Strategic Purchasing and PFM Rules

Transcription

1 Strategic Purchasing and PFM Rules CHERYL CASHIN, RESULTS FOR DEVELOPMENT INSTITUTE WHO SYMPOSIUM ON HEALTH FINANCING FOR UHC PUBLIC FINANCING FOR UHC: TOWARDS IMPLEMENTATION 31 October - 2 November 2017, Montreux, Switzerland 1

2 What does sustainable financing for progress toward UHC mean? Sufficient resources are made available within the country s macroeconomic and fiscal realities to make continuous progress toward UHC objectives Resources are used equitably and efficiently to reach to priority populations and services Spending can be accounted for against UHC objectives Strategic Purchasing 2

3 Health financing policy addresses the unique challenges of the health sector UNCERTAINTY NEEDS: Health needs vary across individuals, geography, and through time. COSTS: Service utilization is determined by choices of individuals. ROLE OF THE PRIVATE SECTOR A large share of health service utilization and the purchase of medicines takes place in the private sector. THE AGENCY PROBLEM The health services that are delivered and the inputs used to produce them are greatly influenced by providers who may have a financial interest. Accumulate and redistribute health funds Opportunity for regulation Incentives for quality and efficiency Providers internalize incentives Pooling Purchasing Provider Autonomy PFM System 3

4 From passive to strategic health purchasing Passive Strategic Resource allocation using norms or historical budgets Open-ended fee-for-service Little/no selectivity of providers Little/no quality monitoring Price and quality taker Deliberate decisions about what to buy, from whom to buy, and how to buy services to achieve health system objectives: Manage overall costs in the system Payment systems that create deliberate incentives Selective contracting Quality improvement and rewards Price and quality maker 4

5 When purchasing is not strategic from the provider s perspective Multiple payment streams each with its own requirements OOP Drugs and supplies Salaries EPI and other program funds Performance-based financing Local government funds Health insurance fund payments Health facility receives noisy or no signals about who to serve, what to provide, and quality Funds often held by district health office or other local government intermediary and do not Limited flexibility to use funds to respond to patient needs Accountable for $ more than health outcomes Risk aversion-- penalized for using funds in innovative ways Ultimately leads to under-execution of funds reach frontline providers 5

6 Under-execution of health budgets in Africa Average 25% unspent health budget in sample of African nations (typically 10-30%) and similar applies to India 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 25% Unspent budget Realised expenditure Source: Public Financing for Health in Africa: from Abuja to the SDGs (WHO 2016); Resource Tracking and Management (M Bhawalkar and R Jha, 2016) 6

7 Foundational elements of strategic purchasing Institutional home for purchasing Defined package of services Output-based provider payment Provider autonomy Monitoring and accountability What is being purchased? How is the package purchased? How can providers manage? How to track what is purchased? A clear definition of the package of services that is accessible to covered individuals. Payment is made to providers for services with incentives to improve efficiency and quality of care. Providers should have some autonomy over management decisions. A good monitoring and accountability system is needed so all actors answer to achieving objectives. Improving purchasing capacity 7

8 Strategic purchasing in Ghana for small share of government health expenditure Total Health Expenditure: 44% 16% 40% Out-of-Pocket National Health Insurance Scheme Ministry of Health Budget Uninsured Inputs 4% Other services and medicines Services and medicines in the NHIS benefits package 38% 54% 4% Salaries Administration Service Investment Source: Schieber, Cashin and Saleh (2012). 8

9 The share of funding through the purchasing agency is growing Total Health Expenditure: 34% 21.3% 35.5% Out-of-Pocket National Health Insurance Scheme Ministry of Health Budget Uninsured Inputs Other services and medicines Services and medicines in the NHIS benefits package Personnel Other World Bank (2017) Ghana Public Expenditure Review. 9

10 Potential challenges in the PFM system for strategic purchasing Strategic purchasing function Decide what to purchase and with which funds Decide how to purchase and with which payment mechanisms Monitor what has been purchased PFM functions Budget formulation Budget execution and payment Accounting and reporting Potential challenges Different purchasing arrangements for different revenue sources Budgets classified, formed and disbursed based on inputs with facility as the budget unit Important inputs (e.g. staff time) outside of purchasing Lack of provider autonomy to respond to incentives Challenges purchasing from the private sector Inefficient procurement rules Delayed or unpredictable release of funds makes contracting difficult Poor information systems and monitoring capacity 10

11 Aligning the budget for strategic purchasing of PHC in Armenia Prior to budget reform 2018 Activity-based budget (4 separate activities) Program-based budget (4 programs) Therapists Program-based budget (1 PHC program) Outpatient specialists PHC Gynecologists Diagnostics Fragmented purchasing of PHC Still fragmented purchasing 4 contracts with 1 polyclinic or rural health center Capitation payment with performance incentives 11

12 A way forward and points for dialogue Strategic purchasing requires being clear and deliberate about what is being purchased Is the service package reflected in the budget structure? Paying health providers specifically to deliver these service Contracting to clarify the obligations of the purchaser and providers Providers have some autonomy to make decisions to respond to incentives Does the PFM system allow strategic output-based payment? Do PFM rules allow for contracting with public and private providers? Do providers have autonomy and are there appropriate accountability measures? 12

13 Thank you. 13