocate more of the revenue generated by taxes on alcohol and tobacco to the health sector. Additional public funds could contribute to deepen universal coverage, i.e. expanding the range of health care services covered. Chart 1 Trends in health care expenditure in Cook Islands, Real GDP per capita (US$, 27) US$ (constant 27 prices) Percentage () GGHE as of THE OOP payment as of THE Other private expenditure as of THE

22 Chart 2 Health expenditures as of GDP in Cook Islands, THE as of GDP GGHE as of GDP Effective, effi cient and equitable health fi nancing is aggravated by continuing incidences of communicable diseases and the rise of non-communicable diseases, especially diabetes and hypertension. Antihypertensive medication alone, for example, accounted for 2 of pharmaceutical costs in 1999/2 5. Allocation of resources to promotive and preventive health care is an effective way to address this development. Chart 3 Trends in health care expenditure in Cook Islands, US$ (constant 27 prices) percentage () Real THE (US$, 27) Real GGHE (US$, 27) GGHE as of GGE Furthermore, geographic disparities within the country lead to an inequitable provision and usage of health care by people from remote outer islands or rural areas. Like in other Pacifi c Island countries, the dependency on imported overseas drugs and other consumables as well as the referral of patients to hospitals outside the country, increase the 5 World Health Organization (23) Health Care Decision-making in the Western Pacific Region: Diabetes and the Care Continuum in the Pacific Island Countries, Manila 13 Cook Islands

23 Health Financing Country Profiles fi nancial burden for the health care system. Hence, investments in the Cook Islands own health infrastructure will be more cost-effi cient in the long run. Chart 4 Breakdown of the percentage of total expenditure on health in Cook Islands by main contribution mechanisms, 1997 and General Taxation.... Social Health Insurance Prepaid Private Schemes Out-of-pocket payment.. Other Links World Health Organization (23) Health Care Decision-making in the Western Pacific Region: Diabetes and the Care Continuum in the Pacific Island Countries, Manila World Health Organization (28) Healthcare Financing Strategy Mid-term Review. Situation Analysis: Cook Islands, Manila WHO (29) Western Pacific Country Health Information Profiles 29 Revision, Manila Cook Islands 14

24 Fiji Fiji is a Pacifi c island country with a total population of about 837, in 27. Gross domestic product (GDP) was US$ 4,14 in 27. The predominant source of health care fi nancing is general government health expenditure (GGHE) which is mainly fi nanced through general taxation. In 27, total health expenditure (THE) was 3.8 of GDP, equivalent to $151. Out-of-pocket (OOP) payments made up 24.5 of THE; GGHE was 69.1 of THE. GGHE amounted to 9.1 of general government expenditure (GGE), 2.6 of GDP, and $15 per capita. Charts 1 and 2 show historical trends in health expenditure. Increasing the health budget in order to cope with rising costs resulting out of higher prevalence of communicable and non-communicable diseases such as diabetes and hypertension, constitutes one of the government s priorities. Additional public funds could serve to deepen universal coverage, i.e. expanding the range of health care services covered. A reduction of OOP expenditure as a share of THE and an increase of public spending have already been achieved in recent years (see Chart 3). The expansion of user fees for health services is being considered. User fees might have a negative impact on the relatively low level of OOP expenditure. So far, however, no concrete work has been undertaken to explore the potential costs and outcomes of expanded user fees. Chart 1 Trends in health care expenditure in Fiji, Real GDP per capita (US$, 27) US$ (constant 27 prices) Percentage () GGHE as of THE OOP payment as of THE Other private expenditure as of THE

25 Health Financing Country Profiles Chart 2 5 Health expenditures as of GDP in Fiji, THE as of GDP GGHE as of GDP The generation of additional health sector revenues must in any case be fl anked by an increased ability to manage and effectively allocate resources. No overall health fi nancing strategy to deal with high referral costs for treatment in hospitals abroad and the costly importation of pharmaceuticals, has been put in place yet. Investments in Fiji s own health infrastructure, however, will be more cost-effi cient in the long run. Chart 3 Trends in health care expenditure in Fiji, US$ (constant 27 prices) percentage () Real THE (US$, 27) Real GGHE (US$, 27) GGHE as of GGE Fiji 16

26 Chart 4 Breakdown of the percentage of total expenditure on health in Fiji by main contribution mechanisms, 1997 and General Taxation.. Social Health Insurance Prepaid Private Schemes Out-of-pocket payment Other Links World Health Organization (23) Health Care Decision-making in the Western Pacific Region: Diabetes and the Care Continuum in the Pacific Island Countries, Manila World Health Organization (28) Healthcare Financing Strategy Mid-term Review. Situation Analysis: Fiji, Manila WHO (29) Western Pacific Country Health Information Profiles 29 Revision, Manila 17 Fiji

27 Japan Japan is a high-income country with a total population of million in 28. Gross domestic product (GDP) was US$ in 27. The predominant source of health care fi nancing is general government health expenditure (GGHE) which is mainly fi nanced through social health insurance (SHI). In 27, total health expenditure (THE) was 8. of GDP, equivalent to US$ Out-of-pocket (OOP) payments made up 15.1 of THE; GGHE was 81.3 of THE. GGHE amounted to 17.9 of general government expenditure (GGE), 6.5 of GDP, and US$ Charts 1 and 2 show historical trends in health expenditure. Comprising more than 35 different societies, four mandatory health insurance schemes cover the Japanese population. Their contribution to THE, however, declined slightly in recent years as did the share of OOP expenditure while general taxation increased, as seen in Chart 3. The four SHI schemes include the Society-Managed Health Insurance (SMHI) for employees of large companies (more than 7 workers) and the Japan Health Insurance Association- Managed Health Insurance (JHIAHI) for employees of small companies. Insurance premiums for both schemes are based on income and the number of dependents insured. Further, National Health Insurance (NHI) reimburses health care costs for the self-employed and retired persons while Mutual Aid Associations (MAA) covers civil servants and teachers. Chart 1 Trends in health care expenditure in Japan, US$ (constant 27 prices) Percentage () Real GDP per capita (US$, 27) GGHE as of THE OOP payment as of THE Other private expenditure as of THE

28 Chart 2 Health expenditures as of GDP in Japan, THE as of GDP GGHE as of GDP Private health insurance companies tend to provide lump-sum payments for services not fully covered by SHI, e.g. preventative care or normal childbirth. To cope with the rising cost of health care caused by rapid population ageing, Japan reintroduced co-payments for the elderly in 1983 and created an equalisation fund that transfers revenue from employee-based schemes to the NHI. Chart 3 Trends in health care expenditure in Japan, US$ (constant 27 prices) percentage () Real THE (US$, 27) Real GGHE (US$, 27) GGHE as of GGE Japan

29 Health Financing Country Profiles Chart 4 Trends in health care expenditure in Japan, US$ (constant 27 prices) percentage () Real THE (US$, 27) Real GGHE (US$, 27) GGHE as of GGE Links Organisation for Economic Cooperation and Development (29) Health-care reform in Japan: controlling costs, improving quality and ensuring equity, Paris WHO (29) Western Pacific Country Health Information Profiles 29 Revision, Manila Japan 2

