Fiji Health Accounts: National Health Expenditures

Transcription

1 Fiji Health Accounts: National Health Expenditures Dec 2011 A publication of the Ministry of Health, Fiji Islands 1

2 Copyright 2010 Fiji Ministry of Health 88 Amy Street Toorak, Suva, Fiji Islands This publication is under copyright and all rights are reserved. Short excerpts may be reproduced without authorization on condition that the source is indicated and as long as it is for non-commercial purposes. However this publication or any substantial portions of it may not be reproduced in any form by any electronic or mechanical means (including photocopying, recording) without permission from the copyright holder. Suggested Citation Fiji Health Accounts , Fiji Ministry of Health, Contributing Authors Ministry of Health: Mr Idrish Khan, Mr Shivnay NAIDU and Mrs Saras LAL Ministry of Strategic Planning: Mr Thompson YUEN and Mrs Sangeshni PREETIKA Fiji Bureau of Statistics: Mr Semi TALEMAIVAVALAGI Fiji National University: Dr Wayne IRAVA and Mrs Nola VANUALAILAI World Health Organization: Ms Martina PELLNY Any enquiries about or comments on this report should be directed to: Idrish Khan Coordinator Fiji Health Accounts 88 Amy Street, Toorak, Suva PO Box 2223, Govt. Bldgs, Suva, Fiji. 2

3 Foreword To strengthen health outcomes in Fiji it is critical that policies to improve the efficiency of health financing are built on a foundation of sound evidence and analysis. The National Health Accounts [NHA] will provide essential financial information on the country s health system, and facilitate a more sustainable, equitable and efficient allocation of resources. The NHA is an exciting document to read as it will provide answers to some basic questions such as: Where do resources come from and where do they go? What kinds of services and goods do the resources purchase and who provides those services? What resource inputs are used for providing services and who do they benefit? The NHA for the period also provide comparisons with other periods as well as comparisons between Fiji and other countries especially the other small Pacific Island Countries [PICs]. The institutionalization of NHA, coupled with the able support of the World Health Organization [WHO] and the Fiji National University [FNU], has resulted in strengthening of the ownership of NHA which, undoubtedly will allow for a realistic account of the country s unique resource environment. With the production of this wonderful piece of work, all that remains is to address the challenge of its application by key stakeholders to produce informed policies that will benefit the people we serve. Dr Eloni Tora Acting Permanent Secretary for Health 3

4 Table of Contents Foreword... 3 Table of Contents... 4 Acknowledgements... 6 List of Tables... 7 List of Figures... 7 Abbreviations... 8 Highlights Background About this Report Structure of the Health Sector and the Flow of Funds Methods and data quality Total Health Expenditure (THE) Trends in THE Health Expenditure in Relation to GDP Health Expenditure per Person Financing of Health Expenditures General Trends of financing sources General Trends of financing agents Government Financing Private Financing External Donor Financing Health Expenditures by Function Recurrent Expenditures Inpatient and Outpatient Care Services Distribution of Medicines and Medical Goods to Outpatients Prevention and Primary Health Care Services Capital Expenditures Health Expenditure by Providers Total expenditures Hospital Spending Non Hospital Spending Government Health Expenditure How much is Government spending on Health?

5 6.2. Government Health Expenditure by Providers Government Health Expenditure by Functions Pacific Comparisons Comparability of Fiji Health Accounts Estimates Total Spending and Sources of Healthcare Financing Composition of Spending by Function and Providers Technical Notes General Definitions Total Health Expenditure (THE) Financing Sources Financing Agents Providers Functions Data sources General Central Government Private Sector Spending Methods used Government Spending Fees Paid To Government Health Care Institutions Private Health Care Institutions Sales of Medicines from Pharmacies Employer Medical Benefits Private Health Insurance Expenditures Other Miscellaneous Items of Household Expenditure Traditional Healers Response rate by Private Providers and Agents References and bibliography Appendix

6 Acknowledgements The development of Fiji Health Accounts based on the internationally recognized System of Health Accounts (SHA) has only been made possible through the collaboration and support of the World Health Organization (WHO) and the Fiji National University (FNU). We also express our sincere gratitude and recognise the support from the Ministry of Strategic Planning and the Fiji Bureau of Statistics for releasing their officers on acontinuous and timely basis, and who have made significant contributions towards the compilation of this report. The report would have not been possible without the participation and cooperation of many individuals and organisations in both the public and private sector that have cooperated in providing data when requested including insurance companies, hospitals, private health clinics, health centres, nursing stations, laboratories, ambulance companies, private providers including doctors and pharmacists, health partner and donor organisations, nongovernmental organisations, banks and other statutory bodies Data analysis was done through the Centre for Health Information, Policy, and Systems Research (CHIPSR) at Fiji National University. Interpretation of the results and the drafting of the report were done by the entire NHA team including Ms Martina Pellny from the WHO Division of Pacific Support based in Suva, Fiji, who also reviewed the draft report. The efforts, contributions and secretariat support of Ministry of Health are greatly acknowledged. The NHA Team 6

7 List of Tables Table 2 1 Total Health Expenditure Table 2 2 THE, GDP, and THE to GDP ratio 2007 to Table 2 3 THE, Current and Constant Prices and Annual Growth Rates, 2007 to Table 3 1 Health Expenditure by Financing Source, 2007 to Table 3 2 Health Expenditure by Financing Agent, 2007 to Table 3 3 Private Health Expenditure by Financing Agent, 2007 to Table 3 4Financing contributions of external partners in 2009/10 in FJ$ Table 3 5Financing contributions of external partners as a share of THE, Table 3 6Percentage of external funding channeled through the governmental system Table 3 7Allocation of external donor funding to different areas of the health sector, FJ$m Table 4 1Total Health Expenditure by Function, Table 4 2Total and Share of Curative Health Expenditure by Functions Table 4 3 Total Health Expenditure by Function (FJ$m), 2007 to Table 4 4 Share of Health Expenditure by Function (%), 2007 to Table 4 5 Shares of Health Expenditure for each Function by Source of Finance (%), 2007 to Table 4 6Prevention and Public Health Expenditures by sub classification (FJ$m), Table 4 7Total and Share of Health Expenditure by Health Related Functions, Table 5 1 Total Health Expenditure by Provider, 2007 to Table 5 2 Total Health Expenditure at Hospitals by Financing Agent (FJ$m), 2007 to Table 6 1 Government Health Expenditures (FJ$m), 2003 to Table 6 2 Government Health Expenditures by Providers (FJ$m), 2009 & Table 6 3 Government Health Expenditures on hospitals, health centres and nursing stations Table 6 4 Government Health Expenditures by Functions (FJ$m) Table 6 5 Government drugs and medical goods expenditure Table 7 1 Health Economic Indicators for Fiji, Samoa, Tonga and Vanuatu Table 7 2 Total Health Expenditure (THE) by Function (%) Table 7 3 Total Health Expenditure (THE) by Provider (%) List of Figures Figure 2 1 Total Health Expenditure, 2007 to 2010 (constant prices) Figure 2 2 Health expenditure as a share of GDP, 2007 to Figure 2 3 Per capita health expenditure and GDP (FJ$m), current prices, 2007 to Figure 3 1 Public, private and donor funding as a % of THE, Figure 3 2 Private health expenditure by financing agent, Figure 3 3 Share of funding by external partner (%), Figure 3 4 Share of funding by function/ area of health (%) Figure 4 1 Total Health Expenditure by Functions (%), 2007 to Figure 5 1 Total health expenditures by providers (%), Figure 5 2 Total health expenditure by provider (%) 2007 to Figure 5 3 Total health expenditure at hospitals by financing agent (%) 2007 to Figure 6 1 TGHE in Real (Constant) and Nominal (Current) value from 2003 to Figure 6 2 TGHE as a % of TGE from 2003 to Figure 6 3 Government Health Expenditure (GHE) as a Percentage of GDP Figure 6 4 TGHE Percentage distribution by Health Providers, Figure 6 5 Government Health Expenditure by Functions Figure 7 1 THE as % of GDP with the WHO 5% benchmark

