Health financing policy, medicines and universal health coverage

TBS Seminar on Essential Medicines and

Health ProductsGeneva, 29 October 2013

Matthew Jowett, PhDSenior Health Financing Specialist

Dept. Health Systems Governance & Financing WHO Geneva

29th October 2013

Health financing policy, medicines and universal health coverage

TBS Seminar on Essential Medicines and Health Products



Universal health coverage goals

Three dimensions interlinked

Evidence from European Region

Instruments in support of UHC



Universal health coverage goalsEquity in service

use(reduce gap between need and utilization)

Quality of services(sufficient to improve

health)

Financial protection(no-one becomes poor as a result of paying

for care)



3 dimensions of health care coverage

Equity in service useQuality



Moldova 2007Population enrolment in national health insurance scheme



XXXXXXXX

- Formal sector workers (salaried)- Civil servants and private sector- Mandatory contributions (payroll tax)

- Informal sector / non-wage- Below the official poverty line- Fully subsidized insurance contributions shared between

local and national government

- Informal sector / non-salaried- Above the official poverty line- Voluntary contributions with no subsidy



.

<0.51

23

45

67

89

1011

Per

cent

age

of h

ouse

hold

s w

ith c

atas

troph

ic h

ealth

exp

endi

ture

0 10 20 30 40 50 60 70 80 90Out-of-pocket payments as a percentage of total health expenditure

Low Low-middle Upper-middle High

Catastrophic health expenditure and out-of-pocket payments by country income

Financial coverage dimension



Insurance effect? Moldova…..





Georgia - outpatient medicines drives OOPs



More (public) money for healthPublic spending crowds displaces out-of-pocket payments

More health for the money……Ref: World Health Report 2010, Chapter 4

Medicines: under-use of generics and higher than necessary prices

Medicines: use of sub-standard and counterfeit medicines

Medicines: in appropriate and ineffective use

Services: inappropriate hospital size (low use of infrastructure)

Services: medical errors and sub-optimal quality of care

Services: inappropriate hospital admissions and length of stay

Services & products: oversupply and overuse of equipment, investigations and procedures

Health workers: inappropriate or costly staff mix, unmotivated workers

Interventions: inefficient mix / inappropriate level of strategies

Leakages: waste, corruption, fraud



Estimated average (median) retail mark-ups: Georgia and selected EU countries

102%

35%

46%

27%

49%

32%

0%

20%

40%

60%

80%

100%

120%

Georgia Czech Rep. Greece Hungary Italy Poland

% m

argi

n

CountrySource: CIF/WB survey and OBIG

EU price source: OBIG/PPRI



Affordability of standard treatments as % of minimum subsistence allowance

24% 22%

4%

61%

12%7%

2%

13%

0%

10%

20%

30%

40%

50%

60%

70%

Peptic ulcer ARI Hypertension Arthritis

Brand

Generic



Portugal - May 2011

• Set the maximum price of the first generic introduced in the market to 60% of the branded product with similar active substance; revise reference-pricing system based on international prices

Pricing and reimbursement of pharmaceuticals

• Electronic prescription for medicines & diagnostic covered by public reimbursement compulsory for physicians in public and private sector; improve monitoring system of prescription and set in place a systematic assessment by individual doctor in terms of volume and value; induce physicians at all levels of the system, public & private, to prescribe generic medicines & the less costly available branded product; establish clear rules for the prescription & complementary diagnostic exams (prescription guidelines for physicians); remove entry barriers for generic medicines.

Prescription and monitoring

prescription• Change the calculation of profit margin into a regressive mark-up and a

flat fee for wholesale companies and pharmacies; ensures a reduction in public spending and encourage the sales of less expensive pharmaceuticals; lower profits will contribute at least 50M€ to the reduction in public expense with drugs distribution. If this does not produce the expected savings in the distribution profits, introduce a pay-back scheme.

Pharmacies sector

• Set up centralized procurement system for purchase of medical goods, to reduce costs and waste; finalize coding system and common registry for medical supplies; take measures to increase competition among private providers and reduce by at least 10% overall NHS spending with private providers delivering diagnostic and therapeutical services by end 2011 and by an additional 10% by end 2012; introduce regular revision of fee s paid to private providers to reduce cost of more mature diagnostic & therapeutical services; assess compliance with European competition rules.

Centralized purchasing and

procurement



Some instruments to support UHC

Spend on cost-effective public health interventions

Better mix, distribution, capacity of

HRH

Targeted incentives to those using &

delivering priority services

Ensure health

financing as “pooled” as

possible



Documents

Health financing policy, medicines and universal health coverage