PST06105 Health Financing

NTA Level 6 • Semester 1 • PST06105 Introduction to Health Financing Health Financing • Source Session/Topic 1 Full source-text version: all educational wording from the extracted learning source is retained; only presenter/tutor metadata and web-layout noise are removed, while formatting is improved for readability. PST 06105: HEALTH FINANCING Session 1: Introduction to Health Financing Learning Tasks At the end of this session students are expected to be able to : Explain the historical background of health financing Describe various concepts of health financing Historical Background of Health Financing H ealth financing has been one of the most important policy agenda nationally and internationally among health leaders and policy-makers. Health financing has risen on agenda of policy- makers due to the fact that health systems , especially developing countries, are facing what is known as a problem of financial (fiscal) sustainability. Historical Background of Health Financing Problem of financial sustainability: exists when health system or government is unable to meet its obligations due to its inability or unwillingness to generate sufficient revenue to meet them . Historical Background of Health Financing Key symptoms of the problem of financial sustainability: ( World Bank, 1987, 1993): Misallocation and insufficient spending on cost-effective health interventions needed by the population: public money was/is spent on health interventions of low cost effectiveness Internal inefficiency: much of the money spent on health is wasted: brand-name pharmaceuticals are purchased instead of generic drugs, health workers are badly deployed and supervised, and hospital beds are underutilized. Historical Background of Health Financing Key symptoms of the problem of financial sustainability: ( World Bank, 1987, 1993): Inequity in the distribution of benefits from health services: The better-off in most had and continue to have better access to health care ; the poor lack access to basic health services and receive low-quality care Difficulty in achieving or maintaining acceptable quality services within the government budget Historical Background of Health Financing As result of these problems, world bank and others proposed health sector reforms policies that were intended to improve performance of health systems; These reforms, among, other recommended that health financing should be strengthening by introducing the following: new financing mechanisms such as user fees, health insurance and other sick coverage; and improved management of public health services. Activity: Brainstorming What is the meaning of the term “health financing” and “sources of finances”? 8 Health financing is defined variously by different experts: R efers to collection of funds from various sources (e.g . government, individual, businesses, donors); pooling fund to share financial risks across larger population groups; and using them to pay for services from public and private health-care providers. (WHO, 2000) Is the process by which revenues are collected from primary and secondary sources, accumulated in fund pools and allocated to provider activities. ( Mossialos et al,2003 ), It is defined also as a process of raising financial resources to finance and pay for health services Sources of finances T he main sources of finances for health care are: Individuals , households and employees Firms , corporate entities and employers Foreign and domestic NGO‟s and charities Foreign governments, companies multilateral agencies Contribution Mechanisms The contribution mechanisms are the ways in which individuals, households, firms and governments do contribute funds to collecting agents. The main contributing mechanisms are : Direct and indirect taxes Compulsory insurance premiums Voluntary insurance premiums Out-of-pocket payment(user charges) Donations , grants and loans Medical savings accounts Importance or significance of health financing The importance or significance of health financing has been stated by WHO (2003) as follows : Adequate and sustained financing is a critical factor in the creation of a viable health system . Fair financing mechanisms allow people to access health services at the right time and prevent people against impoverishment Financing is the mechanism by which plans and policies are translated into action through the allocation of resources Importance or significance of health financing Without adequate financing, plans remain in the realm of rhetoric and good intentions With adequate financing, a resource base can be created for the operations and delivery of services, the development and deployment of a trained workforce and the required infrastructure and technology Financing is a fundamental building block on which the other critical aspects (services, human resources, medicines and equipment, health information and leadership and management) of the health system rest Also, financing is a powerful tool with which policy-makers can develop and shape health services and their impact in improving health of the population Key points Health financing is an important topic and sub-component of health system that facilitate delivery of health service and improvement of health of the population There are number of concepts that need to be understood for better understanding of health financing Evaluation What is the meaning of the following terms h ealth financing, health financing functions, sources of finance, contributing mechanism, and financing option/ mechanism What are the symptoms the problem of financial sustainability? Reference Gottret , P. Schieber , G. (2006). Health financing revisited: a practioner’s guide. Washington DC , USA. World Bank Green , A. (2007). An introduction to health planning for developing countries (3rd Ed.) London : Oxford University Press. Gruen , R and Howarth , A. (2005). Financial management for health services. London: Open University . Jiyenze , M. K. (2013). Health care financing and resource allocation: handout for teaching health care financing. Arusha : CEDHA. [Notes: Unpublished] Kutzin , J (2001). A descriptive framework for country-level analysis of health care financing arrangements . Health Policy; 56, 171–204. Reference Tanzania . MoHSW (2014). DHM Healthcare financing module. Dar es Salaam: MoHSW . Mossialos , et al ( ed ) (2002). Funding health care: options for Europe. Buckingham: Open University Press. WHO (2003). Mental health financing. Geneva. Switzerland: WHO. World Bank (1987). Financing health services in developing countries: an agenda for reform . Washington, D.C: World Bank ,. World Bank (1993). World Development Report 1993: investing in health. Oxford, UK: Oxford University Press. Next Topic →View all Health Financing