30 Kiribati Kiribati is a Pacifi c island country with a total population of about 97 2 in 28. Gross domestic product (GDP) was US$ 167 in 27. The predominant source of health care fi nancing is general government health expenditure (GGHE) which is mainly fi nanced through general taxation and is substantially supported by external donors. In 27, total health expenditure (THE) was 13. of GDP, equivalent to US$ 139 per capita. Out-of-pocket (OOP) payments made up 12.8 of THE; General government health expenditure (GGHE) was 87.2 of THE. GGHE amounted to 7.8 of general government expenditure (GGE), 11.3 of GDP, and US$ 121. Charts 1 and 2 show historical trends in health expenditure. Since there is a comprehensive publicly funded and publicly provided health care system in place, OOP expenditure as a proportion of THE is relatively low. However, in recent years OOP payments have increased and the share of general taxation of THE dropped (see Chart 3). Revenue generated by the Ministry of Health was mostly generated from the sale of pharmaceuticals and medical supplies. Most government expenditure is on curative health services, pharmaceuticals and staff. Chart 1 Trends in health care expenditure in Kiribati, Real GDP per capita (US$, 27) US$ (constant 27 prices) Percentage () GGHE as of THE OOP payment as of THE Other expenditure as of THE

31 Health Financing Country Profiles Chart 2 Health expenditures as of GDP in Kiribati, THE as of GDP GGHE as of GDP Chart 3 Trends in health care expenditure in Kiribati, US$ (constant 27 prices) percentage () Real THE (US$, 27) Real GGHE (US$, 27) GGHE as of GGE Chart 4 Breakdown of the percentage of total expenditure on health in Kiribati by main contribution mechanisms, 1997 and General Taxation.... Social Health Insurance Prepaid Private Schemes Out-of-pocket payment.. Other Links WHO (29) Western Pacific Country Health Information Profiles 29 Revision, Manila Kiribati 22

32 Korea, Republic of The Republic of Korea is a high-income country with a total population of 48.6 million in 28. Gross domestic product (GDP) was US$ 2 14 in 27. The predominant source of health care fi nancing is general government health expenditure (GGHE) which is mainly fi nanced through social health insurance (SHI). In 27, total health expenditure (THE) was 6.6 of GDP, equivalent to US$ Out-of-pocket (OOP) payments made up 35.1 of THE; GGHE was 56.7 of THE. GGHE amounted to 12.5 of general government expenditure (GGE), 3.7 of GDP, and US$ 754. Charts 1 and 2 show historical trends in health expenditure. The Republic of Korea introduced mandatory SHI for industrial workers in large companies in 1977, incrementally expanded SHI to other parts of the population and achieved universal coverage in As of the end of 28, 96.3 of the total population was covered by SHI 6. Chart 1 Trends in health care expenditure in Korea, Real GDP per capita (US$, 27) US$ (constant 27 prices) Percentage () GGHE as of THE OOP payment as of THE Other private expenditure as of THE World Health Organization (29) Western Pacific Country Health Information Profiles 29 Revision, Manila 23

33 Health Financing Country Profiles Chart 2 Health expenditures as of GDP in Korea, THE as of GDP GGHE as of GDP In 2, the country s various health insurance societies were merged into one single payer, the National Health Insurance (NHI). For the formal salaried workers contribution to NHI is proportional to wage income and shared equally between the employee and employer. Since reliable information about the incomes of the self-employed is only partially available, the contribution formula for the self-employed is based on both income and property. There is a safety net for the poor in place, Medicaid. With an annual assessment of poverty status, Medicaid covered 3-5 of the total population in recent years 7. It is fi nanced by general taxation but administered through NHI. The benefi t package of NHI mainly includes curative services but biannual health check ups and vaccination is also provided free of charge. For services covered by the NHI, the co-payment rate is uniformly 2 for inpatient care. For outpatient care in hospitals the copayment rate is Therefore along with SHI OOP payments still constitute a main funding source for the health system, although it was steadily declining in recent years (see Chart 3). Rapid population ageing, weak incentive for physicians to provide cost-effective care under the fee for-service system, and increasing demand for health services have contributed to a higher fi nancial burden for the health care system. 7 Kwon S. (29) Thirty years of national health insurance in South Korea: lessons for achieving universal health care coverage, Health Policy and Planning 24(1), pp ob.cit. Korea, Republic of 24

34 Chart 3 Trends in health care expenditure in Korea, US$ (constant 27 prices) percentage () Real THE ($US, 27) Real GGHE ($US, 27) GGHE as of GGE Chart 4 Breakdown of the percentage of total expenditure on health in Korea by main contribution mechanisms, 1997 and General Taxation Social Health Insurance Prepaid Private Schemes Out-of-pocket payment Other Links Jeong H. (25) Health care reform and change in public private mix of financing: a Korean case, Health Policy 74(2), pp Kwon S. (29) Thirty years of national health insurance in South Korea: lessons for achieving universal health care coverage, Health Policy and Planning 24(1), pp Lee J. (21) Spectre of ageing population worries economists, Bulletin of the World Health Organization 88(3), pp Ruger J.P. & Kim H. (27) Out-of-Pocket Healthcare Spending by the Poor and Chronically Ill in the Republic of Korea, American Journal of Public Health 97(5), pp WHO (29) Western Pacific Country Health Information Profiles 29 Revision, Manila 25 Korea, Republic of

35 Lao People's Democratic Republic The Lao People s Democratic Republic is a low-income country with an estimated total population of 6.3 million in Gross domestic product (GDP) was US$ 698 in 27. Out-of-pocket (OOP) payments are the predominant source of health care fi nancing. General government health expenditures (GGHE) are fi nanced through general taxation, which are largely supported by external donors. In 27, total health expenditure (THE) was 4. of GDP, equivalent to US$ 28. OOP payments made up 61.7 of THE; GGHE was 18.9 of THE. GGHE amounted to 3.7 of general government expenditure (GGE),.8 of GDP, and US$ 5. Charts 1 and 2 show historical trends in health expenditure. As shown in Chart 3, public spending as proportion of THE has declined in recent years while OOP payments have increased. Health equity funds (HEFs), fi nanced by bilateral donors as well as lending banks, attempt to counteract this development. These provide a safety net for the most vulnerable, by refunding user fees for identifi ed poor households. The target is to cover more than 1.5 million potential benefi ciaries under the various HEFs in the near future, thereby making HEFs an important component in the attainment of universal coverage. Chart 1 Trends in health care expenditure in Lao PDR, US$ (constant 27 prices) Percentage () Real GDP per capita (US$, 27) GGHE as of THE OPP payment as of THE Other expenditure as of THE United Nations Department of Economic and Social Affairs (28) World Population Prospects: The 28 Revision 26

36 Chart 2 Health expenditures as of GDP in Lao PDR, THE as of GDP GGHE as of GDP For those employed in the formal sector, the Civil Servants Scheme (CSS) and the Social Security Organization (SSO) for private-sector salaried workers, partially reimburse the costs for needed health services. In the informal sector, voluntary community-based health insurance (CBHI) is progressively being expanded with the aim to eventually cover all of the 3.5 million potential benefi ciaries. These four non-tax fi nanced prepayment schemes (HEF, CSS, SSO, CBHI) added up to around 8 coverage of the total population in The government s aim to introduce universal coverage for its population by 22 has focused policies on the scaling up of existing social health insurance (SHI) schemes and merging them into a single institutional framework. This would replace the separate mandates of the Ministry of Labour and Social Welfare (MOLSW) and the Ministry of Health (MOH). It would also require substantial increases in government funding of health care. Chart 3 Trends in health care expenditure in Lao PDR, US$ (constant 27 prices) percentage () Real THE (US$, 27) Real GGHE (US$, 27) GGHE as of GGE World Health Organization (28) A Review of Health Care Financing Policies and Strategies in Cambodia, China, Laos, Mongolia, the Philippines and Vietnam, Manila 27 Lao People's Democratic Republic

