60 Years of WHO SEARO:  

Road to Universal Coverage in SEAR Countries 

Hasbullah Thabrany1

Introduction  When the World Health Organization was established in 1948, the World was

confronting with communicable diseases and attention primarily was given to eradicate chose diseases. Funding for developing vaccines, cutting modes of contacts, and treating the diseases was mainly supported by the government of member countries. However, the last half of the twentieth century non communicable diseases have become more prevalent once a country becomes stable and the economy was growing. Treating those mainly behavioral diseases has becoming more and more expensive. Attention to financing issues then was growing, mainly in the last two decades of the 20th century. The World Health Report 2000 addressed the increase of global health spending from 3% of world GDP in 1948 to 7.9% in 1997 by analyzing the role of financing on the overall health system performance (WHR 2000)1. In 2001, the figure already jumped to 9% of the world GDP or about US$3.059 trillion (Schieber, 2007)2 and in 2005 the world spent US$ 4.4 Trillion (WHO, 08)3, about US$ 2 Trillion or spent by the USA (Catlin, et al, 2006).4 The dramatic increase in health spending in the world has driven policy makers to look for health financing arrangements which ensure access to health care for everyone. The debates have been not only in finding appropriate health care financing method, but there include the disparity of health spending across countries. Schieber (2007) cited from Mathers et al. addressed the disparity of health sending where only 12 percent of the world health financing was spent in low and middle income countries which account for 84 percent of the global population and 92 percent of the global disease burden.

The disparity of health care financing among developed and developing countries has been and will continue to be the hot issues for the next decades. Differences in costs of providing medical care and scarcity of the people in developed countries to do nursing for the ageing population have attracts health human resources from developing countries. Brain drains of high skilled health professionals from developing to developed countries, for economic reasons, are inevitable. Highly skilled medical and

1 Professor of Health Economics and Policy, School of Public Health, University of Indonesia,

Jakarta, Indonesia. Contact: hasbullah.thabrany@ui.edu

Every year, approximately 44

million households worldwide, or more

than 150 million individuals, face

catastrophic health-care expenditures; of

these, about 25 million households containing more than 100 million

people are pushed into poverty by these costs. (Carrin, Evans,

and Xu, 2007)

nursing professionals are more and more attracted to go to developed countries for better pays. This trend creates more complex problems in addressing equity across countries, creating shortage of highly skilled health personnel. Yet, health professionals in developing countries are trying to follow implementing expensive new technologies, partly induced by suppliers of high tech of medical technologies.

Expansions of medical technologies to developing countries coupled with fast growing ageing population in developing countries have pushed increasing costs of medical care. For some of the people in developing countries, the demand for the new high-tech medical and hospital services are growing. Medical professionals and investors have seen this trend as promising. Indeed, businesses in medical services using high-tech medical technologies are one of the most profitable enterprises. Therefore, more and more investors will enter this market in developing countries such as in SEAR countries. These investors, from domestics and international, are concentrating in big cities taking advantages of asymmetric of information. People in big cities and in high income brackets will have high demand for ‘perceived high quality” and expensive health care. The external effects to health care facilities in small town with relatively less affluence people are unstoppable, resulting in higher burden of health care. Unfortunately, the health care financing systems in developing countries have not ready to confront such fast growing intrusions of high technologies, often good only for diagnostics, which lead to more expensive therapies. Only those who are rich will be able to afford while the poor may be left untreated or they are pushed into deeper poverty. Carrin et al. (2007) reported that annually more than 100 million are pushed into poverty worldwide.5 Without systematic and serious efforts to establish fairness in health care financing, the goal of reducing poverty in the world, as stated in MDG, will be achieved by 2015. The biggest risks will be occurring in South East Asian and African Regions. Countries in those regions have spent very low on health care. In SEAR countries, only Thailand and Maldives spent more than US$ 100 per capita per year in 2005. Other countries on average spent less than US$100 at current exchange rates in 2005.6

The Concept of and the Current Situation of Health Care Finacing in SEAR Countries 

Health care financing must be viewed from the perspective of the overall health care

financing and delivery system. Financing is an insturment to achieve health system goals of a country. Mainly, two major important elements are discussed in formulating the concept of health care financing. In those NHS type country, people are automatically covered by the national health service system. Therefore, people have no expose to uncertainty in fulfilling their medical needs, once they suffer from an illness or injury.However, in those countries where health care is not free, people are facing uncertainty in financing health care they need. They may accumulate saving to purchase health care, including medicines and necessary medical supplies; yet, they may still face uncertainties. Normally, people living in countries where they have to purchase or pay user charges in receiving health care, the charges or prices are set on fee for service basis. The amount of money needed to meet medical needs is not determined in advance. In this situation, saving will not be adequate for a household to meet the medical needs of the household members. In this condition, health insurance becomes the viable option.

