Health care financing for the poor in Lao PDR

Health care financing Health care financing for the poor in Lao PDRfor the poor in Lao PDR

Student: Walaiporn Student: Walaiporn PatcharanarumolPatcharanarumol

Supervisor: Prof. Anne MillsSupervisor: Prof. Anne Mills

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Outline of presentationOutline of presentation

1.1. IntroductionIntroduction2.2. User fees and protection mechanismsUser fees and protection mechanisms3.3. Lao People’s Democratic RepublicLao People’s Democratic Republic4.4. ObjectivesObjectives5.5. Conceptual framework and Conceptual framework and

MethodologyMethodology6.6. Work plan and budgetWork plan and budget

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IntroductionIntroduction

The poor and the health: policy agenda The poor and the health: policy agenda

Poverty Ill health

cause

effect

44

IntroductionIntroduction

The mitigation of impact of user fees The mitigation of impact of user fees

on access to health services by the on access to health services by the

poor poor Main focus of the study: protecting the Main focus of the study: protecting the

poor from the financial burden of user poor from the financial burden of user

fees charged for fees charged for public health care public health care

servicesservices..

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What is user fee?What is user fee?

User fees are payments made by User fees are payments made by

individuals or families at point of individuals or families at point of

service for buying health care service for buying health care

services with whatever form of services with whatever form of

charge and at whatever level of charge and at whatever level of

public health care provisionpublic health care provision

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User feesUser fees

The policy aim: The policy aim: revenue raisingrevenue raising, improving , improving

health system health system efficiencyefficiency and enhancing and enhancing

equity in accessequity in access to the health system to the health system The main source of health services The main source of health services

financing in some countriesfinancing in some countries Can be a financial barrier which leads to Can be a financial barrier which leads to

inequity in access to health care servicesinequity in access to health care services

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Protection mechanismsProtection mechanisms

FeatureFeature Direct Direct targetingtargeting

Characteristic Characteristic targetingtargeting

QualificationQualification Income levelIncome level Individual’s Individual’s characteristicscharacteristics

ExamplesExamples Poor familiesPoor families Armed forcesArmed forces

Children < 5 yrChildren < 5 yr

Pregnant Pregnant womenwomen

AdvantagesAdvantages Targets the Targets the poor directlypoor directly

Less infoLess info

Less cost of Less cost of adm.adm.

Less stigmaLess stigma

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Experiences on user fees Experiences on user fees and exemptionsand exemptions User fees improved hospital servicesUser fees improved hospital services

However, user fees represented barrier in access to However, user fees represented barrier in access to

health services, especially for the low socio-economic health services, especially for the low socio-economic

group. It created a medical poverty trap group. It created a medical poverty trap

Ineffective exemption mechanismsIneffective exemption mechanisms Inadequate fundingInadequate funding A limitation of administrative capacityA limitation of administrative capacity Insufficient informationInsufficient information StigmatizationStigmatization Staff awarenessStaff awareness

Optional mechanisms e.g., the Health Equity Fund, Optional mechanisms e.g., the Health Equity Fund,

Universal Health Care Coverage Universal Health Care Coverage

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Lao PDRLao PDR

Lao PDR: one of the Least Lao PDR: one of the Least

Developed Countries (LDCs)Developed Countries (LDCs)

5.3 million population5.3 million population

Life expectancy at birth: Life expectancy at birth:

54.3 years54.3 years

Adult literacy rate: 66.4%Adult literacy rate: 66.4%

Poverty: 32.7% of total popPoverty: 32.7% of total pop

(National poverty line = 8.5 (National poverty line = 8.5

USD/person/mo)USD/person/mo)

1010

1. Public health facilities1. Public health facilities– 533 Health centers533 Health centers

– 122 District hospitals122 District hospitals

– 13 Provincial hospitals13 Provincial hospitals

– 5 regional and 6 5 regional and 6

specialized hospitalsspecialized hospitals

– 3 Central hospitals3 Central hospitals

Health care delivery Health care delivery system in Lao PDRsystem in Lao PDR

A district hospital in Savannakhet Province

2. Private sector2. Private sector– 1990 licensed pharmacies and 261 private clinics1990 licensed pharmacies and 261 private clinics

– No private hospitalNo private hospital

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Health care financing in Lao Health care financing in Lao PDRPDR

Total health expenditure: 3% of GDP, 12 USD per Total health expenditure: 3% of GDP, 12 USD per

capita capita

Household OOP: 58% of total health expenditureHousehold OOP: 58% of total health expenditure

1/3 of OOP was spent on user fees in public providers 1/3 of OOP was spent on user fees in public providers

No national health insurance schemeNo national health insurance scheme– Government employee scheme: 16% of total pop Government employee scheme: 16% of total pop

– Social health insurance: <1% of total popSocial health insurance: <1% of total pop

– Community based health insurance: 0.2% of total pop (pilot)Community based health insurance: 0.2% of total pop (pilot)

– Most people has no health insurance and they are directly Most people has no health insurance and they are directly

faced with user fees at point of service.faced with user fees at point of service.