37 Health Financing Country Profiles Chart 4 Breakdown of the percentage of total expenditure on health in Lao PDR by main contribution mechanisms, 1997 and General Taxation Social Health Insurance Prepaid Private Schemes Out-of-pocket payment 5.9 Other Links International Social Security Association (29) Pursuing universal health-care provision in Lao People s Democratic Republic Thome J.-M. & Pholsena S. (29) Lao People s Democratic Republic: Health Financing Reform and Challenges in Expanding the Current Social Protection Schemes, in: ESCAP (ed.) Promoting Sustainable Strategies to Improve Access to Health Care in the Asian and Pacific Region, Bangkok World Health Organization (28) A Review of Health Care Financing Policies and Strategies in Cambodia, China, Laos, Mongolia, the Philippines and Vietnam, Manila Lao People's Democratic Republic 28

38 Malaysia Malaysia is an upper middle-income country with a total population of 27.7 million in 28. Gross domestic product (GDP) was US$ 727 in 27. The predominant source of health care fi nancing is general government health expenditure (GGHE) which is mainly fi nanced through general taxation. Out-of-pocket (OOP) payments are an almost equally important source of health care funding. In 27, total health expenditure (THE) was 4.4 of GDP, equivalent to US$ 37. OOP payments made up 4.7 of THE; GGHE was 44.4 of THE. GGHE amounted to 6.9 of general government expenditure (GGE), 2. of GDP, and US$ 136. Charts 1 and 2 show historical trends in health expenditure. The entire Malaysian population is served by both public and private health providers, which complement each other. The parallel existence of public and private health services permits the affl uent part of the population to voluntarily switch to the private health sector, while the poor remain dependent on public health services. As shown in Chart 3, the expanding sector of private health insurance contributed 8. of THE in 27 while the share of general taxation dropped in recent years. The switch of the better-off to private health services has the potential to reduce demand in the public sector and cut government s subsidies which benefi t the affl uent. Public spending could in turn be channelled to the poor who rely on the public health sector. Chart 1 rends in health care expenditure in Malaysia, US$ (constant 27 prices) Percentage () Real GDP per capita (US$, 27) GGHE as of THE OOP payment as of THE Other private expenditure as of THE

39 Health Financing Country Profiles Chart 2 5 Health expenditures as of GDP in Malaysia, THE as of GDP GGHE as of GDP Since the 8th Malaysia Plan, the Ministry of Health and the Economic Planning Unit (EPU) have renewed their efforts to develop a national health care fi nancing mechanism (NHFM). The need for such a mechanism was further emphasized in the 9th Malaysia Plan The decision to establish a NHFM was brought about by changing disease patterns, new technologies and medicines, growing expectations of consumers for high-quality care, and the expansion of the private sector. Chart 3 Trends in health care expenditure in Malaysia, US$ (constant 27 prices) percentage () Real THE (US$, 27) Real GGHE (US$, 27) GGHE as of GGE Malaysia 3

40 Chart 4 Breakdown of the percentage of total expenditure on health in Malaysia by main contribution mechanisms, 1997 and General Taxation.2.4 Social Health Insurance Prepaid Private Schemes Out-of-pocket payment Other Links WHO (29) Western Pacific Country Health Information Profiles 29 Revision, Manila Yu C. (28) Equity in health care financing: The case of Malaysia, International Journal for Equity in Health 7(15) 31 Malaysia

41 Marshall Islands The Marshall Islands are a Pacifi c island country with a total population of about 53 2 in 28. Gross domestic product (GDP) was US$ 2517 in 27, although this fi gure refl ects in part large fi nancial fl ows from the United States of America. The predominant source of health care fi nancing in the Marshall Islands is general government with support from external donors. In 27, total health expenditure (THE) was 14.7 of GDP, equivalent to US$ 371. Out-of-pocket (OOP) payments made up 2.6 of THE; General government health expenditure (GGHE) was 97.4 of THE. GGHE amounted to 14.6 of general government expenditure (GGE), 14.3 of GDP, and US$ 361. Charts 1 and 2 show historical trends in health expenditure. Since there is a comprehensive publicly funded health care system in place OOP payment as a proportion of THE remained low while the share of general taxation rose by 16.2 from 1997 to 27 (see Chart 3). Additional public funds could contribute to deepen universal coverage, i.e. expanding the range of health care services covered. Geographic disparities within the country lead to an inequitable provision and usage of health care by people from remote outer islands or rural areas. In line with its mission statement, the Ministry of Health continues to explore avenues to provide the best quality health care possible to the population despite its meagre funding and limited human and capital resources. Chart 1 rends in health care expenditure in Marshall Islands, Real GDP per capita (US$, 27) US$ (constant 27 prices) Percentage () GGHE as of THE OOP payment as of THE Other private expenditure as of THE

42 Chart 2 Health expenditures as of GDP in Marshall Islands, THE as of GDP GGHE as of GDP Chart 3 Trends in health care expenditure in Marshall Islands, US$ (constant 27 prices) percentage () Real THE ($US, 27) Real GGHE ($US, 27) GGHE as of GGE Chart 4 Breakdown of the percentage of total expenditure on health in Marshall Islands by main contribution mechanisms, 1997 and General Taxation Social Health Insurance.. Prepaid Private Schemes Out-of-pocket payment.. Other Links World Health Organization (23) Health Care Decision-making in the Western Pacific Region: Diabetes and the Care Continuum in the Pacific Island Countries, Manila WHO (29) Western Pacific Country Health Information Profiles 29 Revision, Manila 33 Marshall Islands

43 Micronesia, Federated States of The Federated States of Micronesia are a Pacifi c island country with a total population of about 18 in 28. Gross domestic product (GDP) was US$ 2123 in 27, although this fi gure refl ects in part large fi nancial fl ows from the United States of America. The predominant source of health care fi nancing is general government health expenditure (GGHE) which is mainly fi nanced through general taxation and is substantially supported by external donors. In 27, total health expenditure (THE) was 13.3 of GDP, equivalent to US$ 282. Out-of-pocket (OOP) payments made up 4.2 of THE; GGHE was 95.8 of THE. GGHE amounted to 18.9 of general government expenditure (GGE), 12.7 of GDP, and US$ 27. Charts 1 and 2 show historical trends in health expenditure. The social health insurance (SHI) scheme MiCARE serves as a prepayment mechanism to protect parts of the population against catastrophic health expenditures. MiCARE covers public servants on a compulsory basis but is also open for voluntary membership. As shown in Chart 3, the SHI proportion of THE has more than doubled from 1997 to 27. Chart 1 Trends in health care expenditure in Micronesia, Federated States of Real GDP per capita (US$, 27) US$ (constant 27 prices) Percentage () GGHE as of THE OOP payment as of THE Other private expenditure as of THE