8 Abbreviations A & E Accident and Emergency ADB Asian Development Bank APNHAN CHE FBOS FRCA FJHA FNU FPBS GDP GFATM HIES JICA KOICA MoH MFSPNDS NHA OECD OOP RBF SHA TGHE TGE THE UNDP UNFPA UNICEF WHO Asia Pacific National Health Accounts Network Current Health Expenditure Fiji Bureau of Statistics Fiji Revenue and Customs Authority Fiji Health Accounts Fiji National University Fiji Pharmaceutical Services and Biomedical Services Gross Domestic Product Global Fund to Fight AIDS, Tuberculosis and Malaria Households Income and Expenditure Surveys Japan International Cooperation Agency Korea International Cooperation Agency Ministry of Health Ministry of Finance, Strategic Planning, National Development and Statistics National Health Accounts Organisation of Economic Cooperation and Development Out of Pocket Reserve Bank of Fiji System of Health Accounts Total Government Health Expenditure Total Government Expenditure Total Health Expenditure United Nations Development Program United Nations Population Fund United Nations Children s Fund World Health Organization 8

9 Highlights Summary of Key Indicators Indicator Population 843, ,081 Total Health Expenditure (THE) (FJ$m) Total Government health expenditure (TGHE) (FJ$m) Gross Domestic Product (GDP) (FJ$m) 4, ,218.7 Total Government Expenditure (TGE) (FJ$m) 1, ,668.7 THE as a % of GDP 4.90% 4.80% TGHE as a % of GDP 3.10% 2.90% TGHE as a % of TGE 9.28% 9.17% Out of Pocket (OOP) Expenditure as a % of THE 22.50% 20.00% THE per capita (FJ$) TGHE per capita (FJ$) Total Health Expenditure (THE) in Fiji was FJ$250m in 2010, with per capita spending of FJ$295. From 2009 to 2010, total health expenditure increased in nominal terms by 6% and declined by 1% in real terms. Over the same period, GDP grew in nominal terms by 7%. Consequently, total health spending as a ratio of GDP remains at 4.9% for 2009 and 4.8% for This is a relatively low percentage compared to neighbouring Pacific Island countries and in relation to Fijis economic role and wealth. The allocation between public, private and external funding for health is as follows: In 2010, public funds contributed61%, private funds 30% and external donor funds 9% to total health expenditure. External donor funds increased from 3% in 2007 to 9% in 2010.The 30% private sector contribution to total health expenditure in 2010 is distributed as follows: households 66%, insurance 22%, NGOs 10% and rest of the economy 2%. Compared to 2007 and 2008, like with external donor funding, there is a clear trend that the share of the private sector contribution towards total health expenditure is increasing. 9

10 Overall, investments into health over the past years have largely been paid by the private sector, thus the burden is clearly on the private sector at the moment. It remains important to monitor closely these trends over the next years, since it involves policy questions like equal access to health care and the ability of a society to guarantee and provide universal coverage. In terms of health functions, which mean how the "health" money is used, the largest part of health spending went into curative care. This was 63% of the total health expenditure in Of the curative care expenditure, 57% was spent on inpatient care and 43% was spent on outpatient care. The next three largest shares of health spending in 2010 to THE were paid for health administration (10%), medical goods dispensed to outpatients (5%) and prevention and public health services (5%). Health providers that accounted for most expenditure in 2010 were hospitals with 50%, retailers involved in sale and distribution of medical goods with 14% and providers of ambulatory health care with 13%. In 2010, 91% of hospital expenditures were financed by public sources, 6% by private insurance, 2% by households and 1% by donors. Health expenditure in Fiji remains largely Government funded and channeled through the Ministry of Health. Over the period 2007 to 2010, hospitals have been the major recipient of government health spending. Health administration remains a significant item of government spending on health, averaging 8% over the period 2007 to 2010.Provision and administration of public health programmes have remained constant at 6% over the period 2007 to Compared to other Pacific Island countries, the following interesting benchmarks can be noted: 1 In 2007, the share of total expenditure on health to GDP was at 4% in Fiji which was similar to Vanuatu(4%) but lower than Samoa and Tonga who both had THE as 6% of GDP. Out of pocket expenditure fared relatively high in Fiji with 16% of THE compared to 1 Comparisons with Tonga, Samoa and Vanuatu can only be done for the year 2007, since more recent data was not available at the time this report was written. 10

11 Samoa with 11%, Tonga with 10% and Vanuatu with 8%. Likewise, the share that Fiji allocated for curative care in 2007 (74%) is higher than in our neighboring countries: Vanuatu allocated 58%, Samoa 45% and Tonga only 31% of THE for curative care. In terms of prevention and public health services, Fiji spends 5% of THE. This is higher than Samoa with 3%, but much lower than Vanuatu with 16% and Tonga with 9%. 11

12 1. Background 1.1. About this Report This publication reports on health expenditure in Fiji for 2009 and 2010, by sources of funding and areas of expenditure. The system of reporting used is based on the System of Health Accounts (SHA) framework (OECD, 2000), which is endorsed by the World Health Organization (WHO) for international reporting of health expenditures. By careful classification of health expenditure which falls within the prescribed health care boundary, health accounts are able to provide consistent and comparable health expenditure ratios which can be used for comparisons across country and time. Health expenditure for Fiji is estimated by addressingfour basic questions: Where does the funding come from? (funding sources) Which entities or organizations manage or channelthe funds? (financing agents) Where does the funding go to? (health providers) What kinds of health services are performed and what types of goods are purchased? (health functions) This report also compares some of the Fiji NHA results with results from other Pacific island countries, drawing on the most recent work of the NHA teams and network colleagues in Samoa, Tonga and Vanuatu. The technical notes in the final chapter provide details on how the estimates were produced including definitions, data sources and methods used. The appendix then presents more detailed estimates and the SHA statistical tables for 2009 and

13 1.2. Structure of the Health Sector and the Flow of Funds Funding for the public health sector in Fiji is predominantly financed from general taxation revenue, with a small but growing percentage funded by households and private organizations and the donor community. The Ministry of Health (MoH) is the agency responsible for the management and administration of health funding allocated from the Government annual budgetincluding funding from donors that is channeled through the Treasury (see Figure 1 1). Public sector healthcare services are universally accessible and almost wholly free of charge. These services are provided in Public Hospitals on divisional (e.g. CWM Hospital, Lautoka Hospital, Labasa Hospital) and sub divisional level (e.g. Wainibokasi hospital, Nadi hospital, Sigatoka, Savusavu hospital, etc.), Health Centres and Nursing Stations. Public outpatient services are provided at hospital outpatient departments, but supplemented by a range of both public and private ambulatory facilities and services. Most inpatient provision is at public sector hospitals. These public hospitals also function as teaching hospitals for students from educational institutions such as the College of Medicine Nursing and Health Sciences of the Fiji National University. Household out of pocket (OOP) expenditure accounts for most of the funding for the private sector. This is either in the form of co payments or fees at the point of service in the public sector, or in paying the full bill to private doctors or dispensing drugs at pharmacies. This is supplemented by limited payment arrangements through employer provided medical insurance and to a much smaller degree by self purchased health insurance. Some financing also comes from non profit institutions. 13

