Health financing country profiles. in the Western Pacific Region

Transcription

1 Health financing country profiles in the Western Pacific Region

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3 Health financing country profiles in the Western Pacific Region

4 WHO Library Cataloguing-in-Publication Data Health financing country profiles in the Western Pacific Region: Delivery of health care economics. 2. Health expenditures. 3. Healthcare financing. I. World Health Organization Regional Office for the Western Pacific. ISBN (NLM Classification: W74) World Health Organization 214 All rights reserved. Publications of the World Health Organization are available on the WHO web site ( or can be purchased 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 non-commercial distribution should be addressed to WHO Press through the WHO web site ( For WHO Western Pacific Regional Publications, request for permission to reproduce should be addressed to Publications Office, World Health Organization, Regional Office for the Western Pacific, P.O. Box 2932, 1, Manila, Philippines, fax: , 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 specific 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.

5 Contents Foreword...v Acknowledgement...vi Introduction... 1 Australia... 6 Brunei Darussalam...11 Cambodia...15 China...2 Cook Islands...26 Fiji...3 Federated States of Micronesia...34 Japan...38 Kiribati...43 Lao People s Democratic Republic...47 Malaysia Marshall Islands...57 Mongolia...61 Nauru...66 New Zealand...7 Niue...74 Palau...78 Papua New Guinea...82 Philippines...87 Republic of Korea...93 Samoa...98 Singapore...12 Solomon Islands...17 Tonga Tuvalu Vanuatu Viet Nam iii

6 iv Health financing country profiles in the western pacific region,

7 Foreword The WHO Western Pacific Region continues to face many challenges in ensuring that millions of people, particularly poor and vulnerable populations, have financial protection against illness to prevent financial hardship from out-of-pocket payments or a decision not to seek health services. The development and improvement of health financing policies and their monitoring and evaluation are important to a country s journey towards universal health coverage, which is defined as all people having access to quality health services that are needed without enduring financial hardship paying for these services. WHO supports countries as they move closer towards universal health coverage through the development of their health financing systems. The third edition of the Health Financing Country Profiles for the Western Pacific Region provides summary descriptions of the health financing systems of 27 countries in the WHO Western Pacific Region. A cross-country comparison and individual country profiles of health expenditure trends from are analysed in the context of each country s health financing system, current issues and developments in health financing reform. Shin Young-soo, MD, Ph.D. Regional Director Foreword v

8 Acknowledgement The third edition of Health financing country profiles for the Western Pacific Region provides an update to the second edition with new health financing developments in the Western Pacific Region and more recently available data on health expenditures. Health financing country profiles for the Western Pacific Region is a product of the Health Care Financing unit of the WHO Regional Office for the Western Pacific, led by Ke Xu, within the Division of Health Sector Development under Division Director Vivian Lin. Annie Chu, Ding Yan and Ke Xu contributed to the technical updating of the report. Chris James and Nouria Brikci provided technical input to each profile. Marc Lerner edited the report. The Health Care Financing unit would like to thank the following for their valuable comments: Henrik Axelson, Valeria De Oliveira Cruz, Enkhee Erdenchimeg, Chandika Indikadahena, Ben Lane, Clement Malau, Thi Kim Phuong Nguyen, Lucille Nievera, Ann Robins, Paulinus Sikosana, Paul Chun Soo, and Thongleck Xiong. The unit would like to also give special thanks to Henk Bekedam who initiated the Health Financing Country Profiles for the Western Pacific Region project and supported the production of each edition during his tenure as the previous Director of the Division of Health Sector Development. Financial support from the Australia Government, Department of Foreign Affairs and Trade, formally the Australian Agency for International Development; Japan, Ministry of Health, Labour and Welfare; the Republic of Korea, Ministry of Health and Welfare; and the United Kingdom of Great Britain and Northern Ireland, Department for International Development, contributed to this publication. vi Health financing country profiles in the western pacific region,

9 Introduction A s countries in the WHO Western Pacific Region undergo rapid economic development, health financing plays an increasingly important role in efforts to progress towards universal health coverage, a vision of health sector development in which everyone has access to quality health services with financial protection. Experiences can be shared and lessons can be learnt from countries that are diverse in their geographic, economic and socio-demographic backgrounds as other countries, regardless of their backgrounds, undertake their own paths towards universal health coverage. The WHO Health Financing Strategy for the Asia Pacific Region provides eight strategic areas to help countries move towards universal health coverage, including raising more money for health and gaining more health for the money. The strategy outlines four target indicators to monitor and evaluate progress towards universal health coverage: 1. Out-of-pocket (OOP) spending should not exceed 3% 4% of total health expenditure (THE). 2. Total health expenditure should be at least 4% 5% of gross domestic product (GDP). 3. Over 9% of the population should be covered by prepayment and risk-pooling schemes. 4. Close to 1% of vulnerable populations should be covered by social assistance and safety net programmes. The Health financing country profiles for the Western Pacific Region provides concise overviews of the health financing systems of Member States of the Western Pacific Region. The third edition of Health financing country profiles for the Western Pacific Region covers 1995 to 211. Health expenditure trends across and by countries are analysed using WHO National Health Account data, country health financing systems and policies, and recent developments. Data The health expenditure and associated macroeconomic data used in these profiles come from the WHO Global Health Expenditure Database ( The standardized system of health accounts ensures accurate cross-country comparisons of health expenditures over time. It is important to note that in a few cases the data may differ from country-generated data due to methodological differences, although WHO works closely with governments to ensure consistency whenever possible. Note also that data are aggregated at the national level. Introduction 1

10 Health expenditure: cross-country comparisons As an introduction to the more detailed country-by-country profiles, the figures below provide simple cross-country comparisons in relation to some key health expenditure percentages in 211. The first figure shows health expenditures as a percentage of GDP, disaggregating total health expenditures into general government and private health expenditures. Few low-income countries have health expenditures of less than 4 5% of GDP. Health expenditure as % of gross domestic product (GDP) as % of GDP AUS BRN CHN COK FJI FSM JPN KHM KIR KOR LAO MHL MNG MYS NIU NRU NZL PHL PLW PNG SGP SOL TON TUV VNM VUT WSM GGHE as % of GDP PvtHE as % of GDP AUS Australia KHM Cambodia NZL New Zealand SLB Solomon Islands BRN Brunei Darussalam KIR Kiribati NIU Niue TON Tonga CHN China KOR Republic of Korea NRU Nauru TUV Tuvalu COK Cook Islands LAO Lao People s Democratic Republic PHL Philippines VNM Viet Nam FJI Fiji MHL Marshall Islands PLW Palau VUT Vanuatu FSM Federated State of Micronesia MNG Mongolia PNG Papua New Guinea WSM Samoa JPN Japan MYS Malaysia SGP Singapore 2 Health financing country profiles in the western pacific region,

11 The second figure shows differences in the structure of total health expenditure across countries in the Western Pacific Region. Structure of total health expenditure TUV NIU SOL COK FSM WSM VUT NRU BRN TON MHL NZL KIR JPN PNG PLW AUS FJI KOR MNG CHN MYS LAO VNM PHL SGP KHM Government line ministries Social Security Funds Other Private OOP The third figure shows each government s priority to health, as the share of general government health expenditure (GGHE) in total government expenditure, across countries. Of the 27 countries with health expenditure data available below, 16 spend more than 1% of their total government expenditure on health. Goverment priority to health (GGHE as a % of general government expenditure) AUS BRN CHN COK FJI FSM JPN KHM KIR KOR LAO MHL MNG MYS NIU NRU NZL PHL PLW PNG SGP SOL TON TUV VNM VUT WSM Introduction 3

12 The countries presented through these profiles may belong to the same broad geographical area but are economically and structurally very diverse. A few common threads however emerge from these profiles. Firstly, the main health financing challenges faced by Pacific island countries are very different to those faced by low- to middle-income Asian countries. The small population sizes of most Pacific island countries constrain the ability of those countries to raise sufficient domestic resources to finance all needed tertiary-level health services, particularly in light of the substantial and increasing burdens of noncommunicable diseases (NCDs). This results in a continuous need for overseas referrals, which further strains the financial sustainability of their health financing systems. This contributes, in nearly all cases, to donor dependence. Determining how to develop a revenue-raising mechanism able to sustain the system is therefore one of the most pressing challenges these countries face. In contrast, while the health systems of low- and lower middle-income Asian countries in the Western Pacific Region are able to provide most needed specialized care in-country, their health financing systems often rely heavily on household OOP payments. This can lead to households facing severe financial hardship when accessing services, or indeed not accessing services at all. Secondly, most of these countries are engaged on the journey towards universal health coverage, although the route chosen differs: some rely mainly on government revenue as in Brunei Darussalam, while others rely on a mix of sources taxation and social health insurance (SHI) as in Mongolia or mostly on private expenditures, as in Singapore. Some are further behind in terms of offering financial protection to their population as the share of OOP payments continue to dominate THE, as for example in Cambodia, the Lao People s Democratic Republic and the Philippines. Finally, all countries face the dual challenge of increased technological developments and the prevalence of NCDs, putting financial pressure on their ability to provide good-quality services at a reasonable cost. The need to prioritize health services will increase as will the need to raise additional resources. 4 Health financing country profiles in the western pacific region,

13 Definitions and methodology All health expenditure and gross domestic product (GDP) figures are expressed in current US dollars. The following key terms are frequently used. General government health expenditure (GGHE) This equals the total outlays by government entities to purchase health services and goods. It includes both recurrent and investment expenditures made during the year. It can include funds spent on social health insurance, as well as spending by ministries of health. It may also include health expenditures by other government agencies, such as ministries of defense, education and local government. Categorized by financing agents, GGHE includes expenditures from government line ministries, which include central and federal (ministry of health or other ministries); state, provincial and regional and local and municipal authorities; and extra budgetary agencies, principally social security schemes. Private health expenditure (PvtHE) This equals the total outlays of health by private entities. In the Western Pacific Region, these are typically in the form of direct household out-of-pocket (OOP) payments for health services. Private health expenditure can also be in the form of private insurance, and health services directly funded by private enterprises and from non-profit institutions. Total health expenditure (THE) This is the sum of general government and private expenditures on health, equating to all health expenditures in a country. Note that both government and private health expenditures can be comprised of external sources of funds, as well as domestic sources. These are referred to in this document as external resources for health. External resources These are those financing sources, channeled towards health by all non-resident institutional units that enter into transactions with resident units, or have other economic links with resident units, explicitly labelled or not to health, to be used as means of payments for health goods and services by financing agents in the government or private sectors. It includes donations and loans, in cash and in-kind resources. Introduction 5

14 Australia Health expenditure trends Australia is a high-income country with a population of 22.6 million people in 211. Gross domestic product (GDP) per capita was US$ in 211. The predominant source of healthcare financing is general government health expenditure (GGHE), which is mainly financed through general taxation. In 211, total health expenditure (THE) was 9.% of GDP, equivalent to US$ 5955 per capita. OOP (out-of-pocket) payments made up 19.8% of THE; GGHE was 68.5% of THE. GGHE amounted to US$ 48 per capita and represented 16.8% of general government expenditure (GGE) and 6.2% of GDP. Figures 1 5 show historical trends in health expenditure. THE has been on an upward trend. The structure of health expenditure has remained broadly similar over the years, with the Government accounting for roughly two thirds of THE. The Government s priority to health has remained relatively constant for the past few years. Health financing system Australia has a mixed health delivery and health financing system. The public sector provides most of the inpatient services and accounts for two thirds of the country s hospital beds. However, private medical practitioners provide most out-of-hospital medical services as well as dental services and allied health services such as physiotherapy. Health services are financed largely by the Government, with supplemental funding from copayments by private insurance schemes and household OOP payments. A large portion of the Australian Government s health funding is directed to one the three major national subsidy schemes Medicare, the Pharmaceutical Benefits Scheme (PBS) and the 3% private health insurance (PHI) rebate. Medicare provides all eligible Australian residents free or low-cost health services. It is administered by Medicare Australia and managed by the Department of Health. Medicare is financed largely by general government revenue, although individuals also make financial contributions through a taxation levy known as the Medicare levy, which is taxed at 1.5% of an individual s salary. 1 Medicare covers a large range of outpatient services including consultation fees, tests and examinations. In addition, Medicare s eligible patients admitted into public hospitals automatically receive treatment by doctors and specialists nominated by the hospital and are not charged for receiving treatments. However, they can also opt to be treated as private patients and choose their preferred doctors. Medicare then pays 75% of the Medicare schedule fee for services and procedures provided by the treating doctor. All Australians who have a current Medicare card are covered under the PBS, which covers the medicine costs for a majority of conditions through government subsidies. Like Medicare, the 1. See Extended Medicare Safety Net ( accessed on 31 March 213) for full details of services. 6 Health financing country profiles in the western pacific region,

15 AUS Figure 1. General trends in health expenditure per capita at exchange rate Current US$ per capita (at exchange rate) GGHE PvtHE AUS Figure 2. General trends in health expenditure as % of GDP 9 8 GGHE as % of GDP PvtHE as % of GDP 7 6 % of GDP AUS Figure 3. Trends in the structure of total health expenditure (THE) GGHE OOP Other private % of total health expenditure Australia 7

16 AUS Figure 4. GGHE as % of government spending GGHE as a % of general government expenditure AUS Figure 5. External resources for health as % of THE % of THE Health financing country profiles in the western pacific region,

17 scheme is managed by the Department of Health and administered by the Department of Human Services. 2 To achieve an improved balance between the public sector s and private sector s involvement in the delivery and financing of health care, the Australian Government is encouraging individuals to take out private health insurance (PHI), while preserving Medicare as the universal safety net. Hospital coverage and general treatment coverage are the types of PHI coverage available. PHI provides coverage for treatment as a private patient in a public or private hospital and for services such as physiotherapy, optometry, general dental and podiatry services that are not covered under Medicare. PHI allows some people to access health services that may have been unaffordable. Families and individuals that pay PHI premiums are eligible for federal government rebates on PHI. Rebate recipients will be treated consistently subject to age and income. 1 Since 25, higher rebates are offered to people aged 65 and above. An Extended Medicare Safety Net (EMSN) was also introduced in 24 to provide further financial assistance by meeting 8% of the OOP cost of medical services provided out of hospital once an annual threshold is reached, except for a few services that have a cap. For concession cardholders and families eligible for Family Tax Benefit A, the threshold is Aus$ 61.7 (as at 1 January 213). For all other Medicare cardholders, the threshold is Aus$ (as at 1 January 213). The private sector operates in parallel to the public sector. Services by private medical practitioners are financed by household OOP payments and private insurance. About half of the population has ancillary private insurance, which typically provides coverage for non-medical services provided by hospitals, such as physiotherapy, dental treatment and the purchase of spectacles. Way forward One of the key challenges to Australia s health financing system is managing the rise in health-care costs as a result of advances in medical technology. In addition, there are some concerns over the equity of health access. Given that some areas of surgery are now performed predominantly in the private sector, Australians living in rural areas who face limited availability of private inpatient facilities and thus have substantially lower levels of private health fund membership must wait, often for months, for elective surgery in the public system. Selected references Armstrong BK, et al. (27). Challenges in health and health care in Australia. Medical Journal of Australia 187(9): ( fm.html#_pgfid , accessed 21 February 213). Australia Government, Department of Health. Private health insurance; 213. ( gov.au/internet/main/publishing.nsf/content/private-1, accessed 21 February 213). Australia Government, Department of Health. About the PBS; 213. ( about-the-pbs, accessed 21 February 213). Australia Government, Department of Health. The Extended Medicare Safety Net; 213. ( accessed 21 February 213. Australia Government, Department of Human Services. Payments and services; 213. ( medicareaustralia.gov.au/about/index.jsp, accessed 21 February 213). 2. Australian Medical Association ( accessed on 31 March 213). Australia 9

18 AUSTRALIA GDP and health expenditures per capita (in current currency unit) Gross Domestic Product (GDP) US dollar Australian dollar Total Health Expenditure (THE) US dollar Australian dollar Government Health Expenditure (GGHE) US dollar Australian dollar Private Health Expenditure (PvtHE) US dollar Australian dollar Out-of-pocket expenditure (OOP) US dollar Australian dollar Health expenditure ratios THE as % of GDP GGHE as % of GDP PvtHE as % of GDP GGHE as % of GGE GGHE as % of THE OOP as % of THE Other private as % of THE External resources as % of THE All data for 211 are provisional data Health Expenditure and GDP figures are expressed in current US dollar based on the average exchange rate for that year. 1 Health financing country profiles in the western pacific region,

19 Brunei Darussalam Health expenditure trends Brunei Darussalam is a high-income country with a population of people in 211. Gross domestic product (GDP) per capita was US$ in 211. The predominant source of health-care financing is general government health expenditure (GGHE), which is mainly financed through general taxation. In 21, total health expenditure (THE) was 2.4% of GDP, equivalent to US$ 993 per capita. Outof-pocket (OOP) payments made up 14.8% of THE; GGHE was 85.% of THE. GGHE amounted to US$ 845 per capita and represented 8.8% of general government expenditure (GGE) and 2.1% of GDP. Figures 1 5 show historical trends in health expenditure. THE has been on an upward trend since 23. The structure of health expenditure has stayed almost uniform during the period with the Government accounting for more than 8% of THE. Figure 4 shows that the Government s priority to health has remained relatively constant. Health financing system Brunei Darussalam has a publicly administered and publicly financed health system. The Ministry of Health is the main agency responsible for the delivery of health care, health-care information and all health care-related services in the country. Citizens enjoy free medical and health care provided by the country s four government hospitals, 16 health centres and 64 primary care facilities. In remote areas that are not accessible or are difficult to access, travelling health clinics and the Flying Medical Services provide health-care services. In addition to the government hospitals in every district, there are two private hospitals, one of which is open only for employees of Brunei Shell Petroleum. The Government funds most health services. Funding for health is allocated by the Ministry of Finance and administered by the Ministry of Health. User fees currently constitute a very small percentage of the total funds available to health care. Since the Government provides and pays for comprehensive health-care services, OOP payments are typically very small for most households. Way forward One of the key challenges facing Brunei Darussalam is managing the rising cost of medicines and other medical needs while maintaining the high standards of health service delivery. Brunei Darussalam 11

20 BRN Figure 1. General trends in health expenditure per capita in US$ at exchange rate Current US$ per capita (at exchange rate) GGHE PvtHE BRN Figure 2. General trends in health expenditure as % of GDP GGHE as % of GDP PvtHE as % of GDP % of GDP BRN Figure 3. Trends in the structure of total health expenditure (THE) GGHE OOP Other private % of total health expenditure Health financing country profiles in the western pacific region,