NTA Level 6 • Semester 1 • PST06105 Health Financing System and Mechanisms Health Financing • Source Session/Topic 2 Full source-text version: all educational wording from the extracted learning source is retained; only presenter/tutor metadata and web-layout noise are removed, while formatting is improved for readability. PST 06105: HEALTH FINANCING Session 2 : Health Financing System and Mechanisms Learning Tasks At the end of this session students are expected to be able to: Describe functions of health financing system Describe objectives of health financing system List financing mechanisms Outline the roles of government in medicines Activity: Brainstorming What are functions of health financing system? 3 Functions of Health Financing System Health financing system is a sub-system of the health system responsible for performing the functions of collecting, pooling and risk management, and allocating financial resources to purchase health services from the various health care providers The health financing system performs four main functions ( Kutzin , 2003; Mossialos , 2002 ): Collecting revenue Pooling , Allocation , Purchase of service Functions of Health Financing System 1. Revenue collection Collection is a process of revenue gathering or mobilizing financing revenue from various sources It is a process by which the health system receives money from households and organizations or companies, as well as from donors The collection process involves three elements: source, contribution mechanisms and collecting agents The collecting agents may be: Central governments Regional governments Local governments Independent public body or social security agency Private not-for-profit or for-profit insurance funds Providers ( health facilities) Functions of Health Financing System 2. Pooling of risk Pooling is the ‘accumulation of prepaid health care revenues on behalf of a population ‟ It is a process of accumulation and management of revenues in such a way as to ensure that the risk of having to pay for health care is borne by all the members of the pool and not by each contributor individually. Pooling facilitates the pooling of financial risk across the population or a defined subgroup When there is no risk pooling, individuals are responsible for meeting their own health care costs as they arise. This entails patients‟ meeting user fee charges as they are incurred. Pooling agents may be: Ministry of health: central and decentralised units Local government health department/boards Social health insurance fund (s) Private insurance companies Provider-based schemes Functions of Health Financing System 3. Allocation of financial resources Resource allocation is defined as : “ Process by which available resources are distributed between competing uses to achieve a particular goal” (Pearson, 2003). “ The distribution of resources , in particular finance, from the centre to the peripheral level. It generally concern with broad levels of aggregated financial resources ” (Green, 2007). The distribution of goods and services (e.g. funds, professional time, beds, drugs, etc .) among competing programs or people (e.g. prevention, acute care, clinical programs , groups, individual, etc.) Allocation is also related to other concepts (budgeting and virement). According to Green (2007) budgeting “implies the more detailed determination of precisely how funds will be used” and may be defined a process of deciding what financial resources will be spend in a defined period (usually a year) Virement or reappropriation (Green, 2007) is a process of adjusting the budget to shift resources from one area to another Three approaches are commonly used to allocate resources: Negotiation and political compromise : under this approach, the distribution of health resources is heavily influenced by more vocal, urban populations and by political and other vested interests Incremental allocation: resources, under this approach, are allocated based on the past rather than according to any concept of need but a percentage is increased/decreased to the previous allocation of resource Need-based approach: allocation of resources is based on health needs using objective indicators. Usually a formula is used to improve equity of resource allocation. Need-based approach: The main components of a needs-based resource allocation formula should reflect the main reasons why health needs vary. The following proxies 3 are generally used: Population size – a greater number of people will present with a greater health needs ; Age and sex profiles of populations – the very young and very old and women have greater needs Degree of relative/absolute poverty – poverty causes ill health In Tanzania, the allocation formula has the following proxy indicators components: Population (70 %) Poverty count (10 %) District vehicle route (10%) Under-five mortality (10%) 4. Purchasing Purchasing is “the transfer of pooled resource to service providers on behalf of the population for which the funds were pooled” OR “ is the process by which pooled funds are paid to providers in order to deliver a specified or unspecified set of health interventions ” Health system may have separate entities responsible for purchasing and service provision Purchasing agents may be: Ministry of Health Regional governments Local governments Social health insurance fund(s), Private insurance funds Employers Functions of Health Financing System Objectives of Health Financing System Promoting universal protection against the financial risks associated with ill health. Financial protection aims to ensure that people do not become poor as a result of using health care; Promoting a more equitable distribution of the burden of financing the health system – equity in finance requires richer people to pay more for health care, as a proportion of their income , than poorer people ; Promoting equitable use and provision of services – equity of access to health care based on need rather than ability to pay; Objectives of Health Financing System Improving the transparency and accountability of the system – for example, ensuring that the entitlements and obligations of the population are well understood by all, addressing the issue of informal payments where relevant, auditing institutions and monitoring and reporting on performance; Rewarding good quality care and providing incentives for efficiency in service organization and delivery; o Promoting administrative efficiency by minimizing duplication of responsibility for administering the health financing system and minimizing costs that do not contribute to achieving the aforementioned

NTA Level 6 • Semester 1 • PST06105 User Fees in Health Care Health Financing • Source Session/Topic 3 Full source-text version: all educational wording from the extracted learning source is retained; only presenter/tutor metadata and web-layout noise are removed, while formatting is improved for readability. PST 06105: HEALTH FINANCING Session 3: User Fees in Health Care Learning Tasks At the end of this session students are expected to be able to: Define user fee Explain how user fee operates in the health sector Enumerate advantages and disadvantages of user fee Activity: Brainstorming What is user fee? 3 User fee ( user charges) I s a basic health financing mechanism where a user of health services is a charged a fee at the point of service delivery. A fee is charged to cover all or part of the cost of services provided Is defined as a “financing mechanism that has two main characteristics: payment is made at the point of service use and there is no risk sharing ” Lagarde & Palmer (2008 p.839) User fees charged to users of health services cover related drug costs, supply and medical material costs, entrance fees or consultation fees. User fee is the commonest method of financing health services in Sub-Saharan Africa which was widely and actively promoted during health sector reforms in 1990s ( Gilson,1997 ) User fees commonly regarded as a means of raising revenue and as a means of discouraging what may be viewed as „unnecessary demand‟. Operation of User Fees Operation of User Fees As shown in the previous figure: user fees financing mechanism involves two parties: User of health services Provider of health service. Users of health services pay financial resources (to cover partial or full cost of healthcare ) in form of fees in order to receive health service from the providers. The providers of health services receive financial resources (incomes) from users of health services. The Operation of User Fees In setting fees, providers of health services are guided by the following principles: Ability to pay: fees should be consistent with the ability to pay Relating quality to fees: fees and quality should be linked Successful operation of user fees financing in public health facilities depend on the presence of the following conditions: Well-defined entrance points at the point of health facility The issuance of receipt with duplicate copies to serve as evidence of payment A rigorously enforced system for determining those eligible for exemption Training of staff to promote the importance of enforcing collection Periodic spot checks to establish that above points are being carried out by all staff Periodic audits of the financial transactions and flow of fund Activity: Small group discussion What are advantages and disadvantages of user fees as health financing ? 