14 The Flow of funds in the FIJI Ministry of Health Care System, 2010 Ministry of Health HOUSEHOLDS Government of Fiji Treasury Grants and loans Direct payment to nongovernment service Budget Expenditures Government Providers E.g. Public Health Services Community Health Services Research, Administration Non-Government Service Providers E.g. Fiji Red Cross Society Kidney Foundation of Fiji Out-of-pocket payments and co-payments Contributions Official Donors Grants Benefits paid Benefits paid Private Donors Donations Non-Profit Organizations Benefits paid Private Health Insurers Contributions Enterprises Government All other funding Donor Funding 14

15 Private sector provision consists mainly of outpatient services and the sale of medicines by retail pharmacies. There is one private hospital in Suva that provides inpatient services. Most private providers are paid on a (unregulated) fee for service basis directly by households while some doctors employed by the MoH are granted permission to do locum practice. This has been an effective staff retention strategy used by the MoH to retain specialist doctors. Very few ambulatory care physicians dispense medicines; medicines are normally obtained from pharmacies. There is a small amount of financing of medicines from private health insurance and employer medical benefit schemes Methods and data quality The statistics presented here are current as of July In the process of extracting data for Government health expenditure for , a review was also made of data from 2003 to 2008 as this was already available in the Ministry of Health EPICOR system and provides the opportunity for longer time series, at least for government data. Data sources from the private sector for 2009 and 2010 were obtained through surveys. Since the response rate for some survey groups during the NHA reporting period 2007 and 2008 was quite low, the NHA team revised and simplified most of the survey templates, for example those forgeneral Practitioners, Retail Pharmacies, Dental Practitioners, Optometrists, Acupuncturists, Chiropractors and Traditional Healers. Survey results were cross checked with other important sources such as for example official annual reports of hospitals and other health providers, with reports from the Fiji Inland Revenue & Customs Authority (FRCA) and the Reserve Bank of Fiji (RBF); the latter having to do with medical insurance. Our effort to revise the survey questionnaires paid well, since the response rates for the current round was much higher compared to the previous one. Nevertheless, there is always room for improvement especially with data collection and validation and thus, we noted a number of areas where we wish to improve the NHA process: The NHA team will work more closely with the Fiji Bureau of Statistics (FBOS) to (i) have more health expenditure related questions included in the routine Household Income and 15

16 Expenditure Survey (HIES), (ii) commission private sector surveys on behalf of the NHA team. This will decrease the reliance of the NHA team on conducting surveys themselves, and thus lessen the work load. The composition of the NHA team requires some changes. There is a need to invite representatives from the private sector, the Ministry of Finance budget division and overseas development assistance (ODA) unit. We also wish to continue having a WHO staff as a member of the NHA team. A more comprehensive survey of traditional healers is required for future rounds of NHA to ensure that the population size can be reliably estimated and the expenditure on traditional healers, both cash and in kind, is captured correctly. So far, our estimates rely on information from third parties, and not the traditional healers themselves. A review of all survey questions to address downfalls encountered this year. 16

17 2. Total Health Expenditure (THE) 2.1. Trends in THE There has been an upward trend in the total expenditure on health (THE) goods and services including capital formation between 2007 and 2010 (Table 2 1). Since 2007 THE in nominal terms increased by 22.6% to approximately FJ$250.4m in On the other hand, THE in real terms have been relatively erratic reaching a level of FJ$208.8m in 2010, which is equivalent to an increase of (only) 8.7% compared to In comparison, the growth of GDP from 2007 to 2010 in real terms accounts for 0.4%. Figure 2 1Total Health Expenditure, 2007 to 2010 (constant prices) 250 FJD.million Year Source: Table 2.1 Table 2 1Total Health Expenditure Amount (FJ$m) Growth Rate over Previous Year (%) Year Current Constant (a) Current Constant % 0% % 3.5% % 14.2% % 1.4% (a) Constant prices are calculated using the implicit GDP deflator (2005=100). 17

18 2.2 Health Expendituree in Relation to GDP The ratio of Fiji s health expenditure to its GDP (health to GDP ratio) provides an indication on the proportion of the health sector contributing to the overall economic activity. Between 2007 and 2010, health spending as a ratio of GDP averaged 4.6% (Table 2 2). The Health Financing Strategy for the Asia Pacific Region ( ) recommends that in order for countries to progress in attaining universal coverage basic health care services for all countries should spend at least 5% of GDP on health. Fiji, along with Vanuatu and PNG, lay below this threshold compared to other PIC countries (for more information, see also chapter 7). Fiji s economy performed below par between 2007 and 2010 recording an average negative growth of 0.2% due to the effects of the global financial crisis, series of natural disasters coupled with declining sugar and garment industries. Figure 2 2Health expenditure as a share of GDP, 2007 to % 4.8% 4.3% 3.8% FJD. million 3.3% 2.8% 2.3% 1.8% 1.3% 0.8% Year Source: Table

19 Table2 2THE, GDP, and THE to GDP ratio 2007 to 2010 Total Health Expenditure Year Amount (FJ$m) Nominal Growth Rate (%) Amount (FJ$$m) GDP Nominal Growth Rate (%) Ratio of Health Expenditure to GDP (%) , % 4.4% % 4, % 4.2% % 4, % 4.9% % 5, % 4.8% 2.3. Health Expenditure per Person As the population grows, and demands for improved care for example in the area of chronic diseases rises, health expenditure should also increase at a similar rate, leaving the health expenditure to GDP ratio constant over time. It is prudent to also examine health expenditure on a per capita basis in order to remove the influence of changes in the overall size of the population from the analysis. The nominal estimated health expenditure per capita has continued to increase from FJ$245.6 in 2007 to FJ$295.2 in 2010 (Table 2 3).Per capita health expenditure in real terms recorded a marginal increase of 6.7% to FJ$246.2 over the period 2007 to However there was a marginal decrease of 1.9% from 2009 to 2010 and this might be attributable to the decline in THE by 1.4% in real terms over the same period. It mirrors of course also the volatility of the Fiji currency. 19

20 Figure 2 3Per capitaa health expenditure and GDP (FJ$m), current prices, 2007 to 2010 Total health expenditure per capita (FJD. million) Source: Table Year GDPper capita (FJD. million) 6,200 6,100 6,000 5,900 5,800 5,700 5,600 5,500 5,400 5,300 Source: Table Year Table 2 3THE, Current and Constant Prices and Annual Growth Rates, 2007 to 2010 Year Total Health Expenditure per Capita Current (FJ$) Constant(a) (FJ$ $) Current (USD) (b) Real Growth (c ) Rate (%) Current (FJ$) GDP per Capita Constant (FJ$) Current (USD) % 13.3% 1.9% 5,587 5,855 5,760 6,154 5,252 5,275 5,168 5,131 3,434 3,768 2,961 3,184 (a) Constant THE/Capita is derived by Current THE/GDP Deflator of the same Year divide by Population. GDP Deflator = GDP Current/GDP Constant for the Same Year (b) USD Conversion: 2007 USD$1=FJ$$1.62 and 2008 USD$ $1=FJ$$1.55 (c) USD Conversion: 2009 USD$1=FJ$$1.95 and 2010 USD$ $1=FJ$$

