Financial Aspects

Many countries have experimented with alternative ways of paying providers of health care services. This paper illustrates different methods, suggests some of the theoretic advantages and limitations of each, and provides a general theoretical framework for evaluating alternatives. Over the last two decades, new and more sophisticated payment systems have evolved, with a broadening of units of payment and setting of payments prospectively. The authors discuss the international experience of a number of payment systems, both traditional and more recently developed, including line-item budgeting, salary, fee-for-service, per diem, case-mix adjusted per episode, global budgets and capitation.

Health care labor is central to managing and delivering health services. Because recruitment and retention policies are key issues for purchasers, gaining insights into labor-purchasing mechanisms may permit them to be addressed more effectively. This paper is intended to provide a brief introduction to health care labor purchasing and the mechanisms through which it can have an impact on the delivery of health services and on health system performance. A framework is developed to foster understanding of health labor purchasing mechanisms. [abstract]

The NGO Service Delivery Program (NSDP) developed a system ensuring better access of the health services to the poorest segment of the population, along with raising revenue by providing fee-for services to the better off population. The former strategy highlights a safety net policy for the poorest segment, who are identified by participatory rapid appraisal technique and handed out a health benefit card. The latter strategy helps the NGOs to revise their service charges according to local demand and other factors. This report analyzes this pilot effort and its drawbacks and makes recommendations based on lessons learned. [adapted from author]

This study provides evidence on the cost of providing HAART to health care workers and suggests that this strategy could reduce absenteeism and alleviate future staff shortages at moderate cost to hospitals. This is crucial, given the impending human resources crisis in health care in South Africa and the growing burden of HIV/AIDS. These cost estimates should be good indicators of the costs of extending antiretroviral therapy to health care workers in public-sector hospitals in KwaZulu-Natal. [author’s description]

There is a growing conviction among policy-makers that the availability of adequate numbers of well-trained and motivated human resources is a key determinant of health system’s capacity to achieve their health, responsiveness and fairness-improving goals. The objective of this study was to estimate the cost, effectiveness and incremental cost effectiveness ratios of various distance-education strategies for the health sector in Swaziland; and recommend the most cost-effective option. [abstract]

Intended to complement Working Together for Health: The World Health Report 2006, these policy briefs are intended to assist those who make and carry out health policy worldwide. The briefs address the following, Strengthening information and research on the health workforce: strategies for action; Investing in education for expanded capacity and lifelong learning; Making the most of the existing health workforce; Addressing the complex challenges of health worker migration; Bridging between health workers in separate public health programs; and Financing health workforce development. After describing an issue, the briefs propose ways to address it, many of which have been drawn from experience in countries. [author’s description]

There is currently much debate about the role Global Health Initiatives (GHI) should play in strengthening health systems. There is increasing realization that without more support to help countries build health system capacity, the resources mobilized by GHIs are unlikely to reach their full potential. This paper argues that health-system strengthening requires improving capacity in critical components of health systems in order to get more equitable and sustained improvement across health services and outcomes. This paper discusses these critical components, including human resource development within the broader context of health system strengthening. [adapted from author]

This cross-sectional study was carried out in four states that were selected according to geopolitical and administrative criteria to identify the effects of decentralization on health financing and governance policies in Mexico from the perspective of users and providers. The report discusses the effect of decentralization on health service providers and community involvement. Data collection was performed using in-depth interviews with health system key personnel and community leaders, consensus techniques and document analyses. [adapted from author]

NGOs that provide basic health care to the poor must become less dependent on donor support by diversifying their funding. The NGO Service Delivery Program (NSDP), a USAID-funded health care program in Bangladesh, is working with NGOs to find corporate sponsorship. [publisher’s description]

Using Tanzania as a case study, this report advocates that the only effective means of really addressing the HRH challenge inpoor countries is to begin to immediately scale up training capacity, and that approach is relatively inexpensive when compared to its long-term benefits. [adapted from author]

Ethiopia is currently one of the countries most seriously affected by HIV/AIDS, with the sixth highest number of infections in the world. This paper discusses how to combat this epidemic. As the country scales up HIV/AIDS services, increased attention is focused on identifying constraints to program expansion. One of the most important constraints is that of human resources. [from publisher’s abstract]

Developing countries that have to cope with pressures to reform their bureaucracies have to contend with increasing health worker benefits and salaries that are often intended to retain these health workers in government service. In the Philippines, national and local efforts in health have been forced to focus on guaranteeing some of these benefits, and local governments are feeling the financial limitations of their local funds. [from abstract]

Evidence from Colombia and Chile suggests that decentralization, under certain conditions and with some specific policy mechanisms, can improve equity of resource allocation. In these countries, equitable levels of per capita financial allocations at the municipal level were achieved through different forms of decentralization — the use of allocation formulae, adequate local funding choices and horizontal equity funds. Findings on equity of utilization of services were less consistent, but they did show that increased levels of funding were associated with increased utilization. This suggests that improved equity of funding over time might reduce inequities of service utilization.

This comparative study evaluates the implementation of decentralization of health systems in three Latin American countries: Chile, Bolivia, and Colombia. In terms of the relationship between decentralization and system performance in general, the findings support the conclusion that both the die-hard detractors and the fervent advocates for decentralization are wrong. Decentralization appears to be improving some indicators of equity, such as a tendency toward similar per capita expenditures for wealthier and poorer municipalities, and to be associated with increased and more equitable per capita spending on promotion and prevention.

