Tax and Insurance Funding for Health Systems: Facilitator Notes

OBJECTIVES

The main objectives of this set of country case studies are to:

  • Develop an understanding of the key health care financing functions of revenue collection, pooling of funds and purchasing in relation to tax and insurance mechanisms;
  • Develop an understanding of the role of tax and insurance in the funding of health services in different contexts, particularly in relation to:
    • Providing financial protection to households against the costs of illness, and
    • Promoting cross-subsidies in the overall health system; and
  • Critically evaluate issues relating to achieving universal coverage.
Given the recent emphasis on health insurance as a key health care financing mechanism (e.g. the World Health Assembly’s resolution in 2005 on “Sustainable health financing, universal coverage and social health insurance”), many of the country case studies focus particularly on alternative types of health insurance.

PREPARATION FOR CASE STUDY

In preparing for facilitating this case study, the following readings will provide a good overview of the issues that should be covered in the presentation before the case study and the issues that will arise during group and plenary discussion:

Kutzin J (2001) A descriptive framework for country-level analysis of health care financing arrangements. Health Policy, 56, 171-204.
(This article presents an extremely useful framework for analysing health care financing systems, looking at the key functions of financing: Revenue collection, pooling and purchasing. This framework is now widely used, including by organisations such as WHO and the World Bank).

McIntyre D (2007). Learning from experience: health care financing in low- and middle-income countries. Geneva: Global Forum for Health Research. (Available on www.globalforumhealth.org)
(This monograph provides an extensive review of health care financing experience in low- and middle countries, using the framework outlined in the above article by Kutzin. It highlights key health care financing issues, particularly from an equity perspective.)

TIMING OF THE CASE STUDY

The case study should be preceded by a presentation and/or facilitated discussion. This should cover the following issues:

  • The ‘Kutzin framework’ (i.e. the key health care financing functions – revenue collection, pooling of funds and purchasing).
  • The concepts of:
    • income and risk cross-subsidies;
    • equity in financing (both in terms of who bears the burden of health care financing contributions and who benefits from health care);
    • financial protection; and
    • universal coverage.
  • Briefly distinguish between different forms of health care financing, particularly different forms of health insurance (social health insurance, national health insurance, private health insurance and community-based pre-payment or mutual health insurance schemes).

The above presentation and discussion should preferably be provided in the final afternoon session on the day before the case study will be undertaken. In addition, participants should be divided into groups and copies of the country case studies and participant information sheets handed out. Preferably, each participant should be requested to review two country case studies overnight, but ensure that members of each group receive different country profiles so that all countries are reviewed by each group. Groups of six people would be ideal.

The case study will require 3 - 3.5 hours to complete:

  • Two to 2.5 hours should be set aside to allow participants to present information on the country profiles they have reviewed and to evaluate the overall health care financing system in each country.
  • A further 1 to 1.5 hours should be allowed for briefly presenting the financing system evaluations of the groups and drawing out key issues.

KEY ISSUES FOR DISCUSSION

The table below provides a summary of key issues in relation to health care financing in each country. Some of the key conclusions that can be raised by the facilitator after the group presentations and discussion of the country case studies include:

  • Pre-funding (tax and/or health insurance) health care financing mechanisms are critical for financial protection (i.e. to ensure that no household is impoverished because of a need to use health services);
  • Fragmentation between many different health care financing mechanisms, including a large number of private insurance schemes and/or community-based pre-payment schemes, and a heavy reliance on out-of-pocket payments limit cross-subsidies in the overall health system;
  • Universal coverage (i.e. a system that provides all citizens with adequate health care at an affordable cost) can be achieved with a core of general tax funding, mandatory health insurance – social or national health insurance – or a combination of both;
  • If mandatory health insurance is pursued, equity or progressivity in health insurance contributions, and maximum risk pooling, can be promoted by ensuring that:
    • Contributions are calculated as a percentage of income rather than a fixed sum;
    • Contributions are income related with higher income groups paying a higher percentage of there income;
    • There is no cap, or ceiling, on contributions or, if a cap is imposed, it is not set at too low an income level;
    • Those required to contribute to health insurance are not permitted to ‘opt out’; and
    • If a number of health insurance funds or schemes act as financial intermediaries for the overall mandatory health insurance, there should be some form of risk-equalisation for the core benefit package.

Download the completed table here.