8 Advantages of User Fees It generate additional financial resources for improving health services, range in from 1.2-20% of total health expenditure It is simple and consistent with other goods and services Drug availability and the quality of care can be improved Equity is promoted because limited public resources can be targeted to those most in need Decentralization is reinforced through local control of resource It allows some form of participation of health services by users (but not the community ) It can be used to discourage bypassing of referral health systems Disadvantages of User Fees User fee tended to deter (delayed access and use care) the poor people from utilization of basic health services they needed than non-poor people It encourages self – medication and use of informal health services – health risk behaviors that are not conducive to good health Costs of collection and accounting may be significant It discourages real health needs of the poor and sick people: the most regressive (low income earners pay more) form of financing health care It may encourage impoverishment at family level User fee can encourage health service provider to have ineffective behaviors at delivery point services – provide unnecessary treatments that did not match with health needs Exemption policy implementation, aimed to protect the poor, is not practiced effectively Key Points User fees is one the common health financing mechanisms used to finance health services in developing and developed countries User fees involve two parties in health service: user of health services and provider of the health service Successful implementation of user fees in public health facilities depend meeting some conditions User fees as a financing mechanism has both advantages and disadvantages Evaluation What is a user fee? What are the conditions for effective implementation of user fees in Tanzania?• What are the advantages of user fees as a financing mechanism? What are three disadvantages of user fees as a financing mechanism? Reference Gilson , L. (1997). The lessons of user fee experience in Africa. Health Policy and Planning, 12(4 ), 273-285. Gottret , P. Schieber , G. (2006). Health financing revisited: a practioner’s guide. World Bank Green , A. (2007). An introduction to health planning for developing health systems. Oxford: Oxford University Press. Jiyenze , M. K. (2013). Health care financing and resource allocation: handout for teaching health care financing. Arusha : CEDHA. [Notes: Unpublished] Mubyazi , G., Massaga , J., Kamugisha , M., Mubyazi , J. N., Magogo , G. C., Mdira , K. Y Gesase , S., Sukwaz , T. (2006 ). User charges in public health facilities in Tanzania: effect on revenues, quality of services and people's health-seeking behaviour for malaria illnesses in Korogwe district. Health Services Management and Research, 19(1 ), 23-35. Reference Tanzania. MoHSW (2014). DHM Healthcare financing module. Dar es Salaam: MoHSW WHO (2003). Mental health financing. Geneva, WHO. World Bank (1987). Financing health services in developing countries: An agenda for reform . Washington: International Bank for Reconstruction and Development/ he World Bank. World Health Organization. (2017). Developing a national health financing strategy: a reference guide. Geneva: World Health Organization Gilson , L. (1997). The lessons of user fee experience in Africa. Health policy and planning , 12(3), 273-285. Lagarde , M.,

NTA Level 6 • Semester 1 • PST06105 Tax-based Financing Health Financing • Source Session/Topic 4 Full source-text version: all educational wording from the extracted learning source is retained; only presenter/tutor metadata and web-layout noise are removed, while formatting is improved for readability. PST 06105: HEALTH FINANCING Session 4 : Tax-based Financing Learning Tasks At the end of this session students are expected to be able to: Define tax-based financing Explain how tax-based financing operates in the health sector Enumerate advantages and disadvantages tax-based Activity: Brainstorming What is tax-based financing? 3 Tax-based financing Tax-based financing (public financing) is a financing mechanism whereby financial resources are raised through taxes by the government. There are two types of taxes that the government use to raise financial resources: Direct taxes: taxed levied on wealth and incomes; example direct taxed are property tax , income tax, and corporate tax Indirect taxes: taxes levied on expenditure and services; examples are value added tax(VAT ), excise duty, betting tax, and vehicle license duties Tax-based financing is a predominant form of health care financing in most of Sub- Saharan Africa, including Tanzania It is a suitable for most countries that have the administrative and economic capacity to raise taxes, establish an efficient network of providers, and the capacity to target the poor Tax-based financing mechanism constitutes the most widespread health financing mechanism around the world. Activity: Brainstorming What are the main parties that form a tax-based financing mechanism? 5 Operation of Tax-based Financing Operation of Tax-based Financing Tax- based financing mechanism involves three parties: citizen and users of health services , governmental organizations, and providers of health service In tax-based financing, citizen and users of health services pay taxes to government organizations (e.g. Ministry of Finance through revenue entities and local governments) to enable the government to obtain financial resources for provision of health services and other services that citizen need. Governmental organizations , responsible for collection of governmental revenues (taxes ), disburse the collected financial to providers of health services (e.g. doctors, hospitals, and pharmacies ). Providers of health services in turn use the financial resources to acquire health resources (e.g . staff, medicines, buildings, and equipment). The acquired health resources are used by health service providers to provide health services to citizen when they need such services . Activity: Small group discussion What are three advantages and disadvantages of tax-based financing? 8 Advantages of Tax-based Financing Tax-based financing has potential for financing health services to a large number of population members . More revenue can be generated for services and used for comprehensive cover of the community. The income generated is usually stable ; where stability depends on political commitment and economic condition of a country Financial resources raised through tax is flexible :can be used for different uses or expenditures Payment of taxes is not related to health need, it has potential equity depending on tax system of countries Disadvantages of Tax-based Financing Sometimes the finance raised through this means is unstable , especially during economic crisis and in large informal sector, where many people do not pay taxes It may encourage inequity if the tax based system depends much on indirect taxes rather than direct taxes like income taxes In most cases, in developing countries, it has failed to meet the health needs of the poor thus leading to the introduction of other financing mechanisms notably Social Health Insurance (SHI) and Community Health Insurance (CHI) schemes Key Points Tax-based financing mechanism constitutes the most widespread health financing mechanism around the world and financing resources are raised mainly through various taxes paid by citizens Tax-based involve three parties in health service: citizen and user of health services, government , and provider of the health service Tax–based financing has both advantages and disadvantages Evaluation What is tax-based financing? List three parties involved in tax-based financing What are the three advantages and disadvantages of tax-based financing? References Evans , R. G.