There are many ways to finance and to deliver health care to the people. The traditional way of financing is self-financing in which every individual or family finance his/her own health care needs out of his/her pocket. Traditional market for health care

depends haevily on this mechanism. This mechanism poses high uncertainty to a family due to uncertain events and outcome of health care services. Wihtout any assistance from other families or communities a sick individual cannot recover from a serious sicknes that cost significantly high. The traditional and primordial sharing or solidarity mechanism grow instinctually by giving donations or charity or ‘sedeqah’ to the sick when he or she needs fiancial assistance. However this mechanism cannot solve adequacy problem of uncertain eventual costs of treatment. In modern society, tax funded system in which the government finance part or full health service costs reduces household burden for health care, especially when significant portion of the costs are financed by the tax income. In most countries in this region, some forms of tax funding are common. However, only Sri Lanka provides free health care in public hospital at the point of services. This system is known as National Health Service where the government assume all health care costs for the people. However, the free services are available only in public health care providers. In many countries, the tax funding system has been partial. People are still charged for services. However, the charges are normally below the market prices. When the charges apply for each services, then even within tax funding system, the uncertainty of unfulfilled medical needs may still become a big financial burden to a family. Additional or substitute of tax funding is a social health insurance mechanism in which a certain or the whole population is mandated to contribute portion of their income to finance health care. This social insurance mechanisms often integrated into social security system with other programs such as occupational injury, old age/provident fund and pension program. The tax funding and the social health insurance funding system is grouped as public sector funding. On top of that private insurance, where membership or purchase of health insurance to protect people from catastrophic financial risks is voluntary. This voluntary private health insurance schemes pose many problems when applied as primary instrument for health care financing. Financing via private health insurance, direct out of pocket by a family or by employers are grouped as private financing. Since the health care costs increasing fastly, combination of two or more funding systems is now common in all of the world, including in this region.

As introduced before, the world health care cost had increased from 3% of the world GDP in 1948 to about 9 percent of global GDP in 2001, to 11,2% in 2006 and by 2008 it may reach above 12% of the world GDP. The total per capita health care expenditure (THE) in the world had increased from USD 472 in 2000 to USD 681 in 2005, an increase of 44% over five year. Yet, the highest increases are experienced by low and lower middle income countries which constitute of 69% and 79% increase respectively. This relative world low increase has been attributable to very low share of low and lower middle income contries (LMICs) in the global health expenditure as an estimate of only 12%. But, in real life, the households in low and LMICs are facing most highest burden of health care costs with an average increase of about 15% a year while their income might not grown at the same increase. This increase of reported expenditures reflect higher health care costs in low and LMICs. Most countries in SEAR countries are most likely to face those high burden of inrease health care costs. The poor of the poor countries might be suffered the most. As the data indicate that the growth of total per capita expenditure in low income countries was 69% between 2000 and 2005, however, the government per capita budget inreased only 40% for the same period. The difference of 29% increase may be presumabley borned by the household in low income countries. In the mean time, much of the increase in richer countries, inlucing LIMCs have been borned by the governments or public funds, indicated by negative differences in Table 1

Table 1. Growth of the Total Per Capita Health Expenditures by County Income Groups, 2000-2005

Group of Countries

Per capita THE 2000 (US$)

Per capita THE 2005

(US$)Growth

2000-2005

Gov’t Exp per Capita US$

The Difference

Col a Col b Col c Col d Col e Col f =(d0e)Low Income 16 27 69% 40% 29%Lower middle income 48 86 79% 82% -3%Upper middle income 239 373 56% 63% -7%High Income 2,672 3,886 45% 49% -4%Global 472 681 44% 47% -3%

Infortion is processed from WHO data (www.who.int/whosis). Accessed July 12, 2008 Absorption of the risks of increasing health care costs, significantly much higher to the

burden of households in low income contries such as the countries in SEAR. From 2000 to 2006 the adjusted GNP per capita (in Int $) in SEAR countries grew on average 75% or 12.5% annually while per capita total health expenditures in the region grew 71% from 2000 to 2005 or 14.2% annually. Fornutately in SEAR countries, much of those increase in health expenditures had been abosorved by the governments which grew 99% in five years or almost 20% annually. The highest increase of per capita health expenditure was spent by Maldives where the government spending jumped from Int$ 271 in 2000 to Int$751 in 2005, an increase of more than 150%. In this region, total government share expenditure on health as percentage of total health expenditure increased by 7% over the five year period. The government allocation for health, as percent of total government expenditure has also increased by 18% over five year period. This is a positive sign of the governments commitment to invest in health of their people. The largest increases of the government commitment for health, measured as the government expendire on health as percent of the total government expenditure, were observed in Maldives (from 13.7% to 17.7%) and Timor-Leste (from 12.7% to 19.1%). In the mean time, the proportion of social security expenditure on health as percent of government expenditure on health had increased dramatically in this region, from 4% to 8%. The largest contributors for this increase were Indonesia (from 7.4% to 20.7% triggerred by insuring the poor) and Maldives (from 20.5% to 48.5%). Differences in clasifying social security expenditures may explain this high jump of social security expenditure.

