Setting objectives and identifying gaps and barriers

42 Universal Health Protection Table 4.1. Pros and cons of key financing mechanisms Tax-based health protection: National health systems Pros Cons ● Risks are pooled for the whole population ● Risks of unstable funding and often underfunding due to competing public expenditure ● Potential for administrative efficiency and cost control ● Inefficient due to lack of incentives and effective supervision ● Redistributes high and low risk and high- and low- income groups in the population covered Contribution-based social health insurance Pros Cons ● Generates stable revenues ● Poor are excluded unless subsidized ● Often strong support from the population ● Provides access to a broad package of services ● Complex to manage governance and accountability may be problematic ● Involvement of social partners ● Can lead to cost escalation unless effective contracting mechanisms are in place ● Redistributes between high and low risk and high- and low- income groups in the population covered Premium-based community-based health insurance Pros Cons ● Can reach out to workers in the informal economy ● Poor may be excluded unless subsidized ● Can reach the close-to-poor segments of the population ● May be financially vulnerable if not supported by national subsidies ● Coverage usually only extended to a small percentage of the population ● Strong incentive to adverse selection ● May be associated with lack of professionalism in governance and administration Premium-based private health insurance Pros Cons ● Preferable to out-of-pocket expenditure ● High administrative costs ● Increases financial protection and access to health services for those able to pay ● Ineffective in reducing cost pressures on public health systems ● Encourages better quality and cost- efficiency ● Inequitable without subsidized premiums or regulated insurance content and price ● Encourages better quality and cost-efficiency ● Requires administrative and financial infrastructure and capacity Source: ILO, 2013a. Universal Health Protection 43 Should a mix of financing mechanisms be sought, synergies might be created to achieve redistributive effects and address disadvantages associated with private expenditure. Administrative and governance linkages between the various schemes and systems can have the potential to enhance efficiency by sharing of management functions, mutual registration support, and further coordination regarding the collection of contributionspremiums, auditing and control, contracting of providers and information processing. Revenues that have been collected for health protection purposes should not be incorporated into general government budgets, but instead be accumulated as earmarked contributions in individual funds. This ensures that contributions are used solely for health protection coverage and access to the defined benefits. Fiscal space and additional funds needed for extending health protection might be created and generated by increasing the efficiency of resource utilization, strengthening institutional effectiveness and efficiency, or enforcement, among others Key aspect 4.5. Generally, countries should be in a position to use national resources to finance health protection. However, if national resources are insufficient to implement the basic guarantees incorporated in social protection floors, countries may seek international cooperation and support complementary to their own efforts.

4.2.3. Designing and costing essential health-care packages EHCPs

Designing EHCPs The design of EHCPs cannot be identical for each country, given the differences in demographic, epidemiological, political and socio-economic characteristics. Priorities, needs and capacities define a country’s essential basket of care. Resource-poor countries might emphasize primary health-care coverage, while other countries add specific treatments for less frequent diseases. In any case, establishing an EHCP is an exercise that requires careful considerations of priorities, trade-offs, and defining what “essential” services entail for the population. By definition, an EHCP consists of a set of interventions – usually a combination of in- and out-patient services, including public health and clinical services. It guarantees a basic level of health care for every citizen in a country. However, it cannot meet all needs of the population, particularly not those with specialized diseases that are not accounted for in the EHCP. As resources are often scarce, an emphasis on cost-effective interventions is generally found to ensure a maximum health gain with the funds, resources and personnel available. In the process of determining the composition of the benefit package, trade-offs between Key aspect 4.5 Options for increasing fiscal space while ensuring sustainability of funding - Using public resources more efficiently - Strengthening efficiency in public institutions and service delivery - Reallocating the government budget - Putting greater efforts into tax and contribution collection and the prevention of non-compliance - Governing funds more effectively - Introducing new sources of funding for the national health budget