21 BRN Figure 4. GGHE as % of government spending % of government spending BRN Figure 5. External resources for health as % of THE % of THE Brunei Darussalam 13

22 Selected references Brunei Darussalam Health; 24. ( accessed 21 February 213). Department of Policy and Planning, Ministry of Health, Brunei Darussalam (29). Health Information Booklet. ( accessed 21 February 213). BRUNEI DARUSSALAM GDP and health expenditures per capita (in current currency unit) Gross Domestic Product (GDP) US dollar Brunei dollar Total Health Expenditure (THE) US dollar Brunei dollar Government Health Expenditure (GGHE) US dollar Brunei dollar Private Health Expenditure (PvtHE) US dollar Brunei dollar Out-of-pocket expenditure (OOP) US dollar Brunei dollar Health expenditure ratios THE as % of GDP GGHE as % of GDP PvtHE as % of GDP GGHE as % of GGE GGHE as % of THE OOP as % of THE Other private as % of THE External resources as % of THE All data for 211 are provisional data Health Expenditure and GDP figures are expressed in current US dollar based on the average exchange rate for that year. 14 Health financing country profiles in the western pacific region,

23 Cambodia Health expenditure trends Cambodia is a low-income country with a population of 14.3 million people in 211. Gross domestic product (GDP) per capita was US$ 897 in 211. Out-of-pocket (OOP) expenditures and general government health expenditure (GGHE) are the main sources of health-care financing and account for 56.9% and 22.4% of the country s total health expenditure (THE), respectively. General government health expenditures are financed through general revenues and development assistance for health. In 211, THE was 5.7% of GDP, equivalent to US$ 51 per capita. GGHE amounted to US$ 11 per capita and represented 6.3% of general government expenditure (GGE) and 1.3% of GDP. External resources for health are 15.8% of THE. Figures 1 5 show historical trends in health expenditure. THE has been increasing over the last decade. General government spending on health has slightly increased since 27. OOP payments remain the main source of health financing. GGHE as percentage of general government spending, which reflects the Government s priority to health, has been about 6% since 27. Health financing system Cambodia has a mixed health delivery and health financing system. Health services are provided by the Government in public health facilities, by not-for-profit nongovernmental organizations that may operate independently or be contracted by the Government to provide health services to various districts, and by the for-profit private sector. Official user fees were introduced in 1996 for public health facilities, primarily to regulate unofficial charges believed to be widely prevalent. Official fees are set by individual health facilities on the principle of affordability and in consultation with the local community. The three main sources of health financing in Cambodia are household OOP payments, government funding derived from general revenue, and international donors. OOP payments account for the largest share of THE, mainly comprised of payments for drugs and user fees in the private and public sectors. From 24 to 27, catastrophic incidence declined in all economic quintiles, with the greatest declines observed in the higher quintiles. In 27 about 5% of health services were sought from private providers, while 17% of health services were sought from public providers. 1 The central Government uses a substantial part (7%) of its health budget for the procurement of drugs and medical equipment, and allocates the remainder to provincial governments (3%). Each province maintains its own independent budget, which is used mainly to finance salaries and operational costs of public health facilities. Donor funding for health may be directed to central or provincial government or directly to nongovernmental organizations. 1. Ministry of Health, Cambodia (211), Cambodian demographic health survey and Cambodian socio-economic surveys analysis Out-of-pocket expenditure on health Cambodia 15

24 KHM Figure 1. General trends in health expenditure per capita at exchange rate 5 GGHE Current US$ per capita (at exchange rate) PvtHE KHM Figure 2. General trends in health expenditure as % of GDP GGHE as % of GDP PvtHE as % of GDP 7 % of GDP KHM Figure 3. Trends in the structure of total health expenditure (THE) GGHE OOP Other private % of total health expenditure Health financing country profiles in the western pacific region,

25 KHM Figure 4. GGHE as % of government spending % of government spending KHM Figure 5. External resources for health as % of THE % of THE Cambodia 17

26 The Government s long-term aim is to achieve universal health coverage. The Strategic Framework for Health Financing provides the overall policy framework for Cambodia s health financing. The strategic framework stresses the need to remove financial and other barriers to access to health services for the poor and to protect the poor and the non-poor from the effects of catastrophic expenditures on health care. A draft Health Financing Policy sets out the general policy direction. In addition, a revised Health Financing Charter will provide a legal framework and maps out the steps that need to be taken in order to implement the health financing strategy towards universal coverage. Social health protection schemes include the Health Equity Funds (HEFs), which target the poor, and community-based health insurance (CBHI). There are plans to extend health insurance to the formal private sector and civil servants through the National Social Security Fund (NSSF). HEFs were introduced in 2. Under these schemes, poor patients are eligible to receive reimbursement for transport and food costs in addition to free care at public health facilities. HEFs also reimburse providers on a fee-for-service basis for the fees providers have forgone when treating poor patients. HEFs covered 2.45 million poor people, about 76% of their target population, in 212 and are planned to expand to full coverage in 215. Various CBHI schemes operate in Cambodia, but coverage is limited. Households typically pay a low-cost premium in exchange for coverage for health charges for a stated list of medical benefits delivered at contracted public health facilities. The CBHI system then reimburses the contracted facilities, typically under a capitation scheme. Most of the remaining funds are provided by international donors. Finally, some large employers (rubber plantation estates and garment manufacturing units) have their own health facilities to provide health care for employees, while others reimburse the costs incurred at health facilities. Way forward The Cambodian health financing system is complex and fragmented. The main challenge for the Government in its drive to progress faster towards universal health coverage will be to harmonize different schemes and ensure pooling of risks and resources across all groups. As noted above, a new national health financing policy is in its final stages of development. To implement the health financing policy, the 1996 Health Financing Charter will be revised. Selected references Annear P (28). Mid-term review of implementation: strategy on health care financing for countries of the Western Pacific and South-East Asia region (26 21). Ir P and Bigdeli M (29). Health financing strategies to improve access to health services for the poor in Cambodia: from pilot to policy and action a case study of health equity funds. Annex in a high level meeting on promoting health equity: evidence, policy, and action. Phnom Penh, Cambodia. Ministry of Health, Cambodia (213). Cambodian demographic health survey and Cambodian socio-economic surveys analysis out-of-pocket expenditure on health. Phnom Penh, Cambodia. Ministry of Health, Cambodia (213). Annual health financing report 212. Department of Planning and Health Information. Phnom Penh, Cambodia. Ministry of Health, Cambodia (21). Second health sector support program , 29 Annual Performance Monitoring Report. Phnom Penh, Cambodia. 18 Health financing country profiles in the western pacific region,

27 Ministry of Health, Cambodia (28). Cambodia strategic framework for health financing Phnom Penh, Cambodia. Ministry of Health, Cambodia (28). Health strategy plan , Accountability, Efficiency and Quality Equity. Phnom Penh, Cambodia. WHO Western Pacific Region (29). Promoting health and equity: evidence, policy and action cases from the Western Pacific Region. ( en/index.html, accessed 21 February 213). CAMBODIA GDP and health expenditures per capita (in current currency unit) Gross Domestic Product (GDP) US dollar Cambodian riel Total Health Expenditure (THE) US dollar Cambodian riel Government Health Expenditure (GGHE) US dollar Cambodian riel Private Health Expenditure (PvtHE) US dollar Cambodian riel Out-of-pocket expenditure (OOP) US dollar Cambodian riel Health expenditure ratios THE as % of GDP GGHE as % of GDP PvtHE as % of GDP GGHE as % of GGE GGHE as % of THE OOP as % of THE Other private as % of THE External resources as % of THE All data for 211 are provisional data Health Expenditure and GDP figures are expressed in current US dollar based on the average exchange rate for that year. Cambodia 19

28 China Health expenditure trends China is a lower middle-income country with a population of 1.36 billion people in 211. Gross domestic product (GDP) per capita was US$ 543 in 211. Since 28, general government health expenditure (GGHE) has been the largest source of health financing. The expenditures are mainly financed through social health insurance (SHI). Nonetheless, out-of-pocket (OOP) payments remain an important source of financing. In 211, total health expenditure (THE) was 5.1% of GDP, equivalent to US$ 278 per capita. OOP payments made up 34.8% of THE; GGHE was 55.9% of THE. GGHE amounted to US$ 155 per capita and represented 12.5% of general government expenditure (GGE) and 2.9% of GDP. Figures 1 5 show historical trends in health expenditure. THE has been increasing relatively rapidly in the last decade. After peaking in 21 at nearly 6.%, OOP payments have been on a downward trend. At the same time, the government share of THE has increased from 35.6% in 21 to 55.9% in 21. Figure 4 shows that the Government s priority to health has declined from 1995 to 21, but has been slightly increasing since 26. Health financing system China has a three-tier health service delivery system, including primary health-care facilities, secondary hospitals and tertiary hospitals. Since China s health system reform in 29, Chinese the government put special emphasis on primary health care, and one of the Government s five implementation plans is to improve the grass-roots health services system. 1 The Government is main source of health financing in China. The contribution of OOP payments to THE has been declining in recent years as a result of China s political commitment to health system reforms with increased government funding and the drive to achieve universal health coverage within 1 years. China currently has three main SHI schemes: the New Rural Cooperative Medical Scheme (NRCMS), Urban Employees Basic Medical Insurance (UEBMI) and Urban Residents Basic Medical Insurance (URBMI). As a whole, 61.2% population has NRCMS, with 18.5% and 16.2% of the population insured by UEBMI and URBMI respectively in Under all three schemes, providers commonly are paid on a fee-for-service basis under a fees schedule set by the Government. However, for high-tech services, hospitals can set the prices, which may vary among the level of hospitals. New Rural Cooperative Medical Scheme (NRCMS) The New Rural Cooperative Medical Scheme (NRCMS) was set up in 23 with the aim of providing medical coverage for China s rural population. All rural populations are eligible to join the NRCMS, which is administered and operated by respective rural counties. Enrolment is currently voluntary. 1. State Council of the People s Republic of China (29). Notice on the publishing of health system reform key implementation plan in recent years (29-211).[Chinese] Ministry of Health of P.R.China. Abstract of 212 China Health Statistics. 2 Health financing country profiles in the western pacific region,

29 By 211, universal health coverage of the rural population was nearly achieved with 97.5% of the rural population receiving insurance from NRCMS. 2 NRCMS premiums come from three sources the central Government, local governments and individuals. The contribution rates are flat rates and vary by county. The pooling of funds is done at the county level. All county programmes cover at least a portion of inpatient expenses, with patients cost sharing about 3% 4%. For outpatient services, there is cost sharing by patients for only some high-cost services. Urban Employees Basic Medical Insurance (UEBMI) The Urban Employees Basic Medical Insurance (UEBMI) scheme is mandatory for all urban employees in both public and private companies. Each local government has a dedicated insurance management department that is responsible for managing the locality s UEBMI. It is estimated that 67% of urban employees were covered under UEBMI by the end of 28, and in 211 there were 252 million people insured by UEBMI. 2 Premiums are set at 8% of an employee s monthly payroll, of which employees contribute 2% while their employer provides the remaining 6%. The pooling of funds is done at the municipal city level. Patient share about 2% of the cost for inpatient services. For outpatient services, after exhausting an individual Medical Savings Account, a deductible is applied up to a certain threshold, after which 85% of the remaining amount is reimbursed up to an upper ceiling. Urban Residents Basic Medical Insurance (URBMI) Urban Residents Basic Medical Insurance (URBMI) is a newly established, government-subsidized voluntary insurance scheme, primarily targeting urban residents who have been unemployed for a long-time, elderly people without pensions, students, and all children regardless of their parents employment status. It is financed by household or individual contributions in addition to government subsidies with local governments having autonomy in determining the financing level and the details of the schemes. This has led to large variations in financing levels across regions due to differential financing capacities. 3 By 211 there were 221 million people insured by URBMI. 2 The pooling of funds is done at the municipality level. Similar to NRCMS, patients share about 3% 4% of the cost of inpatient services and some high-cost services for outpatient services. Medical Financial Assistance Program (MFA) In addition to these three medical insurance schemes, China also introduced a Medical Financial Assistance programme in 23 to offer protection to both the urban and rural poor who fall below the poverty line. The MFA contributes the premiums of NRCMS and UEBMI on behalf of MFAeligible people and reimburses the copayments of medical expenditures for those who cannot afford their medical bills. By the end of 29, the MFA had supported 12.8 million urban poor to participate in URBMI and another 43.7 million rural poor to participate in NRCMS billion RMB (US$ 24.5 million) was invested in MFA, with 13 3 million RMB for rural residents Li, C., Yu, X., & Yu, M. (21). The Comparative analysis of urban resident basic medical insurance schemes of four cities in eastern and western China. Chinese Health Economics, 7, 12e13. China 21

30 CHN Figure 1. General trends in health expenditure per capita at exchange rate Current US$ per capita (at exchange rate) GGHE PvtHE CHN Figure 2. General trends in health expenditure as % of GDP GGHE as % of GDP PvtHE as % of GDP % of GDP CHN Figure 3. Trends in the structure of total health expenditure (THE) GGHE OOP Other private % of total health expenditure Health financing country profiles in the western pacific region,

31 CHN Figure 4. GGHE as % of government spending % of government spending CHN Figure 5. External resources for health as % of THE % of THE China 23

32 Way forward China s health reform has focused on several priorities. One of the major priorities is to improve the health insurance system, for example by integrating the three main health insurance schemes. Primary health care is another key area of reform that involves strengthening service delivery at the different levels of facilities, access to essential medicines and the role of the general practitioner. As a majority of hospitals in China are public, public hospital reform is another main area of focus for the overall health reform and aims to improve public hospital efficiency and the quality of health services. Within the past decade, China has increased government expenditure on health and made significant progress towards universal health coverage. In the early stages of the reform, China will continue to address some challenges, such as the integration of health insurance schemes and of public health services in primary-level health facilities. Selected References Ministry of Health of P.R.China. Abstract of 212 China health statistics. ( cn/zwgkzt/ptjty/2126/5544/files/3ca b7a87a25ac79988f23.pdf, accessed 21 February 213). Li C Yu X and M Yu (21). The Comparative analysis of urban resident basic medical insurance schemes of four cities in eastern and western China. Chinese Health Economics, 7, 12(13). Ministry of Health of P.R.China. Abstract of 212 China health statistics. ( cn/zwgkzt/ptjty/2126/5544/files/3ca b7a87a25ac79988f23.pdf, accessed 1 November 213). State Council Evaluation Group for the UREMI Pilot Program (28). Report on UREMI pilot programmes [Chinese]. State Council of the People s Republic of China (29). Notice on the publishing of health system reform key implementation plan in recent years (29 211)[Chinese]. ( accessed 21 February 213). 24 Health financing country profiles in the western pacific region,

33 CHINA GDP and health expenditures per capita (in current currency unit) Gross Domestic Product (GDP) US dollar Chinese yuan Total Health Expenditure (THE) US dollar Chinese yuan Government Health Expenditure (GGHE) US dollar Chinese yuan Private Health Expenditure (PvtHE) US dollar Chinese yuan Out-of-pocket expenditure (OOP) US dollar Chinese yuan Health expenditure ratios THE as % of GDP GGHE as % of GDP PvtHE as % of GDP GGHE as % of GGE GGHE as % of THE OOP as % of THE Other private as % of THE External resources as % of THE All data for 211 are provisional data Health Expenditure and GDP figures are expressed in current US dollar based on the average exchange rate for that year. China 25

34 Cook Islands Health expenditure trends Cooks Islands are a self-governing territory in free association with New Zealand. It had a population of people in 211. Gross domestic product (GDP) per capita was US$ in 211. The predominant source of health-care financing in Cooks Islands is the general government health expenditure, with support from external donors. In 211, total health expenditure (THE) was 4.3% of GDP, equivalent to US$ 614 per capita. Outof-pocket (OOP) payments made up 7.5% of THE; general government health expenditure (GGHE) was 92.5% of THE. GGHE amounted to US$ 568 per capita and represented 14.3% of general government expenditure (GGE) and 4.% of GDP. External resources for health are 6.3% of THE. Figures 1 5 show historical trends in health expenditure. As health care is predominantly financed though general taxation, OOP health expenditures as a share of THE are relatively small. Figure 4 shows that the percentage of general government spending on health has remained at a stable 12% of total government expenditure since 23. Health financing system Health services in Cooks Island are mainly provided and financed by the Government and provided by clinics, health centres and one general hospital in Rarotonga. User fees are charged for inpatient and outpatient health services on a tiered fees-for-service (FFS) basis based on citizenship, residency and age groups. Citizens and permanent residents below 16 or above 6 years old are eligible to receive a wide range of health-care services for free, while visitors pay the highest fee schedule for both consultation and inpatient services. Private health services are mainly provided by private general practitioners. Access to tertiary services overseas must be made through the main referral hospital in Rarotonga, usually to New Zealand. Resident Cook Islanders and permanent residents are eligible to enjoy overseas treatment for free. In 212, the total health budget was approximately New Zealand dollar (NZD$) 11.3 million (NZD$ 755 per capita). A majority of the budget was allocated towards hospital health services, followed by outer island health services and community health services. 1 Way forward Cook Islands main challenges for the coming years will centre on the continued increase in health expenditures and the related need to rationalize the cost and system of referral. Dependence on external resources, specifically New Zealand, should also be addressed. 1. WHO and Ministry of Health, Cook Islands (212). Cook Islands, Health care delivery profile 212, ( health_services/service_delivery_profile_cook_islands.pdf, accessed 21 February 213). 26 Health financing country profiles in the western pacific region,

35 COK Figure 1. General trends in health expenditure per capita at exchange rate Current US$ per capita (at exchange rate) GGHE PvtHE COK Figure 2. General trends in health expenditure as % of GDP 5 GGHE as % of GDP PvtHE as % of GDP 4 % of GDP COK Figure 3. Trends in the structure of total health expenditure (THE) GGHE OOP Other private % of total health expenditure Cook Islands 27

36 COK Figure 4. GGHE as % of government spending % of government spending COK Figure 5. External resources for health as % of THE % of THE Health financing country profiles in the western pacific region,