Table 2 Per capita total expenditure on health at average exchange rate (US$) in SEAR Countries

Member

State

Per capita total expenditure on health at average exchange rate (US$)

Per capita total expenditure on health (PPP int.$)

2001 2002 2003 2004 2005 2001 2002 2003 2004 2005 Bangladesh 11 11 12 13 12 52 53 57 60 57 Bhutan 48 41 43 48 52 95 79 77 84 85 DPR Korea 17 - - - - 42 43 45 46 47 India 21 22 26 30 36 67 73 81 88 100 Indonesia 13 16 24 24 26 52 56 73 74 78 Maldives 153 151 174 208 316 374 388 461 563 878

Myanmar 3 3 4 5 4 31 38 35 36 38 Nepal 12 13 13 14 16 64 72 70 72 76 Sri Lanka 32 34 38 45 51 130 139 152 177 189 Thailand 63 76 89 90 98 228 270 307 300 323 Timor-Leste 37 33 32 34 45 105 103 101 110 145 Average SEAR Countries

37

40

46

51

66

113

119

133

146

183

Growth (% from previous year) - 7% 14% 12% 28% - 6% 11% 10% 25%

Source: WHO/WHOSIS Data. The total overall population of SEAR Countries

in 2005 was 1.7 billion, represent more a quarter of the world population, however, the total expenditure on health was only US$ 57.6 billion, represent 1.3 percent of US$ 4.4 Trillion world health expenditure. Despites the difficulties in finding accurate data, estimates from various sources can be used to analyze the present health care financing situation in SEAR countries. Table 2 indicates that in 2005, only Maldives spent consistently above US$ 100 per capita per year. Within five year periode, total health expenditues in Maldives grew about 100 percent. The second highest spending country has been Thailand that increased total per capita expenditure on health from USD 63 to USD 98 per capita per year. Large population countries with the population above 100 million, India, Indonesia, and Banglades continue to spend below USD 50 during the first five years of the new millenium. As the world acknowledged, investing in health is part of the investment in human lives. Commission on Macro Economics had affirmed that investment in human lives is a durable capital that ensure the country invested to have high return (WHO, 2000).7 However, one should compared per capita total health expenditure in international dollar (PPP$) to reflec relative expensive of living expenses in different countries. Even if it is compared in international dollars, only four countries spent above Int $ 100 in SEAR countries. Two of those countries were small ones. Only Thailand and Sri Lanka significantly spent more.

Why so many SEAR countries have been spending relatively very low? There are several factors determining low spending on health. First, the government commitment to invest in health normally very weak due to poor economic performances of the countries. Competing budget accorss many sectors, normally leads to perceived short-term benefit programs receive more allocation. Investing in health will yield in much long-term periode. Apart from low overall economy of the country in the region, two countries have strong government commitment on investing in their people health. This commitment can be measured by the proportion of government expenditure on health as percent of total government expenditure. As shown in Table 3 Maldives, Thailand, and Timor Leste have demonstrated high commitment by spending more than 10 percent of the government expenditure for health. But the strong government commitment does not automatically demonstrate high health expenditure. Timor Leste is good example in which the government spent almost 20 percent of the government total expenditure, but in real term the country spent only USD 45 per capita, because the economy of the country is still low. Thus, the proportion of government expenditure spent for health is the measure the government commitment to invest in its people health. Only when it couples with high income, the result will be significant in improving people health.

The SEAR countries contribute 25% of the

world population but the countries share of health expenditure in 2005 was only 1.3% of the world US$ 4.4 trillion health

expenditure, about US$ 2 Trillion of which was

spent by the USA.

Other than government spending, pooling mechanim of especially social health insurance play the second significant roles. Social Health Insurance (SHI) mechanim mandates people (starting to people in the formal sector and it is normally shared with employers) to contribute portion of their income to finance health care for the contributors. This is an intermediate goal in achieving universal coverage when tax instruments have not developed yet. Countries with few tax payers and low proportion of social health insurance (SHI) are unable to generate significant amount of money for health care. Therefore, reader could easily point out that total per capita health expenditure in countries with low government spending and undeveloped SHI are normally low. People in such countries are pushed to pay out of their pocket or purchase private health insurance. However, private health insurance will not be developed in countries with low income. In the end, most people in low income, low public spending, and low SHI coverage are facing high burden of health care costs. In Indonesia for example, Rubi (2006) reported that 83% of Indonesians experienced catastrophic healh expenditure when they need hospitalization.8 It is in these kind of countries, Carrin et al (2005) reported more than 150 million people annually are impoverishing to meet their medical needs.

Table 3 General government expenditure on health as% of total government expenditure 2000-2005

Member State General government expenditure on health as% of

total government expenditure 2001 2002 2003 2004 2005

Bangladesh 5.8 5.6 6.4 6.2 5.5 Bhutan 9.9 8.5 7.9 6.1 6.5 DPR Korea 6.0 6.0 6.0 6.0 6.0 India 3.3 3.2 3.1 3.1 3.5 Indonesia 3.6 4.2 4.8 4.5 5.1 Maldives 13.8 13.3 14.2 16 17.7 Myanmar 1.1 1.5 1.2 1.4 1.1 Nepal 6.6 9.4 8.2 8.7 8.4 Sri Lanka 6.3 6.6 6.9 8.2 7.8 Thailand 9 9.3 13.5 11.5 11.3 Timor-Leste 9.4 9 10.3 12.2 19.1