A cautiously optimistic appraisal of the Tanzania Health Interventions Project (TEHIP) in Tanzania, which was designed to test the proposition that mortality and morbidy rates in developing countries could be significantly reduced even with modest resources if health care funding was allocated to cost-effective health interventions more in line with the prevailing local burden of disease. [from preface]

This paper combines the literature on public health, on economics of health and on economics of technological innovation to discuss the peculiarities of labour in the health care sector. The health care system has a distinctive characteristic from other economic sectors: it is the intersection between social welfare and innovation systems. The relationship between technological innovation and cost in the health care sector is surveyed. Finally, the Brazilian case is discussed as an example of a developing country. The peculiarities of labour in the health care sector suggest the need to recognize the worth of sectoral labour and to cease to treat it separately.

To inform the design and implementation of improved workforce planning systems, a review of healthcare systems and interaction between systems of service delivery and approaches to planning human resources was done in five countries: Australia, France, Germany, Sweden and the United Kingdom. These represent different welfare state regimes, and a range of health systems dominated by national taxation, local taxation and social insurance. [from executive summary]

This report presents findings from a nationwide Expenditure Tracking and Service Delivery Survey implemented in Mozambique between August and October 2002. The study focuses on the primary health care system, which is frequently the only source of health care for most Mozambicans. The report covers a broad set of issues, including institutional context, budget management, cost recovery, allocation and distribution of drugs, human resources, infrastructure and equipment, and service outputs. [from abstract]

In an effort to understand the flows of funds throughout the health system, the Government of Rwanda (GoR) conducted, for the second time, a National Health Accounts (NHA) estimation. NHA is an internationally recognized tool for measuring health expenditures in a comprehensive manner — one that includes the public, private and donor sectors. By doing so, NHA offers a financial perspective on who is paying for health care, who is managing health care funds and their allocation, and where the funds are going — by type of provider and service. In short, NHA aims to inform policymakers on resource flows for the entire health system so as to assist in making good policy decisions and averting potentially adverse ones.

Donor funds may be inadequate to support the growing demand for services provided by community-based distribution (CBD) programs. One solution may be to reduce the remuneration of CBD agents, but this approach may lower their productivity. Programs also need to consider reducing other costs, including those for supervision and training. The cost per agent visit—including costs associated with payments to agents and to supervisors and the costs of training—was calculated for three CBD programs in Tanzania. The output measure was visits in which contraceptives were provided or referrals made for family planning services.

This study estimates the personnel cost implications of implementing the newly proposed Integrated Management of Childhood Illness (IMCI) algorithm in the first level health care facilities in rural Bangladesh. Policy makers need to know the additional resource requirements for IMCI before its actual implementation so that appropriate levels and combinations of personnel and drugs can be allocated. [abstract]

The purpose of this book is to provide information about what works—specifically, the cost-effectiveness of health interventions in a variety of settings. Such information should influence the redesign of programs and the reallocation of resources, thereby helping to achieve the ultimate goal of reducing morbidity and mortality. [from foreword]

Of particular interest are Chapter 3 “Strengthening Health Systems” and Chapter 71 “Health Workers: Building and Motivating the Workforce.”

Countries in the Europe and Eurasia region are facing a significant and expanding HIV/AIDS epidemic that is largely concentrated among particularly vulnerable populations. A window of opportunity exists to respond effectively to the epidemic and to halt its spread, both within and beyond vulnerable populations. However, available evidence indicates that this opportunity is being missed. One explanation for this is that significant barriers exist within the region’s health systems that prevent rapid scale–up of effective HIV/AIDS programs.

This study seeks to examine these barriers and ways they can be overcome.

This issue of The Manager offers financial and program managers—from headquarters to the service delivery level - reasons to assess their financial management systems and a method for performing this assessment. It introduces FIMAT, the Financial Management Assessment Tool, a step-by-step process and instrument for rapidly assessing budgeting, accounting, purchasing and other financial systems. It describes how managers can use their assessment results to develop detailed action plans that can be incorporated into their organization’s annual operation plans. [from author]

Provides an overview of a new budgeting approach in Mauritania, developed by the Ministry of Health on the basis of an analysis of the health problems of poor people, their difficulties in accessing health care, and the shortcomings of the health systems in serving them. The document shows how such analysis can inform the budgeting process and reorient public expenditures in the health sector. Budgeting health services in Mauritania have shifted from a line item approach towards performance based programs with specific indicators of success identified both program and region wide. [from author

The present report deals with health financing issues in Malawi and analyzes trends in health expenditures in the 1990s, along with the prospects for improving resource mobilization, allocation and use in the health sector of that country. This review highlights the need to further prioritize the activities under the Malawi National Health Plan so that the plan will be a basis for government policy and budgetary commitments and also an instrument to marshal and orchestrate donor support to the sector. [from foreword]

This paper summarizes the key issues confronting human resources (HR) in the health sector in sub-Saharan Africa and the role that HIV/AIDS has played in exacerbating this crisis. Section I reviews the causes and consequences of this crisis. Section II focuses on the effects of the HIV/AIDS epidemic on the crisis. Section III analyzes the constraints faced by recent health initiatives in addressing HR issues. Finally, Section IV provides recommendations on how donors and other partners can address HR issues in a more intensive, sustained, and concerted manner. [summary]

An initial investment of an estimated $2.0 billion in 2006, rising to an estimated $7.7 billion annually by 2010, is needed from African governments and the collective donor community to double sub-Saharan Africa’s health workforce while increasing its effectiveness, thus making significant progress towards developing the workforces required for countries in sub-Saharan Africa to achieve national and global health goals. [author’s description]