37 Selected references Ministry of Health. Patient referral policy (August 21), ( accessed 21 February 213). Te Marae Ora Ministry of Health user charges schedule (October 21). ( accessed 21 February 213). WHO and Ministry of Health, Cook Islands (212). Cook Islands, Health care delivery profile 212. ( accessed 21 February 213). cook islands GDP and health expenditures per capita (in current currency unit) Gross Domestic Product (GDP) US dollar New Zealand dollar Total Health Expenditure (THE) US dollar New Zealand dollar Government Health Expenditure (GGHE) US dollar New Zealand dollar Private Health Expenditure (PvtHE) US dollar New Zealand dollar Out-of-pocket expenditure (OOP) US dollar New Zealand dollar Health expenditure ratios THE as % of GDP GGHE as % of GDP PvtHE as % of GDP GGHE as % of GGE GGHE as % of THE OOP as % of THE Other private as % of THE External resources as % of THE All data for 211 are provisional data Health Expenditure and GDP figures are expressed in current US dollar based on the average exchange rate for that year. Cook Islands 29

38 Fiji Health expenditure trends Fiji is a Pacific island country with a population of people in 211. Gross domestic product (GDP) per capita was US$ 4397 in 211. The predominant source of health-care financing is general government health expenditure (GGHE), which is mainly financed through general taxation. In 211, total health expenditure (THE) was 3.8% of GDP, equivalent to US$ 168 per capita. Outof-pocket (OOP) payments made up 21.% of THE; GGHE was 68.1% of THE. GGHE amounted to US$ 114 per capita and represented 9.1% of general government expenditure (GGE) and 2.6% of GDP. External resources for health are 7.7% of THE. Figures 1 5 show historical trends in health expenditure. THE has generally been on an upward trend. In the meantime, the structure of health expenditure has stayed almost uniform during the period, with the tendency of OOP payments occupying an increasing percentage of THE. Figure 4 shows that the Government s priority to health fluctuates at about 1% of total government spending. Health financing system Health services in Fiji are mainly provided and financed by the Government. According to The Fiji Islands Health System Review, 16 subdivisional hospitals, three area hospitals, 77 health centres and 11 nursing stations provide public health services. 1 Both inpatient and outpatient services are provided free, unless patients choose to be admitted to paying wards where a range of fees apply. While government health facilities provide medicines on the essential medicines list for free, some of these facilities still lack the resources to provide some services. The private sector is small, and two private hospitals in Suva (and another under construction) provide a range of specialized services, [as do] several day clinics and 13 private general practitioners located mostly in the urban centres of the two main islands, Viti Levu and Vanua Levu. 1 The private sector is financed by OOP payments and provides services at a cost to those willing to pay, with a large variation in the user fees across practitioners. 1 Public health services are largely financed through general tax revenues. Other sources of funding are donor assistance for service enhancement, a small cost-recovery programme of user charges and a revolving drug fund account for community pharmacies. The trend in the past few years has been of an increase in the share of private health expenditure and a decrease in the Government s expenditure. While no compulsory social insurance scheme exists, there are limited voluntary health insurance schemes available Asia Pacific Observatory on Health Systems and Policies. Health Systems in Transition (211):1(1). The Fiji Islands health system review. Manila, World Health Organization Regional Office for the Western Pacific. 3 Health financing country profiles in the western pacific region,

39 FIJ Figure 1. General trends in health expenditure per capita at exchange rate GGHE PvtHE Current US$ per capita (at exchange rate) FIJ Figure 2. General trends in health expenditure as % of GDP GGHE as % of GDP PvtHE as % of GDP % of GDP FIJ Figure 3. Trends in the structure of total health expenditure (THE) GGHE OOP Other private % of total health expenditure Fiji 31

40 FIJ Figure 4. GGHE as % of government spending % of government spending FIJ Figure 5. External resources for health as % of THE % of THE Health financing country profiles in the western pacific region,

41 Way forward Because of increasing pressures on the predominantly publicly funded health system, the Ministry of Health is examining a range of health financing options, including social health insurance. The challenge of how to meet its service delivery gaps and improve equity in financing and access to service delivery will become more pressing if the current trend of increased private health expenditures continues. Selected references Asia Pacific Observatory on Health Systems and Policies. Health Systems in Transition (211):1(1). The Fiji Islands health system review. Manila, World Health Organization Regional Office for the Western Pacific. Ministry of Health, Fiji. Strategic plan Strategic Framework for Change Coordinating Office, Fiji. ( accessed 21 February 213). FIJI GDP and health expenditures per capita (in current currency unit) Gross Domestic Product (GDP) US dollar Fijian dollar Total Health Expenditure (THE) US dollar Fijian dollar Government Health Expenditure (GGHE) US dollar Fijian dollar Private Health Expenditure (PvtHE) US dollar Fijian dollar Out-of-pocket expenditure (OOP) US dollar Fijian dollar Health expenditure ratios THE as % of GDP GGHE as % of GDP PvtHE as % of GDP GGHE as % of GGE GGHE as % of THE OOP as % of THE Other private as % of THE External resources as % of THE All data for 211 are provisional data Health Expenditure and GDP figures are expressed in current US dollar based on the average exchange rate for that year. Fiji 33

42 Federated States of Micronesia Health expenditure trends The Federated States of Micronesia is a Pacific island country with a population of people in 211. Gross domestic product (GDP) per capita was US$ 2852 in 211. The predominant source of health-care financing is general government health expenditure (GGHE), which is mainly financed through general taxation and is largely supported by external donors. In 211, total health expenditure (THE) was 13.8% of GDP, equivalent to US$ 383 per capita. Out-of-pocket (OOP) payments made up 9.% of THE; GGHE was 9.8% of THE. GGHE amounted to US$ 347 per capita and represented 19.8% of general government expenditure (GGE) and 12.5% of GDP. Figures 1 5 show historical trends in health expenditure. THE has been on an upward trend since The Government s contribution to THE has been falling since 24 but still accounted over 9%, while the contribution from OOP payments has been increasing. Figure 4 shows that the Government s priority to health has been on an upward trend. Health financing system Health services in the Federated States of Micronesia are largely financed and administered by the Government, with substantial financial support from donors. The Division of Health is mainly responsible for health planning, donor coordination, and technical and training assistance, as well as the provision of preventive medicine and public health programmes. Each of the four state governments in the country maintains its own health services autonomously. There is a main public hospital in each state serving residents of the urban (state) centres and numerous dispensaries serving residents who live in the outer islands. Health services are highly subsidized by the state governments. In comparison to the public sector, the private sector is comparatively small and consisted of one private hospital and six private clinics in 211. Patients requiring tertiary health services are referred to overseas hospitals in Guam, Hawaii and the Philippines. Health services are financed through a mixture of external donor funding, including Compact of Free Association funding and United States of America federal programmes, the government budget, and private expenditure. External donor funds account for a large share of public expenditure on health and are distributed to both national and state governments. Private health financing includes household OOP payments to private facilities, expenditure by private companies to provide health care to their employees and expenditure by nonprofit institutions serving households. MiCare is the country s main health insurance scheme, but enrolment is not mandatory. All individuals who are government employees and their dependents, students attending country post-secondary institutions, former members of the MiCare Plan, and individual employees of the participating entities and their dependents are eligible to enrol in the plan. Given that participation of eligible individuals in MiCare has remained optional since the inception of the programme, the plan covers only a small portion of the population. 34 Health financing country profiles in the western pacific region,

43 FSM Figure 1. General trends in health expenditure per capita at exchange rate 4 35 GGHE PvtHE Current US$ per capita (at exchange rate) FSM Figure 2. General trends in health expenditure as % of GDP GGHE as % of GDP PvtHE as % of GDP 1 % of GDP FSM Figure 3. Trends in the structure of total health expenditure (THE) GGHE OOP Other private % of total health expenditure Federated States of Micronesia 35

44 FSM Figure 4. GGHE as % of government spending % of government spending FSM Figure 5. External resources for health as % of THE % of THE Health financing country profiles in the western pacific region,

45 Way forward The vision of MiCare is ultimately to extend medical coverage to more citizens at affordable rates. However, the financial dependence on donors and the continued need to refer patients outside of the islands for tertiary services are the main challenges facing the health system. In view of the financial pressures on the overseas referral system, the Government is considering alternative overseas medical locations. Selected references Division of Health, Department of Health and Social Affairs, Federated States of Micronesia (21). Federated States of Micronesia national health expenditure ( fsm/fsm_nha_25-8.pdf, accessed 21 February 213). Federated States of Micronesia health insurance plan: MiCare (28). ( accessed 21 February 213). FEDERATED STATES OF MICRONESIA GDP and health expenditures per capita (in current currency unit) Gross Domestic Product (GDP) US dollar Total Health Expenditure (THE) US dollar Government Health Expenditure (GGHE) US dollar Private Health Expenditure (PvtHE) US dollar Out-of-pocket expenditure (OOP) US dollar Health expenditure ratios THE as % of GDP GGHE as % of GDP PvtHE as % of GDP GGHE as % of GGE GGHE as % of THE OOP as % of THE Other private as % of THE External resources as % of THE All data for 211 are provisional data Health Expenditure and GDP figures are expressed in current US dollar based on the average exchange rate for that year. Federated States of Micronesia 37

46 Japan Health expenditure trends Japan is a high-income country with a population of 128. million people in 211. Gross domestic product (GDP) per capita was US$ in 211. The predominant source of health-care financing is general government health expenditure (GGHE), which is mainly financed through social health insurance (SHI). In 211, total health expenditure (THE) was 9.53 of GDP, equivalent to US$ 4268 per capita. Outof-pocket (OOP) payments made up 16.4% of THE; GGHE was 79.9% of THE. GGHE amounted to US$ 3412 per capita and represented 18.2% of general government expenditure (GGE) of 7.4% of GDP. Figures 1 5 show historical trends in health expenditure. THE has been increasing steadily since 28. In the meantime, the structure of health expenditure has stayed almost uniform during the period, with GGHE occupying more than 8% of THE. Figure 4 shows that the Government s priority has remained relatively stable at 18% of GGE for the past decade. Health financing system Health services in Japan are provided by both the public and the private sectors but are financed largely by the country s various social health insurance (SHI) schemes, with subsidies from the Government. Primary care is supplied by the country s 9 physician-run clinics. Secondary care is provided by hospitals, which may be privately owned or run by the Government. All providers, whether private or public, are paid on a fees-for service (FFS) basis under a price schedule set by the Government. Preventive services are funded by general tax and delivered mainly by local public health authorities. Social health insurance (SHI) is the main source of heath financing in Japan. Public financing of health, which includes both government expenditure on health derived from its general budget and SHI, makes up about 8% of total health expenditure (THE). Private financing is made up of OOP payments and private insurance. Private health insurance complements SHI in Japan. Private insurance typically provide lump-sum payments for services not fully covered by SHI. Enrolment into one of the Japan s SHI schemes is compulsory for residents of Japan. The health insurance system in Japan is complex, but the numerous SHI schemes can be broadly classified into three categories: employment-based insurance, the national health insurance scheme, and medical insurance for the elderly. Employment-based insurance covers all employed workers and their dependents, and is further subdivided into the Society-Managed Health Insurance (SMHI) scheme which covers employees of large companies (more than 7 workers), and Japan Health Insurance Association-Managed Health Insurance (JHIAHI), which covers employees of small- and medium-sized enterprises. Under the SMHI, each large company is covered by an insurance society. The premium rate of these societies ranges from 3% 1% of monthly wages, and is shared equally by employees and employers. JHIAHI is a single insurance scheme managed by Japan Health Insurance Association (JHIA). The premium rate of 8.2% of wages is shared equally between employers and employees. 38 Health financing country profiles in the western pacific region,

47 JPN Figure 1. General trends in health expenditure per capita at exchange rate 45 4 GGHE PvtHE Current US$ per capita (at exchange rate) JPN Figure 2. General trends in health expenditure as % of GDP GGHE as % of GDP PvtHE as % of GDP 7 % of GDP JPN Figure 3. Trends in the structure of total health expenditure (THE) GGHE OOP Other private % of total health expenditure Japan 39

48 JPN Figure 4. GGHE as % of government spending % of government spending JPN Figure 5. External resources for health as % of THE % of THE Health financing country profiles in the western pacific region,

49 The National Health Insurance (NHI) covers residents who are not eligible for employment-based health insurance, including farmers, the self-employed, the unemployed and the retirees. Each municipal government runs its own insurance schemes and local governments set the level of premiums for their health insurance schemes. Finally, there is a special medical scheme for the elderly run by municipalities, which is financed through transfers from all insurers and the Government. Despite some differences in the degree of cost sharing, the range of benefits and the level of national subsidy, these programmes are broadly similar in terms of health services covered and reimbursement procedures for services provided. All funds cover a broad range of medical services including hospital and physician care, dental care and pharmaceuticals. At the same time, they all place a cap on the amount of OOP spending health consumers may incur in a year. All SHI schemes compensate medical providers directly for their services. Specific levels of remunerations are defined for all medical procedures under a price list set by Japan s Ministry of Health, Labour and Welfare. Once every two years, the Health Ministry negotiates a fixed price for every procedure and every drug with the health-care industry. Way forward While the Japanese health financing system has been highly rated by the Organisation for Economic Co-operation and Development (OECD) as extremely efficient and effective and for providing good access to services for the entire population, 1 the Japanese Government is having to face various challenges, including rapid technological changes in health care, a rapidly ageing population as well as fiscal constraints. Selected references Legislative Council Secretariat (21). Fact sheet: health care financing in Japan. ( legco.gov.hk/yr9-1/english/sec/library/91fs18_2183-e.pdf, accessed 1 November 213). Organization for Economic Cooperation and Development (29). Health-care reform in Japan: controlling costs, improving quality and ensuring equity. Paris, Organization for Economic Cooperation and Development. Tatara K, Okamoto E (29). Japan: health system review. Health Systems in Transition; 11(5): ( data/assets/pdf_file/11/85466/e92927.pdf, accessed 21 February 213). World Health Organization (29). Western Pacific Country Health Information Profiles 29 revision. Manila, World Health Organization Regional Office for the Western Pacific. 1. Legislative Council Secretariat (21). Fact sheet: health care financing in Japan. ( sec/library/91fs18_2183-e.pdf, accessed 1 November 213). Japan 41

50 JAPAN GDP and health expenditures per capita (in current currency unit) Gross Domestic Product (GDP) US dollar Japanese yen Total Health Expenditure (THE) US dollar Japanese yen Government Health Expenditure (GGHE) US dollar Japanese yen Private Health Expenditure (PvtHE) US dollar Japanese yen Out-of-pocket expenditure (OOP) US dollar Japanese yen Health expenditure ratios THE as % of GDP GGHE as % of GDP PvtHE as % of GDP GGHE as % of GGE GGHE as % of THE OOP as % of THE Other private as % of THE External resources as % of THE All data for 211 are provisional data Health Expenditure and GDP figures are expressed in current US dollar based on the average exchange rate for that year. 42 Health financing country profiles in the western pacific region,

51 Kiribati Health expenditure trends Kiribati is a Pacific island country with a population of people in 211. Gross domestic product (GDP) per capita was US$ 1649 in 211. The predominant source of health care financing is general government health expenditure (GGHE), which is mainly financed through general taxation and is substantially supported by external donors. In 211, total health expenditure (THE) was 1.7% of GDP, equivalent to US$ 177 per capita. Out of pocket (OOP) payments made up 1.3% of THE; GGHE was 8.% of THE. GGHE amounted to US$ 142 per capita and represented 1.% of general government expenditure (GGE) and 8.% of GDP. External resources made up 3.% of THE. Figures 1 5 show historical trends in health expenditure. THE increased steadily from 1995 to 27. Other private expenditures have accounted for a much larger share of THE since 26, although the Government remains the main contributor to THE. Figure 4 shows that the Government s priority to health has remained relatively constant since 25. Figure 5 shows large fluctuations in the share of external resources for health out of THE over time. Health financing system Kiribati has a publicly funded, publicly provided health system that is administered by the Ministry of Health and Medical Services (MHMS). Citizens receive free medical service from the country s one national referral hospital, three referral hospitals and 15 primary care facilities (3 health centres and 75 health clinics). 1 In order to access tertiary services, patients must fulfil the clinical criteria outlined by MHMS. Overseas referrals are made by the national referral hospital in South Tawara to Fiji; India; New Zealand; and the United States of America. A traditional health system exists in parallel to the formal sector. There is no formal coordination or collaboration between the two systems, and traditional healers are not included in the formal health system or regulations. 1 Most people use both traditional and formal health services. The Government is the main source of finance for health services in Kiribati. Public health services are financed mainly through general tax revenues. In addition, donor funding accounts for more than one quarter of total government expenditures on health. Public health services are mainly reliant on donor support. 1 Out-of-pocket (OOP) payments constitute a very small share of THE although the share of private health expenditure has substantially increased since 25. Way forward There are efforts to develop the private sector to reduce pressures on the public health system. MHMS has recently permitted government doctors to establish fee paying clinics at the national hospital after official hours. The Government is also considering charging a flat fee for outpatient hospital care as a way to make the distribution of public health subsidies more equitable across islands. Under the proposed plans, outer island dispensary visits would remain free, but the 1. WHO and Ministry of Health and Medical Services, Kiribati (212). Republic of health service delivery profile, 212. Kiribati 43

52 KIR Figure 1. General trends in health expenditure per capita at exchange rate GGHE PvtHE Current US$ per capita (at exchange rate) KIR Figure 2. General trends in health expenditure as % of GDP GGHE as % of GDP PvtHE as % of GDP 1 % of GDP KIR Figure 3. Trends in the structure of total health expenditure (THE) GGHE OOP Other private % of total health expenditure Health financing country profiles in the western pacific region,

53 KIR Figure 4. GGHE as % of government spending % of government spending KIR Figure 5. External resources for health as % of THE % of THE Kiribati 45

54 more expensive hospital services that are disproportionately used by South Tarawa residents would incur a modest fee. The referral system also constitutes a challenge to the sustainability of the health sector. Selected references The World Bank (27). Opportunities to improve social services in Kiribati. Human Development in the Pacific Islands Summary Report ( ext.worldbank.org/edstats/kirwp7.pdf, accessed 21 February 213). World Health Organization and Ministry of Health and Medical Services, Kiribati (212). Health service delivery profile: Kiribati. ( profile_kiribati.pdf, accessed 29 October 213). KIRIBATI GDP and health expenditures per capita (in current currency unit) Gross Domestic Product (GDP) US dollar Australian dollar Total Health Expenditure (THE) US dollar Australian dollar Government Health Expenditure (GGHE) US dollar Australian dollar Private Health Expenditure (PvtHE) US dollar Australian dollar Out of pocket expenditure (OOP) US dollar 2 2 Australian dollar 2 2 Health expenditure ratios THE as % of GDP GGHE as % of GDP PvtHE as % of GDP GGHE as % of GGE GGHE as % of THE OOP as % of THE Other private as % of THE External resources as % of THE All data for 211 are provisional data Health Expenditure and GDP figures are expressed in current US dollar based on the average exchange rate for that year. 46 Health financing country profiles in the western pacific region,