( 2002).Financing health care: Taxation and the alternatives. in Mossialos , E., Dixon, A., Figueras , J., Kutzin , J., Funding Health Care: options for Europe. Buckingham & Philadelphia: Open University Press. Folland , S., Goodman, A. C., & Stano , M. (2007). The economics of health and health care .New York: Pearson Getzen , T. E. (2013). Health economics and financing. Hoboken, NJ: Wiley. Gottret , P. Schieber , G. (2006). Health financing revisited: a practioner’s guide. World Bank Green , A. (2007). An introduction to health planning for developing health systems. Oxford: Oxford University Press. Guinness , L and Wiseman V (2011). Introduction to health economics. Mainhead : Open University Press. References Jiyenze , M. K. (2013). Health care financing and resource allocation: handout for teaching health care financing. Arusha : CEDHA. [Notes: Unpublished] Mossialos , E., Dixon, A., Figueras , J., Kutzin , J. Funding Health Care: Options for Europe. UK : Open University Press, 2002. Olsen , J. A. (2009). Principles in health economics and policy. Oxford: Oxford University Press . Savedoff , W. D. (2004). Tax-based financing for health systems: options and experiences.Geneva : WHO Tanzania . MoHSW (2014). DHM Healthcare financing module. Dar es Salaam: MoHSW WHO (2003). Mental health financing. Geneva, WHO. World Health Organization. (2017). Developing a national health financing strategy: a reference guide. Geneva: World Health Organization. ← Previous TopicNext Topic →View all Health Financing topicsOpen Complete Full Notes PDF / OFFLINE NOTES Unataka kutumiwa notes hizi kupitia WhatsApp?Kwa notes zilizopangiliwa vizuri kwa kusoma offline au PDF, bonyeza kitufe hapa chini. Ujumbe wenye Level, Semester, Module na Topic utaandaliwa moja kwa moja.TUMIWA NOTES WHATSAPP WhatsApp: 255620339260

NTA Level 6 • Semester 1 • PST06105 Social Health Insurance Health Financing • Source Session/Topic 5 Full source-text version: all educational wording from the extracted learning source is retained; only presenter/tutor metadata and web-layout noise are removed, while formatting is improved for readability. PST 06105: HEALTH FINANCING Session 5: Social Health Insurance Learning Tasks At the end of this session students are expected to be able to: Define social health insurance Explain how social health insurance operates in the health sector Enumerate advantages and disadvantages social health insurance Activity: Brainstorming What is social health insurance? 3 Social Health Insurance (SHI) Historically, health insurance developed as a way of solving the problem of access to an income to replace earnings when sick, and generally later to secure the provision of an acceptable standard of health care Those originally covered from the early nineteenth century were the more skilled workers and not too poor farmers. Social health insurance (SHI) is a modern socio-economic prepayment mechanism that is based on mutual support (Norman and Weber, 1994). Social Health Insurance (SHI) M inimum features of SHI (McIntyre , et al, 2003): Is legislated by governmen t and requires regular, compulsory contributions by specified population groups (usually initially covering those in formal employment and their dependents, and then gradually extending to other groups); Has an income-related contribution schedule (i.e. premiums are calculated according to ability to pay), which is uniform even if the SHI consists of a number of health funds serving as the financing intermediaries for the SHI; and Has a standardized, prescribed minimum benefit package Social Health Insurance (SHI) SHI has two functions(Abel-Smith,1992): It is a way of raising all or part of the money to pay for health care It is a way of securing the provision of services SHI, together with user fee, were initially advocated by the World Bank (1987 and 1993 reports) and strategy to reduce the 1970-1990‟s health finance gap in developing countries Many countries, including Tanzania, have adopted health insurance to achieve the three health policy objectives which are: Improved financial base for health services; Improved health system performance in term of access and equity Containing cost escalation Social Health Insurance (SHI) Tanzania Mainland has a social health insurance known as National Health Insurance Fund (NHIF) Currently NHIF covers several categories of members such as from public institutions, cooperative Health (tobacco, coffee, cotton, cashnut ), staff of Religious Denomination, Toto Afya Card, students, Private Groups of Entrepreneurs, Private Membership (individuals and private companies ). Activity: Brainstorming How does social health Insurance operate in health sector? 8 Operation of Social Health Insurance Operation of Social Health Insurance SHI involves three parties: citizen and users of health services, insurance organization, and providers of health services Arrangement of SHI Are compulsory ,risk pooling and prepayment schemes Individuals or organizations pay compulsory premiums related to income not health needs In social health insurance, specified group of people (e.g. public sector employees) pay premium to government-owned insurance organizations before they fall sick. Operation of Social Health Insurance Arrangement of SHI: Insurance organizations collect, pool, manage and use financial resources to pay or reimburse providers of health services (e.g. doctors, hospitals, and pharmacies). Providers of health services in turn use the financial resources to acquire health resources (e.g. staff, medicines, buildings, and equipment). The acquired health resources are used by health service providers to give health services to citizen when they need such services . Activity: Small group discussion What are the advantages and disadvantages of social health insurance? 12 Advantages of Social Health Insurance SHI has potential for generating sufficient financial resources to cover large numbers of populations, depending on the size of formal sector of a country Social health insurance is an easy and effective way to raise resources to improve health The funds raised by social health insurance are stable and they are not affected by these changes and the income is earmarked solely for health sector This stability is maintained by the regulations and laws that govern the allocation and expenditure Advantages of Social Health Insurance SHI tend to be more equitable: clients tend to pay according to income and avoids experiential risk which is common to private insurance Health insurance can improve and promote efficiency in health service provision. This can take place through active contracting and purchasing, accreditation of health providers and monitoring health service providers. Insurance allows individuals to seek treatments early than uninsured people (Hsiao et al , 2007) who tend to seek treatment late and at advanced stage of the disease process and therefore treated at high cost Citizens may be more willing to pay their contributions because the destination of the money is visible, specific, and related to a vital need Disadvantages of Social Health Insurance There are difficulties of administration in informal economies, where income of the many members of the community do not have reliable income There may be stratification between various schemes with equity implications SHI may give “paper rights” to benefit package : package stated in document but not provided to members of SHI SHI has potential for inducing provider moral hazard , providing unnecessary treatments and tests to members of the scheme Possible exclusion of the poor, it first covers civil servants Disadvantages of Social Health Insurance SHI has potential for inducing clients moral hazard , using unnecessary treatments and tests included in the package Potentially, it increases employment costs , as employers are required to contribute financial resources for their employees Many insurance schemes use encourage cream-skimming strategies to enroll members Social health insurance can generate an excess demand for health services, leading to escalating costs Key Points SHI is now an important financing mechanisms both in developing and developed for raising financing resources for the health sector and for ensuring that people have access to health services SHI involve three parties in health service: citizen and user of health services, government-own health insurance, and an network of providers of the health service SHI has