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User fees and exemptions User fees and exemptions in Lao PDRin Lao PDR

Decree 52 on Medical Services and Guide of Decree 52 on Medical Services and Guide of

the Public Health Minister, 1995the Public Health Minister, 1995– Cost recovery in hospital was introduced to Cost recovery in hospital was introduced to

generate revenue generate revenue

– School children and students, monks and poor School children and students, monks and poor

people are exempted from payingpeople are exempted from paying

– Hospitals are allowed to keep up to 80% of their Hospitals are allowed to keep up to 80% of their

revenues from user charges (20% of revenue from revenues from user charges (20% of revenue from

user charges goes to local government)user charges goes to local government)

1313

User fees and exemptions User fees and exemptions in Lao PDRin Lao PDR

User charges:User charges:– Drugs at cost plus 25% margin Drugs at cost plus 25% margin

– Other services such as laboratory, radiology, Other services such as laboratory, radiology,

admission and surgery with a fixed fee schedule.admission and surgery with a fixed fee schedule.

Exemption mechanism is not functioning: the Exemption mechanism is not functioning: the

poor lack knowledge and believe that poor lack knowledge and believe that

exemption is unrealisticexemption is unrealistic

Vientiane Time: “people do not come to the Vientiane Time: “people do not come to the

hospital when they have no money unless hospital when they have no money unless

they have a serious health problem”they have a serious health problem”

1414

What do we know?What do we know?

What’s next?What’s next?

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Gap of knowledgeGap of knowledge

No clear evidence whether exemption influences the poor’s No clear evidence whether exemption influences the poor’s

coping strategies or not. Most studies haven’t looked atcoping strategies or not. Most studies haven’t looked at

demand sidedemand side

– Why households do / do not take up exemptions.Why households do / do not take up exemptions.

– Which factors might encourage the poor to take up exemptions? Which factors might encourage the poor to take up exemptions?

There has been little exploration of provider motivations to There has been little exploration of provider motivations to

grant exemptions.grant exemptions. Little research has been conducted with a comprehensive Little research has been conducted with a comprehensive

view from view from households, health care providers and policy households, health care providers and policy

makersmakers

No comprehensive analysis inNo comprehensive analysis in Lao PDRLao PDR

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ObjectivesObjectives

1.1. To assess the perceptions and To assess the perceptions and preferences of preferences of national policy makersnational policy makers on on fee exemption policy and fee exemption policy and implementation. implementation.

2.2. To assess To assess public health care providers’public health care providers’ behaviour and attitudes on exemption behaviour and attitudes on exemption mechanismsmechanisms

3.3. To To analyze barriers of access to public analyze barriers of access to public health care services, utilization patterns health care services, utilization patterns and and household illnesshousehold illness costs by socio- costs by socio-economic group.economic group.

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Objectives Objectives (continued)(continued)

4.4. To assess To assess the strategiesthe strategies households use households use to cope with medical bills with an to cope with medical bills with an emphasis on taking up the exemption emphasis on taking up the exemption mechanism.mechanism.

5.5. To analyse the financial implications of To analyse the financial implications of alternative protection mechanismsalternative protection mechanisms..

6.6. To identify policy implications for pro-To identify policy implications for pro-poor financing and provide poor financing and provide policy policy recommendationsrecommendations on improved ways of on improved ways of protecting the poor.protecting the poor.

Conceptual Framework

6

Government (Policy maker perspective)

Health system(Supply-side perspective)

Household/community(Demand-side perspective)

Illness

Impact on household

budget

Public health care expenditure implication

Policy options for protecting the poor

Utilization patternPublic Health care financing

Cost of Illness

Public health care providers- Health Centre- District Hospital- Provincial Hospital

Policies on health care financing

and exemption

policy

Coping strategies for

treatment cost of illness

Exemption mechanism

Demand-side design and implementation

Supply-side design and implementation

Policy design and

implementation

Take up?