55 Lao People s Democratic Republic Health expenditure trends The Lao People s Democratic Republic is a lower-middle income country with a population of 6.3 million people in 211. Gross domestic product (GDP) per capita was US$ 1313 in 211. Outof-pocket (OOP) expenditures are the main source of health-care financing. General government health expenditures (GGHE) are financed through general taxation, but they are largely supported by external donors. In 211, total health expenditure (THE) was 2.8% of GDP, equivalent to US$ 37 per capita. OOP payments made up 39.7% of THE; GGHE) was 49.3% of THE. GGHE amounted US$ 18 per capita and represented 6.1% of general government expenditure (GGE) and 1.4% of GDP. Figures 1 5 show historical trends in health expenditure. THE has been on a general upward trend since In the meantime, GGHE decreased from 1995 to 27 but has been increasing since 28. Figure 4 shows that GGHE as percentage of GGE has averaged 6% since Health financing system Health services in the Lao People s Democratic Republic are provided mainly by the Government, but they financed largely by household OOP payments. The Lao People s Democratic Republic as of 21 had seven central-level hospitals of which three are specialized centres, four regional hospitals, 16 provincial hospitals, 13 district hospitals and 894 health centres. 1 The private sector for health is small but expanding. It consisted in 21 of 222 private clinics, 1993 private pharmacies and numerous traditional medicine practitioners. User fees were introduced in 1996 and are now charged at most public and private health facilities, with exemptions in principle at public facilities for certain vulnerable groups. The private sector is also involved in the delivery of health services. The sources of financing are household OOP payments, government expenditure, donor aid and various prepayment schemes. OOP payments predominantly are spent on medicine at both public and private facilities. Donor funding comprises a significant proportion of total government expenditures. The public health system has been highly decentralized, and provincial governments have been granted control over provincial revenues and budgets for health. Consequently, per capita governmental health spending and coverage of key primary health interventions varied considerably across provinces and districts. Social health protection was introduced in 1975, and four social health protection schemes exist in the country but their contribution to health financing is currently small. The main social health protection schemes include the State Authority for Social Security (SASS) that provides coverage for civil servants, the Social Security Organization (SSO) health insurance scheme, 1. WHO and Ministry of Health, Lao People s Democratic Republic (212). Health Service Delivery Profile: Lao People s Democratic Republic. ( accessed 21 February 213). Lao People s Democratic Republic 47

56 LAO Figure 1. General trends in health expenditure per capita at exchange rate 4 35 GGHE PvtHE Current US$ per capita (at exchange rate) LAO Figure 2. General trends in health expenditure as % of GDP 7 6 GGHE as % of GDP PvtHE as % of GDP 5 % of GDP LAO Figure 3. Trends in the structure of total health expenditure (THE) GGHE OOP Other private % of total health expenditure Health financing country profiles in the western pacific region,

57 LAO Figure 4. GGHE as % of government spending % of government spending LAO Figure 5. External resources for health as % of THE % of THE Lao People s Democratic Republic 49

58 community-based health insurance (CBHI), health equity funds (HEF), and free maternal, neonatal and child health (MNCH) services. Together they cover only about 2% of the total population in Reimbursements for providers under SASS and SSO schemes are made on a riskadjusted capitation payment basis, while reimbursement for HEFs is made under a combination of capitation and case-based reimbursement. The SASS scheme is mandatory for all civil servants, and also covers their spouses and children. It is still administered by the Ministry of Labour and Social Welfare. However, according to the Decree on National Health Insurance issued in October 212, SASS will move its health component to the Ministry of Health (MOH). The employer (the Government) and the employee each contribute a payroll tax of 2% towards the premium. 2 The benefit package covers all outpatient, inpatient and prescription drug fees at hospitals. Road traffic accidents and cosmetic surgery are excluded. Civil servants must register a district hospital as their primary provider and are covered only for services obtained in higher-level hospitals if they receive referrals. Providers are reimbursed by SASS on a capitation basis. The SSO-administered scheme is mandatory for salaried employees in the private sector, their spouses and children. It is still administered by the Ministry of Labour and Social Welfare. However, according to the Decree on National Health Insurance, SSO will move its health component to MOH. Employers and employees contribute a payroll tax of 4% each as the premium. Benefits are similar to those provided by SASS. Those enrolled are permitted to select their primary provider. Health-care benefits include ambulatory and inpatient care. These are, in principle, without copayment or limits on the number of services provided, although in practice members still have to make OOP payments. Because the formal sector is limited in size and geographical scope, the SSO scheme is currently implemented in only four provinces. Although the scheme is officially mandatory, there is no mechanism in place to enforce employers to comply. Consequently, only about 1% to 15% of employers are enrolled. Some private employers opt to provide private health insurance or reimbursement for their employees, sometimes even in addition to participation in the SSO scheme. CBHI was a voluntary health insurance scheme launched by MOH in 21 as a pilot project. 3 It operated in 33 districts across 11 provinces as of December 212. Premiums vary between urban and rural areas and according to family size. Members are eligible for a benefit package similar to SASS and SSO. Unlike the SSO and SASS schemes, CBHI does not cover referrals to central hospitals except in Vientiane Capital. Only about 6% of the target population was enrolled in CBHI in HEFs have been introduced in various parts of the country by international agencies since 23. HEFs target sections of the population that are unable to pay for services at public health facilities or health insurance premiums. HEFs typically offer benefit packages that fully cover curative care at all public health facilities, transportation costs, social services for hospitalized patients and one relative, and funeral costs. HEFs are largely funded by international donors and the Government, through revenues generated from the Nam Theun 2 hydropower project. 2. WHO Western Pacific Region: countries and areas. Policy Brief on Health Financing for Lao PDR. ( accessed 21 February 213). 3. The World Bank (21). Community-based health insurance in the Lao People s Democratic Republic: understanding enrollment and impacts. ( accessed 21 February 213). 5 Health financing country profiles in the western pacific region,

59 Way forward The Government is in the process of merging the various social health protection schemes into a single National Health Insurance Agency as established in the 212 Decree on National Health Insurance. A critical issue is how to modify the existing social health protection mechanisms in light of the existing projects and programmes. The small share of government resources dedicated to health, as well as the large share of OOP and the fragmented approach to social health protection, will continue to challenge the Government s goals of establishing universal health coverage by 225. The promise of free maternal, neonatal and child health services may protect some of the population against catastrophic expenditures and improve access for this target group, but more general constraints such as the limited technical capacity to administer an increase in health services, the low quality of services at public facilities, and utilization patterns that are not well-aligned with benefit packages such as preferences for private health care and widespread self-treatment will need to be addressed. Selected references Ministry of Health, Lao People s Democratic Republic. Health financing strategy (Draft). WHO and Ministry of Health, Lao People s Democratic Republic (212). Health Service Delivery Profile: Lao People s Democratic Republic. ( delivery_profile_laopdr.pdf, accessed 21 February 213). WHO Western Pacific Region: countries and areas. Policy Brief on Health Financing for Lao PDR. ( accessed 21 February 213). The World Bank (21). Community-based health insurance in the Lao People s Democratic Republic: understanding enrollment and impacts. ( en/21/11/ /community-based-health-insurance-lao-peoples-democratic-republicunderstanding-enrollment-impacts, accessed 21 February 213). The World Bank (21). Enrollment of firms in social security in the Lao People s Democratic Republic: perspectives from the private sector. ( en/21/11/ /enrollment-firms-social-security-lao-pdr-perspectives-private-sector, accessed 21 February 213). The World Bank (21). Health financing note. East Asia and Pacific region. Volume II: Health System Profiles. ( HFNEAPVol2921.pdf, accessed 21 February 213). Lao People s Democratic Republic 51

60 Lao People s Democratic Republic GDP and health expenditures per capita (in current currency unit) Gross Domestic Product (GDP) US dollar Lao kip Total Health Expenditure (THE) US dollar Lao kip Government Health Expenditure (GGHE) US dollar Lao kip Private Health Expenditure (PvtHE) US dollar Lao kip Out-of-pocket expenditure (OOP) US dollar Lao kip Health expenditure ratios THE as % of GDP GGHE as % of GDP PvtHE as % of GDP GGHE as % of GGE GGHE as % of THE OOP as % of THE Other private as % of THE External resources as % of THE All data for 211 are provisional data Health Expenditure and GDP figures are expressed in current US dollar based on the average exchange rate for that year. 52 Health financing country profiles in the western pacific region,

61 Malaysia Health expenditure trends Malaysia is an upper middle-income country with a population of 28.9 million people in 211. Gross domestic product (GDP) per capita was US$ 9977 in 211. The predominant source of health-care financing is general government health expenditure (GGHE), which is mainly financed through general taxation. In 211, total health expenditure (THE) was 3.8% of GDP, equivalent to US$ 383 per capita. Out-ofpocket (OOP) payments made up 35.4% of THE; GGHE was 55.2% of THE. GGHE amounted US$211 per capita and represented 6.2% of general government expenditure (GGE) and 2.1% of GDP. Figures 1 5 show historical trends in health expenditure. THE has been increasing in recent years. OOP payments as a percentage of THE increased in 211. Figure 4 shows that the Government s priority to health has experienced a slight fall between 27 and 28. As a whole. GGHE as percentage of GGE is around 5% 6%. Health financing system Malaysia has a mixed health financing and delivery system. Most of its public health system is financed by general taxation. The Government provides a wide range of comprehensive services from primary to tertiary health services and uses its annual budget from the Treasury to fund its public health facilities and to carry out other public health activities. Primary care services at public health clinics are delivered free, while inpatient services are provided at highly subsidized rates. Specialist services are available at designated public hospitals through a national system of referral. They are also highly subsidized by the Government. Public sector services are highly subsidized with goods and services free to the user or with small copayments. The private sector also offers a wide range of health services, including traditional and alternative care. The private sector provides more than half of the country s outpatient services and 17% of inpatient services. OOP payments account for a majority of the financing source for the private sector. According to the Malaysia Health System Review, Malaysia offers public sector health services to the whole population, although under-staffing and long waits mean that many people instead use private services, especially for visits to a doctor, pay out-of-pocket for consultations and for medicines and pay for coverage through private health insurance schemes. 1 Nongovernmental organizations also are involved in providing health services and are often funded by the Ministry of Health. Malaysia does not have a national social health insurance scheme (social health insurance accounts for less than.8% of total health expenditure). The Social Security Organization (SOCSO) and the Employee Provident Funds (EPF) also contribute marginally to health financing in Malaysia. Although the primary purpose of the EPF is to create savings for old age for the contributor and his or her family, 3% of the account can be withdrawn for reimbursement of health-care services. There is also voluntary private health insurance that is mostly used for private hospital costs Asia Pacific Observatory on Health Systems and Policies. Malaysia health system review (212), Health Systems in Transition. 2(1), Manila. World Health Organization Regional Office for the Western Pacific. Malaysia 53

62 MYS Figure 1. General trends in health expenditure per capita at exchange rate 4 35 GGHE PvtHE Current US$ per capita (at exchange rate) MYS Figure 2. General trends in health expenditure as % of GDP GGHE as % of GDP PvtHE as % of GDP % of GDP MYS Figure 3. Trends in the structure of total health expenditure (THE) GGHE OOP Other private % of total health expenditure Health financing country profiles in the western pacific region,

63 MYS Figure 4. GGHE as % of government spending % of government spending MYS Figure 5. External resources for health as % of THE % of THE Malaysia 55

64 Way forward The increasing dominance of the private sector also presents human resource challenges ( brain drain from the public to the private sector) and exacerbates equity concerns. A rapidly ageing population and an increase in chronic diseases also present challenges to the Government, which the current health financing structure will need to address. Selected references Asia Pacific Observatory on Health Systems and Policies. Malaysia health system review (212), Health Systems in Transition. 2(1), Manila. World Health Organization Regional Office for the Western Pacific. The World Bank (21). Health financing note. East Asia and Pacific region. Volume II: Health System Profiles. ( HFNEAPVol2921.pdf, accessed 21 February 213). MALAYSIA GDP and health expenditures per capita (in current currency unit) Gross Domestic Product (GDP) US dollar Malaysian ringgit Total Health Expenditure (THE) US dollar Malaysian ringgit Government Health Expenditure (GGHE) US dollar Malaysian ringgit Private Health Expenditure (PvtHE) US dollar Malaysian ringgit Out-of-pocket expenditure (OOP) US dollar Malaysian ringgit Health expenditure ratios THE as % of GDP GGHE as % of GDP PvtHE as % of GDP GGHE as % of GGE GGHE as % of THE OOP as % of THE Other private as % of THE External resources as % of THE.7.7 All data for 211 are provisional data Health Expenditure and GDP figures are expressed in current US dollar based on the average exchange rate for that year. 56 Health financing country profiles in the western pacific region,

65 Marshall Islands Health expenditure trends The Marshall Islands are a Pacific island country with a population of in 211. Gross domestic product (GDP) per capita was US$ 3169 in 211, although this figure reflects, in part, large financial flows from the United States of America. The predominant source of health-care financing in the Marshall Islands is general government health expenditure with substantial support from external donors. In 211, total health expenditure (THE) was 16.5% of GDP, equivalent to US$ 524 per capita. Out-of-pocket (OOP) payments made up 12.6% of THE; General government health expenditure (GGHE) was 83.3% of THE. GGHE amounted to US$ 437 per capita and represented 18.3% of general government expenditure (GGE) and 13.8% of GDP. External resources for health was 32.% of THE. Figures 1 5 show historical trends in health expenditure. THE, which was on an upward trend, has remained relatively constant in recent years. The structure of health expenditure has been uniform with very low OOP payments as a proportion of THE. Figure 4 shows that the Government s priority to health has hovered around 18.% since 21. Health financing system The Government is the main provider of health services in the Marshall Islands. All citizens are eligible to receive free health care from public health facilities. Public health-care services in the Marshall Islands are provided through two hospitals in the urban areas of Majuro and Ebeye and 6 health centres on the outer islands. 1 In addition, there is one private health clinic in Majuro. Patients requiring tertiary health services are referred to hospitals in the Philippines and Hawaii. Health services are largely funded by external aid or grant programmes. They include the United States Federal Health Grants and the various grants under the Compact of Free Association between the Marshall Islands and the United States of America. Private expenditure on health is very small. Way forward The financial and referral dependence of the Marshall Islands towards the United States of America, the Philippines and the state of Hawaii is the main challenge that the Government needs to address. 1. WHO Western Pacific Region (211). Marshall Islands country profile 211 ( accessed 29 October 213). Marshall Islands 57

66 MHL Figure 1. General trends in health expenditure per capita at exchange rate Current US$ per capita (at exchange rate) GGHE PvtHE MHL Figure 2. General trends in health expenditure as % of GDP 25 GGHE as % of GDP PvtHE as % of GDP 2 % of GDP MHL Figure 3. Trends in the structure of total health expenditure (THE) GGHE OOP Other private % of total health expenditure Health financing country profiles in the western pacific region,

67 MHL Figure 4. GGHE as % of government spending % of government spending MHL Figure 5. External resources for health as % of THE % of THE Marshall Islands 59

68 Selected references US Department of Health and Human Services (211). Republic of the Marshall Islands Title V maternal and child health 21 needs assessment. ( Documents/NeedsAssessments/211/MH-NeedsAssessment.pdf, accessed 21 February 213). WHO Western Pacific Region (211). Marshall Islands country profile 211. ( int/countries/mhl/16msipro211_finaldraft.pdf, accessed 29 October 213). marshall islands GDP and health expenditures per capita (in current currency unit) Gross Domestic Product (GDP) US dollar Total Health Expenditure (THE) US dollar Government Health Expenditure (GGHE) US dollar Private Health Expenditure (PvtHE) US dollar Out-of-pocket expenditure (OOP) US dollar Health expenditure ratios THE as % of GDP GGHE as % of GDP PvtHE as % of GDP GGHE as % of GGE GGHE as % of THE OOP as % of THE Other private as % of THE External resources as % of THE All data for 211 are provisional data Health Expenditure and GDP figures are expressed in current US dollar based on the average exchange rate for that year. 6 Health financing country profiles in the western pacific region,

69 Mongolia Health expenditure trends Mongolia is a lower middle-income country with a population of 2.8 million people in 211. Gross domestic product (GDP) per capita was US$ 3129 in 211. General government health expenditure (GGHE) is the predominant source of health care financing and is equally financed through general taxation and social health insurance (SHI). In 211, total health expenditure (THE) was 5.1% of GDP, equivalent to US$ 161 per capita. Outof-pocket (OOP) payments made up 39.7% of THE; GGHE was 57.3% of THE. GGHE amounted to US$ 92 per capita and represented 6.8% of general government expenditure (GGE) and 2.9% of GDP. External resources for health is 4.8% of THE. Figures 1 5 show historical trends in health expenditure. While THE has generally been on an upward trend, it fell slightly in 28. OOP payments as percentage of THE have increased since 23 while that of GGHE decreased, even though GGHE represents the major part of THE. Changes in the methodology of the survey used to obtain OOP expenditure information may attribute to the drastic changes since 23. Figure 4 shows that GGHE as percentage of GGE decreased in 25 and again in 211. Health financing system Health services in Mongolia are largely provided by the Government and funded through the Government and the country s social health insurance (SHI) scheme. There is, however, a growing private sector that is financed mainly by households OOP payments and funds from the SHI. Primary care health services are provided by private family group practices in urban areas and by soum health centres and bagh feldshers in rural areas. Specialized care is delivered by provincial or urban district general hospitals at the secondary level. State clinical hospitals and specialized national centres provide tertiary care and are located mainly in Ulaanbaatar. By 21, 16 specialized hospitals, four regional diagnostic and treatment centres, 17 aimag general hospitals, 12 district general hospitals, 6 rural general hospitals, 37 inter-soum hospitals, 274 soum hospitals, 218 family group practices, and 1113 private hospitals and clinics were delivering health care and services to the population. Officially, most public health facilities charge user fees for diagnostic tests specified by the Ministry of Health and copayments for inpatient services funded by SHI in accordance with the amendments made in the Health Law in 26. These official user charges contribute only 5% of THE. This is not, however, the total OOP payments made by the Mongolian population for their health services, since Mongolians can also purchase services privately, mostly from private doctors and pharmacies. Primary health care and treatment of certain specified chronic and infectious diseases, such as diabetes, cancer, tuberculosis, brucellosis, HIV/AIDS and mental diseases, are provided for free or at highly subsidized rates to all of the population regardless of their insurance status. Primary health care in urban settings is contracted out to medical practitioners in family group practices with full government support. Mongolia 61