NTA Level 6 • Semester 1 • PST06105 Community-based Health Insurance Health Financing • Source Session/Topic 6 Full source-text version: all educational wording from the extracted learning source is retained; only presenter/tutor metadata and web-layout noise are removed, while formatting is improved for readability. PST 06105: HEALTH FINANCING Session 6: Community-based Health Insurance Learning Tasks At the end of this session students are expected to be able to: Define community-based health insurance Explain how community-based health insurance operates in the health sector Enumerate advantages and disadvantages community-based health insurance Activity: Brainstorming What is community-based health insurance? 3 Community-based Health Insurance (CHI) Community-based health insurance (CHI) is part of an overall health financing strategy in a number of developing countries are sometimes referred to as health insurances for the informal sector, micro–health insurances, mutual health organizations, or micro insurance schemes CHI is defined as a not-for-profit prepayment plans for health care controlled by community and have voluntary membership Community , using representatives, manages the collection of resources and purchase of health services CHIs were actively promoted by UNICEF for people in the informal sector in 1980-1990s through Bamako Initiative It is a voluntary and prepayment scheme where community pay a set premium to the scheme . Community-based Health Insurance (CHI) The premium is based on community rating (based on pooled risk of defined population) The prominent community-based health insurance in Tanzania is known as Community Health Fund (CHF), which currently operated by local governments within a local government There two forms of CHF in Tanzania: Ordinary CHF: Improved CHF Community-based Health Insurance Ordinary CHF has the following features: No separation between purchaser and providers of health services, that is, the Council Health Service Board represents both the interests of CHF members and health care providers (health facilities) Weak data management system Passive enrolment strategy based on health facilities Restricted benefit package with card applicable at the enrolled facility and rarely involving hospital services Passive to no community sensitization campaigns Identity card given to head of the household (only one card for the household) Community-based Health Insurance Improved CHF has the following features: Reorganized structure that displays the different roles of purchaser (CHF) and health care provider (health facilities) Reform of data management system by installation and use of an insurance management system with a central server with online and offline modes Active close‐to‐client strategy with village‐level enrolment officers Expanded range of services to include hospitalisation and portability of CHF cards within the region Active mobilization campaigns with social marketing strategies that involve both community‐based campaigns and mass media campaigns Each member of the household is given individual membership cards Activity: Brainstorming How does community-based health insurance operate? 8 Operation of Community-based Health Insurance Operation of Community-based Health Insurance CHI involves two parties: citizen and users of health services and providers of health services In CHI arrangement, specified group of people or households (e.g. within a local government ) pay premium to providers of public health services (.e.g. dispensaries, health centres , hospitals) before they fall sick Addition to premium paid, households receive a “matching grant” from the central government , which is equivalent to the premiums paid by the enrolled households in Tanzania In return, insured members of the community receive health services when they fall sick Providers of public health services collection, and use financial resources pay for medicines costs, laboratory tests, supply and medical material costs, entrance fee or consultation fees Additional details of CHF are provided in Hand out 1 Operation of Community-based Health Insurance T here are factors, reported by researchers that influence operation of CHF in Tanzania; these factors are reported in the following table 5.1 below. Activity: Small group discussion What are the advantages and disadvantages of Community-based health insurance? 12 Advantages of CHI Advantages (strengths) of CHI are as follows: Provide better access to health care for low-income people or the informal sector CHI do provide additional financial resources earmarked for health Provide some protection to their members Disadvantages of CHI CHI has limited ability to raise significant resources due to low overall income of the community Limited population coverage due to: people do not understand the need for health insurance , voluntary nature of schemes, and they do not trust the managers of the scheme Sustainability is questionable for most CHIs due to small size of the pool(population coverage ), which makes many community based health insurance schemes vulnerable to failure Voluntary community health insurances are liable to risks related to adverse selection(individuals are able to purchase insurance at rates that are below actuarially fair rates and cream skimming (seek to enroll only so called good risks and avoid enrolling customers whose profile suggests that they are unhealthy with chronic disease ) Key Points CHI is now promoted as an alternative financing in developing for raising financing resources for the health sector and for ensuring that people informal sector have access to health services CHI involve two main parties in health service: citizen and user of health services and an network of providers of the health service CHI has both advantages and disadvantages There are factors that constraint the performance and operation of CHI Evaluation What is community-based health insurance? List are the parties involved in CHI What are advantages and disadvantages of CHI? What are the factors that facilitate operation of CHF in Tanzania? Reference Ekman , B. (2004). Community-based health insurance in low-income countries: a systematic review of the evidence. Health policy and planning, 19(5), 249-270 Gottret , P. Schieber , G. (2006). Health financing revisited: a practioner’s guide. World Bank Green , A. (2007). An introduction to health planning for developing health systems. Oxford: Oxford University Press Kalolo , A., Gautier, L., Radermacher , R., Stoermer , M., Jahn , A., Meshack , M., & De Allegri , M. (2018). Implementation of the redesigned Community Health Fund in the Dodoma region of Tanzania: A qualitative study of views from rural communities . The International journal of health planning and