Barriers on access to

health care services

Policy recommendation

Treatment seeking pattern

Government (Policy maker perspective)

Health system(Supply-side perspective)

Household/community(Demand-side perspective)

1919

Study settingStudy setting

Savannakhet Province

National Growth and National Growth and

Poverty Eradication Poverty Eradication

Strategy (NGPES), Strategy (NGPES),

Lao PDR 2004Lao PDR 2004

Totally 142 districts Totally 142 districts

are classified into are classified into

three groupsthree groups Very poorVery poor

PoorPoor

Non poor Non poor

2020

Study settingStudy setting

Savannakhet Province

Savannakhet Savannakhet ProvinceProvince

Very poor or poor Very poor or poor districtsdistricts

Why Savannakhet Why Savannakhet

Province? Province? – SafetySafety

– Possible to travelPossible to travel

– No dialect problemNo dialect problem

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MethodologyMethodology

Supply-side perspectiveSupply-side perspective

1. National policy makers (qualitative method)1. National policy makers (qualitative method)

2. Providers (quantitative and qualitative 2. Providers (quantitative and qualitative

methods)methods)

Demand-side perspectiveDemand-side perspective

3. Households (quantitative and qualitative 3. Households (quantitative and qualitative

methods)methods)

SynthesisSynthesis

4. Financial modeling4. Financial modeling

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The first sub-studyThe first sub-study: : national policy makers national policy makers

ObjectivesObjectives– Existing exemption policy (funding, design, Existing exemption policy (funding, design,

implementation)implementation)– Attitudes on user charges and exemption Attitudes on user charges and exemption

policypolicy– Policy options for protecting the poorPolicy options for protecting the poor

ToolTool– Key informant interviews using semi-Key informant interviews using semi-

structured Q’nairestructured Q’naire

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The first sub-studyThe first sub-study: : national policy makers national policy makers

VariablesVariables (examples) (examples) The purpose of user feesThe purpose of user fees

Who controls the fee policy?Who controls the fee policy?

Existence and clarity of national policy on exemption, Existence and clarity of national policy on exemption, resource, benefit packageresource, benefit package

Who decides means testing? What criteria are used for Who decides means testing? What criteria are used for means testing?means testing?

Relationship between criteria and national poverty criteriaRelationship between criteria and national poverty criteria

Responsiveness of eligibility criteria to local circumstancesResponsiveness of eligibility criteria to local circumstances

Effective exemption mechanism, how to finance (tax, pre-Effective exemption mechanism, how to finance (tax, pre-payment), which option is feasible, not feasible, who and payment), which option is feasible, not feasible, who and what package will be protected, priority settingwhat package will be protected, priority setting

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The second sub-study: The second sub-study: public health care providerspublic health care providers

Both quantitative and qualitative methods will be applied to obtain all important information from all levels of public health care providers.

Quantitative data: financial data, revenue from user fee, exemption (+/- debt)

Qualitative data: attitude and practice on user fee and exemption, factor affecting exemption in practice

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The second sub-study: The second sub-study: public health care providerspublic health care providers

Health care facilities Site of study for quantitative method

Tools for qualitative

method

Savannakhet provincial hospital

Provincial hospital KI interviewOne FGD

All district hospitals (15 DH)

Provincial health office

-

Four district hospitals 4 DH (2 high and 2 low level of exemptions in very poor or poor district)

4 DHKI interviewOne FGD

Some health centers Some health centers in 1 high and 1 low level of exemption with less leakage

One FGD or KI interview for each health center

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The third sub-study: The third sub-study: household sidehousehold side

Three methods are applied to Three methods are applied to

obtain information from obtain information from

household sidehousehold side

– Analysis of national surveyAnalysis of national survey

– Rapid rural appraisalRapid rural appraisal

– Household case studiesHousehold case studies

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Analysis of national surveyAnalysis of national survey

Objectives Objectives – To quantify household members’ To quantify household members’

information on morbidity rate, use of information on morbidity rate, use of health services, cost of treatment and health services, cost of treatment and transportation cost by socio-economic transportation cost by socio-economic groupgroup

– To determine cost of treatment as % of To determine cost of treatment as % of household income or expenditurehousehold income or expenditure

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Rapid rural appraisal (RRA)Rapid rural appraisal (RRA)– It is aimed at exploratory researchIt is aimed at exploratory research

to generate baseline datato generate baseline data to handle complicated information setsto handle complicated information sets to rank lists of items such as foods and to rank lists of items such as foods and to understand variation and complexity to understand variation and complexity

within field settings within field settings

(Seaman, Clarke et al. 2000)(Seaman, Clarke et al. 2000)

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Rapid rural appraisal (RRA)Rapid rural appraisal (RRA)– It emphasizes the use of It emphasizes the use of

existing dataexisting data interaction with local residents andinteraction with local residents and a judicious combination of qualitative methods. a judicious combination of qualitative methods.