70 MNG Figure 1. General trends in health expenditure per capita at exchange rate GGHE PvtHE Current US$ per capita (at exchange rate) MNG Figure 2. General trends in health expenditure as % of GDP 7 6 GGHE as % of GDP PvtHE as % of GDP 5 % of GDP MNG Figure 3. Trends in the structure of total health expenditure (THE) GGHE OOP Other private % of total health expenditure Health financing country profiles in the western pacific region,

71 MNG Figure 4. GGHE as % of government spending % of government spending MNG Figure 5. External resources for health as % of THE % of THE Mongolia 63

72 The main sources of financing in Mongolia are the government budget, SHI funds and OOP payments. Each year, the Ministry of Health allocates funding for public health interventions and to all tertiary public health facilities and local government units. National public health programmes, research, professional training, health services during natural or unforeseen disasters, and infectious diseases natural foci services are paid on the basis of a global budget from the central government budget. Local governments then allocate funding to hospitals and primary health-care facilities. Hospitals use Diagnosis Related Groups (DRG) to determine funding, with 115 DRG classes used by both the Government and the SHI scheme. However, funding for a public hospital in reality is commonly decided on a historical basis: the previous year s spending is adjusted for a certain percentage increase which is then classified or divided among 115 DRG classes to define the respective contributions of the state budget and health insurance funds. Primary health-care providers have been funded through a risk-adjusted capitation model since OOP payments are mostly spent as copayments. Mongolia s SHI programme was initiated in 1994 with the aim of protecting the vulnerable and low-income sector of the population while encouraging personal responsibility for health. It is administered by the Social Insurance General Office (SIGO), which operates under the Ministry of Population Development and Social Protection. The SIGO has affiliates in local government units where collection of premiums is handled by social insurance inspectors. All employees, self-employed, children under 16 years old, students, pensioners and other recognized social welfare beneficiaries are eligible to enroll in SHI. Enrolment is compulsory for all population groups since 23. Coverage in 29 was 77.5% of the population, a decline from 84.9% in 2, mainly due to decreased subsidies for contribution payments for specific population categories, such as herdsmen and students. It reached 82.6% of the population in 21, an increase of 5.% compared the previous year. The SHI contribution is set at 4% of the salary in the formal sector, which is shared equally between employees and employers. Flat contribution rates apply for herdsmen, students and the self-employed. These rates are defined on the basis of minimum wage and contribution levels. The insurance contribution for the remaining population, including children under 16 years old, pensioners and the disabled, is set at Mongolian tugrik 64 (US$.4) monthly and is paid by the Government, according to the Citizen s Health Insurance Law. In 28, the government-subsidized portion comprised 13% of total revenue of the health insurance fund (HIF). However, 6% of total expenditure from the HIF was spent for health care of the insured whose premiums were subsidized by the Government. Therefore, there is a need to increase the share of HIF in the general government health expenditure and to increase health insurance premiums paid by the Government for some population groups. HIF income and expenditures have been increasing annually since 2. In comparison with the previous year, HIF s income in 21 increased by 24.4% and expenses by 35.4%. The benefit package of the SHI covers nearly all types of inpatient care and a limited range of outpatient services and diagnostic tests. Officially, patients are supposed to make a 15% copayment to tertiary-level providers and 1% for services at the secondary level of inpatient care. SIGO in principle reimburses public hospitals on a DRG basis. Payments for inpatient services of private health providers are calculated based on the rate defined by the accreditation percentage of the respective provider, multiplied by the average case-mix rate applied for similar level public hospitals. In addition, SIGO reimburses designated pharmacies at a discounted rate of 5% 7% when and only when the drugs are prescribed by family group practices and soum health centres. Way forward Some of the main concerns with Mongolia s SHI scheme are the poor definition of the benefit package and provider payment methods. The benefit package and payment methods also have not been changed adequately over time. In 21, a Strategy on Health Financing was approved. Activities to be implemented include: 1) to renew the benefit packages funded by state budget 64 Health financing country profiles in the western pacific region,

73 and SHI; 2) to use capitation payment for financing of family group practices, soum and intersoum hospitals to ensure equal access to the essential health-care package of services by a full subsidy from the Government and updated capitation payments every year; 3) to advocate for a mandatory health insurance system with universal coverage; and 4) to decrease OOP payments to 25% of total health expenditure. Currently, Mongolia is revising its Citizen s Health Insurance Law to address the evolving needs in providing financial protection to its citizens. Selected references Bayarsaikhan D, Nakamura K (29). Health promotion financing with Mongolia s social health insurance. Asia Pacific Journal of Public Health 21(4): Ministry of Health, Ministry of Finance, and Ministry of Social Welfare and Labour of Mongolia (21). Health care financing strategy. Ulaanbaater, Mongolia. The World Bank (21). Health financing note. East Asia and Pacific region. Volume II: health system profiles. ( HFNEAPVol2921.pdf, accessed 21 February 213). WHO: Western Pacific Region (211). Mongolia: Country Health Information Profile. ( wpro.who.int/countries/mng/18mogpro211_finaldraft.pdf, accessed 21 February 213). mongolia GDP and health expenditures per capita (in current currency unit) Gross Domestic Product (GDP) US dollar Mongolian togrog Total Health Expenditure (THE) US dollar Mongolian togrog Government Health Expenditure (GGHE) US dollar Mongolian togrog Private Health Expenditure (PvtHE) US dollar Mongolian togrog Out-of-pocket expenditure (OOP) US dollar Mongolian togrog Health expenditure ratios THE as % of GDP GGHE as % of GDP PvtHE as % of GDP GGHE as % of GGE GGHE as % of THE OOP as % of THE Other private as % of THE External resources as % of THE All data for 211 are provisional data Health Expenditure and GDP figures are expressed in current US dollar based on the average exchange rate for that year. Mongolia 65

74 Nauru Health expenditure trends Nauru is a Pacific island country with a population of 1 38 people in 211. Gross domestic product (GDP) per capita was US$ 8392 in 211. The predominant source of health-care financing in Nauru is general government health expenditure, with support from external donors. In 211, total health expenditure (THE) was 8.1% of GDP, equivalent to US$ 683 per capita. Out-of-pocket (OOP) payments made up 7.8% of THE; General government health expenditure (GGHE) was 86.7% of THE. GGHE amounted US$ 592 per capita and represented 9.9% of general government expenditure (GGE) and 7.1% of GDP. External resources for health are 39.% of THE. Figures 1 5 show historical trends in health expenditure. THE had been on a downward trend from 1995 to 21, but since 22 it has generally increased. Government s contribution to THE had been fluctuating around 8% between 1995 and 27, while it has showed a tendency to decrease since 28. Figure 4 shows that the Government s priority to health has continued to decrease since 25. Health financing system Health services in Naura are provided mainly by the country s only hospital. To improve the effectiveness and efficiency of service delivery in health, the Government in 1999 amalgamated the Nauru General Hospital and the National Phosphate Corporation Hospital to become the Republic of Nauru Hospital. The Republic of Nauru Hospital offers a number of medical and surgical specialties, but specialized clinical services are only offered by visiting specialized clinical teams and overseas medical facilities. Overseas referrals for specialized clinical care are made to Australia, Fiji and India and are coordinated by the Overseas Medical Referral Committee. Health-care services are provided to all citizens for free. Funding for health services in Nauru comes mainly from financial assistance by Australia and other international donors. OOP payments contribute very marginally to THE. Way forward According to the National Sustainability Report 29, the Government aims to investigate and implement options for sustainable health financing by 213, including cost recovery and an insurance medical scheme. The 213 Nauru National Assessment Report concluded that the increasing cost of health service provision (including prescriptions and overseas referrals) places pressure on the health sector. Furthermore, the country faces the dual challenge of donor dependence and the inability to provide higher-level care. 66 Health financing country profiles in the western pacific region,

75 NRU Figure 1. General trends in health expenditure per capita at exchange rate 7 6 GGHE PvtHE Current US$ per capita (at exchange rate) NRU Figure 2. General trends in health expenditure as % of GDP GGHE as % of GDP PvtHE as % of GDP 14 % of GDP NRU Figure 3. Trends in the structure of total health expenditure (THE) GGHE OOP Other private % of total health expenditure Nauru 67

76 NRU Figure 4. GGHE as % of government spending % of government spending NRU Figure 5. External resources for health as % of THE % of THE Health financing country profiles in the western pacific region,

77 Selected references Government of the Republic of Nauru (213). Nauru national assessment report for the Third International Conference on Small Island Developing States (SIDS). ( content/documents/23nauru%2national%2assessment%2report%2for%2third%2 SIDS%2Conference%2213.pdf, accessed 21 February 213). Republic of Nauru national sustainable development strategy (29). ( naurugov.nr/documents/nsds/reviewinfrastructuresector.pdf, accessed 21 February 213). nauru GDP and health expenditures per capita (in current currency unit) Gross Domestic Product (GDP) US dollar Australian dollar Total Health Expenditure (THE) US dollar Australian dollar Government Health Expenditure (GGHE) US dollar Australian dollar Private Health Expenditure (PvtHE) US dollar Australian dollar Out-of-pocket expenditure (OOP) US dollar Australian dollar Health expenditure ratios THE as % of GDP GGHE as % of GDP PvtHE as % of GDP GGHE as % of GGE GGHE as % of THE OOP as % of THE Other private as % of THE External resources as % of THE All data for 211 are provisional data Health Expenditure and GDP figures are expressed in current US dollar based on the average exchange rate for that year. Nauru 69

78 New Zealand Health expenditure trends New Zealand is a high-income country with a population of 4.4 million people in 211. Gross domestic product (GDP) per capita was US$ in 211. The predominant source of health-care financing is general government health expenditure (GGHE), which is mainly financed through general taxation. In 211, total health expenditure (THE) was 1.1% of GDP, equivalent to US$ 3691 per capita. Out-ofpocket (OOP) payments made up 1.5% of THE; GGHE was 83.2% of THE. GGHE amounted to US$ 372 per capita and represented 19.8% of general government expenditure (GGE) and 8.4% of GDP. Figures 1 5 show historical trends in health expenditure. THE has been increasing steadily over the last decade. In the meantime, the structure of health expenditure has stayed relatively constant, with GGHE as percentage of THE increasing gradually. Figure 4 shows that GGHE as percentage of GGE has been on a steady upward trend for nearly two decades. Health financing system New Zealand has a mixed public private system for the delivery and financing of health services. The health service delivery system is organized around physicians, who are independent and self-employed providers, primary health organizations (PHOs) and district health boards (DHBs). All New Zealand residents have access to a broad range of health services with substantive government funding, supplemented by a copayment scheme. Health care is provided free to pregnant women and children under the age of six. For the rest of the population, the size of government subsidies depends on the age and the level of income. General Medical Services (GMS) are subsidies paid to general practitioners under the Section 88 notice to help reduce patient fees for children and subsidy cardholders. The general practitioners can claim a subsidy if the patient is: 1) 15 years or younger; 2) 17 years or younger and not financially independent; 3) a Community Services cardholder; or 4) a High-Use Health cardholder. If the general practitioner s fee is more than the subsidy, then the patient may need to pay the difference. 1 Low-income residents are further eligible for a Community Services Card. Patients suffering from long-term illnesses are also eligible for High Use Health Card. Treatment for accident-related injuries is covered fully by the Accident Compensation Corporation. Public funding for health accounts for a large portion of the country s health expenditure and is derived from general taxation. The Government sets an annual budget for publicly funded health services and distributes funds to the DHBs. There are currently 2 DHBs in New Zealand. More than three quarters of public funds are districted to DHBs. DHBs use this funding to plan, purchase and provide health services within their areas and also regionally, including public hospitals and the majority of public health services. DHBs plan, manage, provide and purchase health services for the population of their districts to ensure services are arranged effectively and efficiently for all of New Zealand. This includes funding for primary care, hospital services, public health services, aged care services, and services provided by other non-government 1. Ministry of Health. New Zealand (213). Primary health care services and projects. ( primary-health-care/primary-health-care-services-and-projects, accessed 21 February 213). 7 Health financing country profiles in the western pacific region,

79 NZL Figure 1. General trends in health expenditure per capita at exchange rate 4 35 GGHE PvtHE Current US$ per capita (at exchange rate) NZL Figure 2. General trends in health expenditure as % of GDP GGHE as % of GDP PvtHE as % of GDP 7 % of GDP NZL Figure 3. Trends in the structure of total health expenditure (THE) GGHE OOP Other private % of total health expenditure New Zealand 71

80 NZL Figure 4. GGHE as % of government spending % of government spending NZL Figure 5. External resources for health as % of THE % of THE Health financing country profiles in the western pacific region,

81 health providers, including Maori and Pacific providers. 2 The other sources of financing are household OOP payments and private insurance. About one third of the country s population purchase private insurance, which provides supplementary coverage. Way forward Some of the main challenges for New Zealand are controlling the raising costs of health services with the advances in medical technologies and improving access to health services given the changing demography. Selected references Ministry of Health. New Zealand (213). Primary health care services and projects. ( health.govt.nz/our-work/primary-health-care/primary-health-care-services-and-projects. accessed 21 February 213). Ministry of Health. New Zealand (213). District health boards. ( new-zealand-health-system/key-health-sector-organisations-and-people/district-healthboards?mega=nz%2health%2system&title=district%2health%2boards(accessed on 2 February 213), accessed 21 February 213). new zealand GDP and health expenditures per capita (in current currency unit) Gross Domestic Product (GDP) US dollar New Zealand dollar Total Health Expenditure (THE) US dollar New Zealand dollar Government Health Expenditure (GGHE) US dollar New Zealand dollar Private Health Expenditure (PvtHE) US dollar New Zealand dollar Out-of-pocket expenditure (OOP) US dollar New Zealand dollar Health expenditure ratios THE as % of GDP GGHE as % of GDP PvtHE as % of GDP GGHE as % of GGE GGHE as % of THE OOP as % of THE Other private as % of THE External resources as % of THE All data for 211 are provisional data Health Expenditure and GDP figures are expressed in current US dollar based on the average exchange rate for that year. 2. Ministry of Health. New Zealand (213). District health boards. ( key-health-sector-organisations-and-people/district-health-boards?mega=nz%2health%2system&title=district%2 health%2boards(accessed on 2 February 213), accessed 21 February 213). New Zealand 73

82 Niue Health expenditure trends Niue is a self-governing territory in free association with New Zealand. It had a population of 1426 in 211. Gross domestic product (GDP) per capita was US$ in 211. The predominant source of health-care financing is general government health expenditure with support from external donors. In 211, total health expenditure (THE) was 14.6% of GDP, equivalent to US$ 219 per capita. Out-of-pocket (OOP) payments made up.8% of THE; General government health expenditure (GGHE) was 99.2% of THE. GGHE amounted to US$ 2171 per capita and represented 17.6% of general government expenditure (GGE) and 14.4% of GDP. Figures 1 5 show historical trends in health expenditure. THE has been on an upward trend, with that of 21 relatively high. The Government s contribution to THE has been dominant over time, representing more than 95% of THE. Figure 4 shows that GGHE as percentage of GGE has been increasing since 22, with only a slight decrease in 24 and 25. Health financing system The Government of Niue provides and finances all health services in Niue. Health services are available to the citizens for free, mainly through Niue Foou Hospital, the territory s only hospital. In addition. Community outreach is maintained through village visits by public health nurses and regular village inspections by public health officers. While medical services are free for local residents, payment is required for some prescribed medicines, such as contraceptives. 1 As such, private health expenditure constitutes a very small portion of THE. Niue receives substantial support from New Zealand and other international donors to finance its public health expenditure. Way forward Niue, which has a small population, faces a persistent dual challenge of donor dependency and the inability to provide referral services on the island. 1. WHO Western Pacific Regional Office (211). Nauru: Country Health Information Profiles. ( countries/niu/22niupro211_finaldraft.pdf. accessed 21 February 213). 74 Health financing country profiles in the western pacific region,

83 NIU Figure 1. General trends in health expenditure per capita at exchange rate Current US$ per capita (at exchange rate) GGHE PvtHE NIU Figure 2. General trends in health expenditure as % of GDP 4 35 GGHE as % of GDP PvtHE as % of GDP 3 25 % of GDP NIU Figure 3. Trends in the structure of total health expenditure (THE) GGHE OOP Other private % of total health expenditure Niue 75

84 NIU Figure 4. GGHE as % of government spending % of government spending NIU Figure 5. External resources for health as % of THE % of THE Health financing country profiles in the western pacific region,

85 Selected reference WHO Western Pacific Regional Office (211). Nauru: Country Health Information Profiles. ( accessed 21 February 213). niue GDP and health expenditures per capita (in current currency unit) Gross Domestic Product (GDP) US dollar New Zealand dollar Total Health Expenditure (THE) US dollar New Zealand dollar Government Health Expenditure (GGHE) US dollar New Zealand dollar Private Health Expenditure (PvtHE) US dollar New Zealand dollar Out-of-pocket expenditure (OOP) US dollar New Zealand dollar Health expenditure ratios THE as % of GDP GGHE as % of GDP PvtHE as % of GDP GGHE as % of GGE GGHE as % of THE OOP as % of THE Other private as % of THE External resources as % of THE All data for 211 are provisional data Health Expenditure and GDP figures are expressed in current US dollar based on the average exchange rate for that year. Niue 77

86 Palau Health expenditure trends Palau is a Pacific island country with a population of about 2 69 in 211. Gross domestic product (GDP) per capita was US$ in 211, although this figure reflects in part large financial flows from the United States of America. The predominant source of health-care financing in Palau is general government health expenditure, with support from external donors. In 211, total health expenditure (THE) was 9.% of GDP, equivalent to US$ 93 per capita. Out-of-pocket (OOP) payments made up 11.6% of THE. General government health expenditure (GGHE) was 74.7% of THE. GGHE amounted to US$ 695 per capita and represented 6.% of general government expenditure (GGE) and 6.7% of GDP. Figures 1 5 show historical trends in health expenditure. THE has been on a general upward trend since 24. The Government s contribution to THE has increased since 2. Figure 4 shows that the Government spends on average about 14% of its total expenditures on health. Figure 5 shows that external resources for health are about 3% 4% of THE in the past few years. Health financing system Health services in Palau are mainly provided by the public sector and financed by the Government, although a private sector exists. The country s health facilities include the Belau National Hospital (BNH), four community health centres, four satellite dispensaries that serve outlying localities, and private clinics and dispensaries. 1 The Ministry of Health provides preventive care services to all citizens for free and charges a flat rate fee for drugs. User fees at Belau National Hospital were charged based on income and family size and are paid out of pocket (OOP) if patients do not have private health insurance. The private sector is allowed to charge its own fees. Prior to 21. THE was financed by the Government, overseas donors, household OOP expenditures and private insurance. OOP payments are made for drug purchases, and user fees are collected at Belau National Hospital and private clinics. The National Health Saving Plan, a social health insurance (SHI) scheme, was introduced in 21. It covers all workers and their families on a mandatory basis. Employers and employees each contribute 2.5% of their wages, while the Government subsidizes contributions for elderly and disabled based on average insured wages of all contributors. The National Health Saving Plan has two heath financing instruments the Medical Savings Account and National Health Insurance (NHI) that make up the Health Care Fund Programme. Individuals accumulate funds in their Medical Savings Account to cover the costs of outpatient medical treatment and medication for themselves and their families. Medical Savings Account (MSA) funds may also be used to pay for private health insurance premiums. Individuals are allowed to make voluntary tax-free contributions to their MSA at any time The NHI programme was designed to complement the MSAs as these do not cover costs associated with catastrophic illnesses or injuries. The NHI covers inpatient and off-island treatment. For inpatient care, the patient pays 2%, up to a ceiling of US$ 2 US$ 4 and NHI covers the remaining cost. For off- island care costs approved by the Referral Committee, the patient pays 2% up to a ceiling of US$ 1 US$ 4 depending on household income, and the NHI covers the remaining costs. 78 Health financing country profiles in the western pacific region,

