Like demand incentives, these supply-side spin-offs of financing policies are often ignored. Thus the role of charitable and voluntary contributions is decreasing, although it may still be important in times of emergency or disaster and can be a useful supplement to other forms of health finance. the various major sources of health care financing in Nigeria, its focal point was on the NHIS. Health care financing in upper-middle- and high-income countries is generally provided through health insurance schemes (often employment or union based) or governmental financing that is funded by … Schemes may be profit or non-profit making, and may be organized for individuals or groups, the latter often benefiting from lower premiums (resulting from lower per capita administration costs as well as a degree of risk-sharing). Although tax ratios tend to increase in line with development, this depends in large part on a country's political will to increase the tax burden. General lax revenue is used in almost every country of the world to finance certain components of health care and, in developing countries, it is often the most important source of financing. The evidence concerning the demand for health care in developing countries is mixed but suggests that, especially for low income groups, demand may be elastic with respect to price, falling as price increases and resulting in significant shifts in the use of alternative providers. The problems of the health sector that are discussed in Chapter 11 have fuelled the debate about how health care is financed. Criteria for Assessing Financing Mechanisms. Yet their impact on the cost of provision and their encouragement of inappropriate service provision contribute to the inefficiency of resource use. However, in order to control the level of utilization of services, individuals are often required to pay for part of the cost of medical care on a direct fee-for-service basis. In the area of Health Financing, WHO provides evidence-based policy and technical support to Member States to improve health system financing in terms of policy development, allocation and tracking of funds, social and financial risk protection, equity in financing … Taxes on business transactions, profits and incomes are all of lesser importance. Health Financing Functions . CDC Procurement and Grants Office . Direct household expenditure is not independent of other sources of finance. Some methods of payment influence consumer behaviour by the incentives given to providers to withhold or provide services; while some may directly stimulate or restrain the utilization of services. The first step in evaluating equity, however, must be to define the equity goal of health care and so clarify the nature of the gains sought (e.g. Past reliance on deficit financing in the economy as a whole is now burdening many countries with excessive debt repayment problems. Low-income groups tend to delay use of health services until illness is severe, presumably in part to avoid payment, but such delay generally only increases the necessary expenditure. research questions around expenditures and revenues for public health in the U.S., financing of select public health program areas, how health departments maximize the resources they have, and … health care goods and services rely on a mix of different. The need for these additional sources of funds is driven by rising demand for health care services, escalating costs of care, rapid increases in technology, and a limit on how much can be raised through … Although this may seem small in proportion to the national commitments of rich countries, for low-income countries at the receiving end of the transfers, these resources are substantial; in Sub-Saharan … The demand for health services can be defined in terms of the coincidence in one individual of both the willingness and ability to pay. Self-help can take many forms such as labour, local insurance, support for volunteer health workers, and drug cooperatives. It is dependent on the level and type of fees, the bureaucratic structure required to implement them, the existence of exemption mechanisms, the impact of fee systems on the demand for care and the rates of collection. Unless such projects sell their services or contribute directly to increased output that can be taxed to service the debt, the deficit must be repaid from general tax revenue. The problem with such taxes is that they are often difficult to administer, may be politically unpopular, and are also often unpopular with tax administrators because they limit their freedom of action. The typical net yield from lotteries is between 10-30% of gross receipts. raising funds for health; reducing financial barriers to access through prepayment and subsequent pooling of funds in preference to direct out-of-pocket payments; and. The extent to which these payments represent a real ability and willingness to pay for health care is, however, unclear. However, low tax ratios (the proportion of national income collected as tax) in these countries mean that it is often insufficient by itself to support health care. Until recently, comparatively little was known about the extent or the characteristics of direct household expenditure on health care, but a range of recent studies have shown that this form of financing is far more common and considerably more important than was hitherto thought. Private insurance is not subject to the political allocation process and may channel extra funds into the health sector. Indirect taxes are paid to the government or other public agency via a third party (retailer or supplier). Governments may in some instances also contribute to the schemes. Public sources of funding include those which are compulsory and pre-paid; meaning paid before the need for care is identified or care is accessed. The main problems of social insurance are related to issues of equity. how is abuse of the system restricted?) Available evidence on the burden of taxation is inadequate to permit firm conclusions about its incidence to be drawn. inflation through the repercussions of high increases in staff pay); foreign exchange problems through heavy foreign borrowing for development projects or for payments for imports such as pharmaceuticals or equipment; opportunity costs such as the attraction of scarce manpower into the health sector