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Prospects for improving access and efficiencies in Health Delivery – BLNZ countries
www.eohbpo.co.za
Presentation: BHF Conference 2013 By Reg Magennis
To be reviewed in conjunction with BLNZ survey results
IMPROVING ACCESS, EFFICIENCY IN PRE-FUNDED HEALTH SYSTEMS
International experience
International experience: achieving access and efficiency through benefit design
• Prioritise (make trade-offs)
Match healthcare needs & resources;
Across all tiers - comprehensive approach
• Specify level of care;
• Use evidence (of cost-effectiveness, ethics, social acceptance)
• Address real needs/ expectations (actual disease profile)
• Emphasise PHC:
Use hospitals, specialists appropriately
Improve outcomes & patient satisfaction
• Update benefits regularly: for changes in disease profile, technology, resources
• Promote health lifestyles:
Early detection, prevention
Address risk factors: obesity, diabetes, hypertension, cancer
Main Source: World Health Organisation: World Development Report 2008. Primary Health Care: Now More Than Ever
International experience: improving access
• Pool funds: to increase availability, accessibility, quality of services;
• Larger pools: increase efficiency;
• Move towards universal coverage: this requires:
Economic growth
Efficient banking
Administration
Literacy & Business skills
Governance integrity
Government commitment
Culture of social solidarity
• Address breadth, depth & height of coverage (see WHO diagram- next)
Main Source: World Health Organisation: World Development Report 2008. Primary Health Care: Now More Than Ever
Theory: Expanding access through pre-paid systems
Three ways of moving towards universal cover
Expenditure on health
Reduce cost sharing
Height:Whatcostsare
covered?
Include other
services
Extend to uninsured Depth: which
Benefits Are covered?
Breadth: who is insured?
Source: World Health Organisation: World Development Report 2008. Primary Health Care: Now More Than Ever: 26.
International experience: Improving efficiency, affordability & access through provider arrangements
The following are conclusively associated with cost-inefficiency:
• Disproportionate use of hospital & specialist care;
• Fee for service (as opposed to salary, DRG, capitation);
• Perverse incentives (kick-backs, doctor dispensing for profit- etc.);
• Un-negotiated/ unregulated- tariff/ prices
• Use of un-assessed technologies (not shown to be cost-effective)
Source: Prahalad C., K. 2007. The Innovation Sandbox: To Create an impossibly low-cost, high-quality new business model, start by cultivating constraints. Strategy and Business Special Issue, Autumn 2007
International experience: Improving affordability
Innovation in India: has shown that service providers can respond innovatively to budgetary constraints without compromising quality, by applying the following principles innovatively:
• Specialization (of products, services).
• Pricing (advantages through economies of scale).
• Capital intensity (buy equipment in bulk & use full capacity).
• Talent leverage (build less costly teams: delegate complex tasks through training).
• Workflow (organise roles and work processes to optimise skills and capacity utilization)
• Customer Acquisition (link customers to services more efficiently).
• Values and Organization (adopt patient care values of quality & efficiency).
Source: Prahalad C., K. 2007. The Innovation Sandbox: To Create an impossibly low-cost, high-quality new business model, start by cultivating constraints. Strategy and Business Special Issue, Autumn 2007
International experience: Drivers of the performance of prefunded systems In general health insurance is characterized by:
Health insurance drives new technology Fee-for-service drives supplier demand
Therefore: Benefit package design & provider reimbursement play a key role in cost
Health insurance markets fail due to factors such as: • moral hazard: doctor / patient choices divert resources from real needs • provider billing arrangements (can lead to inefficient resource allocation) • risk selection (leads to risk pool regulation) • trust based relationships (can lead to over-servicing) • licensing and educational standards (creates scarcity)
A FOCUS ON ECONOMIC GROWTH AND BANKING - AS INDICATORS
Conditions for expanding access to health services in Africa
Africa: Where are we now?
Structural changes in Africa enabled significant increased labour productivity over the last decade.
Rapid urbanisation is allowing increased access to markets and it is expected that by 2030, 50% of Africans will be living in cities
Overarching theme in Africa has been the inability of economic growth to create employment to a sufficient degree.
Increasing water stress and loss of habitat and biodiversity are further areas of concern, with constrained agricultural production and food insecurity increasing.
Improvement in physical, legal and governmental infrastructure, together with the reduction of corruption, crime and unfair business practices are needed to allow for an enabling environment able to attract investment.
Intra-African trade has been lacking and will benefit greatly from these improvements.
South African trade comprise 50% of total African trade, with only 11% of this number being intra-African.
Africa: Future demographic and economic trends
The future
60
The number of people per
square kilometre (population
density) by 2050 (UN)
10%
Old age dependency ratio of
10% by 2050 (UN)
>1.8 billion
Africa’s population by 2050 (UN)
4.9%
Sub-Sahara GDP growth rate in
2015 (EIU)
Current
22
The number of people per square
kilometre (population density)
(UN)
6%
Old age dependency ratio (UN)
> 1 billion
Africa’s population (UN)
5.5%
Sub-Sahara GDP growth rate in
2011 (f) (AEO)
Source: Fasset- Global Economic Outlook May/ June 2012: www.fasset.org.za
Energy intensity
0
100
200
300
400
500
600
700
800 S
ub
-Saha
ran A
fric
a
East-
Centr
al E
uro
pe
Mid
del E
ast and
Nort
h A
fric
a
Asia
an
d A
ustr
alia
sia
Latin A
merica
Nort
h A
merica
Weste
rn E
uro
pe
World
1990 2000 2010 2015
Economic growth is closely related to growth
in energy consumption because the more
energy is used, the higher the economic
growth. However, it is possible to decouple
energy consumption and economic growth to
some extent. More efficient use of energy may
entail economic growth and a reduction in
energy use.