The Myth of “5% GDP” In many occasions and publications, often people read this sentence “WHO

recommends countries to spend 5% of it GDP for health”. I personally have been often asked about when, why, and how WHO calculates such magic number. One day, in the early 2000, when I was giving a testimony at the Indonesian Parliament, I was bombarded with so many questions regarding the sufficient level of health spending. Many officials and academicians mentioned about the need to mobilize resources to meet the WHO recommendation of 5% GDP. In Indonesia, many also translate that the 5% GDP is equivalent to 15% government budget for health. Even, WR for Indonesia at that time (Georg Petersen) asked me to show him which document of WHO recommended such magic number, because he had been hearing many times people talking about that magic number. Yet, no official WHO document or statement was found on that recommendation. What was going on? Who created that magic number? The answer then showed up when I received a paper from Gee Carrin from WHO

Head Quarter and Dr. Than Sein form WHO SEARO that there had been no official recommendation.

Than Sein et al. (2004)9 wrote that “in 1981, an indicator—the number of countries with at least 5% of GNP spent on health—was proposed for the purpose of monitoring and evaluation of the global strategy for Health-For-All by the year 2000 (HFA2000)”. No formal recommendation had been adopted of "5% of GNP spent on health". However, that level of spending was used frequently in many policy debates and, even, mentioned in some cases as "WHO recommended target".2 In SEAR countries, except Maldives, Nepal and Timor-Leste, others could not spend more than 5% of GDP on health in the first five years of the new millennium (see table 4). India seems to try to achieve that level. Coupled with high economic growth in recent years and high political commitment, India may soon has a solid foundation for improving its people’s health. Many other countries in this region have spent much less, even since the early 1990s. Many countries around the world never achieved what Than Sein called "fictitious target". A recent IMF study suggested that effective health coverage would require around 12 per cent of GNP in low-income countries in order to meet the international development goals.10 However, by 2005 only few developed countries have spent more than 10% of their GDP for health, the highest spender has been the United States. Interesting enough, the NHA data developed by WHO and member’ countries indicated that many small developing countries such as Timor-Leste has been pushed to spent more on health care, probably due to economy of scales and relative low income of the countries. While developed, large enough countries such as the United Kingdom, South Korea, and Japan have been spent remarkably below 10% of GDP with high performance health indicators. The efficient of predominantly public health care financing systems of those three countries may contribute to the efficient health care system. As it is observed in this region, Thailand and Sri Lanka that implement quite dominant tax funded systems seem to spend less yet these two countries have achieved universal coverage. How much should a country spend on health? There is no definitive answer. It depends on the country wants to achieve (Savedoff, 2003).11 It also depends on the political commitment of the government leadership in a country and the fiscal capacity of the country. However, public health professionals should advocate the government to invest sufficiently for health, because it provides high return in the long run.

Table 4 Total Expenditure on Health as % of Gross Domestic Product of SEAR Countries, 2000-2005

Member State Total expenditure on health as % of

Gross domestic product 2001 2002 2003 2004 2005

Bangladesh 3.2 3.1 3.1 3.1 2.8Bhutan 5.7 4.5 4.1 4.2 4DPR Korea 3.5 3.5 3.5 3.5 3.5India 4.6 4.8 4.8 4.9 5Indonesia 1.8 1.8 2.2 2.1 2.1Maldives 6.8 6.6 7.2 7.8 12.4Myanmar 2.1 2.3 2.2 2.2 2.2

2 For those who are interesting to find out more on this issue can read “WHO, Health for all 2000 (HFA2000)

Series No. 4, Development of indicators for monitoring and evaluation of HFA2000, and Health for all 2000 Series No.3, Global strategy for Health for All by the Year 2000) and World Health Report 2001 (WHR2001)

Nepal 5.3 6.1 5.8 5.7 5.8Sri Lanka 3.8 3.8 3.9 4.2 4.1Thailand 3.3 3.7 3.9 3.5 3.5Timor-Leste 8.6 8.5 9.2 10.3 13.7

Health Insurance: The Expected Solution  Investing the government money raised from tax revenues in developing countries is

difficult because of the competing budget and short-sighted of the decision makers. In addition, the tax systems of the SEAR countries have not been able to mobilize adequate fund to finance the government mandatory services such as health, education, and economic infrastructures. The complexity of tax collection and allocations for health services to implement the Beveridge model of National Health Service in the United Kingdom, have pushed many countries to look other options to mobilize funds to finance equitable health care (Le Grand, 2002).12 Health insurance mechanism has been selected by many countries to ensure universal and equitable health care. However, private health insurance schemes pose many problems in addressing efficiency, effectiveness and primarily equity. On the other hand, social health insurance has potentials to substitute or complement the tax funded system to ensure equity while preserving efficiency and quality of care. The concept of social health insurance has grown from practically mid 19th century where miners in Germany organized some kind of compulsory health insurance. It is agreed that Bismarck’s 1883 law was land mark for SHI development. The law was considered part of a drive from the German Government to gain workers’ support and to weaken their social and political movement. But then, the concept of SHI expanded and implemented in many developed and developing countries as a mean to establish sustainable health care financing that ensure equity.