at the expense of other professions; and disincentives to investment and employment (e.g. Utilization of, and payment for, health services is, moreover, likely to depend heavily on the perception of their relevance to a specific health need and the extent to which they provide a service that people value. Public Health Financing CDC Office for State, Tribal, Local and Territorial Support and . In all OECD countries, the various schemes that pay for the. Government services may charge user fees (often nominal) for certain services. organisational skills, manpower and cash) and by developing affordable and culturally appropriate delivery systems, it is hoped that basic health care will become universally accessible. While the precise definition of equity that is adopted is often not clear it generally reflects a concern to distribute health care fairly, in recognition of differences in health need. Moreover, such willingness to pay as exists is attached primarily to curative services, and so can only extend the provision of preventive care if it is possible to re-allocate resources within the health sector. For example, there must be national agreement that extra finance will be retained for use within the sector (rather than being matched by budget cuts or transferred to other sectors) and that resources can be re-allocated within the sector to meet priority health needs, in order to justify alternative financing strategies. The challenge is to develop new types of local institution that can coordinate and systematically utilize the community resources. In the United … In addition administrative corruption or evasion on the part of those liable to taxation or fees may reduce the actual yield below its hypothetical yield. to preventive rather than curative care). It is also important to recognize that health financing problems are not simply health sector problems, but often reflect economy-wide difficulties. Overall, it is argued that social insurance reinforces the maldistribution of resources between rural and urban areas in developing countries. Current levels of household expenditure partly result from the existing pattern of government health care provision, and the limited access to free/cheap government health care (particularly in rural areas). In countries where demand is sufficiently high, commercial insurance companies may be active. Resource shortages in developing country health systems clearly must be addressed, but the introduction of new financing systems is not an appropriate initial response to the problem. In conclusion, employment contributions as a source of health financing are … When it is used, deficit financing is typically for specific construction projects (e.g. more equal access to health care or more equal utilization). Non-tax revenues are from state-owned companies, including natural resource revenues such as oil and gas. Within the health sector the first priority must be to improve efficiency, making better use of available resources and enhancing the standing of the sector nationwide. Identifying the effect of financing mechanisms on consumer behaviour requires an understanding of its determinants. Private health insurance differs from social insurance in two main ways. The general trend, however, is for governments to support or take over mission health services. Household income is ultimately the source of most health care finance, but direct expenditure constitutes a specific category of financing that should be considered separately. Governments have in many instances an increasingly favourable attitude to the development of social insurance. who collects the fees? Taxes that make the poor poorer could seriously damage their health status and undermine their productivity; there are also many other fields of socioeconomic development that compete with the health sector for funds and yet give substantial support to primary health care (e.g. Their inability to pay not only reflects the largely chance initial allocations of income, but also is likely to underlie their sickness/vulnerability. Perceptions of poor quality in government services certainly undermine their use and, therefore, willingness to pay for them. The administrative difficulties of implementing a fee system (e.g. General tax revenue is currently not the most reliable source of finance for the health sector in developing countries. Clearly planners must assess these other influences, as well as monetary prices, in order to evaluate the effects on utilization of financing mechanisms such as user fees. Report and monitor health financing indicators to achieve targets of National Health Policy 2017, Sustainable Development Goals and Universal Health Coverage. sugar and coffee plantations in Latin America, tea and rubber estates in Asia and cocoa farms and mines in Africa). Health Financing Functions Revenue contribution and collection In 2015, 48.3% of THE was from public sources, 49.8% was from private sources, and 1.9% was from donors. Displacement is not necessarily an undesirable consequence if the new or expanded source of finance is more efficient or more equitable than the one it partially displaces. The national Department of … For example, donors may have different priorities from the recipient nation and may not recognize their most urgent health needs. Some financing sources are biased with respect to the types of expenditure that they favour: favouring curative rather than preventive, or capital rather than recurrent, expenditures. as a result of financing health services through high taxes on certain economic activities, enterprises or sectors). The net yield is usually high, unless bureaucratic overheads are high. However, this standard is likely to penalize those who are least able to pay and most likely to be sick (low-income groups). Government expenditures for health that are channelled through non-health Opponents of community financing mechanisms argue that it puts the burden of financing on those least able to afford it (often the poorer rural communities). Charitable or voluntary contributions can take the form of financial support or in-kind donations (e.g. Although not a major source of health sector finance in most countries, they may constitute an important source of finance for specific projects or programmes. 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