44 Chart 2 Health expenditures as of GDP in Micronesia, Federated States of, THE as of GDP GGHE as of GDP There are ongoing discussions on scaling up SHI, with the aim of achieving universal coverage. Patients insured by SHI get 9 of their medical charges reimbursed with a 1 copayment 11. The country s health care system carries a high fi nancial burden due to the costs of overseasreferrals accounting for 11.7 of THE in 25 12, as well as due to the costly treatment of non-communicable diseases and tuberculosis. The health care system is also largely dependent on imported drugs and consumables. Hence, investments in the Federated States of Micronesia s own health infrastructure will be more cost-effi cient in the long term. Chart 3 Trends in health care expenditure in Micronesia, Federated States of, US$ (constant 27 prices) percentage () Real THE (US$, 27) Real GGHE (US$, 27) GGHE as of GGE World Health Organization (28) Healthcare Financing Strategy Mid-term Review. Situation Analysis: Federated States of Micronesia, Manila 12 op. cit. 35 Micronesia, Federated States of

45 Health Financing Country Profiles Chart 4 Breakdown of the percentage of total expenditure on health in Micronesia, Federated States of by main contribution mechanisms, 1997 and General Taxation 1.1 Social Health Insurance.. Prepaid Private Schemes Out-of-pocket payment.. Other Links World Health Organization (23) Health Care Decision-making in the Western Pacific Region: Diabetes and the Care Continuum in the Pacific Island Countries, Manila World Health Organization (28) Healthcare Financing Strategy Mid-term Review. Situation Analysis: Federated States of Micronesia, Manila WHO (29) Western Pacific Country Health Information Profiles 29 Revision, Manila Micronesia, Federated States of 36

46 Mongolia Mongolia is a lower middle-income country with a total population of 2.7 million in 28. Gross domestic product (GDP) was US$ 1481 in 27. General government health expenditures (GGHE) which are equally fi nanced through general taxation and social health insurance (SHI) are the predominant source of health care fi nancing. In 27, total health expenditure (THE) was 6.2 of GDP, equivalent to US$ 91. OOP payments made up 1.7 of THE; GGHE was 75.7 of THE. GGHE amounted to 12.2 of general government expenditure (GGE), 4.7 of GDP, and US$ 69. Charts 1 and 2 show historical trends in health expenditure. As part of the country s comprehensive socioeconomic reforms in the 199s, compulsory SHI was introduced in 1994 and almost led to universal coverage by However, SHI coverage has been continuously falling over the last years and accounted for 77.3 in 27. The main reason for this decline is that in 1999 the government stopped subsidizing SHI membership for students and self-employed including herders who then opted out of the scheme. Other factors affecting SHI coverage rate are diffi culties in reaching non-salaried workers, the inability or unwillingness to pay insurance premiums and the high levels of internal migration. However, SHI remains a main contributor to THE, accounting for 37.8 in (see Chart 3), and the most promising health fi nancing mechanism for achieving universal coverage in Mongolia. Chart 1 Trends in health care expenditure in Mongolia of US$ (constant 27 prices) Percentage () Real GDP per capita (US$, 27) GGHE as of THE OOP payment as of THE Other private expenditure as of THE World Health Organization (28) A Review of Health Care Financing Policies and Strategies in Cambodia, China, Laos, Mongolia, the Philippines and Vietnam, Manila 37

47 Health Financing Country Profiles Chart 2 Health expenditures as of GDP in Mongolia, THE as of GDP GGHE as of GDP Key stakeholders within the public health fi nancing system comprise the MOH which develops budgets for the health sector, the State Social Insurance General Offi ce (SSIGO) which is responsible for premium collection and monitoring of healthcare service quality as well as the Social Insurance National Council (SINC) which monitors usage and expenses. Chart 3 Trends in health care expenditure in Mongolia, US$ (constant 27 prices) percentage () Real THE (US$, 27) Real GGHE (US$, 27) GGHE as of GGE Mongolia 38

48 Chart 4 Breakdown of the percentage of total expenditure on health in Mongolia by main contribution mechanisms, 1997 and General Taxation Social Health Insurance.. Prepaid Private Schemes Out-of-pocket payment Other Links Tumendemberel N. (29) Mongolia: Promoting Sustainable Financing and Universal Coverage through Social Health Insurance, in: ESCAP (ed.) Promoting Sustainable Strategies to Improve Access to Health Care in the Asian and Pacific Region, Bangkok World Bank (27) The Mongolian Health System at a Crossroads: An Incomplete Transition to a Post-Semashko Model, Washington DC World Health Organization (27) Mongolia: Health system review, Health Systems in Transition 9(4), Copenhagen World Health Organization (28) A Review of Health Care Financing Policies and Strategies in Cambodia, China, Laos, Mongolia, the Philippines and Vietnam, Manila 39 Mongolia

49 Nauru Nauru is a Pacifi c island country with a total population of about 1 1 in 28. Gross domestic product (GDP) was US$ 4458 in 27. The predominant source of health care fi nancing in Nauru is general government with support from external donors. In 27, total health expenditure (THE) was 15.1 of GDP, equivalent to US$ 673 per capita. Out-of-pocket (OOP) payments made up 24.6 of THE; General government health expenditure (GGHE) was 7.9 of THE. GGHE amounted to 38.1 of general government expenditure (GGE), 1.7 of GDP, and US$ 477. Charts 1 and 2 show historical trends in health expenditure. As seen in Chart 3, public spending for health as a proportion of THE remained around 7 in recent years while the share of OOP payment more than quadrupled in the period from 1997 to 27. A further increase is likely to pose barriers to the fi nancial access of health care services for the poor and should be prevented by effective, effi cient and equitable measures. Chart 1 Trends in health care expenditure in Nauru of US$ (constant 27 prices) Percentage () Real GDP per capita (US$, 27) GGHE as of THE OOP payment as of THE Other private expenditure as of THE

50 Chart 2 Health expenditures as of GDP in Nauru, THE as of GDP GGHE as of GDP Chart 3 Trends in health care expenditure in Nauru, , US$ (constant 27 prices) percentage () Real THE (US$, 27) Real GGHE (US$, 27) GGHE as of GGE Chart 4 Breakdown of the percentage of total expenditure on health in Nauru by main contribution mechanisms, 1997 and General Taxation.... Social Health Insurance Prepaid Private Schemes 5.8 Out-of-pocket payment 4.5 Other Links WHO (29) Western Pacific Country Health Information Profiles 29 Revision, Manila 41 Nauru

51 New Zealand New Zealand is a high-income country with a total population of 4.2 million in 28. Gross domestic product (GDP) was US$ in 27. The predominant source of health care fi nancing is general government health expenditure (GGHE) which is mainly fi nanced through general taxation. In 27, total health expenditure (THE) was 8.9 of GDP, equivalent to US$ Out-of-pocket (OOP) payments made up 17.4 of THE; GGHE was 77. of THE. GGHE amounted to 17.4 of general government expenditure (GGE), 6.9 of GDP, and US$ Charts 1 and 2 show historical trends in health expenditure. Of THE, around two thirds is currently coming from tax-funded Vote Health, which pays for core health services such as hospitals, primary care, public health care, mental health care, addiction services, and care for older people. The remaining public funds which are equivalent to around 1 of THE are from the Accident Compensation Corporation (ACC), which pays for accident and injury prevention and treatment 14. As shown in Chart 3, in recent years public spending on health has decreased while OOP expenditure has risen. Chart 1 Trends in health care expenditure in New Zealand of US$ (constant 27 prices) Percentage () Real GDP per capita (US$, 27) GGHE as of THE OOP payment as of THE Other private expenditure as of THE World Health Organization (29) Western Pacific Country Health Information Profiles 29 Revision, Manila 42