In the last two decades of the 20th century, WHO was quite active to address financing problems and in some parts has involved in promoting various health insurance schemes such as community health insurance, health funds, and others community or non government initiatives to establish sustainable health care financing. During the early 1980s, journal and policy debates had sprout in developing some kind of Health Maintenance Organization (HMOs, a concept of integrated commercial health insurance with managing the delivery of health care to contain costs). In some part of the world, WHO also committed to assist member countries to develop health insurance. For example in Indonesia and Philippine, the concept of HMOs was promoted by the Ministry of Health, as foreseen being able to address health care financing problems. However, during the late 1990s those community based or HMOs initiatives had not proven successful in generating adequate funds which are sustainable and had significant impacts on the people health.

An extensive WHO review was made in 1998 (henceforth called WHO Study) concerning 82 non-profit health insurance schemes for people outside formal sector employment in developing countries. The study observed that very few of these schemes covered large populations or did not even cover high proportions of the eligible population. From a subset of 44 of the schemes, the median value of the percentage of the eligible population covered was 24.9%; 13 schemes had a coverage rate below 15%, and 12 schemes had a coverage rate above 50%. As discussed intensively in many health insurance papers, voluntary health insurance schemes are prone to adverse selection. Carrin et al. (2005)13 reported that in those CBHIs many people tended to sign up with the

CBHIs, at the moment of illness. It is not surprisingly that the members with high risks had been over-represented in the CBHIs. The achievements of CBHIs so far have been modest, although many CBHIs schemes still are relatively young and may need more time to develop.

However, Schieber (2007) reported that recent review of the CBHI experience found less positive results, quoting ILO study “no evidence from the documents reviewed that [CBHI schemes] positively impact health status or at least the utilization of services and financial protection for their members and/or for society at large, particularly the poor”. The review found that most CBHIs tend to be small with 70 percent of CBHIs covered less than 200 members with limited legal or de facto ownership by the community and with dependence from other health subsystems or subsidies. In Indonesia, similar experiences observed when the Ministry of Health was trying to develop HMO models of the US as a basic health insurance model for Indonesia. It completely failed despites millions of dollars had been invested to promote, provide assistance, and to train health personnel in those developing HMOs at the community, workplaces, or even business entities.

The failure of private health insurance, not only of small schemes like CBHIs, in achieving efficiency and equity has long been identified in the economic literatures. The main factors are adverse selection, small pool, and moral hazards. The WHO report of 1997 stated that a clear message from reform experiences is that greater reliance on market mechanisms requires more regulation, not less. A WHO Guidelines, for example on social health insurance not commercial (private) insurance, have been widely used and cited.14 A comprehensive review of CBHI and private health insurance schemes in Indonesia indicated that both equity and efficiency is not achievable by private health insurance (Thabrany, et al., 2002).15 In Thailand, the government had terminated the health card schemes and the subsidized community health insurance schemes by adopting the Thirty Baht Scheme (now zero Baht) (Nitayarumphong).16 In the US, predominance private health insurance leave more than 50 million people are uninsured yet the country spends more than 16% of the GDP for health or US$ 6,697 per capita per year (Catlin, 2006). The known market failure of private health insurance in creating equity and macro efficiency has led many countries in the world follow the Bismarckian Model of social health insurance as a reliable tool to mobilize funds for health care. However, once should learned that the relative small size of many sickness funds in Germany leads to less efficient and generate more complex problem in equalizing funds across sickness funds. Therefore, countries such as the Philippine, Taiwan, and Korea took revolutionary steps to integrated social health insurance schemes into a single national fund. By doing that, Taiwan and Korea have proofed that they could achieve universal coverage with relatively small portion of GDP go to health care.

However, one should note that the nature of SHI is a pooling fund to finance individual health risks, mainly to cover personal health expenditures. It may cover promotive, preveintive, curative, and rehabilitative at individual level. The SHI is not the tool for financing public health programs such as general or public health promotion, sanitation, eradication of vectors, or anti-smoking campaign. The tax funding system is still needed to finance such public health programs. A good example of surcharge tax funding system, from tobacco tax, has been demonstrated by the Thai Health Foundation.17 It provide an excellent model for SEAR member countries to adopt similar resource mobilization to finance public health programs.

The Roles of WHO in HCF  The Roles of WHO since its establishment in 1948 have been changing overtime to

reflect changing health conditions and health objectives of the world. WHO has been

consistently responding to the existing and the predicted threats over a priode of time. Those roles could be esily followed by reading World Health Reports overtime.

