Rich-Poor Differences in Health Care Financing

Transcription

1 Rich-Poor Differences in Health Care Financing Role of Communities and the Private Sector Alexander S. Preker World Bank October 28, 2003

2 Flow of Funds Through the System Revenue Pooling Resource Allocation Collection or Purchasing (RAP) Service Provision Taxes Government Agency Private Public Public Charges Mandates Grants Loans Private Insurance Communities Social Insurance or Sickness Funds Private Insurance Organizations Employers Individuals And Households Public Providers Private Providers Out-of-Pocket

3 Origins of Rich-Poor Differences In Financing Child Health Collecting Pre-Paid Revenues Pooling of Funds and Sharing of Risks Allocating Resources and Purchasing

4 Origins of Rich-Poor Differences In Financing Child Health Collecting Pre-Paid Revenues Pooling of Funds and Sharing of Risks Allocating Resources and Purchasing

5 Low-Income Countries Have Weak Capacity to Raise Revenues Governments in many countries often raise less than 5% of GDP in public revenues; and The tax structure in many low-income countries is often regressive. Total Government Revenues as % GDP ,000 10, ,000 Per capita GDP (Log scale)

6 Low Income Pattern: Direct Charges Revenue Pooling Resource Allocation Collection or Purchasing (RAP) Service Provision Taxes Private Public Grants Out-of-Pocket

7 Total Expenditure on Health Care Percent of GDP 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% South Africa Malawi Tanzania Zambia Average Kenya Rwanda Uganda Ethiopia Mozambique HE % of GDP

8 Public Expenditure on Health Care Percentage of Total Public Expenditure 14% 12% 10% 8% 6% 4% 2% 0% South Africa Zambia Malawi Tanzania Average Ethiopia Kenya Uganda Mozambique Rwanda PHE % Tot.Govt EXP.

9 Origins of Rich-Poor Differences In Financing Child Health Collecting Pre-Paid Revenues Pooling of Funds and Sharing of Risks Allocating Resources and Purchasing

10 What do We Mean by Pooling? Cross-subsidy from low-risk to high-risk Cross-subsidy from rich to poor Cross subsidy from productive to non-productive part of the life cycle Resource endowment $ $ Resource endowment $ $ Resource endowment $ $ Low risk High risk Poor Rich Produ ctive Nonproduc tive Health risk Income Age

11 Low Income Patterns: Fragmentation Revenue Pooling Resource Allocation Collection or Purchasing (RAP) Service Provision Private Public Public Providers Private Providers

12 Less Pooling of Revenues in Low Income Countries Share of world s 1.3 billion living on less than US$1 day indicated by size of blue bubbles

13 Out-Of-Pocket (OOPs) Expenditure And Poverty Without Risk Sharing 10 9 HH expenditure as multiple of PL Pov line = dongs/day Post OOP HH income Pre OOP HH income

14 Hospitalization Causes Impoverishment Supply Side Subsides are not Enough BIHAR UTTAR PRADESH PUNJAB RAJASTHAN GUJARAT MADHYA PRADESH WEST BENGAL NORTH EAST ALL INDIA MAHARASHTRA ORISSA HARYANA ANDHRA PRADESH KARNATAKA TAMIL NADU KERALA

15 Origins of Rich-Poor Differences In Financing Child Health Collecting Pre-Paid Revenues Pooling of Funds and Sharing of Risks Allocating Resources and Purchasing

16 Benefit Incidence: The Rich Get More Public Benefits (All India, ) 40.0% Share of the Public Subsidy 30.0% 20.0% 10.0% 10.1% 13.4% 17.8% 25.6% 33.1% 0.0% Poorest 20% 2nd Middle 20% 4th Richest 20% Income Quintiles

17 The Private Sector is Important It provides financing It provides access to quality services It increases consumer satisfaction

18 Who Pays for Health in India? Public-Centre 4% Private Investment 3% Private Insurance 0% Public-States 14% Private Out-ofpocket 79% Source: NSSO; CSO; Data

19 Out-of-Pocket Health Payments and Household Income All India ( ): The Poor Contribute Significantly Per Capita Private Spending (Rs.) Poorest 20% 20%-40% Middle 20% 60%-80% Richest 20% Out of Pocket to Public Facilities Out of Pocket to Private Facilities

20 Service Delivery: People Use Public and Private Sectors (All India, ) Immunizations Antenatal Care Institutional Deliveries Hospitalization Outpatient Care 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Public-Private Sector Shares Public Private

21 Responsiveness: Little Satisfaction in Andhra Pradesh (2000) But Private Sector Outperforms Public Sector Overall visit Explanation of care Nurse s skills Nurse s manner Doctor s skills Doctor s manner Waiting time Percent Satisfied or Very Satisfied Public Private

22 But Without Subsides the Poor Get Less: Proportion of Institutional Deliveries, All India ( ) Richest 20% 36% 60%-80% 53% Middle 20% 63% 20%-40% 68% Poorest 20% 73% Percent of Births Delivered at Health Facilities Public Private

23 Urgent Need for Change At the Global Level Increased Targeting of Public Resources Increased Private Sector Participation Increased Financial Protection Increased Subsides for the Poor Communities often Play an Important Role

24 The End