NTA Level 6 • Semester 1 • PST06105 Private Health Insurance Health Financing • Source Session/Topic 7 Full source-text version: all educational wording from the extracted learning source is retained; only presenter/tutor metadata and web-layout noise are removed, while formatting is improved for readability. PST 06105: HEALTH FINANCING Session 7: Private Health Insurance Learning Tasks At the end of this session students are expected to be able to: Define private health insurance Explain how private health insurance operates in the health sector Enumerate advantages and disadvantages private health insurance Activity: Brainstorming What is a private health insurance? 3 Private health insurances Private health insurances are voluntary and for profit prepayment schemes operated by individuals or private organizations Individual persons voluntarily subscribes to the insurance by paying the prescribed premium The premium is determined based on individual health status, individual and risk rated premium They complement coverage provided by national or social health insurances Activity: Brainstorming What parties are involved in a private health insurance? 5 Operation of Private Based Financing Operation of Private Based Financing Private health insurance, like SHI, involves three parties: citizen and users of health services , profit making and private insurance organization, and providers of health services . The arrangement of private health insurance is shown in the previous figure In private health insurance, a segment of population pays premium to privately-owned insurance organizations before they fall sick on voluntary basis. Private Insurance organizations are responsible for collection, pooling, management and using financial resources to pay or reimburse providers of health services (e.g. doctors, hospitals , and pharmacies). Providers of health services in turn use the financial resources to acquire health resources (e.g . staff, medicines, buildings, and equipment). The acquired health resources are used by health service providers to give health services to citizen when they need such services . Activity: Small group discussion What are the advantages and disadvantages of private health insurance? 8 Advantages of Private Health Insurance They generate financial resources for health services They are prepaid schemes for financing covered for enrolled members Private health insurance reduces the burden of health services provided by the state; so that the poor may get more coverage in public health services Disadvantages of Private Health Insurance They pools risk based on individual risks (premium based on individual risks)experiential or risk rating There are significant administrative costs in relation to population coverage (size) of the insurances They tend to be curative oriented There are may be difficulties in controlling costs Key Points Private health insurances are now providing health insurance to people not covered by community or social health insurance in Tanzania and other countries. Private health insurance involve three parties in health service: citizen and user of health services , private health insurance organization, and providers of the health service Private health insurances have both advantages and disadvantages Evaluation What is private health insurance? What are the parties involved private health insurance What are three advantages and disadvantages of private health insurance? Reference Drechsler , D., & Jutting, J. (2007). Different countries, different needs: the role of private health insurance in developing countries. Journal of Health Politics, Policy and Law , 32(3), 497-534 Folland , S., Goodman, A. C., & Stano , M. (2017). The economics of health and health care .New York: Pearson Getzen , T. E. (2013). Health economics and financing. Hoboken, NJ: Wiley. Gottret , P. Schieber , G. (2006). Health financing revisited: a practioner’s guide. World Bank Green, A. (2007). An introduction to health planning for developing health systems. Oxford: Oxford University Press Guinness , L and Wiseman V (2011). Introduction to health economics. Mainhead : Open University Press Sekhri , N., & Savedoff , W. (2005). Private health insurance: implications for developing countries . Bulletin of the World Health Organization, 83, 127-134 Tanzania . MoHSW (2014). DHM Healthcare financing module. Dar es Salaam: MoHSW WHO (2003). Mental health financing. Geneva, WHO. ← Previous TopicNext Topic →View all Health Financing topicsOpen Complete Full Notes PDF / OFFLINE NOTES Unataka kutumiwa notes hizi kupitia WhatsApp?Kwa notes zilizopangiliwa vizuri kwa kusoma offline au PDF, bonyeza kitufe hapa chini. Ujumbe wenye Level, Semester, Module na Topic utaandaliwa moja kwa moja.TUMIWA NOTES WHATSAPP WhatsApp: 255620339260

NTA Level 6 • Semester 1 • PST06105 International Health Financing Health Financing • Source Session/Topic 8 Full source-text version: all educational wording from the extracted learning source is retained; only presenter/tutor metadata and web-layout noise are removed, while formatting is improved for readability. PST 06105: HEALTH FINANCING Session 8: International Health Financing Learning Tasks At the end of this session students are expected to be able to: Define international health financing Explain how international health financing operates in the health sector Enumerate advantages and disadvantages international health financing Activity: Brainstorming What is international health financing? 3 International Health financing International health financing is a form of financing where external (or non-domestic) finances and other resources are channeled in a country to support the health sector in order to supplement and complement the government health financing in providing public health services to the general populations External funds are used to finance health service delivery Funds are obtained from external donors or development partners ( e.g. IMF , WHO , UNICEF , DANIDA, SIDA, USAID, Governments, OXFAM) Resources are mobilized in form of grants, loans or donations in form of monetary, technical assistance or in kinds (in form medicines, equipment etc.). Activity: Brainstorming What parties involved in international health financing? 5 Operation of International Health Financing International Funds mobilized from government of developed countries, international organizations , or private sector organizations to health sector of developing countries. International funds are channeled through different routes of the government: To ministries of finance through general budget to support the economy and other government projects and programmes . To support health sector through sector-wide approaches, health projects and health programmes ; e.g. some of the international funds are pooled in fund known as health basket fund, which is used to support health sector To support health activities, projects, and programmes of NGOs -international , national or local Activity: Small group discussion What are the advantages disadvantages of international health financing? 