In 1948, WHO took over the responsibility for further development of the International Classification of Disease (ICD), which dates back to the 1850s as it was first known as the International List of Causes of Death. The ICD has become the international standard used for clinical and epidemiological purposes.18 In the early 1950s until mid 1960s, WHO played significant roles in eradicating and reducing prevalent communicable diseases, prioritizing highest case fatality rates such as yaws. By 1965, the control programs had examined 300 million people in 46 countries and reduced global disease prevalence by more than 95%. As communicable diseases had been reduced, consequently as life expectancy became longer and life styles changes non communicable diseases have become more prevalent. Yet, financing problem was still unidentified. When the first heart transplant was conducted by Christiaan Barnard in South Africa, in 1967, the world expected a new revolution in health care and human health. Yet, no one at that time paid attention to health care financing. Even the US that has been confronting with health care financing since 1980s, had not observed problem in financing. Although two years before, the US just launched it Medicare and Medicaid program under the amendment of the Social Security Act.

The world efforts to tackle health problems led by WHO continued to move furthers by intervening pre-disease occurance. In 1974, WHO expanded programs on Immunization to bring basic vaccines to all the world’s children. Success in preventing, event eradicating some communicable diseases, WHO started to move to reduce wastes in using resources for health. In 1997, the first Essential Medicines List appeared, two years after the World Health Assembly introduced the concepts of “essential drugs” and “national drug policy”.156 countries today have a national list of essential medicines. The introduction of essential drugs could be interpreted as the WHO concerns over health care financing. But the focus was not mobilizing resources, as the world health expenditure was relatively manageable. The International Conference on Primary Health Care, in Alma-Ata, Kazakhstan in 1978 set the historic goal of “Health for All” to which WHO continues to aspire universal health goals. From this point, efforts to create healthy people and healthy life for the whole world population continue to be committed by consecutive Assemblies. Health leaders of all over the world continue to pay attention to new emerging diseases such as HIV-AIDS (first found in 1983), SARS, and later avian influenza. Efforts to eradicate fatal and high burden of diseases such as polio continued to be the WHO endeavor. Despites serious efforts to improve people’s life in all over the world, yet the world demonstrated bigger gaps between the developed and developing countries.

Efforts to identify non diseases factor that significantly affecting people’s health started in 1990s. The WHR of 1995 tried to address gaps in health conditions and health resources between developed and developing countries.19 The WHR of 2000 started to ignite attention on health care financing as this report pinpointed that health financing is the most important factor in health system performance in producing people’s health.20 Debates and studies were generated to respond to the report. In SEARO, Dr. Than Sein has been instrumental in promoting equitable health care financing in SEAR Countries by having several high level consultancy and coordinating publication of implementation of social health insurance and SEAR countries. Together with WPRO, Dr. Than Sein also published SHI in selected Asia-Pacific Countries in 2005.21 The sound concept and evidence showing by many countries of the implementation of SHI to achieve universal coverage have influenced many countries to implement SHI. The World Health Assembly of 2005 adopted a resolution recommending member countries to speed up universal coverage. There are only two financing methods that could lead to universal coverage, the tax funding and SHI systems and the two financing systems must be combined to ensure universal coverage.

Lessons Learned from Several Member Countries  The proportion of households with out of pocket is a good indicator for estimating the

impact of catastrophic health expenditures. The WHO Technical Briefs Number 2, 2005 has delineated the importance of health care financing system to reduce catastrophic health care expenditures (WHO-HSF, 2005).22 In Indonesia for example, 83% of household in 2004 in which one of the household member needing hospitalization experienced catastrophic health expenditure (Rubi, 2007). Rubi’s paper on catastrohic health expenditure in Indonesia can be explained by the large portion (about 60%) of out of pocket source for health care in Indonesia. Studies on health care financing indicates that when out of pocket health expenditures comprise of more than 15% in a country, health expenditures may be more likely to impoverish households in that country due to catastrophic health care needs (HSF). Many people in SEAR countris, except in Sri Lanka and Thailand where universal coverage been achieved, will have high probability to experience catastrophic household expenditures. Therefore, as urged by WHO, all countries must move forward to achieve universal coverage.

To illustrate how a country could achieve universal coverage to protect its people from catastrophic health expenditures due to illnesses or injuries, selected country financing, mainly India, Indonesia, and Thailand are summarized. The brief descriptions are by no means actual summaries of the financing in those countries, but illustrate a range of differences in financing by combination of social health insurance systems and the tax funding systems. Detailed description of SHI implementation in Asia and Pacific can be found in the book of SHI in Selected Asia-Pacific Regions that can be downloaded from WHO site. India

India with over a billion and the inter-state variations makes universal coverage is difficult. Despite the economic growth in recent years, current government spending on health lags behind. Low-income population has also faced with increased out-of-pocket spending, in order to get access to health care. Although efforts to established social insurance have been done since the beginning of its independence, population coverage by any form of health insurance is still very low in India. The principal social security law, passed in 1948, to provide health care for the working population– particularly low-salaried state employees and their dependants. By 1954, the government has created a compulsory health insurance scheme for central government employees which known as the Central Government Health Scheme (CGHS). In addition, for civil servants, there is Employees’ State Insurance Scheme (ESIS) Various health insurance schemes cover around over 85 millions of beneficiaries with variation in the quality and benefits (WHO, 2005).23