21 3. Financing of Health Expenditures 3.1. General Trends of financing sources Between 2007 and 2010, the major source of funding for the health sector is from the Government budget (Table 3 1).However the trend over the period 2007 to 2010 show that public financing has declined from 71.2% to 60.8%. In this respect, public financing fluctuated between 2.9% and 3.1% of GDP. The other main sources of funding are the private sector and development partners ("rest of the world"). While the share of private financing has fluctuated between2007 and 2010, the trend shows a steady increase from 25..4% in 2007 to 30.4% in 2010.In the private sector, most of the funding comes from out of pocket payments (OOP), which averaged 27.9% of THE over the years 2007 to 2010 (see section 3.3 for more detail on OOP). Figure 3 1Public, private and donor funding as a % of THE, % 80% 60% 40% 20% 0% Source: Table 3.1 Public Private Donors 21

22 Development partners, which play a significant role in the funding of bilateral and multilateral health programs, contributed an average 6.1% of THE over the years 2007 to Commonly termed as donor funds, financing from development partners has increased from FJ$6.9m in 2007 (3.4% of THE) to FJ$22.1m in 2010 (8.8% of THE). This represents an increase of 5.4% in the share of THE and 0.3% in GDP. Table 3 1Health Expenditure by Financing Source, 2007 to 2010 Total Health Expenditure (FJ$) Share of Total Health Expenditure Total Health Expenditure as a Share of GDP FS.1 FS.2 FS.3 FS.1 FS.2 FS.3 FS.1 FS.2 FS.3 Year Public Private Donors Public Private Donors Total Public Private Donors Total ## 71.2% 25.4% 3.4% 100% ## 3.1% 1.1% 0.1% 4.4% ## 69.6% 24.5% 5.9% 100% ## 2.9% 1.0% 0.2% 4.2% ## 62.9% 31.0% 6.1% 100% ## 3.1% 1.5% 0.3% 4.9% ## 60.8% 30.4% 8.8% 100% ## 2.9% 1.5% 0.4% 4.8% 3.2. General Trends of financing agents Table 3 2 shows the major recipients of health finances (i.e. financing agents). The bulk of public financing is channelled through the Ministry of Health (62.7% of public funds in 2010). This has declined slightly after the movement of the Fiji School of Nursing and the Fiji School of Medicine (now together known as the College of Medicine Nursing and Health Sciences) to the Fiji National University and coming under the jurisdiction of the Ministry of Education. Table 3 2Health Expenditure by Financing Agent, 2007 to Amount (FJ$m) Share (%) Amount (FJ$m) Share (%) Amount (FJ$m) Share (%) Amount (FJ$m) Share (%) Ministry of Health HF % % % % Ministry of Education HF % % % % Ministry of defence HF % % % % Private insurance HF % % % % Households HF % % % % NGOs HF % % % % Private firms HF % % % % Rest of World HF % % % % % % % % 22

23 Private sector funds are mainly channelled via the financing agents of households, private insurance firms, NGOs and other private firms. Here households are the dominant financing agent of health funds. Rest of the World represents development partners financing of health and 5.5% of THE in Government Financing The Government through mainly general taxation finances the healthcare system in Fiji. Despite an increasing trend in overall Government expenditure since 2008, the public share of total health financing has decreased by 10.4% points between 2007 and 2010 (Table 3 1). Total Government Expenditure amounted to FJ$143.2m in 2008, representing 2.9% of a nominal GDP of FJ$4,900.7m. By 2010, public health expenditures reached FJ$152.2m, equivalent to 2.9% of nominal GDP of FJ$5,218.7m. For a more detailed analysis of the public health expenditure, please see chapter Private Financing As previously stated, the private sector contributes significantly the health sector and over the period 2007 to 2010 has continued to increase its share of THE (refer Table 3 1). The financing sources (and financing agents) of the private sector are households, private insurance companies, NGOs and other private firms (or in SHA is termed rest of the economy ).Table 3 2 highlights that household out of pocket expenditure accounts for an average of 69.2%, followed by private health insurance (20.6%), NGOs (7.5%), and health care providers (2.6%) for The contribution from NGOs as a share of private financing has almost doubled from FJ$3.7m (5.1%) in 2009 to FJ$7.5m (9.9%) in Increased partnership between the Government and NGOs has seen increased activity amongst NGOs in the health sector. One clear example is the partnership between the MoH and the Pacific Eye Institute in the provision of health training for medical students and affordable specialist eye services for the general public. 23

24 While private insurance remains the second largest contributor to private sector financing of health, it shows a declining trendover the period 2007 to In 2007 private insurance was FJ$ $17.5m (33.6% of private funds)but this has decreased to FJ$14.1m in 2010(19.3% of private funds). However in 2010, there is a slight increasee and this shows a growing confidence of consumers of the insurance market. These consumers are largely companies that buy health insurance on behalf of their employees. Household out of pockeremains above 60% of private expenditure over the period 2007 to 2010.OOP was its expenditure ( OOP), the highest financing source for the private sector peak in 2009 at 72.5% of private funds. While a minute amount goes to the public sector (via user fees at government health facilities), the larger portions are being spent at private pharmacies, general practitioners, private dentists and opticians. An increasing trend means that there is increased utilization of the private health sector. The rest of the economy, which includes private organizations (other than insurance companies and NGOs) contribute between 2.5% to 3.5% over the period 2007 to One example of expenditure within this category is donation of equipment or money by local banks to either re furnish or renovate hospitals and health centres. Figure 3 2 Private health expenditure by financing agent, % 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Other firms Non Government Organisation Households Year Insurance Source: Table

25 Table 3 3Private Health Expenditure by Financing Agent, 2007 to 2010 HF.2.1 HF.2.2 HF.2.3 HF.2.4 Insurance Households NGO Other firms Total Private Spending Year Amount (FJ$m) Share (%) Amount (FJ$m) Share (%) Amount (FJ$m) Share (%) Amount (FJ$m) Share (%) Amount (FJ$m) Ratio (a) (%) (a) Ratio of Total private spending to THE 3.5. External Donor Financing Fiji can rely on the support of a number of external health partners and donors for its health sector. Multilateral partners contributing to the health of the Fiji population are for example WHO, UNFPA, UNICEF, SPC and the Global Fund for AIDS, Tuberculosis and Malaria. Some of the most active bilateral partners for health are for example: AusAID, NZAID, JICA, India, Korea and the People's Republic of China (PRC). Important contributions, but less in terms of funding, also come from other private external organizations. Table 3 3 gives an overview on the financial contributions of external donors and partners to Fiji in 2009 and The estimated amounts are based on the information given from the partners themselves (through surveys), cross checked with information from the Ministry of Health database and the ODA database of the Ministry of Finance that was compiled and updated during the Paris Declaration Survey We have further attempted to eliminate possible double counting's that appear if for example AusAID as the original donor gives funding to other partners, for example SPC or UNICEF to administer and implement certain programs. We also tried to apportion funding for Fiji in the case of regional donor programs. The below figures are therefore to be considered as the closest possible estimate on external funding for health in 2009 and

26 As Table 3 4 shows the allocation by health partners in Fiji is dominatedd by one big donor (AusAID)and other partners (e.g. WHO, Global Fund, JICA and NZAID) that play a constant role in Fiji with shares of up to FJ$14.5m in 2009 and FJ$22.8m in 2010.There are also a number of other partners with long term programs for health but smaller financial contributions. Table 3 4Financing contributions of external partners in 2009/10 in FJ$ UNICEF UNFPA SPC WHO Global Fund AusAID PR China India JICA Korea NZAID Total 2009 (FJ$m) (FJ$m) Figure 3 3Share of funding by external partner (%), 2010 NZAID 3% JICA WHO 6% 11% India 2% SPC 2% UNF FPA 1% Korea 0% U NICEF 0% AusAID 60% Global Fund 15% Source Table