7 Advantages of International Health Financing They contribute significant amounts of financial resources for the health sector, especially in developing country health systems When used effectively , they contribute to improvement of health of the poor people They can contribute potentially to improve management and administrative processes of health sector in a recipient country through sector- wide approaches and general budget support Disadvantages of International Health Financing Finance generated through international health financing are not so stable ; they fluctuate depending on socio-economic condition or current political relations of the donor countries External finances come with conditions, may not be in line with country or organization priorities and policies When poorly coordinated, they may bring fragmentation to a health system and additional transactional costs If the government relies too much on this mode of financing health services, it may reduce innovativeness in seeking and allocating adequate local funds to the health sector Key Points International financing constitutes the most widespread health financing mechanism in the developing countries Financial resources and other resources are channeled to ministry of finance, health sector , health programmes , health project and NGOs working in the health sector. International health financing has both advantages and disadvantages Evaluation What is international health financing? How international health financing operate in the health sector of Tanzania? What are three advantages and disadvantages of international health financing? Reference Gottret , P. Schieber , G. (2006). Health financing revisited: a practioner’s guide. World Bank Green, A. (2007). An introduction to health planning for developing health systems. Oxford: Oxford University Press Tanzania . MoHSW (2014). DHM Healthcare financing module. Dar es Salaam: MoHSW WHO (2003). Mental health financing. Geneva, WHO ← Previous TopicNext Topic →View all Health Financing topicsOpen Complete Full Notes PDF / OFFLINE NOTES Unataka kutumiwa notes hizi kupitia WhatsApp?Kwa notes zilizopangiliwa vizuri kwa kusoma offline au PDF, bonyeza kitufe hapa chini. Ujumbe wenye Level, Semester, Module na Topic utaandaliwa moja kwa moja.TUMIWA NOTES WHATSAPP WhatsApp: 255620339260

NTA Level 6 • Semester 1 • PST06105 Concepts and Principles of Financial Management Health Financing • Source Session/Topic 9 Full source-text version: all educational wording from the extracted learning source is retained; only presenter/tutor metadata and web-layout noise are removed, while formatting is improved for readability. PST 06105: HEALTH FINANCING Session 9: Concepts and Principles of Financial Management Learning Tasks At the end of this session students are expected to be able to: Describe financial management concepts Describe financial management functions Outline financial management weaknesses in the public sector Explain principles of financial management Financial Management Concepts Finance is key resource in any organization and used for acquiring human and non human resources Thus , financial management is a key management function in any organization Financial Management is a process of planning, mobilizing, allocating, and using financial resources effectively and efficiently to meet the needs or objectives of an organization Financial Management Functions and Responsibilities of Manager The following are the functions of financial management: Financial planning Mobilizing or obtaining financial resources Disbursing funds Financial reporting and risk management of financial resources An effective financial management requires a financial management system that have: Clear strategic direction, as indicated by strategic plan Defined financial process and procedures Defined roles and responsibilities within an organization Effective information base Financial Management Functions and Responsibilities of Manager An effective financial management requires a financial management system that have: Technical capacities, as indicated by staff knowledge and skills Owned by the organization Health managers have the following specific responsibilities in relation to financial resources : Preparing a sound budget Monitor or control expenditure: using line item control method, using activity control method or variance analysis technique. Participate effectively during auditing process Activity: Small group discussion What are financial management weaknesses encountered in public sector? 6 Financial Management Weaknesses in Public Sector The public sector experiences a number of weaknesses related financial management; financial management weaknesses include the following: Revenue management Missing revenues earnings receipt books Failure to adequate collect revenue from various sources Failure to monitor revenue collection Cash management Bank reconciliation is not done on monthly basis Surprise cash survey is not conducted Financial Management Weaknesses in Public Sector Expenditure management Inadequately supported expenditures Missing payment vouchers Missing acknowledgement receipts from recipients of funds Expenditure charged to wrong account codes On call allowances received but not paid Payments not subjected to pre-audit Lack of proper authorization of expenditure Unspent balances for Community Health Fund Expenditure incurred contrary to CHF Operations Guidelines Outstanding claims not paid by the National Health Insurance Fund Financial Management Weaknesses in Public Sector Procurement Procurement of goods and services without tender board approval Procurement of services from unapproved suppliers Procurements made without competitive bidding Stores/goods not recorded in ledgers Goods paid for but not delivered Inadequate documentation of contracts and projects Financial Management Weaknesses in Public Sector Weaknesses in the financial management in public organizations are due to failure of managers to apply principles of financial management. Failure to apply principles of financial management may be due to poor understanding of these principles Thus , the weaknesses in financial management can be addressed by understanding and applying principles of financial management in the public sector, including health sector Principles of Financial Management Principles of financial management are guidelines or good practices that ensure that an organization uses its resources to achieve organizational goals. Financial management principles are based on the following financial controls: Control environment: consists of the actions, policies, and procedures that provide overall guidance to an organization: e.g. financial policies, procedures, organizational structure , and audit committees. Principles of Financial Management Financial management principles are based on the following financial controls: Control procedures- refer to: Segregation of duties (authorization, record keeping, and custody of assets) Proper procedures for authorizations: only authorized people should authorize expenditure Physical control over assets and records: physically control access to assets and records Adequate documents and records: keep and maintain records and documents as evidence during auditing Independent checks on performance: conducting auditing, both internal and external auditing Principles of Financial Management External auditing – auditing conducted by an external auditor- an independent individual (not employee of the organization to be audited) assigned for auditing purposes Internal auditing – conducted by an employee of an organization Auditors conduct auditing to determine independently the performance of organization on generation, development, allocation, and use of various resources in organizations Auditors give their opinions which has various meaning and implications to management and use of resources Principles of Financial Management The following are four types of auditors‟ opinions and their related meaning: Unqualified opinion: an unqualified audit opinion is issued when the financial statements of an organization has been prepared, in all material respects and in accordance with the applicable financial reporting framework. Qualified opinion: A qualified audit opinion is issued when there are material misstatements in the financial statement due to the disagreements with management or limitation of scope which is neither material nor pervasive Adverse Opinion: audit opinion shall be expressed when there evidence of misstatements , individually or in the aggregate that are both material and pervasive to the financial statements prepared by an organizations. Disclaimer Opinion: given when auditors fail to obtain audit evidence for/from opinion on financial statements of organization Key points Health professional, including pharmaceutical personnel, are now playing key role in financial management In order to play their key role in financial management, health professionals need to understand and effectively use principles of financial management in the health sector . Evaluation What is financial management? What are the functions of financial management? What are responsibilities of a health manager on financial management? State four principles of financial management Activity: Assignment Download and read the current report of Auditor and Control General of one of local governmental Authority ( Organisation ) in the country Outline common weaknesses reported by the auditor from that report 17 Reference Cammack , J. (2007). Building capacity through financial management: practical guide. London