Tax funded system is implemented partially by which people still have to pay user charges. The quality of care however, is considered poor and therefore many people choose to purchase health care from private providers with higher probability of catastrophic health care. Social health protection has not been a major political issue for some years. The opportunity to extend social health insurance coverage through mandatory systems is still limited, since salaried employees do not constitute the majority of workers. The challenge remains the huge population of the informal sector. In contrast to China, India is responsive to greater involvement of NGOs. Various interested parties are now looking at the potential of NGOs to extend coverage through promotion of health care as part of social protection schemes for the respective population, and the accelerated establishment and expansion of community-based health insurance schemes. Indonesia

Health care financing system in Indonesia has been very low; far from most people are expected. The tax funded systems by local governments provide care with various levels with various user charges. In addition, the quality of care is considered poor pushing many people to purchase health care from private providers. As the result, out of pocket remain high with 83% of those needing hospitalization are facing catastrophic health expenditures (Rubi, 2006). Although Indonesia first introduced a national compulsory social health insurance scheme for civil servants in 1968, coverage of SHI remains stable at 8% of the total population. The scheme is now managed by a state-owned company, PT Askes. The contribution is 4% of basic salary shared by employees (2%) and the government as employer (2%). The scheme covers about 14 million civil servants including their spouses and two children of less than 21 years old. In 1992, Indonesia also introduced another SHI scheme for salaried employees in the private sector, managed by PT Jamsostek. The scheme covers only less than 3 million beneficiaries, including employees, spouses, and children below 21 years (up to the third child). However, due to poor understanding of the goal of social security, the regulation allow opt out option resulting in only about 3 million beneficiaries of about 100 million eligible beneficiaries. The contribution is 3% of basic salaries for singles and 6% for married employees, paid solely by employers.

Interestingly,the Ministry of Health, through the Health Act of 1992, introduced a nationwide voluntary “Managed Care Schemes” called Jaminan Pemeliharaan Kesehatan Masyuarakat (JPKM), influenced by the US consultants. This was aimed at developing integrated financing and health care delivery as the model for CBHIs. By the end of 2002, there were 24 licensed JPKM covered small number of population. Licensing was stopped in 2003. Since the 1970s, Indonesia had also introduced many community-based risk-sharing schemes, including the nation-wide programs called, Dana Sehat (community micro-health financing schemes). The expected coverage by those small schemes had not been significant. This is consistent with findings from WHO-ILO study of CBHIs.

In 2002, the President of the Republic of Indonesia established a “Presidential Taskforce on Social Security” to expand SHI to all population. The National Social Security Law (NSSL) passed in October 2004 covers five social security programs one of which is social health insurance. The Law mandates contribution be shared and the program is administered under not for profit system. The Law also mandates the government to pay contribution for the poor and near poor, as a lesson. Once they have income above the poverty line, they have to pay from their salary/income. In 2005, the MoH launched the first nation-wide government paying contribution for 36.4 million poor. The program popularly is known as Askeskin. The number of low income then increased to 76.4 million in 2008. By introducing government paying contribution, as mandated by the NSSL, the coverage is now expanded from 9% in 2004 to nearly 50% of the population in 2008. Many administrative and technical as well as political issues emerge during the implementation of this model. The hot issue of this scheme has been mean-testing for eligibility. At the same time, political reforms by direct elections of President, governors, and mayors, more and more political leaders are now campaigning to provide “free health care” for everybody in their jurisdiction. Most of them do not care about the existence of the NSSL that was passed in 2004. In the mean time, expansion of coverage for about 30 million formal sector employees remain debated as to which carriers (Askes or Jamsostek) shall be given the task. Lack of people, professionals, academicians, and political leaders with adequate understanding of social health insurance or social security concept has led the expansion of coverage has not gone smoothly. Sri Lanka

Sri Lanka has been instrumental in SEAR countries in achieving universal coverage using the NHS/Beveridge model in which the government

Sri Lanka has demonstrated efficiency with the NHS model of financing. With only 4% GDP or 7-8% government expenditures for health, universal coverage is

achieved.

provides ‘free health care’ for everybody. The NHS model is commonly adopted in the UK and Commonwealth countries and this model has shown efficient at the macro level. However, some concern about the quality of care in which under this system, individual health personnel do not have financial incentives to provide quality of care, as measured by satisfaction of the clients. However, as long as the majority of people accept the care, there is no reason to abandon this system. In all of countries undertaking this model, the proportions of health expenditure to the country GDP have been relatively low. Yet, the related health performances measured by health indices are good. Sri Lanka has demonstrated that with relatively stable of 4% GDP or about 7-8% of the government expenditures have been devoted for health, the whole people are protected from being impoverished due to unmet health care needs. In addition, by providing “free” health care at the point of services are needed, the principle of egalitarian equity—which is universally adopted in health care—can be assured. It should be noted that the word “free” in the NHS system does not mean that no one paying. People pay taxes when they are working and earning income or making money.