27 Overall, we observe a clear increase in (external) partner funding for health over the past years (although some of the estimates in 2007 and 2008 were probably underestimated due to a lower response rate). In 2007, the external donor community funded around FJ$6.9m which represented a share of 3.4% of Total Health Expenditure; and in 2008, external funds amounted to around FJ$12.2mwith around 5.9% of THE. Now in 2009, external contribution increased again in total terms to FJ$14.5m (representing 6.1% of THE), and in 2010, we register FJ$22.1m which represents a share of 8.8% of THE, which is substantial for a country like Fiji. This also increases the dependency of the country on external funding for health. Table 3 5Financing contributions of external partners as a share of THE, Year THE (FJ$m) Funding by external partners (FJ$m) Ratio of external funding to THE (%) In connection with the aid effectiveness agenda and the principles of the Paris Declaration (2005), it is of interest to countries and health partners to monitor the status and progress towards aligning development aid with the countries' strategies, systems and procedures. One indicator here is the amount that is channelled through the countries own governmental (procurement/ financial) systems instead of being administered and channelled directly by the health partners. The aim behind this indicator is that the increase of funding channelled by the countries systems will help to build capacity in applying international recognized financial and procurement standards. The SHA/ NHA methodology is a good tool to monitor this since all funding is coded inter alia according to the financing agent (HF), the institution that administers or channels the funding. In 2009, around 8.8% of external funding was channelled through the Ministry of Finance's/ Ministry of Health's accounting systems in Fiji mainly by WHO, UNFPA, SPC and the government of PR of China. In 2010, there is a significant increase in the use of the countries 27

28 systems, mainly due to the start of the Global Fund activities in Fiji. 21.3% of all external funding for health was administered by the Ministry of Finance's/ Ministry of Health's accounting systems and in addition to the considerable amount from the Global Fund, this was due to direct contributions from WHO, UNICEF, UNFPA and SPC. In Fiji, the three UN agencies channelled anaverage of 25% of their overall funding through the governmental system. Table 3 6Percentage of external funding channeled through the governmental system Year Funding by external partners (FJ$m) Funding channelled through the government system (FJ$m) Funding channelled through the government system (%) The last aspect of analysing external funding for health will focus on questions such as: what was the funding given by external health partners and donors used for in Fiji? Was it used for curative care or for prevention? These questions can show us the health spending preferences of donors. The areas of the health sector in which health partners and donors in coordination with the Ministry of Health allocated mostly funding to in 2009 and 2010 are the following three main areas: the prevention of non communicable diseases and the prevention of communicable disease, training of health personnel and the investment into health facilities. These funding priorities go hand in hand with health status demands. Fiji as many other Pacific Island Countries, has to fight the double burden of disease: to continuously prevent the outbreak of communicable diseases that are prevalent in the tropical climate of the islands, and to fight the onset of a new emergency, the increase of non communicable diseases, especially with a high incidence of an obese population with associated chronic diseases such as diabetes and cardio vascular diseases. Fiji, like other Pacific Island Countries, is also dealing with an undersupply of health workers, a shortage of doctors and nurses. To assist in combating this issue, donors invested considerably into the education and training of health personnel, as well as in the upgrading 28

29 and modernisation of government health facilities. For example, in 2009 the PR China supported the Mokani Health Centre in the Central Division and the government of South Korea helped to construct the new emergency department at LabasaHospital in Vanua Levu. In 2010, AusAID purchased boats, solar power systems and generators for various rural health centres throughout Fiji. Table 3 7Allocation of external donor funding to different areas of the health sector, FJ$m Curative care Ancillary services (laboratory, emergency transport) Drugs and appliances Preventive care and public health (NCD/ CD/ MCH etc) Environmental health and food safety Education/ training of health personnel Research for health Investment in facilities Administrative costs (Global Fund) Administrative costs (FHSIP) Total We also observe large amounts under administrative costs that we were not able to break down further. This is the administration of the Global Fund project that started in 2010, including salary costs for staff members and costs for consultants. We also counted the management and health information component of the AusAID funded project "Fiji Health Sector Improvement Project" as administrative costs since they were aimed at improving the overall organisation of the Fiji health system. The health information component encompassed for example investments into the upgrading of the PATIS system, including costs for software and hardware and consulting services, as well as training in it. The management component includes the costs of various workshops and trainings, salaries and consulting services etc. 29

30 The following graph gives a good visual picture on the allocation of external funding for 2010 according to functions or health sector areas: Figure 3 4Share of funding by function/ area of health (%) External donor funding for health in Fiji, allocation by function, %: Administrative costs (FHSIP) 3%: Curative care 5%: Ancillary services (lab, emergency transport) 2%: Drugs and appliances 16%: Preventive care and public health (NCD/ CD/ MCH etc) 5%: Administrative costs (Global Fund) 14%: Investment in facilities 6%: Research for health 18%: Training of health personnel 3%: Environmental health and food safety 30

31 4. Health Expenditures by Function Health Expenditure by Function sounds very technical. In simple terms it means "for what services and goods has the health money been spent on?" The international NHA/SHA methodology classifies certain areas of use, certain functions, and codes them with HC (see also table 4 1). The analysis by function is important for any health system reform it delivers information to the policy level for example on how the relation between inpatient and outpatient care is, or what is the balance between recurrent expenditures and capital investments. Countries that wish to deepen their NHA with disease specific health accounts, for example expenditures for diabetes patients, need to first invest into a (over time) reliable and rigorous basic classification as done below for Fiji Recurrent Expenditures The Fiji Health Accounts (FJHA) systematically classifies the purposes or functional uses of health expenditures (Table 4 1). Total health expenditure (THE) in Fiji consists of both recurrent and capital expenditures. Recurrent expenditures are used for a range of routine functional purposes, whilst capital expenditures (included as part of health related functions, HCR) are used to invest in new capital infrastructure, equipment, but also for example (long term) investments into human resources (education, training and research). Table 4.1 shows the distribution of health expenditure by function for Fiji in 2010.It shows that out of the FJ$250.4m THE in 2010, FJ$228.1m is classified as recurrent expenditures and FJ$22.2m as capital expenditures. 31

32 Table 4 1Total Health Expenditure by Function, 2010 SHA Code Function Category 2010 % of Current Health Expenditure HC.1.1 Inpatient Care % HC.1.2 Outpatient Care(a) % HC.2 + HC.3 Services of Rehabilitative and Long Term Nursing Care % HC.4 Ancillary Services to Health Care(b) % HC.5 Medical Goods Dispensed to Outpatients % HC.6 Prevention and Public Health Services % HC.7 Health Administration and Health Insurance % HCR Health Related Functions(c) % Total Health Expenditure % (a) Outpatient Curative Care includes Traditional Healers (b) Ancillary services to health care include provision of laboratory and imaging services, as well as patient transport (c) Health Related Function includes Training & Education and Research and Development 32

33 Figure 4.1 provides an overview of recurrent health expenditure by functions for the years 2007 to Figure 4 1Total Health Expenditure by Functions (%), 2007 to % 90% 80% 70% 60% 50% 40% 30% Health Related Functions(c) Health Administration and Health Insurance Prevention Services Medical Goods Dispensed to Outpatients Ancillary Services to Health Care(b) Services of Rehabilitativee and Long Term Nursing Care Outpatient Care(a) Inpatient Care and Public Health 20% 10% 0% 2007 Source: Table