52 Chart 2 1 Health expenditures as of GDP in New Zealand, THE as of GDP GGHE as of GDP District health boards (DHBs) formed in 21 take a leading role in the delivery of health care services within their geographical areas through their own hospitals or purchased services from other hospitals. Each DHB is allocated an annual budget by central government based on the number of people living in each region, their age structure, and other population characteristics that affect the need for health and disability services. Private health insurance companies insure people against supplementary costs, rather than providing a comprehensive health cover. Prepaid private schemes accounted for 4.6 of THE in 27 (see Chart 3). While patients may be required to pay partially or fully for health care services or medicines received, the government has set up a safety net to support those who cannot afford the payments. Chart 3 Trends in health care expenditure in New Zealand, US$ (constant 27 prices) percentage () Real THE ($US, 27) Real GGHE ($US, 27) GGHE as of GGE New Zealand

53 Health Financing Country Profiles Chart 4 Breakdown of the percentage of total expenditure on health in New Zealand by main contribution mechanisms, 1997 and General Taxation.. Social Health Insurance Prepaid Private Schemes Out-of-pocket payment.3.9 Other Links Li S. (26) Health Care Financing Policies of Australia, New Zealand and Singapore, Research Paper RP6/5-6 of the Hong Kong Legislative Council, Hong Kong WHO (29) Western Pacific Country Health Information Profiles 29 Revision, Manila New Zealand 44

54 Niue Niue is a self-governing territory in free association with New Zealand with a total population of 1549 in 28. Gross domestic product (GDP) was US$ 9228 in 27, although this fi gure refl ects in part large fi nancial fl ows from New Zealand. The predominant source of health care fi nancing in Niue is general government with substantial support from external donors. In 27, total health expenditure (THE) was 13.6 of GDP, equivalent to US$ 1258 per capita. Out-of-pocket (OOP) payments made up 1.4 of THE; General government health expenditure (GGHE) was 98.6 of THE. GGHE amounted to 1.8 of general government expenditure (GGE), 13.4 of GDP, and US$ 124. Charts 1 and 2 show historical trends in health expenditure. Since there is a comprehensive publicly funded health care system in place, OOP expenditure as a proportion of THE is very low and even decreased further in the period from 1997 to 27, as shown in Chart 3. However, the depth of universal coverage, i.e. the range of health care services covered, remains an issue to be addressed. Chart 1 Trends in health care expenditure in Niue of Real GDP per capita (US$, 27) US$ (constant 27 prices) Percentage () GGHE as of THE OOP payment as of THE 2 2 Other private expenditure as of THE

55 Health Financing Country Profiles Chart 2 4 Health expenditures as of GDP in Niue, THE as of GDP GGHE as of GDP Chart 3 Trends in health care expenditure in Niue, US$ (constant 27 prices) percentage () Real THE (US$, 27) Real GGHE (US$, 27) GGHE as of GGE Chart 4 Breakdown of the percentage of total expenditure on health in Niue by main contribution mechanisms, 1997 and General Taxation Social Health Insurance Prepaid Private Schemes Out-of-pocket payment Other Links WHO (29) Western Pacific Country Health Information Profiles 29 Revision, Manila Niue 46

56 Palau Palau is a Pacifi c island country with a total population of about 2 7 in 28. Gross domestic product (GDP) was US$ 887 in 27, although this fi gure refl ects in part large fi nancial fl ows from the United States of America. The predominant source of health care fi nancing in Palau is general government with support from external donors. In 27, total health expenditure (THE) was 1.8 of GDP, equivalent to US$ 873 per capita. Out-of-pocket (OOP) payments made up 8.7 of THE; General government health expenditure (GGHE) was 78.4 of THE. GGHE amounted to 12.7 of general government expenditure (GGE), 8.5 of GDP, and US$ 685. Charts 1 and 2 show historical trends in health expenditure. Increased user fees for hospital services as well as copayments of 55 for offi cial overseas medical referrals have reduced the fi nancial burden of the country s health sector 15. Consequently, public spending on health as a proportion of THE dropped by 13.2 in the period from 1997 to 27 (see Chart 3). However, these measures potentially affect the utilization of health facilities by poor patients who are forgoing medical care because of unaffordable OOP payments at the point of service. Chart 1 Trends in health care expenditure in Palau Real GDP per capita (US$, 27) US$ (constant 27 prices) Percentage () GGHE as of THE OOP payment as of THE Other private expenditure as of THE Asian Development Bank (28) Palau: Development of a Sustainable Health Financing Scheme, Manila 47

57 Health Financing Country Profiles Chart 2 2 Health expenditures as of GDP in Palau, THE as of GDP GGHE as of GDP Palau has been working on the development of a national SHI since 1995 with the aim to achieve universal coverage of its population in the near future. In January 28, the National Healthcare Coverage and Savings Act was passed which envisages the establishment of a national health savings plan (NHSP) in the fi rst phase, and a national group health insurance plan in the second phase. The NHSP is to be fi nanced by individual medical savings accounts (MSAs) with contributions from employers and employees, as well as possible donor funding. Only few Palauans are currently covered by private health insurance, usually as part of company schemes. The country s aging population and the trend toward a higher prevalence of noncommunicable diseases such as diabetes and hypertension will increase the need for effective, effi cient and equitable health fi nancing. Chart 3 Trends in health care expenditure in Palau, US$ (constant 27 prices) percentage () Real THE (US$, 27) Real GGHE (US$, 27) GGHE as of GGE Palau 48

58 Chart 4 Breakdown of the percentage of total expenditure on health in Palau by main contribution mechanisms, 1997 and General Taxation... Social Health Insurance Prepaid Private Schemes Out-of-pocket payment 3.5. Other Links Asian Development Bank (28) Palau: Development of a Sustainable Health Financing Scheme, Manila WHO (29) Western Pacific Country Health Information Profiles 29 Revision, Manila 49 Palau

59 Papua New Guinea Papua New Guinea is a lower middle-income country with a total population of 6.5 million in 28. Gross domestic product (GDP) was US$ 988 in 27. The predominant source of health care fi nancing is general government health expenditure (GGHE) which is mainly fi nanced through general taxation and is substantially supported by external donors. In 27, total health expenditure (THE) was 3.2 of GDP, equivalent to US$ 31. Out-of-pocket (OOP) payments made up 7.7 of THE; GGHE was 81.8 of THE. GGHE amounted to 7.3 of general government expenditure (GGE), 2.6 of GDP, and US$ 26 per capita. Charts 1 and 2 show historical trends in health expenditure. Since a comprehensive publicly funded health care system is in place OOP payments are low and further decreased in recent years, as shown in Chart 3. Theoretically health care is free of charge but in most provinces small fees are charged for outpatient services. To deepen universal coverage in Papua New Guinea and expand the range of health care services covered increased public spending is crucial. Chart 1 Trends in health care expenditure in Papua New Guinea of Real GDP per capita (US$, 27) US$ (constant 27 prices) Percentage () GGHE as of THE OOP payment as of THE Other private expenditure as of THE