– ToolsTools semi-structured key informant interviewssemi-structured key informant interviews focus group discussionsfocus group discussions supplemented by observation, photographs, and a supplemented by observation, photographs, and a

preliminary review of secondary data. preliminary review of secondary data. – Various techniques e.g., social mapping, Various techniques e.g., social mapping,

wealth ranking with card sorting, and wealth ranking with card sorting, and preference rankingpreference ranking

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Household case studies (by in-depth interview)Household case studies (by in-depth interview)

ObjectivesObjectives– To measure costs of treatment in the hospital To measure costs of treatment in the hospital

paid by the householdpaid by the household– To explore coping strategies used by the To explore coping strategies used by the

household to deal with financial costs of illnesshousehold to deal with financial costs of illness– To explore experience and probe attitudes of To explore experience and probe attitudes of

households on exemptionshouseholds on exemptions– To investigate other barriers of access to To investigate other barriers of access to

health care serviceshealth care services

3131


Household case studies (by in-depth interview)Household case studies (by in-depth interview)

Two selected districts form the second sub-study

High level of exemption

Low level of exemption

Poor household Poor household

1. Non-use DH and PH* 3 3

2. Use DH

2.1 Admission 3 3

2.2 Chronic illness 3 3

2.3 Acute care > 2 episode

3 3

Total 12 12DH = district hospital, PH = provincial hospital* for example death (from disease) at home, giving birth at home

without birth attendance

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The fourth sub-study: The fourth sub-study: financial modellingfinancial modelling

ObjectiveObjective– To analyze financial implications for health care To analyze financial implications for health care

providers’ budgets of various options for protection providers’ budgets of various options for protection mechanismsmechanisms

Data/information neededData/information needed– Coverage data:Coverage data: size and structure of entitled population size and structure of entitled population

by protection mechanismby protection mechanism

– Utilization dataUtilization data: pattern and intensity of the utilization: pattern and intensity of the utilization

– Benefit package and amount of benefit data:Benefit package and amount of benefit data: over a over a certain period of time.certain period of time.

– Expenditure and revenue dataExpenditure and revenue data

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The fourth sub-study: The fourth sub-study: financial modellingfinancial modelling

Possible dummy tablePossible dummy table

Status quo Scenario I Scenario II Scenario III Scenario…

A. Coverage data All poor All poor For all

B. Utilization data

C. Benefit package and amount of benefit

OP, IP and P&P

IP and P&P OP, IP and P&P

D. Expenditure of DHS

E. Revenue of DHS

E1. Government subsidy

E2. Revenue from user fees

E3. Other revenue

S X Y Z

Financial gap S – X S – Y S – Z

Diagram of samples and Diagram of samples and methodsmethods

National level MOH and NIPH

Provincial level One provincial hospital

District levelin the

province

All district hospitals

In-depth interview

In-depth interview

Village level in the 2 districts

Some health centers

12 households for case study

Some health centers

KI interview, FDG and financial data collection

Exemption level

Less leakage

4 district hospitals (low and high exemptions)

12 households for case study

1 district hospital with low exemptions

1 district hospital with high exemption


Financial data collection


KI interview

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CollaborationCollaboration

National Institute of Public National Institute of Public Health, Lao PDRHealth, Lao PDR

Provincial Health Department: Provincial Health Department: Savannakhet ProvinceSavannakhet Province

Savannakhet Provincial HospitalSavannakhet Provincial Hospital District Health Office (two District Health Office (two

districts)districts)

3737

Work plan and budgetWork plan and budget

Duration of fieldwork: 10 monthsDuration of fieldwork: 10 months

from Oct 05 - July 06from Oct 05 - July 06 Total budget requirement for the Total budget requirement for the

fieldwork ~ 900,000 baht fieldwork ~ 900,000 baht All costs are covered by Dorothy All costs are covered by Dorothy

Hodgkin Postgraduate Award Hodgkin Postgraduate Award 2004.2004.

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AcknowledgementAcknowledgement

To Prof. Anne Mills for her intellectual To Prof. Anne Mills for her intellectual

guidance and continuing supervision.guidance and continuing supervision.

To advisory committees, Dr. Steve Russell To advisory committees, Dr. Steve Russell

and Dr. Catherine Goodman, for their and Dr. Catherine Goodman, for their

supports and suggestionssupports and suggestions

To DHPA for financial support of my PhD To DHPA for financial support of my PhD

studiesstudies

To IHPP-ThailandTo IHPP-Thailand

Thank you for your Thank you for your attentionattention

Documents

Health care financing for the poor in Lao PDR