34 Inpatient and Outpatient Care Services The largest part of health spending by function is for curative care (inpatient and outpatient care services) as shown in Table 4 2. Table 4 2Total and Share of Curative Health Expenditure by Functions Year HC.1.1 Inpatient (I/P) Care Cost (FJ$m) Share of THE HC.1.3 Outpatient (O/P) Care(a) Cost (FJ$m) Share of THE Total I/P & O/P Share of THE THE Cost +/ (FJ$m) Share +/ % % % % % % % % % % % % % % % The total curative health care expenditure was 74.4% of THE in 2007, and has decreased to 63.4% in 2010 (Table 4 2). Curative care expenditure in 2007 was made up of 25.7% outpatient and 48.7% inpatient. In 2010, 27.0% of the curative care was outpatient care and 36.4% was inpatient care. Thus an increase in outpatient care and a decrease in inpatient care. The percentage share of inpatient care decreased by 12.3%whilethe share of outpatient care has slightly increased by 1.3% from 2007 to 2010.It showcases the MoH reforms towards a stronger Primary Health Care, away from hospital based care. Inpatient care is mainly financed by the public sector, which accounted for 79.7% in 2007 compared to 93.2% in 2010 (Table 4 5). This increase could be a result of the increase in inpatient number of days over the period 2007 to Outpatient care was also mainly financed by the public sector with public shares of 80.0% in 2007 compared to 61.9% in

35 Table 4 3Total Health Expenditure by Function (FJ$m), 2007 to 2010 Year HC.1.1 HC.1.2 HC.2 + HC.3 HC.4 HC.5 HC.6 HC.7 HCR Inpatient Care Outpatient Care(a) Services of Rehabilitative and Long Term Nursing Care Ancillary Services to Health Care(b) Medical Goods Dispensed to Outpatients Prevention and Public Health Services Health Administration and Health Insurance Health Related Functions(c) Total (a) Includes Traditional Healers (b) Include provision of laboratory and imaging services, as well as patient transport (c) Includes Training & Education and Research and Development Table 4 4Share of Health Expenditure by Function (%), 2007 to 2010 HC.1.1 HC.1.3 HC.2 + HC.3 HC.4 HC.5 HC.6 HC.7 HCR Services of Rehabilitative and Long Term Nursing Care Ancillary Services to Health Care(b) Medical Goods Dispensed to Outpatients Prevention and Public Health Services Health Administration and Health Insurance Year Inpatient Care Outpatient Care(a) Health Related Functions(c) Total % 25.7% 0.4% 1.5% 5.2% 5.4% 9.7% 3.5% 100% % 25.3% 0.5% 1.0% 5.7% 5.4% 7.9% 5.1% 100% % 26.9% 0.1% 2.2% 12.2% 4.7% 7.6% 7.9% 100% % 27.0% 0.1% 2.6% 10.9% 4.2% 9.9% 8.9% 100% (a) Includes Traditional Healers (b) Includes provision of laboratory and imaging services, as well as patient transport (c) Includes Training & Education and Research and Development 35

36 Table 4 5Shares of Health Expenditure for each Function by Source of Finance (%), 2007 to 2010 HC.1.1 HC.1.3 HC.2 + HC.3 HC.4 HC.5 HC.6 HC.7 HCR Services of Rehabilitative and Long Term Nursing Care Ancillary Services to Health Care(b) Medical Goods Dispensed to Outpatients Prevention and Public Health Services Health Administration and Health Insurance Inpatient Care Outpatient Care(a) Health Related Functions(c ) Year Public Private Public Private Public Private Public Private Public Private Public Private Public Private Public Private % 20.2% 80.0% 20.0% 100.0% 0.0% 66.0% 34.0% 0.0% 100.0% 51.4% 48.6% 43.9% 56.1% 98.7% 1.3% % 21.8% 81.4% 18.6% 100.0% 0.0% 88.6% 11.4% 0.2% 99.8% 47.3% 52.7% 50.5% 49.5% 67.4% 32.6% % 6.8% 63.8% 36.2% 33.4% 66.6% 33.6% 66.4% 0.0% 100.0% 94.4% 5.6% 39.5% 60.5% 77.6% 22.4% % 6.8% 61.9% 38.1% 24.0% 76.0% 43.9% 56.1% 0.0% 100.0% 89.6% 10.4% 44.5% 55.5% 67.9% 32.1% (a) Private expenditure also includes Donors (b) Outpatient Curative Care includes Traditional Healers (c) Ancillary services to health care include provision of laboratory and imaging services, as well as patient transport (d) Health Related Function includes Training & Education and Research and Development 36

37 Distribution of Medicines and Medical Goods to Outpatients The second major component of health spending by function is on drugs and medical goods dispensed to outpatients.this category includes only pharmaceutical and therapeutic appliances and comprises sales of medicines and other medical goods from private pharmacies and other retailers.this is because under the SHA guidelines, expenditure on pharmaceuticals during an inpatient episode of care is categorized as inpatient expenditure. Furthermore the nature of the accounting system does not enable us to clearly isolate outpatient drugs used in government health facilities as opposed to inpatient drugs. Therefore drug consumption under government facilities are coded to inpatient and outpatient care and not included under this category.also, we are unable to add to the expenditures incurred by the private sector the expenditures from the public sector, for example for eye glasses and wheelchairs provided to outpatients free of charge. Thus it is important to note that the expenditure on medicines included in this category only accounts for a portion of overall expenditures on medicines in Fiji s health sector. Fiji spent FJ$27.4m or 10.9% of THE in 2010on medical goods to outpatients(table 4 3). This has doubled in % terms since 2007 (5.2%) and tripled in dollar value terms (FJ$10.6m). This category is usually a large growing category in many countries and the trend in Fiji showcases this. The increase in Fiji is either an increase in drug prices or increased quantity of purchased drugs. Nevertheless this is an important indicator to monitor since in the private sector this is largely financed by households out of pocket expenses Prevention and Primary Health Care Services Prevention and primary health care services are classified as public health services in Fiji. The sub classifications are outlined in the table below. Overall, prevention and primary health care expenditures accounted for FJ$10.4m or 4.2% in This signifies a slight decrease in comparison with previous years which was FJ$11.1m or 5.4% in 2007 for example (Table 4 6). The decline in the share of preventive care in THE was solely due to a decline in the reduction of the national public health budget. Approximately, 61.0% of the 37

38 financing of these programs was through Government funding,36.0% from donors and 3.0% from the private sector and NGOs. The donor contribution to public health programs is relatively high and this poses a sustainability problem for the Government in long run (for example vaccination programs are often financed by external donors). Table 4 6Prevention and Public Health Expenditures by sub classification (FJ$m), 2010 General Government Private Sector Non profit institutions (other than social insurance) Rest of the world HF.1 HF.2 HF.2.3 HF.3 Total Maternal & child health; family HC planning &counseling Prevention of communicable diseases HC Prevention of non communicable HC disease Occupational healthcare HC All other public health services HC Other Total HC Capital Expenditures Expenditure for capital formation goes largely to building and improving hospitals, purchasing plant and equipment, and education, training of health personnel. In 2007, Fiji accounted for a small share of capital formation which was FJ$7.1m or 3.5% of the THE (Table 4 3). The source for this funds was largely the Fiji Government (FJ$7.0m or 99.0%) while external donors contributed FJ$1.0m or 1.0%. When compared to 2007, health related function (capital formation, investments into education, training and research)in 2010 has increased by 5.4%, accounting for FJ$22.2m or 8.9% of THE (Table 4 3). In 2010, the largest share came from the donors (FJ$9.1m or 40.8%), followed by public (FJ$8.9m or 40.1%) and then private (FJ$4.2m or 19.1%) (refer Table 4 7). The contribution of the private sector towards capital formation and training and education of health personnel is an indication of the Governments policy or road map to strengthen public and private sector coordination and partnership arrangement in order to meet the 38