60 Chart 2 Health expenditures as of GDP in Papua New Guinea, THE as of GDP GGHE as of GDP The high incidence of communicable diseases and the rise of non-communicable diseases led to an escalation in health care costs. Allocation of resources to promotive and preventive health care is an effective way to address this development. Over 8 of recurrent health budgets were allocated exclusively to salaries in 26, leaving little for maintenance, goods and services 16. Due to the geographical disparities in the distribution of health services people in rural areas are most disadvantaged in accessing needed medical services. Following a recent review of fi scal space for health by the National Economic and Fiscal Commission, reforms are being initiated to increase essential service delivery through a new inter-governmental fi nancing system. It is planned to replace the previous based provincial block grants with functional grants based on health needs. Chart 3 Trends in health care expenditure in Papua New Guinea, US$ (constant 27 prices) percentage () Real THE (US$, 27) Real GGHE (US$, 27) GGHE as of GGE World Health Organization (29) Western Pacific Country Health Information Profiles 29 Revision, Manila 51 Papua New Guinea

61 Health Financing Country Profiles Chart 4 Breakdown of the percentage of total expenditure on health in Papua New Guinea by main contribution mechanisms, 1997 and General Taxation Social Health Insurance Prepaid Private Schemes Out-of-pocket payment Other Links World Health Organization (28) Healthcare Financing Strategy Mid-term Review. Situation Analysis: Papua New Guinea, Manila WHO (29) Western Pacifi c Country Health Information Profi les 29 Revision, Manila Papua New Guinea 52

62 Philippines The Philippines is a lower middle-income country with a total population of 88.6 million in 27. Gross domestic product (GDP) was US$ 1638 in 27. Out-of-pocket (OOP) payments are the predominant source of health care fi nancing. General government health expenditures (GGHE) are largely fi nanced through general taxation. In 27, total health expenditure (THE) was 3.9 of GDP, equivalent to US$ 63. OOP payments made up 54.5 of THE; GGHE was 34.9 of THE. GGHE amounted to 6.8 of general government expenditure (GGE), 1.4 of GDP, and US$ 22. Charts 1 and 2 show historical trends in health expenditure. Responsibility for public health service delivery and fi nancing is divided between the national Department of Health (DOH) and local government units. PhilHealth, the country s social health insurance (SHI) scheme, covers a relatively high proportion of the population, estimated as 77 in 28. The further expansion of PhilHealth to an even bigger part of the population is crucial for the attainment of universal coverage in the country. However, the depth of fi nancial protection for PhilHealth members is limited, with its contribution to THE only 8. in 27 (see Chart 3). Chart 1 Trends in health care expenditure in Philippines, Real GDP per capita (US$, 27) US$ (constant 27 prices) Percentage () GGHE as of THE OOP payment as of THE Other private expenditure as of THE

63 Health Financing Country Profiles Chart 2 5 Health expenditures as of GDP in Philippines, THE as of GDP GGHE as of GDP PhilHealth also have a Sponsored Program for the poor, where premiums are subsidized. In 29, 72 of the 4.7 million indigent families were enrolled in the Sponsored Program. There is a concern, however, that many of them are not making use of their membership due to a fear of stigmatization 17. Much of health providers incomes are based on fee-for-service payments, with associated concerns related to over-provision of care. Discussions in recent years have explored the possibility of moving away from fee-for-service reimbursement of providers. Chart 3 Trends in health care expenditure in Philippines, US$ (constant 27 prices) percentage () Real THE (US$, 27) Real GGHE (US$, 27) GGHE as of GGE ob. cit. Philippines 54

64 Chart 4 Breakdown of the percentage of total expenditure on health in Philippines by main contribution mechanisms, 1997 and General Taxation Social Health Insurance Prepaid Private Schemes Out-of-pocket payment Other Links Obermann K. et al. (26) Social health insurance in a developing country: The case of the Philippines, Social Science & Medicine 62, pp World Health Organization (28) A Review of Health Care Financing Policies and Strategies in Cambodia, China, Laos, Mongolia, the Philippines and Vietnam, Manila 55 Philippines

65 Samoa Samoa is a Pacifi c island country with a total population of about in 28. Gross domestic product (GDP) was US$ 2716 in 27. The predominant source of health care fi nancing is general government health expenditure (GGHE) which is mainly fi nanced through general taxation and is substantially supported by external donors. In 27, total health expenditure (THE) was 5.4 of GDP, equivalent to US$ 146. Out-of-pocket (OOP) payments made up 11.8 of THE; GGHE was 84.5 of THE. GGHE amounted to 1.5 of general government expenditure (GGE), 4.6 of GDP, and US$ 123. Charts 1 and 2 show historical trends in health expenditure. All Samoans have fi nancial access to health services at no extra costs or in some cases low user fees. User fees for health services have been applied cautiously in order to not jeopardize accessibility and affordability for vulnerable groups. Therefore OOP expenditure as a proportion of THE is low and has fallen in recent years while public spending on health has risen (see Chart 3). Additional public funds could contribute to deepen universal coverage, i.e. expanding the range of health care services covered. Chart 1 Trends in health care expenditure in Samoa, Real GDP per capita (US$, 27) US$ (constant 27 prices) Percentage () GGHE as of THE OOP payment as of THE Other private expenditure as of THE

66 Chart 2 Health expenditures as of GDP in Samoa, THE as of GDP GGHE as of GDP A comprehensive tax-based fi nanced health system is in place. However, a SHI law was adopted whose implementation is currently delayed. Public servants can already contribute to the National Provident Fund which accounted for.6 of THE in 27. Like in other Pacifi c island countries, the dependency on imported overseas drugs and other consumables as well as the referral of patients to hospitals outside the country, increase the fi nancial burden for the health care system. Inequity of access to overseas care remains a challenge. Hence, investments in Samoa s own health infrastructure will be more costeffi cient in the long term. Chart 3 Trends in health care expenditure in Samoa, US$ (constant 27 prices) percentage () Real THE (US$, 27) Real GGHE (US$, 27) GGHE as of GGE Samoa

67 Health Financing Country Profiles Chart 4 Breakdown of the percentage of total expenditure on health in Samoa by main contribution mechanisms, 1997 and General Taxation Social Health Insurance Prepaid Private Schemes Out-of-pocket payment Other Links World Health Organization (23) Health Care Decision-making in the Western Pacific Region: Diabetes and the Care Continuum in the Pacific Island Countries, Manila World Health Organization (28) Healthcare Financing Strategy Mid-term Review. Situation Analysis: Samoa, Manila WHO (29) Western Pacific Country Health Information Profiles 29 Revision, Manila Samoa 58

68 Singapore Singapore is a high-income country with a total population of 3.6 million in 28. Gross domestic product (GDP) was US$ in 27. Since the country s health care fi nancing system is a private yet publicly supported medical savings account (MSA) system out-of-pocket (OOP) payments are the predominant funding source for health care. In 27, total health expenditure (THE) was 3.2 of GDP, equivalent to US$ OOP payments made up 63.3 of THE; General government health expenditure (GGHE) was 32.6 of THE. GGHE amounted to 7.2 of general government expenditure (GGE), 1. of GDP, and US$ 379. Charts 1 and 2 show historical trends in health expenditure. Singapore has a mixed health fi nancing system with multiple tiers of protection in case of illness including strong government support as well as innovative complementary programs designed to promote individual responsibility. Therefore OOP payments as a share of THE went up in recent years while public spending declined (see Chart 3). Chart 1 Trends in health care expenditure in Singapore, US$ (constant 27 prices) Percentage () Real GDP per capita (US$, 27) GGHE as of THE OOP payment as of THE Other private expenditure as of THE