87 PLW Figure 1. General trends in health expenditure per capita at exchange rate Current US$ per capita (at exchange rate) GGHE PvtHE PLW Figure 2. General trends in health expenditure as % of GDP GGHE as % of GDP PvtHE as % of GDP 1 % of GDP PLW Figure 3. Trends in the structure of total health expenditure (THE) GGHE OOP Other private % of total health expenditure Palau 79

88 PLW Figure 4. GGHE as % of government spending % of government spending PLW Figure 5. External resources for health as % of THE % of THE Health financing country profiles in the western pacific region,

89 Way forward High dependence on funding from the United States of America and the government budget for financing THE has been a key policy concern. The small population size, as well as an increase in chronic diseases and the continuous need to refer patients off the island, also represent persistent challenges to the financial sustainability of the island s health sector. Selected references Asian Development Bank (28). Palau: development of a sustainable health financina scheme. Technical Assistant Report. Project Number 422. ( PAL/422-PAL-TAR.pdf, accessed 29 October 213). Republic of Palau Health Care Fund (21). Medical savings account and national health insurance. Palau s first national, healthcare financing system. ( 29 October 213). PALAU GDP and health expenditures per capita (in current currency unit) Gross Domestic Product (GDP) US dollar Total Health Expenditure (THE) US dollar Government Health Expenditure (GGHE) US dollar Private Health Expenditure (PvtHE) US dollar Out-of-pocket expenditure (OOP) US dollar Health expenditure ratios THE as % of GDP GGHE as % of GDP PvtHE as % of GDP GGHE as % of GGE GGHE as % of THE OOP as % of THE Other private as % of THE External resources as % of THE All data for 211 are provisional data Health Expenditure and GDP figures are expressed in current US dollar based on the average exchange rate for that year. Palau 81

90 Papua New Guinea Health expenditure trends Papua New Guinea is a lower middle-income country with a population of 7 million people in 211. Gross domestic product (GDP) per capita was US$ 1767 in 211. The predominant source of health-care financing is general government health expenditure (GGHE), which is mainly financed through general taxation and substantially supported by external donors. In 211, total health expenditure (THE) was 4.5% of GDP, equivalent to US$ 79 per capita. Outof-pocket (OOP) payments made up 11.7% of THE; GGHE was 79.% of THE. GGHE amounted to US$ 62 per capita and represented 2.8% of general government expenditure (GGE) and 3.5% of GDP. Figures 1 5 show historical trends in health expenditure. THE has been fluctuating and has shown a tendency to increase since 22. Since 1995, the Government s contribution to THE has been fluctuating, while the contribution of OOP payments has slightly increased. Figure 4 shows that the Government s priority to health has averaged about 1.% since Health financing system Health service delivery in Papua New Guinea is mainly provided at Government and church health facilities, funded by a mix of government tax revenues. OOP payments and donor funds. The central Government is responsible for the national referral hospital, as well as one specialist hospital and four regional and 16 provincial public hospitals. The provinces and districts have been given the responsibility to run rural health services, although the financial resources to do so may be inadequate. The majority of health service delivery is carried out by provincial and local governments as part of rural health service delivery through rural hospitals, health centres, health subcentres and aid posts. All of these services offer a mix of public health, primary and community care. In addition, churches also contribute significantly to health service delivery in rural areas and are responsible for training many of the country s health workers. However, the Government remains the main source of finance for church-run health activities and meets more than 8% of the costs of church health services. Private sector organizations include for-profit, enterprise-based services or employment-related health-care programmes; small for-profit private sector, women s and youth organizations; nongovernmental organizations and an undocumented number of unregulated traditional healers. General taxation is one of the major sources of finance for government expenditure on health. Overseas donors also finance a significant share of the Government s expenditure on health. The central Government provides provinces with a Provincial Health Function Grant, which provincial governments can decide how to use within its portfolio of health activities. In principle, all public health and primary health-care services are free at the point of use. However, since health function grants do not always reach the facility level on time, staff at those facilities tend to charge user 82 Health financing country profiles in the western pacific region,

91 fees. Fees in church facilities are usually displayed in public view and are generally higher than fees in public facilities. The Public Hospitals (Charges) Act (1972) covers the user fees in public hospitals, but not health centres nor aid posts. The role of private insurance is also small, with only a minority of the population covered with such insurance. Consequently, private expenditure on health, including OOP payments and private insurance, accounts for less than 1% of THE. Nonetheless, the demand for private insurance is increasing. Way forward The National Health Plan envisaged a substantial real increase in the Government s funding for the health sector. The plan, however, did not materialize because of a sharp economic slowdown in 22 and a continuing decline in overseas aid. The National Health Plan s vision is of strengthened primary health care for all and improved service delivery for the rural majority and the urban disadvantaged, which should lead to equity issues being addressed. This new plan also emphasizes the importance of increased efficiency and the central role of human resources for health, as well as the need of infrastructure rehabilitation and better governance structures. The main challenges have been identified and a plan developed to address them. Selected references Government of Papua New Guinea (21). National health plan Volume 1 policies and strategies. Papua New Guinea. Australian Agency for International Development (29). Evaluation of Australian aid to health service delivery in Papua New Guinea. Solomon Islands, and Vanuatu. Evaluation report. ( accessed 21 February 213). WHO and the National Department of Health. Papua New Guinea(212):Papua New Guinea health service delivery profile.212. ( papua_new_guinea.pdf, accessed 21 February 213). Papua New Guinea 83

92 PNG Figure 1. General trends in health expenditure per capita at exchange rate 8 7 GGHE PvtHE Current US$ per capita (at exchange rate) PNG Figure 2. General trends in health expenditure as % of GDP GGHE as % of GDP PvtHE as % of GDP % of GDP PNG Figure 3. Trends in the structure of total health expenditure (THE) GGHE OOP Other private % of total health expenditure Health financing country profiles in the western pacific region,

93 PNG Figure 4. GGHE as % of government spending % of government spending PNG Figure 5. External resources for health as % of THE % of THE Papua New Guinea 85

94 papua new guinea GDP and health expenditures per capita (in current currency unit) Gross Domestic Product (GDP) US dollar Papua New Guinean kina Total Health Expenditure (THE) US dollar Papua New Guinean kina Government Health Expenditure (GGHE) US dollar Papua New Guinean kina Private Health Expenditure (PvtHE) US dollar Papua New Guinean kina Out-of-pocket expenditure (OOP) US dollar Papua New Guinean kina Health expenditure ratios THE as % of GDP GGHE as % of GDP PvtHE as % of GDP GGHE as % of GGE GGHE as % of THE OOP as % of THE Other private as % of THE External resources as % of THE All data for 211 are provisional data Health Expenditure and GDP figures are expressed in current US dollar based on the average exchange rate for that year. 86 Health financing country profiles in the western pacific region,

95 Philippines Health expenditure trends The Philippines is a lower middle-income country with a population of 94.9 million in 211. Gross domestic product (GDP) per capita was US$ 237 in 211. Out-of-pocket (OOP) expenditures are the main source of health financing. General government health expenditures (GGHE) are largely financed through general taxation. In 211, total health expenditure (THE) was 4.4% of GDP, equivalent to US$ 15 per capita. OOP payments made up 52.7% of THE; GGHE was 36.9% of THE. GGHE amounted to US $39 per capita and represented 1.2% of general government expenditure (GGE) and 1.6% of GDP. Figures 1 5 show historical trends in health expenditure. THE has been increasing steadily since 22. The Government s contribution to THE has increased to over 35.% for the past few years, while the contribution of OOP payments has decreased since 29. Government s priority to health has increased since 29 to over 1.%. Health financing system In the health delivery system, the public sector supplies health services through a nationwide network of public hospitals, health centres and village health stations. The private sector supplies health services through private hospitals, physicians clinics and diagnostic clinics, mostly located in urban areas. Both public and private health facilities operate on a fee-for-service (FFS) basis, although public facilities receive further funding from national or local government governments for salaries and other costs. Most public health facilities are managed by local governments, except for Department of Health-retained hospitals. In the health financing system, household OOP payments are the largest contributor to THE in the Philippines. Patients are expected to make OOP payments for health services in public and private facilities, beyond whatever cost is covered by the country s social health insurance (SHI) scheme and their private insurance. However, public health facilities are mandated to provide health services free or at lower cost to those who are identified as poor by social workers. Wealthier patients typically seek health services in the private sector, which are permitted to set their own pricing policies. Public financing of health is the second largest contributor to THE and consists of the government budget financed by taxation and funds from SHI. The National Health Insurance Program (NHIP) is managed by the Philippines Health Insurance Corporation (PhilHealth). It is financed by contributions from employees, employers, individuals (including overseas foreign workers or OFWs), and national and local governments. Philippines 87

96 PHL Figure 1. General trends in health expenditure per capita at exchange rate Current US$ per capita (at exchange rate) GGHE PvtHE PHL Figure 2. General trends in health expenditure as % of GDP GGHE as % of GDP PvtHE as % of GDP % of GDP PHL Figure 3. Trends in the structure of total health expenditure (THE) GGHE OOP Other private % of total health expenditure Health financing country profiles in the western pacific region,

97 PHL Figure 4. GGHE as % of government spending % of government spending PHL Figure 5. External resources for health as % of THE % of THE Philippines 89

98 Revenue raising PhilHealth is financed by contributions from employees, employers, individuals (including OFWs), and national government and local governments. Employers and employees in the formal sector each contribute a 2.5% payroll tax as a premium (up to a salary cap of about 3 pesos per month, about US$ 7, although plans to adjust this cap are under way). Under the Individual Paying Program, the self-employed and OFWs contribute an annual premium of around 12 pesos (US$ 28). Retirees and pensioners are granted lifetime membership so long as they have paid at least 12 months of premiums into the programme. Those belonging to the poorest 2% of the population are classified as indigent and are entitled to subsidized membership. The premium for the sponsored programme is subsidized by the central Government (mean contribution 8%, range 5% 9%) and local government (mean contribution 2%, range 1% 5%). Yearly enrolment has depended on local government political will and fiscal capacity. Starting in 211, sponsored members are identified using the Department of Social Welfare and Development s national household targeting system for poverty reduction, and will be fully subsidized by the national Government. This is in line with the health agenda of President Benigno Aquino III, which seeks to achieve universal health coverage, with a special focus on reaching the poorest. In 25, PhilHealth launched the KaSAPI (Kalusugang Sigurado at Abot-Kaya sa PhilHealth Insurance) initiative. It seeks to boost and sustain enrolment among workers in the informal economy. Under KaSAPI, PhilHealth enters into strategic partnerships with microfinance agencies, many of which specifically serve informal economy workers. Members of microfinance agencies could enrol in the NHIP through their agencies and obtain health insurance on more flexible payment terms and in a streamlined process. Pooling of risks and resources Coverage estimates have varied markedly. For instance, PhilHealth previously estimated that about 74% of the nation s population was enrolled in the programme in 21. Yet the 28 National Demographic Health Survey showed that only 38% of respondents were aware of at least one household member being enrolled in PhilHealth. A recent joint evaluation by PhilHealth and the Department of Health estimated population coverage to be 53%, a figure that is being used as the basis for current reform initiatives. Strategic purchasing PhilHealth pools funds from a variety of sources. Members are entitled to obtain their benefits from any PhilHealth-accredited provider, which can be either public or private. PhilHealth uses the provider payment mechanism as one way to control the behaviour of health providers. Fee-for-service was used to reimburse health providers until, when PhilHealth introduced a case rate system as the new mechanism of reimbursement. Fees-for-service made the cost of a specific disease condition or procedure highly unpredictable and variable in the country. In the new mechanism, the reimbursable amount of specific diseases and procedures is fixed. The new mechanism does not only improve the turnaround time for claims processing, but it also promotes transparency on the actual cost of care. Since PhilHealth members would now know the amount of subsidy, it is hoped that they can plan and make rational choices ahead of time. Members are reimbursed up to a ceiling for different categories of care, after which they have to make OOP payments. PhilHealth reimburses accredited providers on a fee-for-service regime, again with ceilings, though hospitals are allowed to charge over and above the PhilHealth fees (balanced billing). In addition to the standard package, PhilHealth has also expanded outpatient benefits for indigent members. It has also introduced packages targeted to specific groups, such as mothers and children and tuberculosis patients. 9 Health financing country profiles in the western pacific region,

99 Private insurance exists and often is provided by private employers, either voluntarily or as a result of collective bargaining agreements. A number of for-profit health nanagement organizations (HMOs) have been established in the Philippines since the 199s. HMO benefit packages typically offer preventive health care, inpatient and outpatient services, and emergency care. In addition, the Labor Code also prescribes a minimum set of medical, dental and occupational safety obligations for employers. Way forward Despite social and private health insurance schemes, the current high level of OOP payments suggests that the population is still subjected to high financial risks. Indeed, a recent WHO study found that the extent of severe financial hardship caused by using health services ( catastrophic expenditures) has been increasing in recent years. It also found that inpatient admission rates were markedly lower among the poorer segments of the population. In light of these continuing challenges, the current government recently has launched the Aquino Health Agenda. It aims to achieve universal health care or kalusugang pangkalahatan, with a strong focus on substantially improving the coverage of the poor. Recently, there have been millions of poor families newly enrolled in PhilHealth and several improvements in inpatient and outpatient benefits. As also stipulated in the Philippines Health Financing Strategy 21 22, the Government seeks to increase health spending, expand PhilHealth to cover the majority of the population and make the NHIP the main source of health financing, reducing OOP payments. Selected references Asia Pacific Observatory on Health Systems and Policies. Health Systems in Transition(211):1(1). The Philippines health system review. Manila. World Health Organization Regional Office of the Western Pacific. Lavado L. et al. (forthcoming). Financial health burden in the Philippines. Quimbo S. et al. (28). Underutilization of social insurance among the poor: evidence from the Philippines. PLoS One 3(1):3379. Obermann K. et al. (28). Lessons for health care reform from the less developed world: the case of the Philippines. Eur J Health Econ 9(4): Philippines 91

100 philippines GDP and health expenditures per capita (in current currency unit) Gross Domestic Product (GDP) US dollar Philippine peso Total Health Expenditure (THE) US dollar Philippine peso Government Health Expenditure (GGHE) US dollar Philippine peso Private Health Expenditure (PvtHE) US dollar Philippine peso Out-of-pocket expenditure (OOP) US dollar Philippine peso Health expenditure ratios THE as % of GDP GGHE as % of GDP PvtHE as % of GDP GGHE as % of GGE GGHE as % of THE OOP as % of THE Other private as % of THE External resources as % of THE All data for 211 are provisional data Health Expenditure and GDP figures are expressed in current US dollar based on the average exchange rate for that year. 92 Health financing country profiles in the western pacific region,

101 Republic of Korea Health expenditure trends The Republic of Korea is a high-income country with a population of 49.8 million in 211. Gross domestic product (GDP) per capita was US$ in 211. The predominant source of healthcare financing is general government health expenditure (GGHE), which is mainly financed through social health insurance (SHI). In 211, total health expenditure (THE) was 7.2% of GDP, equivalent to US$ 1616 per capita. Outof-pocket (OOP) payments made up 32.9% of THE; GGHE was 57.3%% of THE. GGHE amounted to US$ 927 per capita and represented 13.7% of general government expenditure (GGE) and 4.1% of GDP. Figures 1 5 show historical trends in health expenditure. THE has been increasing overall, with the exception of 28 and 29). The contribution of OOP payments to THE has been on a downward trend, while GGHE s contribution has been on an upward trend since 23. Figure 4 shows that the Government s priority to health has been increasing steadily since 23. Health financing system Health services in the Republic of Korea are mainly provided by the private sector, but they are financed by the country s SHI system that runs a copayment scheme. Prior to 2, the SHI system in the Republic of Korea was characterized by a multiple-payer structure. The 3 insurance societies were merged in stages at the beginning of 1998 to form one national single payer the National Health Insurance Service (NHIS) to overcome problems with fragmentation. At present, all employed citizens and their families are mandatory members of the National Health Insurance (NHI) scheme. NHI is financed by contributions collected from the insured and employers and by government subsidies from the national treasury, national health promotion fund, tobacco tax and other sources. It covers more than 97% of the population and consists of two categories of members employees and the self-employed. 1 For employees, contributions are 5.33% of their gross salaries, with employer and employee each paying half of the premium. The premium levels for those insured in the self-employed category depend on their income and income type. Since the introduction of the self-employed insurance scheme in 1998, the Government has been subsidizing the premiums of beneficiaries. Under NHI, the extent and the level of benefit coverage are determined by the Government, and the benefit package is the same for the whole population. 1 All hospitals, clinics and pharmacies, whether public or private, are legally obliged to subscribe as providers under NHI. They are reimbursed by the NHIS on a fee-for-service basis. As such, the NHIS acts as a monopsony by purchasing health services from all providers and setting the cost of every medical procedure that the law covers. 1. The World Bank (21). Health Care Financing Note. East Asia and Pacific Region. Volume II: Health System Profiles. PROFILE SIX: REPUBLIC OF KOREA. Republic of Korea 93

102 KOR Figure 1. General trends in health expenditure per capita at exchange rate GGHE PvtHE Current US$ per capita (at exchange rate) KOR Figure 2. General trends in health expenditure as % of GDP 7 6 GGHE as % of GDP PvtHE as % of GDP 5 % of GDP KOR Figure 3. Trends in the structure of total health expenditure (THE) GGHE OOP Other private % of total health expenditure Health financing country profiles in the western pacific region,