Thailand

In 1978, Thailand introduced the Civil Servant’s Medical Benefit Scheme (CSMBS), to cover health care for all civil servants (including employees of state enterprises), pensioners and their dependants (parents, spouses and up to 3 children under 18 years old). The total number of retired and existing civil servants and their dependents was over six million in 2003. The source of funds is the general revenue of the government and the scheme is managed by the Ministry of Finance. The first community based health insurance (CBHI) scheme developed in Thailand was the Voluntary Health Card (VHC) project started in 1983 initiated by the Ministry of Public Health. The scheme initially covered mother and child-care in rural areas. Coverage was extended in 1994 through the involvement of local leaders, and benefits were expanded to primary health care and in-patient care in district hospitals. By the mid-1990s the VHC covered around 11 million persons. The MOPH proposed a reform from CBHI to a publicly subsidized voluntary health insurance, whereby families had to pay 500 Baht per year for their Family Card membership and government matched this.

The first compulsory social health insurance system came through the integration of health care and the social security scheme for private sector-salaried workers. Based on the Social Security Act of 1990, the government introduced national mandatory social health insurance for all private enterprises. The Social Security Organization (SSO), under the Ministry of Labor, manages the scheme. The scheme now covers over seven million employees, and also provides limited benefits for the spouses of insured workers. The financial contribution was progressive with a five-fold gap between the contribution of the highest and lowest wage earners, based on 4.5% of payroll equally shared by the employers, employees and the government. Failure to extend coverage to workers' dependents (non working spouse and dependent children) has been a major reason for the limited growth in coverage of the population through the SSO.

After almost 20 years of trying to expand coverage through CBHI, SWS, VHC, and expansion of dependents’ workers, finally Thailand used tax funding system to cover the informal sector. In October 2001, Thailand has achieved universal access to health care through a combination of social health insurance and government-funded schemes. The first form of social protection was the Social Welfare Scheme for poor and

Thailand has shown leadership in health care

financing both in addressing equity of medical care and

ensuring public health programs in SEAR countries.

low income households in 1975. By 2000, around 20 million people were covered under this scheme. The major criticism of the scheme was focused on the difficulties in means-testing for identifying the poor, due to which many of the poorest households were not effectively included.

In October 2001, Thailand’s Universal Coverage Scheme, notably known as the “30 Baht Scheme” began to the Social Welfare Scheme and the Voluntary Health Card Scheme. The program covers almost all citizens except civil servants and their dependants and those covered by the SSO. The Universal Coverage Scheme provides comprehensive health care with initially applying co-payment (a nominal fee of 30 Bahts—a little less than US$1) per each health visit or hospital admission. However, due to some delay of treatments attributable to the required copayment, the “30 Baht scheme is now “Zero Baht Scheme”. The scheme is mainly funded by general tax revenue, with an estimated budget of about 2,000 Baht (about US$ 65) per capita per year in 2008 which is paid directly to designated providers as a capitation payment.

Due to the low cost scheme, the Universal Coverage Scheme (UCS) demonstrates a long term financial sustainability and affordability by the government, which in fact applies the same approach to all beneficiaries, regardless of income. By introducing the UC Scheme, Thailand has managed to cover virtually all people. In addition, the Thai Health Foundation was established financed by 2% surcharges of tobacco tax. This Foundation takes responsibility of financing public health programs, while SSO, CSMBS, and the UCS cover individual health risks.

Lessons for Other Countries

Increasing health care across countries leads WHO to actively promote universal

coverage, especially for developing countries. Papers by Carrin et al (2005) and other health economists from various organizations strongly urge to the development of social health insurance as the option or complement for tax funded system to support universal coverage. The important of UC to prevent impoverishment of people in LICs and LMICs that is now threatening more than hundred millions of households annually. Virtually all countries that rely on pooled contributions also receive financing from government budget revenues in order to provide coverage for particular population groups, such as the poor.

Conclusion and Recommendation In its development of 60 years in the world and 50 years in South-East Asia Region,

WHO has played significant roles in ensuring that all human being in the world could achieve high health status. Initial efforts by WHO have been mainly responding to prevention, reduction, or eradication of various communicable diseases, especially those diseases with high mortality or disability producing diseases. As the health situations have become more complex, WHO roles have moved from program oriented into more system approaches. Attention to the important of systems in reducing health risks started in 1990s, in accordance with increasing portion of the world GDP dedicated to finance health care, especially in developed countries. The gaps in financing between developed and developing countries have been more prevalent since the early 1990s. The SEAR countries contribute 25% of the world population but the countries share of health expenditure in 2005 was only 1.3% of the world US$ 4.4 trillion health expenditure. The advent of medical technology, changing life styles, improvement of economy and living environments has increased non-communicable diseases and their financial consequences of higher health care costs. Coupled with the failures of public funding to ensure access to everybody, the increasing health care costs have pushed hundreds of millions of people in low income and middle income countries into new poverty, unless some health care financing mechanisms are established. The tax funded systems in especially SEAR countries

have been inadequate to ensure equity, except in Sri Lanka. Some countries such as India, Indonesia, and Thailand have been undertaking social health insurance expansion to expand health coverage to achieve universal coverage. The universal coverage is now becoming agenda of virtually all countries in the world. However, the tax funded systems and the SHI systems must be integrated or coordinated to ensure efficiency of the system. Capacity building to build up a critical mass of academicians, legal makers, decision makers, politicians, and representatives of the people must be strengthened if a country is committed to achieve universal coverage.

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