69 Health Financing Country Profiles Chart 2 5 Health expenditures as of GDP in Singapore, THE as of GDP GGHE as of GDP Introduced in 1984, Medisave is a national savings scheme to which employees are required to make mandatory contributions of 6.5 to 9. of his or her income depending on their age, while employers make a matching contribution 18. Individuals can use their MSA to pay hospital expenses incurred by themselves or their immediate family. In order to prevent individuals exhausting their MSAs before retirement, the government sets limits on the use of Medisave. MediShield is a low-cost, catastrophic illness insurance scheme set up in 199 and designed to help members meet the medical expenses from major or prolonged illnesses, for which their MSA balance would not be suffi cient. Annual premiums for MediShield can be paid from the individual s MSA. There are also private supplementary insurance products offering additional coverage. These are integrated with MediShield to provide a national risk pool for basic coverage. Medifund is an endowment fund set up by the Government as a safety net to cover health service costs for Singaporeans who are unable to pay for them. In 27, part of Medifund was specifi cally set aside to be dedicated to needy, elderly patients (65 years and above). ElderShield is a severe-disability insurance scheme, designed to provide Singaporeans with basic fi nancial protection against expenses required in the event of severe disability, especially in old age. Introduced in 22, it was further reformed in 27 to improve its benefi ts, and private insurers are now allowed to provide supplementary products with higher coverage. 18 Li S. (26) Health Care Financing Policies of Australia, New Zealand and Singapore, Research Paper RP6/5-6 of the Hong Kong Legislative Council, Hong Kong Singapore 6

70 Chart 3 Trends in health care expenditure in Singapore, US$ (constant 27 prices) percentage () Real THE (US$, 27) Real GGHE (US$, 27) GGHE as of GGE Chart 4 Breakdown of the percentage of total expenditure on health in Singapore by main contribution mechanisms, 1997 and General Taxation Social Health Insurance 1.9. Prepaid Private Schemes Out-of-pocket payment Other Links Li S. (26) Health Care Financing Policies of Australia, New Zealand and Singapore, Research Paper RP6/5-6 of the Hong Kong Legislative Council, Hong Kong Singaporean Ministry of Health (28) Singapore s Healthcare Financing System, Singapore World Bank (23) Financing Health Care: Singapore s Innovative Approach, Washington DC WHO (29) Western Pacific Country Health Information Profiles 29 Revision, Manila 61 Singapore

71 Solomon Islands The Solomon Islands are a Pacifi c island country with a total population of about 535 in 28. Gross domestic product (GDP) was US$ 174 in 27. The predominant source of health care fi nancing in the Solomon Islands is general government with support from external donors. In 27, total health expenditure (THE) was 5.1 of GDP, equivalent to US$ 55 per capita. Out-of-pocket (OOP) payments made up 5.1 of THE; General government health expenditure (GGHE) was 92.4 of THE. GGHE amounted to 15.4 of general government expenditure (GGE), 4.7 of GDP, and US$ 5. Charts 1 and 2 show historical trends in health expenditure. Since there is a comprehensive publicly funded health care system in place, OOP expenditure as a proportion of THE is very low and even decreased further in the period from 1997 to 27, as shown in Chart 3. However, the depth of universal coverage, i.e. the range of health care services covered, remains an issue to be addressed. Chart 1 Trends in health care expenditure in Solomon Islands, Real GDP per capita (US$, 27) US$ (constant 27 prices) Percentage () GGHE as of THE OOP payment as of THE Other private expenditure as of THE

72 Chart 2 1 Health expenditures as of GDP in Solomon Islands, THE as of GDP GGHE as of GDP Chart 3 Trends in health care expenditure in Solomon Islands, US$, percentage () Real THE (US$, 27) Real GGHE (US$, 27) GGHE as of GGE Chart 4 Breakdown of the percentage of total expenditure on health in Solomon Islands by main contribution mechanisms, 1997 and General Taxation.... Social Health Insurance Prepaid Private Schemes Out-of-pocket payment Other Links WHO (29) Western Pacific Country Health Information Profiles 29 Revision, Manila 63 Solomon Islands

73 Tonga Tonga is a Pacifi c island country with a total population of about 12,7 in 28. Gross domestic product (GDP) was US$ 2515 in 27. The predominant source of health care fi nancing is general government health expenditure (GGHE) which is mainly fi nanced through general taxation and is substantially supported by external donors. In 27, total health expenditure (THE) was 4.9 of GDP, equivalent to US$ 124. Out-of-pocket (OOP) payments made up 22. of THE; GGHE was 74. of THE. GGHE amounted to 11.7 of general government expenditure (GGE), 3.6 of GDP, and US$ 92. Charts 1 and 2 show historical trends in health expenditure. The increasing prevalence of non-communicable diseases (NCDs) such as diabetes and hypertension have lead to an increasing cost of services for NCDs related complications and associated high cost overseas referrals. Also the demographical change with an ageing population favours chronic high cost diseases. Allocation of resources to promotive and preventive health care is an effective way to address this development. The dependency on imported overseas drugs and other consumables further increase the fi nancial burden for the health care system. Chart 1 Trends in health care expenditure in Tonga, Real GDP per capita (US$, 27) US$ (constant 27 prices) Percentage () GGHE as of THE OOP payment as of THE Other private expenditure as of THE

74 Chart 2 1 Health expenditures as of GDP in Tonga, THE as of GDP GGHE as of GDP A government priority is the reduction of OOP payments by enhancing the fi nancial protection for the poor and vulnerable. As seen in Chart 3, OOP expenditure as a share of THE has already been brought down successfully in recent years. The government is considering at the introduction of social health insurance (SHI) for civil servants with the view to extend it to workers employed in the formal sector within the next years. This constitutes an important step on Tonga s way to universal coverage of its population. However, there is concern that the formal sector might be too small to support a SHI scheme. Geographic disparities within the country lead to an inequitable provision and usage of health care by people from outer islands or rural areas. They have limited access to curative services. Chart 3 Trends in health care expenditure in Tonga, US$, percentage () Real THE (US$, 27) Real GGHE (US$, 27) GGHE as of GGE Tonga

75 Health Financing Country Profiles Chart 4 Breakdown of the percentage of total expenditure on health in Tonga by main contribution mechanisms, 1997 and General Taxation Social Health Insurance* Prepaid Private Schemes Out-of-pocket payment Other Links World Health Organization (23) Health Care Decision-making in the Western Pacific Region: Diabetes and the Care Continuum in the Pacific Island Countries, Manila World Health Organization (28) Healthcare Financing Strategy Mid-term Review. Situation Analysis: Tonga, Manila WHO (29) Western Pacific Country Health Information Profiles 29 Revision, Manila Tonga 66