103 KOR Figure 4. GGHE as % of government spending % of government spending KOR Figure 5. External resources for health as % of THE % of THE Republic of Korea 95

104 When the insured or their dependents receive medical care benefits, they bear a part of the medical costs and the amount may vary: 2% of total medical fees for inpatients and 3% 6% for outpatients depending on the type of medical care institutions. A copayment ceiling system has also been introduced to protect households against catastrophic or high-cost diseases and covers inpatient, outpatient and pharmaceutical services. Under the system, an insured person is exempted from further copayments when the total amount of medical costs exceeds 2 to 4 million won (about US$ 2 US$ 4), depending on annual income. The remainder of the population is covered by the Medical Aid Program, a means-tested programme for low-income households that is fully financed jointly by the central Government and the provincial governments. Since NHI only covers around 55% of THE, many citizens also have private health insurance, which provides coverage for procedures considered as elective by the NHIS. It is estimated that about 2% of the population is covered by private insurance. The market for private health insurance is not insignificant in the Republic of Korea with private health insurance s share of total financing for health care estimated at 3.4%. With high OOP rates under the current NHI, it is expected that more people will join private health insurance plans, and that the private health insurance market will expand in the years to come. 1 Way forward While the Republic of Korea has managed to achieve universal health coverage in a relatively short time frame, the continued inequity in access to services as a result of high OOP payments, as well as a rapidly ageing population, rising pharmaceutical costs and the continued use of a fee-for- services payment mechanism constitute challenges for the sustainability, efficiency and equity of the health financing system. Selected references Lee CY and E Kim. Case study: Republic of Korea. ( case_study_korea.pdf, accessed 21 February 213). The World Bank (21). Health care financing note. East Asia and Pacific region. Volume II: Health System Profiles, profile six: republic of Korea. Washington DC. The World Bank. Republic of Korea. Ministry of Health and Welfare (213). Policies. ( eng/jc/sjc18mn.jsp?par_menu_id=1315&menu_id=13151, accessed 21 February 213). 96 Health financing country profiles in the western pacific region,

105 republic of korea GDP and health expenditures per capita (in current currency unit) Gross Domestic Product (GDP) US dollar Korean won Total Health Expenditure (THE) US dollar Korean won Government Health Expenditure (GGHE) US dollar Korean won Private Health Expenditure (PvtHE) US dollar Korean won Out-of-pocket expenditure (OOP) US dollar Korean won Health expenditure ratios THE as % of GDP GGHE as % of GDP PvtHE as % of GDP GGHE as % of GGE GGHE as % of THE OOP as % of THE Other private as % of THE External resources as % of THE All data for 211 are provisional data Health Expenditure and GDP figures are expressed in current US dollar based on the average exchange rate for that year. Republic of Korea 97

106 Samoa Health expenditure trends Samoa is a Pacific island country with a population of in 211. Gross domestic product (GDP) per capita was US$ 3553 in 211. The predominant source of health-care financing in Samoa is general government health expenditure (GGHE), which is mainly financed through general taxation with support from external donors. In 211, total health expenditure (THE) was 7.% of GDP, equivalent to US$ 25 per capita. Outof-pocket (OOP) payments made up 7.2% of THE; GGHE was 88.5% of THE. GGHE amounted to US$ 221 per capita and represented 25.1% of general government expenditure (GGE) and 6.2% of GDP. External resources for health is 22.6% of THE. Figures 1 5 show historical trends in health expenditure. THE has been on an upward trend since 22, with the exception of 29. Government accounted for the predominant share of THE, and its percentage of THE continued to increase. Figure 4 shows that the Government s priority to health has an upward tendency as a whole, with a slight decrease in the trend from 21 to 25. Health financing system Samoa has a mixed-delivery and mixed-financing health system. The Health Sector Plan , which is the cornerstone for all health sector development and the reference point for policy, strategy and planning, led to the Ministry of Health Act 26 and the National Health Service Act 26, which in turn led to the formation of the National Health Service (NHS). The Ministry of Health (MOH) now focuses exclusively on monitoring and regulating the health sector as whole, while the NHS focuses exclusively on health services provision. The private sector consists of one private hospital, MedCen Hospital, and numerous private health-care providers, including nongovernmental organizations and traditional healers. Tertiary treatment is available overseas and is financed by the Samoa Medical Treatment Scheme (SMTS) and the New Zealand Medical Treatment Scheme (NZMTS), funded by New Zealand. Health services are financed by the Government through general taxation, household OOP payments and overseas donors. All citizens and residents are eligible to receive highly subsidized health-care services provided by NHS. In addition, the Samoa National Provident Fund, which is also financed by general tax revenues, provides free health services and medical care for all citizens 65 years and above. This scheme covers all primary and secondary treatment performed at public health facilities, as well as prescription drugs. Compared to the public sector, the private sector charges much higher user fees for delivery of health services, as well as for drugs. Private health-care provision is financed by household OOP payments. Finally, donor funding for health is directed either to the Ministry of Finance, which disperses the funding to NHS and MOH, or directly to nongovernmental organizations. Health services provided by nongovernmental organizations are made available to the entire population free at the point of use and are for preventive care and awareness-raising programmes. 98 Health financing country profiles in the western pacific region,

107 WSM Figure 1. General trends in health expenditure per capita at exchange rate Current US$ per capita (at exchange rate) GGHE PvtHE WSM Figure 2. General trends in health expenditure as % of GDP 7 6 GGHE as % of GDP PvtHE as % of GDP 5 % of GDP WSM Figure 3. Trends in the structure of total health expenditure (THE) GGHE OOP Other private % of total health expenditure Samoa 99

108 WSM Figure 4. GGHE as % of government spending % of government spending WSM Figure 5. External resources for health as % of THE % of THE Health financing country profiles in the western pacific region,

109 Way forward Similar to other Pacific islands. Samoa will continue to be challenged by its small population size, leading to a limited ability to raise revenue, and its lack of a referral hospital, leading to increasing health expenditures. The rise and prevalence of noncommunicable diseases, as well as high neonatal mortality rates, will also continue to put pressure on the financial sustainability of the health sector. Selected references Ministry of Health. Samoa. Health sector plan ( wsm/samoahealthsectorplan715.pdf, accessed 21 February 213). NHA Team-Policy Unit. Strategic Development and Planning Division. Ministry of Health. Samoa. National health accounts fiscal year 26/27. ( et=%2fcguyjhep44%3d&tabid=5385&mid=9136&language=en-us, accessed 21 February 213). samoa GDP and health expenditures per capita (in current currency unit) Gross Domestic Product (GDP) US dollar Samoan tala Total Health Expenditure (THE) US dollar Samoan tala Government Health Expenditure (GGHE) US dollar Samoan tala Private Health Expenditure (PvtHE) US dollar Samoan tala Out-of-pocket expenditure (OOP) US dollar Samoan tala Health expenditure ratios THE as % of GDP GGHE as % of GDP PvtHE as % of GDP GGHE as % of GGE GGHE as % of THE OOP as % of THE Other private as % of THE External resources as % of THE All data for 211 are provisional data Health Expenditure and GDP figures are expressed in current US dollar based on the average exchange rate for that year. Samoa 11

110 Singapore Health expenditure trends Singapore is a high-income country with a population of 5.2 million in 211. Gross domestic product (GDP) per capita was US$ 51 2 in 211. Out-of-pocket (OOP) expenditures are the main source of health-care financing and account for more than half of the country s total health expenditure. However, OOP payments also include withdrawals from medical savings accounts. In 211, total health expenditure (THE) was 4.5% of GDP, equivalent to US$ 2286 per capita. OOP payments made up 6.4% of THE; general government health expenditure (GGHE) was 31.% of THE. GGHE amounted to US$ 79 per capita and represented 8.8% of general government expenditure (GGE) and 1.4% of GDP. Figures 1 5 show historical trends in health expenditure. THE has been increasing steadily since 22. In the meantime. OOP payments remain the major part of THE, followed by GGHE with GGHE decreasing before 24, stabilizing from 24 to 27 and slightly increasing since 27. Figure 4 shows that the Government s priority to health has remained relatively constant since 23, with GGHE as a percentage of GGE averaging 7.%. Health financing system Singapore has a mixed delivery and financing health system organized around a multi-tier system: According to the Ministry of Health, the primary care sector is dominated by private sector providers, which account for about 8% of the market. 1 While outpatient services in private facilities are typically paid OOP, all Singaporeans are entitled to subsidized medical services at government polyclinics and hospitals, which is the first tier of protection. The public sector delivers about 8% of acute care. 1 Furthermore, the Government subsidizes up to 8% of the total bill in acute hospital wards for all Singaporeans. In the step-down care sector (e.g. nursing homes, community hospitals and hospices), service provision is mainly provided by voluntary welfare organizations, most of which are funded by the Government for services rendered to patients. 1 Medisave is the centerpiece of the Singapore health financing system and serves as the second tier of protection. 1 Established in 1984, Medisave is a compulsory individual medical savings account (MSA) scheme. All employed Singaporeans and their employers contribute a part of the monthly wages (typically 7 9.5%) into an individual s saving account that is portable across jobs and after retirement. 2 Individuals may use the accumulated contributions in their Medisave to pay for hospital expenses incurred by themselves or their immediate family members. To prevent individuals from exhausting their Medisave account before retirement, the Government sets limits to the use of Medisave. 1. Ministry of Health, Singapore (213). Costs and financing. ( financing.html, accessed 29 October 213). 2. Ministry of Health, Singapore (213). Schemes and subsidies. ( and_financing/schemes_subsidies/medisave.html, accessed 29 October 213). 12 Health financing country profiles in the western pacific region,

111 SGP Figure 1. General trends in health expenditure per capita at exchange rate Current US$ per capita (at exchange rate) GGHE PvtHE SGP Figure 2. General trends in health expenditure as % of GDP GGHE as % of GDP PvtHE as % of GDP % of GDP SGP Figure 3. Trends in the structure of total health expenditure (THE) GGHE OOP Other private % of total health expenditure Singapore 13

112 SGP Figure 4. GGHE as % of government spending % of government spending SGP Figure 5. External resources for health as % of THE % of THE Health financing country profiles in the western pacific region,

113 MediShield provides a third level of protection and is designed to help members meet the medical expenses from major or prolonged illnesses for which their MSA balance would not be sufficient. Annual premiums for MediShield can be paid from the individual s Medisave account. Deductibles and copayments are applicable when receiving care. ElderShield is insurance for severe disability that is available for subscription by Singaporeans to protect against the financial risks of suffering a severe disability. Many middle- and higherincome Singaporeans have also supplemented their basic coverage with integrated private insurance policies (integrated shield plans) for treatment in the private sector. Singaporeans must subscribe to the basic MediShield product before they can purchase the add-on private integrated shield plans. This industry structure preserves the national risk pool and guards against cherry picking of healthy lives by private insurers. Similarly, ElderShield supplements allow policyholders to enhance the disability benefits coverage offered by the basic ElderShield product. 1 Finally, Medifund is a medical endowment fund to help needy Singaporeans who are unable to pay for their medical expenses. Medifund acts as a safety net for those who cannot afford the subsidized bill charges, over and above the protection provided by Medisave and MediShield. In terms of revenue raising, household OOP payments fund a large portion of THE. The next largest source of health-care financing is government expenditure derived from its general budget. Private health insurance provides additional coverage. It is estimated that 2.32 million people in Singapore are covered by private health insurance. Way forward Singapore s ethos of giving citizens individual responsibility for financing their health-care services, as well as affordable health care, continues to face the challenge of high OOP payments. Addressing the barriers that these represent for some parts of the population may be a policy avenue to explore, as well as trying to harness the pooling potential of these high OOP payments, which would imply departing from the current medical savings accounts approach. Recently, Singapore announced that it plans to introduce Medishield Life to ensure lifetime coverage of financial protection. Selected references Ministry of Health, Singapore (213). Costs and financing. ( moh_web/home/costs_and_financing.html, accessed 29 October 213). Ministry of Health, Singapore (213). Schemes and subsidies. ( moh_web/home/costs_and_financing/schemes_subsidies/medisave.html, accessed 29 October 213). Ministry of Health, Singapore (213). What is MediShield Life? ( moh_web/home/pressroom/current_issues/213/national-day-rally-213/medishield.html, accessed 29 October 213). Singapore 15

114 singapore GDP and health expenditures per capita (in current currency unit) Gross Domestic Product (GDP) US dollar Singapore dollar Total Health Expenditure (THE) US dollar Singapore dollar Government Health Expenditure (GGHE) US dollar Singapore dollar Private Health Expenditure (PvtHE) US dollar Singapore dollar Out-of-pocket expenditure (OOP) US dollar Singapore dollar Health expenditure ratios THE as % of GDP GGHE as % of GDP PvtHE as % of GDP GGHE as % of GGE GGHE as % of THE OOP as % of THE Other private as % of THE External resources as % of THE All data for 211 are provisional data Health Expenditure and GDP figures are expressed in current US dollar based on the average exchange rate for that year. 16 Health financing country profiles in the western pacific region,

115 Solomon Islands Health expenditure trends Solomon Islands is a Pacific island country with a population of in 211. Gross domestic product (GDP) per capita was US$ 1517 in 211. The predominant source of health-care financing in Solomon Islands is general government health expenditure, with support from external donors. In 211, total health expenditure (THE) was 8.8% of GDP, equivalent to US$ 134 per capita. Out-of-pocket (OOP) payments made up 3.% of THE; general government health expenditure (GGHE) was 94.8% of THE. GGHE amounted to US$ 127 per capita and represented 25.5% of general government expenditure (GGE) and 8.4% of GDP. Figures 1 5 show historical trends in health expenditure. THE has been on an upward trend since 26. The structure of health expenditure has remained relatively constant with the Government accounting for the predominant share of THE. Figure 4 shows that the Government s priority to health follows no clear pattern. Health financing system Solomon Islands has a publicly financed and publicly delivered health system. Any health reforms will be carried out within the existing overall public public system. 1 Health service delivery in Solomon Islands is predominantly a function of the Ministry of Health and Medical Services (MHMS), with implementing agencies in the provinces. The country s health-care facilities are comprised of the National Referral Hospital (NRH) in Honiara, provincial secondary-care hospitals, church-operated secondary care hospitals and numerous primary health clinics. General outpatient clinic services and inpatient services are provided free of charge to all Solomon Islands nationals. User fees are charged for a limited set of services such as specific dental procedures, radiology and laboratory services, and the issuance of medical records and documents, as well as visits to specialty outpatient clinics. The public sector is responsible for the bulk of health financing in Solomon Islands. The Government funds health services at both the central and provincial levels through its general revenue derived from taxation and income from the export of primary commodities. About one third of public health financing comes from overseas development aid, especially from Australia, Japan and New Zealand. The Government provides some funding for the services of church-operated hospitals and nongovernmental organizations through the MHMS, and accounts for these services in their health sector planning and management. 1 Private health insurance makes a negligible contribution to THE. 1. Ministry of Health & Medical Services, Solomon Islands (211). National health strategic plan ( ). ( wpro.who.int/health_services/solomon_islands_nationalhealthplan.pdf. accessed 29 October 213). Solomon Islands 17

116 SLB Figure 1. General trends in health expenditure per capita at exchange rate GGHE PvtHE Current US$ per capita (at exchange rate) SLB Figure 2. General trends in health expenditure as % of GDP 9 8 GGHE as % of GDP PvtHE as % of GDP 7 6 % of GDP SLB Figure 3. Trends in the structure of total health expenditure (THE) GGHE OOP Other private % of total health expenditure Health financing country profiles in the western pacific region,

117 SLB Figure 4. GGHE as % of government spending % of government spending SLB Figure 5. External resources for health as % of THE % of THE Solomon Islands 19

118 Way forward Solomon Islands is one of the largest Pacific islands, but it faces challenges of financial sustainability and donor dependence that also affect smaller islands. Selected references Australian Agency for International Development (29). Evaluation of Australian aid to health service delivery in Papua New Guinea. Solomon Islands and Vanuatu. Evaluation Report. ( accessed 21 February 213). Ministry of Health, Solomon Islands. Brief introduction. ( MOHintro.htm, accessed 21 February 213). Ministry of Health & Medical Services, Solomon Islands (211). National health strategic plan ( ). ( pdf, accessed 29 October 213). World Bank (21). Soloman Islands health financing options. ( org/curated/en/21/6/ /solomon-islands-health-financing-options, accessed 21 February 213). solomon islands GDP and health expenditures per capita (in current currency unit) Gross Domestic Product (GDP) US dollar Solomon Islands dollar Total Health Expenditure (THE) US dollar Solomon Islands dollar Government Health Expenditure (GGHE) US dollar Solomon Islands dollar Private Health Expenditure (PvtHE) US dollar Solomon Islands dollar Out-of-pocket expenditure (OOP) US dollar Solomon Islands dollar Health expenditure ratios THE as % of GDP GGHE as % of GDP PvtHE as % of GDP GGHE as % of GGE GGHE as % of THE OOP as % of THE Other private as % of THE External resources as % of THE All data for 211 are provisional data Health Expenditure and GDP figures are expressed in current US dollar based on the average exchange rate for that year. 11 Health financing country profiles in the western pacific region,

119 Tonga Health expenditure trends Tonga is a Pacific island country with a population of in 211. Gross domestic product (GDP) per capita was US$ 4347 in 211. The predominant source of health-care financing in Tonga is general government health expenditure (GGHE), which is mainly financed through general taxation and is substantially supported by external donors. In 211, total health expenditure (THE) was 5.% of GDP, equivalent to US$ 219 per capita. Outof-pocket (OOP) payments made up 11.1% of THE; GGHE was 83.6% of THE. GGHE amounted to US$ 183 per capita and represented 15.8% of general government expenditure (GGE) and 4.2% of GDP. Figures 1 5 show historical trends in health expenditure. THE has been on an upward trend since 1995, although it decreased in 29. GGHE accounts for about 8% of THE, and has been on an upward trend overall, despite a decrease in 29. Health financing system Health services in Tonga are largely provided and financed by the Government. The Ministry of Health is responsible for delivering health services through the country s public health facilities, which include four hospitals and 48 primary care health centres. Tonga nationals who use public health facilities are able to receive free medical treatment and drugs. A small private health sector exists and consists mainly of traditional healers and nongovernmental organizations. Patients requiring specialist care that is not available in Tonga can be referred to New Zealand under two overseas treatment schemes funded by the governments of Tonga and New Zealand. 1 The decision whether to refer is made by the Medical Transfer Board. The bulk of government expenditure is directed to public health facilities. Public expenditure on health is financed by general taxation with the support of external donors. OOP spending was mostly on traditional healers, private pharmacies and private physicians. According to WHO s Tonga Country Health Profile, About 12% of the population have some kind of health insurance. The private sector is still small and consists mainly of traditional healers and governmentemployed doctors practising after hours. About 14% of total expenditure on health is for traditional healers, although they are mostly paid in kind. Expenditure on drugs accounts for approximately 7.8% of total expenditure on health. 1 Private health insurance, which accounts for less than 1% of total health spending, is used almost exclusively to help cover the costs of overseas medical treatment. Achieving a more diversified and sustainable financing base for the health sector is a key policy goal for the Government. Under this rationale, the Cabinet approved the introduction of user fees in public facilities in 25. Initially, the user fees primarily targeted non-tongan nationals and applied only to inpatient services provided at Vaiola Hospital. However, the new policy eventually will involve an increase for the inpatient food and admission fees for Tongan nationals. These charges will be capped at 21 days. 1. WHO Western Pacific Region (211). Tonga country information profile. ( accessed 21 February 213). Tonga 111