39 health care and manpower needs.all capital expenditure in the health sector on infrastructure projects funded by the government is channeled through Treasury and occasionally, this also applies to donor funded projects. There are however also investments that bypass Treasury and are financed directly by the donor. Table 4 7Total and Share of Health Expenditure by Health Related Functions, 2010 THE (FJ$m) Share (%) Public Private Donors Public Private Donors Investment in medical facilities HC.R % 2.7% 13.5% Education and training of health personnel HC.R % 15.9% 18.2% Research and development in health HC.R % 0.0% 6.4% Food, Hygiene and drinking water control HC.R % 0.0% 0.0% Environmental health HC.R % 0.5% 2.7% Health related functions HC.R % 19.1% 40.8% 39

40 5. Health Expenditure by Providers 5.1 Total expenditures The Fiji Health Accounts (FJHA) are a standard set of tables that classifies all aspects of the nation s health expenditures into four principal categories of health care system; (a) financing sources, (b) financing agents, (c) functions and (d) providers. This chapter will discuss the providers category. Providers are the final recipients of health care funds they are where the money goes, and in exchange they deliver health services. Figure 5 1 represents the main providers for the Fiji health system. Three categories of providers accounted for most expenditure in 2010; (a) Hospitals (49.8%), (b) Retailers involved in the Sale and Distribution of Medical Goods (14.0%) and (c) Providers of Ambulatory Health Care (13.3%). Hospitals in Fiji are mainly public (there is only one functioning private hospital) and hospitals are also the largest recipients of government funding. Ambulatory Health Care providers are mainly the public health centers and nursing stations, private physicians, dentists, optometrists, acupuncturists and private ancillary services. Traditional healers also form part of ambulatory care providers. Retail sales and distributors of medical goods are private pharmacies. The provision of public health programs accounted for 6.3% of the Total Health Expenditure (THE) in 2010, compared to 5.3% in 2007, thus increased. Contrary to this, the share of general health administration decreased from a share of 10.1% in 2007 to 6.1% in 2010 (Table 5 1). Possible reasons for this decrease might either be improved efficiencies of health administration or has methodological reasons.for instance government expenditures that were previously allocated to the health administration in the Fiji NHA report 2007/2008 have now been distributed across providers due to an improved data collection methodology. 40

41 Figure 5 1Total health expenditures by providers (%), 2010 Hospitals 50% Nursing and Residential Care Facilities 0% Other Industries (Rest of Economy) 1% Rest of the World 3% General Health Provision and Administration and Administration of Insurance Public Health 6% Programmes 6% Institutions providing health services related 7% Retail Sales and Other Providers of Medical Goods 14% Providers of Ambulatory Health Care(a) 13% Source: Table 5.1 Hospitals accounted for the largest shares in expenditures over the years, even though there was a large reduction by almost 9.5% from 2008 to 2009 and a further reduction in 2010 by 4.1% (Figure 5 1 and Table 5 1) ). These reductions were in contrast to the increase in retail sales and other providers of medical goods expenditures which almost tripled over the years from 2007 to One reason might be again the improved methodology in data collection from the private sector although there might be other reasons here as well, including an increasing trend of peoplee going directly to the pharmacies to self medicate with over the counter drugs. Expenditures for ambulatory care recorded an increase of 1.3% from 2009 to Expenditures incurred by institutions providing health related services (such as educational institutions, the medical and nursing colleges etc) also recorded an increase of 6.0% in 2009 and 6.7% in 2010, indicating an increased investment into education of health personnel and capital investments. 41

42 Figure 5 2Total health expenditure by provider (%) 2007 to Year Hospitals Nursing and Residential Care Facilities Providers of Ambulatory Health Care(a) Retail Sales and Other Providers of Medical Goods Provision and Administration of Public Health Programmes Other Industries (Rest of Economy) General Health Administration and Insurance Institutions providing health related services Rest of the World Source: Table Hospital Spending Hospital expenditures are mostly financed by public sources, which recorded an increase of almost 10% of THE from 2008 to 2009 (Table 5 2 and Figure 5 2). This is in contrast to the decline in activity at private hospitals, which are exclusively financed by the private sector, by almost 9% between 2008 and Overall, private household out of pocket expenditures for hospital services also have decreased from 9.9% in 2008 to 3.1% in 2009 and 2.1% in 2010, respectively. 42

43 Figure 5 3Total health expenditure at hospitals by financing agent (%) 2007 to % 100% 80% 60% 40% 20% 0% Year General Government Private Insurance Private household out of pocket expenditure Non profit institutions serving households (other than social insurance) Corporations (other than health insurance) Rest of the World (Donors) Source: Table

44 Table 5 1Total Health Expenditure by Provider, 2007 to 2010 HP.1 HP.2 HP.3 HP.3.4 HP.4 HP.5 HP.6 HP.7 HP.8 HP.9 Year Amnt (FJ$m) Hospitals Share (%) Nursing and Residential Care Facilities Amnt (FJ$m) Share (%) Providers of Ambulatory Health Care(a) Amnt (FJ$m) Share (%) Traditional Healers Amnt (FJ$m) Share (%) Retail Sales and Other Providers of Medical Goods Amnt (FJ$m) Share (%) Provision and Administration of Public Health Programmes Amnt (FJ$m) Share (%) General Health Administration and Insurance Amnt (FJ$m) Share (%) Other Industries (Rest of Economy) Amnt Share (%) (FJ$m) Institutions providing health related services Amnt (FJ$m) Share (%) Rest of the World Amnt (FJ$m) Share (%) % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % % ` (a) Providers of Ambulatory Health Care includes Private Health Practitioners, Traditional Medicines HP.3 Is the Total of all HPs from Matrix HF x HP. HP.3.4 TH is shown separately for reporting purposes only. Table 5 2Total Health Expenditure at Hospitals by Financing Agent (FJ$m), 2007 to 2010 Year HF.1 HF.2 HF.2.1 HF.2.2 HF.2.3 HF.2.4 HF.3 Public General Government Share Private Private Insurance Share Private household out of pocket expenditure Share Private Non profit institutions serving households (other than social insurance) Share Corporations (other than health insurance) Share Rest of the World (Donors) FJ$m % FJ$m % FJ$m % FJ$m % FJ$m % FJ$m % FJ$m % Share Total % % % % 0 0.0% % % % % % % 0 0.0% % % % % % % 0 0.0% % % % % % % 0 0.0% % %

45 5.3 Non-Hospital Spending Most non hospital spending were recorded with providers of ambulatory care, which showed an increase from 12.0% in 2007 to 13.3% in 2010 (Table 5 1). This suggests that a larger part of the population is opting to use private health clinics and doctors and this corresponds with increased spending on pharmaceuticals at retail pharmacies. Spending on curative services has declined in hospitals from 62.7% in 2007 to 49.8% in 2010 (Table 5 1). Of the remaining non hospital spending, the two largest components are: expenditures for the provision of public health programs (6.3%) and on general administration (6.1%) in 2010 (Table 5 1). The level of expenditures on agencies providing public health services was in line with the overall slow increase in spending on public and preventive health services by the government. 45