NTA Level 6 • Semester 1 • PST06105 Health Financing – Complete Full Notes Complete educational source text in one page Completeness safeguard: this page keeps the complete educational module/source wording in one place so learning material is not lost when browsing topic by topic. Presenter/tutor metadata is intentionally excluded. PST 06105: HEALTH FINANCING Session 1: Introduction to Health Financing Learning Tasks At the end of this session students are expected to be able to : Explain the historical background of health financing Describe various concepts of health financing Historical Background of Health Financing H ealth financing has been one of the most important policy agenda nationally and internationally among health leaders and policy-makers. Health financing has risen on agenda of policy- makers due to the fact that health systems , especially developing countries, are facing what is known as a problem of financial (fiscal) sustainability. Historical Background of Health Financing Problem of financial sustainability: exists when health system or government is unable to meet its obligations due to its inability or unwillingness to generate sufficient revenue to meet them . Historical Background of Health Financing Key symptoms of the problem of financial sustainability: ( World Bank, 1987, 1993): Misallocation and insufficient spending on cost-effective health interventions needed by the population: public money was/is spent on health interventions of low cost effectiveness Internal inefficiency: much of the money spent on health is wasted: brand-name pharmaceuticals are purchased instead of generic drugs, health workers are badly deployed and supervised, and hospital beds are underutilized. Historical Background of Health Financing Key symptoms of the problem of financial sustainability: ( World Bank, 1987, 1993): Inequity in the distribution of benefits from health services: The better-off in most had and continue to have better access to health care ; the poor lack access to basic health services and receive low-quality care Difficulty in achieving or maintaining acceptable quality services within the government budget Historical Background of Health Financing As result of these problems, world bank and others proposed health sector reforms policies that were intended to improve performance of health systems; These reforms, among, other recommended that health financing should be strengthening by introducing the following: new financing mechanisms such as user fees, health insurance and other sick coverage; and improved management of public health services. Activity: Brainstorming What is the meaning of the term “health financing” and “sources of finances”? 8 Health financing is defined variously by different experts: R efers to collection of funds from various sources (e.g . government, individual, businesses, donors); pooling fund to share financial risks across larger population groups; and using them to pay for services from public and private health-care providers. (WHO, 2000) Is the process by which revenues are collected from primary and secondary sources, accumulated in fund pools and allocated to provider activities. ( Mossialos et al,2003 ), It is defined also as a process of raising financial resources to finance and pay for health services Sources of finances T he main sources of finances for health care are: Individuals , households and employees Firms , corporate entities and employers Foreign and domestic NGO‟s and charities Foreign governments, companies multilateral agencies Contribution Mechanisms The contribution mechanisms are the ways in which individuals, households, firms and governments do contribute funds to collecting agents. The main contributing mechanisms are : Direct and indirect taxes Compulsory insurance premiums Voluntary insurance premiums Out-of-pocket payment(user charges) Donations , grants and loans Medical savings accounts Importance or significance of health financing The importance or significance of health financing has been stated by WHO (2003) as follows : Adequate and sustained financing is a critical factor in the creation of a viable health system . Fair financing mechanisms allow people to access health services at the right time and prevent people against impoverishment Financing is the mechanism by which plans and policies are translated into action through the allocation of resources Importance or significance of health financing Without adequate financing, plans remain in the realm of rhetoric and good intentions With adequate financing, a resource base can be created for the operations and delivery of services, the development and deployment of a trained workforce and the required infrastructure and technology Financing is a fundamental building block on which the other critical aspects (services, human resources, medicines and equipment, health information and leadership and management) of the health system rest Also, financing is a powerful tool with which policy-makers can develop and shape health services and their impact in improving health of the population Key points Health financing is an important topic and sub-component of health system that facilitate delivery of health service and improvement of health of the population There are number of concepts that need to be understood for better understanding of health financing Evaluation What is the meaning of the following terms h ealth financing, health financing functions, sources of finance, contributing mechanism, and financing option/ mechanism What are the symptoms the problem of financial sustainability? Reference Gottret , P. Schieber , G. (2006). Health financing revisited: a practioner’s guide. Washington DC , USA. World Bank Green , A. (2007). An introduction to health planning for developing countries (3rd Ed.) London : Oxford University Press. Gruen , R and Howarth , A. (2005). Financial management for health services. London: Open University . Jiyenze , M. K. (2013). Health care financing and resource allocation: handout for teaching health care financing. Arusha : CEDHA. [Notes: Unpublished] Kutzin , J (2001). A descriptive framework for country-level analysis of health care financing arrangements . Health Policy; 56, 171–204. Reference Tanzania . MoHSW (2014). DHM Healthcare financing module. Dar es Salaam: MoHSW . Mossialos , et al ( ed ) (2002). Funding health care: options for Europe. Buckingham: Open University Press. WHO (2003). Mental health financing. Geneva. Switzerland: WHO. World Bank (1987). Financing health services in developing countries: an agenda for reform . Washington, D.C: World Bank ,. World Bank (1993). World Development Report 1993: investing in health. Oxford, UK: Oxford University Press. PST