120 TON Figure 1. General trends in health expenditure per capita at exchange rate Current US$ per capita (at exchange rate) GGHE PvtHE TON Figure 2. General trends in health expenditure as % of GDP 7 6 GGHE as % of GDP PvtHE as % of GDP 5 % of GDP TON Figure 3. Trends in the structure of total health expenditure (THE) GGHE OOP Other private % of total health expenditure Health financing country profiles in the western pacific region,

121 TON Figure 4. GGHE as % of government spending % of government spending TON Figure 5. External resources for health as % of THE % of THE Tonga 113

122 User fee exemptions apply to patients under 14 years old and over 7, those in the Infections Disease Ward (or isolated in the ward for infection control) and those admitted for psychiatric illnesses. There are also plans to introduce social health insurance (SHI). Way forward The revenue collection method currently uses general taxation, is relatively simple, and allows for a greater degree of risk pooling, little fragmentation of pools and greater equity in access as a result. However, the introduction of user fees may jeopardize this equity achievement. The rolling out of SHI could improve the revenue-raising ability of the state. Tonga s current challenges, therefore, remain the financial sustainability of its health sector, linked to its small population size and high costs associated with overseas referrals, among other factors. Selected references World Bank (21). Financing options for the health sector in Tonga. ( INTHSD/Resources/topics/ /FiscalSpaceforHealthTongaFinancingOptions forthehealthsector.pdf, accessed 21 February 213). WHO Western Pacific Region (211). Tonga country information profile. ( countries/ton/33tonpro211_finaldraft.pdf, accessed 21 February 213). tonga GDP and health expenditures per capita (in current currency unit) Gross Domestic Product (GDP) US dollar Tongan pa anga Total Health Expenditure (THE) US dollar Tongan pa anga Government Health Expenditure (GGHE) US dollar Tongan pa anga Private Health Expenditure (PvtHE) US dollar Tongan pa anga Out-of-pocket expenditure (OOP) US dollar Tongan pa anga Health expenditure ratios THE as % of GDP GGHE as % of GDP PvtHE as % of GDP GGHE as % of GGE GGHE as % of THE OOP as % of THE Other private as % of THE External resources as % of THE All data for 211 are provisional data Health Expenditure and GDP figures are expressed in current US dollar based on the average exchange rate for that year. 114 Health financing country profiles in the western pacific region,

123 Tuvalu Health expenditure trends Tuvalu is a Pacific island country with a population of 9847 in 211. Gross domestic product (GDP) per capita was US$ 3636 in 211. The predominant source of health-care financing is general government health expenditure (GGHE), which is mainly financed through general taxation. Donor support has decreased in the last 1 years. In 211, total health expenditure (THE) was 17.3% of GDP, equivalent to US$ 629 per capita. Outof-pocket (OOP) payments were minimal; GGHE was 99.9% of THE. GGHE amounted to US$ 629 per capita and represented 18.% of general government expenditure (GGE) and 17.3% of GDP. Figures 1 5 show historical trends in health expenditure. THE, which has been on an upward trend, fell in There has been no major change in the structure of health expenditure, with GGHE dominating. Figure 4 shows that the Government s priority to health has fallen in the last few years. Health expenditure trends Health services in Tuvalu are largely provided by the Government and made available to all citizens for free. The Ministry of Health is responsible for the country s only hospital located on the main island of Funafuti, as well as numerous clinics located on the outer islands and staffed by registered nurses. 1 Preventive services are provided by the Tuvalu Family Health Association (TFHA), the country s leading nongovernmental organization and other nongovernmental organizations. The main source of funding for the country s health expenditure is the government budget. The remainder of the expenditure is funded by donor grants, which are earmarked mainly for the overseas referral scheme and for capital investment. The contribution of household OOP payments to THE is very negligible. Two medical treatment schemes for overseas referrals operate in Tuvalu. The New Zealand Medical Treatment Scheme (NZMTS) is funded by the New Zealand Official Development Assistance (NZODA) programme for the care of Tuvaluans exclusively within New Zealand and is managed directly by NZODA. The Tuvalu Medical Treatment Scheme (TMTS) is funded by the Government of Tuvalu. Citizens are usually referred to Fiji or New Zealand for specialist treatment and the expenses are borne by the Government. 1. WHO Western Pacific Region (211). Tuvalu country information profile. ( tuv/34tuvpro211_finaldraft.pdf, accessed 21 February 213). Tuvalu 115

124 TUV Figure 1. General trends in health expenditure per capita at exchange rate 7 6 GGHE PvtHE Current US$ per capita (at exchange rate) TUV Figure 2. General trends in health expenditure as % of GDP 25 2 GGHE as % of GDP PvtHE as % of GDP % of GDP TUV Figure 3. Trends in the structure of total health expenditure (THE) GGHE OOP Other private % of total health expenditure Health financing country profiles in the western pacific region,

125 TUV Figure 4. GGHE as % of government spending % of government spending TUV Figure 5. External resources for health as % of THE 8 % of THE Tuvalu 117

126 Way forward In view of the large portion of the country s THE spent on the Tuvalu Medical Treatment Scheme and its escalating costs, one of the key health priorities and strategies of the National Strategy for Sustainable Development is to assess the cost-effectiveness of the overseas medical treatment scheme compared to the reallocation of these resources to domestic capacity-building. In addition, there is a growing interest by the Government in running some form of social health insurance (SHI) to pool health risks and serve as a safety net for its members. However, a major government concern is the population s inability to pay a premium that is sufficient to make the SHI financially sustainable. Selected references Tuvalu Ministry of Health national health plan (29-218). Annex. ( health_services/tuvalu_nationalhealthplan.pdf, accessed 21 February 213). WHO Western Pacific Region (211). Tuvalu country information profile. ( int/countries/tuv/34tuvpro211_finaldraft.pdf, accessed 21 February 213). tuvalu GDP and health expenditures per capita (in current currency unit) Gross Domestic Product (GDP) US dollar Australian dollar Total Health Expenditure (THE) US dollar Australian dollar Government Health Expenditure (GGHE) US dollar Australian dollar Private Health Expenditure (PvtHE) US dollar Australian dollar Out-of-pocket expenditure (OOP) US dollar Australian dollar <1 < Health expenditure ratios THE as % of GDP GGHE as % of GDP PvtHE as % of GDP GGHE as % of GGE GGHE as % of THE OOP as % of THE Other private as % of THE <1 <1 <1 < External resources as % of THE All data for 211 are provisional data Health Expenditure and GDP figures are expressed in current US dollar based on the average exchange rate for that year. 118 Health financing country profiles in the western pacific region,

127 Vanuatu Health expenditure trends Vanuatu is a Pacific island country with a population of in 211. Gross domestic product (GDP) per capita was US$ 321 in 211. The predominant source of health-care financing is general government health expenditure (GGHE), which is mainly financed through general taxation and is supported by external donors. In 211, total health expenditure (THE) was 4.2% of GDP, equivalent to US$ 134 per capita. Outof-pocket (OOP) payments made up 6.9% of THE; GGHE was 87.9% of THE. GGHE amounted to US$ 117 per capita and represented 15.% of general government expenditure (GGE) and 3.7% of GDP. Figures 1 5 show historical trends in health expenditure. THE has been on an upward trend since 22. The Government s contribution to THE has been increasing, while OOP payments have been falling since 26. Figure 4 shows that the Government s priority to health has been constantly increasing since 27. Figure 5 shows that external resources for health as a share of THE have fluctuated greatly, particularly before 2. Health financing system Health services in Vanuatu are largely provided and financed by the Government. The country s public health facilities include five public hospitals that offer inpatient and specialist outpatient services and 258 primary care facilities. Two public hospitals located in Port Vila and Luganville refer patients for specialized treatment overseas, mainly to Australia and New Zealand. The private sector is small and consists of one hospital. Both public and private health facilities charge user fees. The major source of funding for the health sector is the government budget, with the support of international donors. Public funds account for almost all of the inpatient expenditure in the public hospitals and much of the outpatient health expenditure. Vanuatu introduced user fees in public facilities in 25. These funds are not added to the Ministry of Health budget but are treated as state revenue and go into the Ministry of Finance account. Household OOP payments are made to traditional healers, as well as for user fees at government facilities. Some health facilities also pursue additional fundraising activities, usually with the support of chiefs, churches and other community leaders. Way forward The small population and costly overseas referral system will continue to represent the main challenges for the health sector. The Government is considering social health insurance as an option, though the issue is still under discussion. Vanuatu 119

128 VUT Figure 1. General trends in health expenditure per capita at exchange rate GGHE PvtHE Current US$ per capita (at exchange rate) VUT Figure 2. General trends in health expenditure as % of GDP GGHE as % of GDP PvtHE as % of GDP % of GDP VUT Figure 3. Trends in the structure of total health expenditure (THE) GGHE OOP Other private % of total health expenditure Health financing country profiles in the western pacific region,

129 VUT Figure 4. GGHE as % of government spending % of government spending VUT Figure 5. External resources for health as % of THE % of THE Vanuatu 121

130 Selected references Australian Agency for International Development (29). Evaluation of Australian aid to the health service delivery in Papua New Guinea, Solomon Islands and Vanuatu. Evaluation report. ( accessed 21 February 213). WHO Western Pacific Regional (211). Vanuatu country information profile. ( int/countries/vut/35vanpro211_finaldraft.pdf, accessed 21 February 213). vanuatu GDP and health expenditures per capita (in current currency unit) Gross Domestic Product (GDP) US dollar Vanuatu vatu Total Health Expenditure (THE) US dollar Vanuatu vatu Government Health Expenditure (GGHE) US dollar Vanuatu vatu Private Health Expenditure (PvtHE) US dollar Vanuatu vatu Out-of-pocket expenditure (OOP) US dollar Vanuatu vatu Health expenditure ratios THE as % of GDP GGHE as % of GDP PvtHE as % of GDP GGHE as % of GGE GGHE as % of THE OOP as % of THE Other private as % of THE External resources as % of THE All data for 211 are provisional data Health Expenditure and GDP figures are expressed in current US dollar based on the average exchange rate for that year. 122 Health financing country profiles in the western pacific region,

131 Viet Nam Health expenditure trends Viet Nam is a lower-middle income country with a population of 8.9 million people in 211. Gross domestic product (GDP) per capita was US$ 1393 in 211. Out-of-pocket (OOP) payments are the predominant source of health-care financing. General government health expenditures (GGHE) are financed mainly though general taxation. In 211, total health expenditure (THE) was 6.9% of GDP, equivalent to US$ 96 per capita. OOP payments made up 56.1% of THE; GGHE was 39.9% of THE. GGHE amounted to US$ 38 per capita and represented 9.4% of general government expenditure (GGE) and 2.7% of GDP. Figures 1 5 show historical trends in health expenditure. THE has been increasing rapidly since 22. Between 25 and 27, the Government s contribution to THE increased, while the contribution of OOP payments fell and remained relatively stable. Figure 4 shows that the Government s priority to health has been on an upward trend since 25. GGHE as percentage of GGE has remained around % since 27. Health financing system Viet Nam has a mixed delivery and financing system for health care. In the 197s and early 198s, health care was funded and provided by the Government and all citizens received free health care. The private sector has grown rapidly since the country embarked on its doi moi reforms, and today the private sector provides much of outpatient health services. Meanwhile, the public sector continues to provide most inpatient care. In 28, public health facilities included 774 general hospitals, 136 specialized hospitals and primary health centres. Private health facilities include 83 private hospitals and numerous general practitioners clinics, traditional medicine clinics, private pharmacies and nursing homes. Both public and private facilities charge user fees. Since 25, health care is provided free to children six years old and under. Revenue raising Household OOP payments account for the bulk of health financing in Viet Nam. The Government is the second-largest contributor of THE. Even though total external assistance to Viet Nam in general has been declining since Viet Nam became a lower middle-income country, official development assistance and international nongovernmental organization assistance to the health sector has been maintained at a relatively high level. 1 Financial risk protection The Government uses the funds derived from general revenues to provide direct subsidies to public health facilities, purchase compulsory health insurance for certain target groups and reimburse health providers directly for services provided to children under six. The Social Health Insurance Law passed in 28 outlined the expansion of health insurance coverage to various target groups. The Five-year Health Sector Plan ( ) has set the goal that population coverage will reach 75% by 215 and 9% by 22. In addition, the road map s Viet Nam 123

132 VNM Figure 1. General trends in health expenditure per capita at exchange rate Current US$ per capita (at exchange rate) GGHE PvtHE VNM Figure 2. General trends in health expenditure as % of GDP 7 6 GGHE as % of GDP PvtHE as % of GDP 5 % of GDP VNM Figure 3. Trends in the structure of total health expenditure (THE) GGHE OOP Other private % of total health expenditure Health financing country profiles in the western pacific region,

133 VNM Figure 4. GGHE as % of government spending % of government spending VNM Figure 5. External resources for health as % of THE % of THE Viet Nam 125

134 objectives are to improve the quality of health services and further reform health financing to reduce OOP payments. 1 Viet Nam s journey towards universal coverage started in 1992 when social health insurance (SHI) was first introduced. It is managed by Viet Nam Social Security (VSS) and has evolved over the years. It consists of a compulsory and a voluntary scheme. According to the Ministry of Health, about 68% of the population was enrolled in SHI by 213. This represents a rapid increase in recent years. with coverage rates close to 4% in 28. The Compulsory Health Insurance (CHI) scheme covers all civil servants, politicians, war veterans and people of merit. Their family members are not covered. Contributions are shared between the employer and employee. In addition. CHI has begun to cover children under six, the elderly, poor, and ethnic minorities since 23. The formal sector contributes 4.5% of employees salaries 1.5% from employees and 3.% from employers. For the informal sector, 1% subsidies are provided by the Government for specific populations, such as the poor, children under six, and ethnic minority groups. Under the Health Care Fund for the Poor programme, both the central government and the provincial governments are jointly responsible for contributing the premiums for this group of the population. The Voluntary Health Insurance (VHI) scheme was introduced in 1994 to cover students, family members of those who are compulsorily insured and organizations which are not covered under the compulsory scheme. Premiums range between VND 5 (US$ 3) for students in rural areas to VND 32 (US$ 21) for adult members in urban areas. The near poor receive 7% government subsidies, while students and middle-income households receive 3% government subsidies. A private insurance market consisting of both foreign and local insurance companies exists in Viet Nam. However, it is unclear how many people have private insurance. Despite rapid improvements in population coverage in recent years and although most health services are in principle covered by health insurance a recent analysis of survey data found that the actual financial protection afforded by health insurance remained limited. Indeed, enrollees are required to register with a local government facility and are expected to use the same facility as the first point of care. Reimbursement rates are lower when enrollees choose to receive care in contracted private facilities. The copayment rate ranges from 5 7%. depending on the type of services and level of care. High copayment rates may be one of the barriers that prevent the near poor from accessing health services. Maximum reimbursement is capped at 4 times the minimum monthly wage for high-technology medical services. For these reasons, OOP payments remain substantial despite the existence of health insurance. Benefit package The benefit package for all schemes covers both inpatient and outpatient services that are received at all public facilities and contracted private facilities. VSS only reimburses a part of the provider s costs, typically on a fee-for-service basis, under a fee schedule set in A capitation method is used mainly at district hospitals. The balance of the costs is covered by direct subsidies to contracted health facilities and household OOP payments. To address problems with overuse, there are plans to pilot a diagnosis-related group (DRG) based payment method. 1. Ministry of Health, Viet Nam (212). Master plan roadmap to universal health insurance coverage period Hanoi, Viet Nam. 126 Health financing country profiles in the western pacific region,

135 Way forward Some of the key challenges to Viet Nam s SHI scheme include low enrolment in the compulsory programme and adverse selection in the voluntary programme. Between 25 and 21, expenditure of the SHI also has exceeded revenue. This has been viewed as the result of increased use of healthcare services, over-supply of health care by providers, low contribution rates and adverse selection. Since 22, fee-collecting public hospitals have been given the autonomy to use their savings to increase staff incomes and for reinvestment. While this has the potential to improve hospital management, it also carries the risk of increasing rather than reducing reliance on household OOP payments to finance health care. Viet Nam is undergoing a revision of its Social Health Insurance Law to further advance its progress towards universal health coverage. Selected references Ekman B et al. (28). Health insurance reform in Viet Nam: a review of recent developments and future challenges. Health Policy and Planning, 23: Ministry of Health, Viet Nam (212). Master plan roadmap to universal health insurance coverage period Hanoi, Viet Nam. World Bank (21). Health financing note. East Asia and Pacific region. ( org/healthnutritionandpopulation/resources/hfneapvol2921.pdf, accessed 21 February 213). Ministry of Health, Viet Nam (211). Joint annual health review 211. Strengthening management capacity and reforming health financing to implement the five-year health sector plan Hanoi, Viet Nam. viet nam GDP and health expenditures per capita (in current currency unit) Gross Domestic Product (GDP) US dollar Vietnamese dong Total Health Expenditure (THE) US dollar Vietnamese dong Government Health Expenditure (GGHE) US dollar Vietnamese dong Private Health Expenditure (PvtHE) US dollar Vietnamese dong Out-of-pocket expenditure (OOP) US dollar Vietnamese dong Health expenditure ratios THE as % of GDP GGHE as % of GDP PvtHE as % of GDP GGHE as % of GGE GGHE as % of THE OOP as % of THE Other private as % of THE External resources as % of THE All data for 211 are provisional data Health Expenditure and GDP figures are expressed in current US dollar based on the average exchange rate for that year. Viet Nam 127

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