46 6. Government Health Expenditure As mentioned previously in Chapter 2, the Government is the largest financial contributor towards meeting the Nation s health expenditure. Government revenue generated mostly via taxes provides the finances that are channeled through mostly the Ministry of Health (MoH). As the largest source for health funds, Chapter 6 looks at Total Government health expenditure (TGHE) and attempts to show where and how this money is being spent How much is Government spending on Health? Analysis of health expenditure from the Ministry of Health s EPICOR data base, show that over a period of 8 years (2003 to 2010) Total Government Health Expenditure (TGHE) has increased in nominal value (current) but decreased in real value (constant). In real terms this means government expenditure on health in 2010 is less than what government spent in the years 2005 to On both value scales (current and constant) we see that government spent the most money on health in Table 6 1Government Health Expenditures (FJ$m), 2003 to 2010 Year Current Constant TGHE when reflected as a percentage of Total Government Expenditure (TGE) hovers around the 7% to 8% mark (see Figure 6 2) and has remained relatively constant over the period 2003 to The increase and decrease is largely driven by fluctuations in government revenues (thus affecting the government fiscal position) over those years, but less aligned with the health status of the population and the increasing (financial) needs for people with chronic diseases. According to the World Health Report (2010), universal coverage and equal access to health care can only be attained if governments spend at least 8% to 10% of TGE on health. 46

47 Figure 6 1TGHE in Real (Constant) and Nominal (Current) value from 2003 to TGHE FJ$ Millions Current Constant Years Figure 6 2TGHE as a % of TGE from 2003 to % 10.0% 9.5% Percentage 9.0% 8.5% 8.0% 7.5% 7.0% 6.5% Year 47

48 As a percentage of GDP, TGHE has averaged 3.1% over the period 2003 to The percentage has remained relatively constant and without any significant increase over the last 8 years. Figure 6 3Government Health Expenditure (GHE) as a Percentage of GDP 3.6% 3.4% 3.2% Percentage 3.0% 2.8% 2.6% 2.4% 2.2% 2.0% Years 6.2. Government Health Expenditure by Providers Government health providers in Fiji exist at different levels that are determined by the complexity of the health services they provide. As outlined in Table 6 2, we distinguish between hospitals, ambulatory care centers, nursing and residential care facilities, public health programs, other health related services (which are for example training and research), rest of the economy (which constitute other industries within the country as secondary providers of healthcare), rest of the world (which constitute mostly expenditure for overseas referrals) and health administration. 48

49 Table 6 2Government Health Expenditures by Providers (FJ$m), 2009& 2010 Year Hospitals Nursing and Residential Care Facilities Ambulatory Health Care Public Health Programmes Health Administration Other health Rest of economy related services Rest of the World Total Figure 6 4 shows the distribution of government health expenditures among that constitute the major recipients of government health funds. the health providers Figure 6 4TGHEPercentage distribution by Health Providers, % 3% 4% 5% 12% 1% Hospitals Ambulatory care Health administration Public Health programs Health related services Rest of the world Source: Table 6-2 Hospitals which include divisional hospitals and sub division nal hospitals account for the largest share of government spending. This was also the case as reported in the National Health Account reports for 2007 and 2008 and thus for the last four years hospitalss remain the major recipient of government health spending. At 75% of TGHE this equates to FJ$114m in Of this value 67% is spent on divisional hospitals while 33% is spent on sub divisional and specialty hospitals. Ambulatory care refers to expenditures at health centres and nursing stations. In 2010 this accounts for 12% of TGHE and equates to 49

50 FJ$17.6m. This value is only 15% of what government spends on hospitals. Of the ambulatory care expenditure, 76% is incurred at Health Centres while 24% is by Nursing Stations. From 2009 to 2010, government has decreased funding to hospitals by 3m and increased ambulatory care by a similar amount, in advance of the reforms to strengthen primary health care by increasing the effectiveness of the services provided at health centres and nursing stations. Later we compare this development with outputs that we registered on how funds were used for inpatient and outpatient care. Table 6 3Government Health Expenditures on hospitals, health centres and nursing stations Category Divisional hospitals Sub divisional hospitals Specialty hospitals Health Centres Central Eastern Western Northern Nursing Stations Total Of the FJ$114m health expenditure incurred by hospitals in terms of geographic divisions the distribution are as follows: Central hospitals 43%, Western hospitals 33%, Northern hospitals 18% and Eastern hospitals 5%. Of the FJ$13.4m health expenditure incurred by health centres in terms of geographic divisions the distribution are as follows: Central 52%, Western 22%, Northern 19% and Eastern health centres 7%. Health administration which includes activities such as formulation, coordination, administration and monitoring of overall health policies, budgets and programmes accounts for 5% of TGHE and this equates to FJ$8.4m. Public health programs which includes expenditures at health promotion centres only accounts for 4% of TGHE and this equates to FJ$6.3m. Despite the plans and initiatives to revamp funding for preventive health and health promotion, the health expenditure on these activities remains minimal. However, there are quite a few preventive and health promotion activities that are provided by 50

51 ambulatory providers or even hospitals, for example with regard to diabetes clinics, family planning services etc. These are incorporated in the expenditures under ambulatory care or hospitals. At this point in time, we are unable to disentangle curative and preventive care carried out by these providers. Health related services include expenditures on education, training and health research and accounts for 3% of THE in 2010 (equates to 4.9m). Rest of the World refers to government funds spent on overseas referrals and this equates to a value of FJ$1.6m in An interesting trend to notice is that the provider rest of the world which denotes funds spent on overseas referrals has continued to increase since While this provider only accounts for approximately 1.4% of TGHE, it will need monitoring in the future as the demand and need for specialized overseas treatment increases. The number of patients sent for treatment abroad has also increased from 75 in 2008, 82 in 2009 and 93 in India has been the most popular destination having more than 75% of patients in 2008, more than 80% patients in 2009 and more than 92% patients in The remaining patients over these years have gone to New Zealand and Australia. In terms of staff costing, 70% of TGHE is spent on salary and wages. This amount is distributed across all providers and is incorporated into expenditures of health providers Government Health Expenditure by Functions Figure 6 5 shows the distribution of government health expenditures by function. In SHA terminology function means how the money was used? In other words, what are the areas of care the money went to? In countries with good and detailed hospital and patient data, NHA is able to provide information on expenditures by disease groups. Unfortunately, the available data in Fiji do not accommodate such an analysis yet. Our focus was therefore on the distinction between in patient and out patient services as a first step. In patient expenses are generated only at hospitals, while out patient care can be provided in hospitals and ambulatory health centers or nursing stations, and is usually cheaper 51

52 compared to similar care provided as an in patient service. This is why it is important to monitor both indicators closely. Figure 6 5Government Health Expenditure by Functions Inpatient curative care 56% Outpatient curative care 27% Health related functions Health administration 4% 5% 6% Prevention and public health services 2% Ancillary services to health care Source: Table 6-4 In the main function which generated majority of the expenseswas in patient care (56% of TGHE). This percentage is similar to that reported in 2007 and 2008 national health accounts. Thus while their dollar value has increased from 2007 to 2010, when reflected as a percentage of TGHE, in patient services have remained relatively constant around the 55% to 56% mark. Most in patient expenses are generated at hospitals and as earlier discussed hospital funding largely reduced from 2009 to Thus decreasing hospital funding but with constant inpatient care expenditures possibly indicates improved efficiency in hospitals however since we have no measurement on the overall quality of care delivered, this would need more detailed analysis. The next largest functional expense isout patient services (27% of TGHE). Outpatient services, like inpatient services, show a similar trend with continued increases in dollar value from 2007 to but as a percentagee of TGHE has hovered around the 27% mark. Outservice patient expenditures are spread out across the spectrum of government health providers. 52