76 Tuvalu Tuvalu is a Pacifi c island country with a total population of about 97 in 28. Gross domestic product (GDP) was US$ 2788 in 27. The predominant source of health care fi nancing is general government health expenditure (GGHE) which is mainly fi nanced through general taxation and is supported by external donors. In 27, total health expenditure (THE) was 1.6 of GDP, equivalent to US$ 296. Out-of-pocket (OOP) payments made up 1.3 of THE; GGHE was 92. of THE. GGHE amounted to 16.1 of general government expenditure (GGE), 9.8 of GDP, and US$ 272. Charts 1 and 2 show historical trends in health expenditure. In general, all health services are provided free of charge through the Ministry of Health and legislation prevents the operation of private medical practice. User fees, however, have been introduced for selected items such as laboratory services or dental fees but OOP expenditure as a proportion of THE remained on a stable and low level in recent years (see Chart 3). To deepen universal coverage in Tuvalu and expand the range of health care services covered increased public spending is crucial. Chart 1 Trends in health care expenditure in Tuvalu, Real GDP per capita (US$, 27) US$ (constant 27 prices) Percentage () GGHE as of THE OOP payment as of THE 5 2 Other private expenditure as of THE

77 Health Financing Country Profiles Chart 2 2 Health expenditures as of GDP in Tuvalu, THE as of GDP GGHE as of GDP Non-communicable diseases are seen as the major health challenge for the country and their long-term, high-cost complications are placing a strain on the limited health sector budget. Allocation of resources to promotive and preventive health care is an effective way to address this development. The country faces a problem fi nancing and delivering essential services locally. However, the overseas medical treatment scheme (MTS) could be used more equitably and effi ciently. The long distance from overseas suppliers of drugs and consumables results in high costs and often causes shortages. Chart 3 Trends in health care expenditure in Tuvalu, US$, percentage () Real THE (US$, 27) Real GGHE (US$, 27) GGHE as of GGE Tuvalu 68

78 Chart 4 Breakdown of the percentage of total expenditure on health in Tuvalu by main contribution mechanisms, 1997 and General Taxation Social Health Insurance Prepaid Private Schemes Out-of-pocket payment Other Links World Health Organization (28) Healthcare Financing Strategy Mid-term Review. Situation Analysis: Tuvalu, Manila WHO (29) Western Pacific Country Health Information Profiles 29 Revision, Manila 69 Tuvalu

79 Vanuatu Vanuatu is a Pacifi c island country with a total population of about 233 in 28. Gross domestic product (GDP) was US$ 1859 in 27. The predominant source of health care fi nancing is general government health expenditure (GGHE) which is mainly fi nanced through general taxation and is supported by external donors. In 27, total health expenditure (THE) was 4.7 of GDP, equivalent to US$ 88. Out-of-pocket (OOP) payments made up 15.4 of THE; GGHE was 69.3 of THE. GGHE amounted to 11.4 of general government expenditure (GGE), 3.3 of GDP, and US$ 61. Charts 1 and 2 show historical trends in health expenditure. As seen in Chart 3, OOP payments as a proportion of THE were reduced by 3.9 over the period from 1997 to 27 while public spending on health rose by 7.8. In theory there is equal access to public health services although in reality people in outer islands may have less access to some services and access to overseas curative care is limited due to the high costs. To deepen universal coverage in Vanuatu and expand the range of health care services covered increased public spending is crucial. Chart 1 Trends in health care expenditure in Vanuatu, Real GDP per capita (US$, 27) US$ (constant 27 prices) Percentage () GGHE as of THE OOP payment as of THE Other private institutions as of THE

80 Chart 2 5 Health expenditures as of GDP in Vanuatu, THE as of GDP GGHE as of GDP The long distance from overseas suppliers of drugs and consumables results in high costs and often causes shortages. The country is facing an increasing prevalence of high cost chronic diseases. Allocation of resources to promotive and preventive health care is an effective way to address this development. Chart 3 Trends in health care expenditure in Vanuatu, US$, percentage () Real THE (US$, 27) Real GGHE (US$, 27) GGHE as of GGE Vanuatu

81 Health Financing Country Profiles Chart 4 Breakdown of the percentage of total expenditure on health in Vanuatu by main contribution mechanisms, 1997 and General Taxation.. Social Health Insurance Prepaid Private Schemes Out-of-pocket payment Other Links World Health Organization (28) Healthcare Financing Strategy Mid-term Review. Situation Analysis: Vanuatu, Manila WHO (29) Western Pacific Country Health Information Profiles 29 Revision, Manila Vanuatu 72

82 Viet Nam Viet Nam is a low-income country with a total population of 85.2 million in 27. Gross domestic product (GDP) was US$ 89 in 27. Out-of-pocket (OOP) payments are the predominant source of health care fi nancing. General government health expenditures (GGHE) are fi nanced mainly through general taxation. In 27, total health expenditure (THE) was 7.1 of GDP, equivalent to US$ 57. OOP payments made up 54.8 of THE; GGHE was 39.3 of THE. GGHE amounted to 8.7 of general government expenditure (GGE), 2.8 of GDP, and US$ 23. Charts 1 and 2 show historical trends in health expenditure. The expansion of user fees in the 199s helped to relieve the fi nancial burden on the government. At the same time user fees had a negative impact on service utilization among the poor, widening the poverty gap and contributing to higher OOP payment 19. Chart 1 Trends in health care expenditure in Viet Nam, Real GDP per capita (US$, 27) US$ (constant 27 prices) Percentage () GGHE as of THE OOP payment as of THE Other privat expenditure as of THE Dao H.T. et al. (28) User fees and health service utilization Vietnam: How to protect the poor?, Public Health 122, pp

83 Health Financing Country Profiles Chart 2 1 Health expenditures as of GDP in Viet Nam, THE as of GDP GGHE as of GDP The population covered by social health insurance (SHI) has been increasing, accounting for 42. of the total population in 26 2, although there is still potential to further strengthen the fi nancial protection offered by SHI. As one of the policies to increase coverage and ultimately achieve universal coverage, a Health Care Fund for the Poor (HCFP) was established in 22. This has led to substantial increases in public spending on health, since it subsidizes all people identifi ed as poor and has already led to a reduction of OOP expenditure within the group of HCFP benefi ciaries. Chart 3 shows the decline of OOP payments as a share of THE by 1.7 in the period from 1997 to 27. Another important step towards universal coverage was the enforcement of a Health Insurance Law in July 29 that guarantees equal access to health care services for the 17 million poor. Chart 3 Trends in health care expenditure in Viet Nam, US$ (constant 27 prices) percentage () Real THE (US$, 27) Real GGHE (US$, 27) GGHE as of GGE World Health Organization (28) A Review of Health Care Financing Policies and Strategies in Cambodia, China, Laos, Mongolia, the Philippines and Vietnam, Manila Viet Nam 74

84 Chart 4 Breakdown of the percentage of total expenditure on health in Viet Nam by main contribution mechanisms, 1997 and General Taxation Social Health Insurance Prepaid Private Schemes Out-of-pocket payment Other Links Axelson H. et al. (29) Health financing for the poor produces promising short-term effects on utilization and out-of-pocket expenditure: evidence from Vietnam, Int Journal for Equity in Health 8:2 Dao H et al. (28) User fees and health service utilization: how to protect the poor?, Public Health 122 Ekman B. et al. (28) Health insurance reform in Vietnam: a review of recent developments and future challenges, Health Policy and Planning 23, pp Ministry of Health Vietnam & Health Partnership Group (28) Joint Annual Health Review 28, Hanoi Phuong N. (29) Viet Nam: Review of Financing of Health Care in: ESCAP (ed.) Promoting Sustainable Strategies to Improve Access to Health Care in the Asian and Pacific Region World Health Organization (28) A Review of Health Care Financing Policies and Strategies in Cambodia, China, Laos, Mongolia, the Philippines and Vietnam, Manila 75 Viet Nam

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