Source: Economist Intelligence Unit, KPMG calculations
Africa: Showing rapid economic growth
2001 - 2010 2011 – 2015 : Forecast
2001 -
2010
2011-
2015
China
9.5
Nigeria
6.8
Zambia
6.9
Tanzania
7.2
India
8.2
Congo
7.0
Vietnam
7.2
Angola
11.1
Rwanda
7.6
Cambodia
7.7
Nigeria
8.9
Kazakhstan
8.2
Ethiopia
8.4
Myanmar
10.3
China
10.5
Chad
7.9
Mozambique
7.9
Ethiopia
8.1 Mozambique
7.7
Ghana
7.0
Source: IMF World Economic Outlook, February 2012
Most of the fastest developing economies are currently in the Sub-
Saharan region
Proportion of adults banked and financially excluded
0
10
20
30
40
50
60
70
80
90
% o
f ad
ult
s
Banked Financially excluded
Banked: individuals using commercial bank products; Financially excluded: individuals using no financial products to manage
their financial lives
Barriers to banking
0 10 20 30 40 50 60
Other
Bank service charges are too high
Can not maintain the minimum balance
Have income, but insufficient balance after expenses
Insufficient or no money
Percentage
THE NEED FOR FORMAL PREFUNDED SYSTEMS
Protecting households from financial catastrophe and impoverishment
Top 5 risks faced by the poor in selected countries
Priority SA Namibia Botswana Kenya Zambia Uganda
1 S (Serious illness/
accident)
T (Theft) D (Death) N (Natural disaster)
D S
2 T D T (home) T S D
3 D S S B (basic need not
met)
T N (home contents)
4 J (job loss) J T (livestock)
L (loss of land)
T N (farm)
5 N T J J E (education expenses)
N (home)
Source: EIGHTY20, FinScope 2011
Declining Official Development Assistance (ODA) for health (OECD donor government sources)
Recipient country Distribution per capita in constant 2010 (US$)
Swaziland 59.2
Lesotho 42.0
Namibia 40.8
Botswana 37.9
Zambia 30.7
Rwanda 28.0
Haiti 23.5
Timor-Leste 21.5
Malawi 20.5
Liberia 20.4
WHO Health Statistics: 2013
Declining ODA commitments and disbursements
0
5
10
15
20
25
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Co
nst
ant
20
12
US$
Bill
ion
s
Commitments
Disbursements
Traditional sources: Declines after financial crisis in OECD countries
Possible new sources: China, Brazil, India, Gulf States
Role of enterprises and financial systems in addressing major healthcare risks- to households
Enterprises and pre-funded health systems can help people manage their medical/ health risks through four channels: 1. Help individuals manage health and safety risks directly by
providing: Health insurance; Safe work environment; Job satisfaction; Economic security.
2. Absorb risk, share risks, generate employment, mobilise health system capital
3. Improve healthcare delivery efficiency through specialization, economies of scale, and innovation
4. Reduce volatility in health consumption expenditure and ensure stable health services & supplies
Source: World Bank, Oct 30 2012. Concept Note: WORLD DEVELOPMENT REPORT 2014 ; Managing Risk for Development .
FORMALLY FUNDED ACCESS TO HEALTH SERVICES IN BLNZ COUNTRIES
Funding access to health services
Total health care expenditure per capita per annum (US$)
0
20
40
60
80
100
120
140
160
180
2007 2008 2009 2010 2011
US$
pe
r ca
pit
a p
er
ann
um
Botswana Lesotho Namibia Sub-saharan Africa
Sources: World Bank and WHO, 2013
Total Healthcare expenditure as % of GDP
0
2
4
6
8
10
12
14
2007 2008 2009 2010 2011
% o
f G
DP
Botswana Lesotho Namibia Sub-saharan Africa
Sources: World Bank and WHO, 2013
Private healthcare expenditure as % GDP
0
0.5
1
1.5
2
2.5
3
3.5
4
2007 2008 2009 2010 2011
% o
f G
DP
Botswana Lesotho Namibia Sub-saharan Africa
Sources: World Bank and WHO, 2013
Out of pocket expenditure (OOP) as % of private health expenditure
0
10
20
30
40
50
60
70
80
2007 2008 2009 2010 2011
% o
f p
riva
te h
eal
th e
xpe
nd
itu
re
Botswana Lesotho Namibia Sub-saharan Africa
Sources: World Bank and WHO, 2013
Private per capita health expenditure (at average US$ exchange rate)
Botswana Lesotho Namibia Zimbabwe
2011 169 37 121 56 (Total health spend per capita:
2001)
2010 136 34 113 na
2009 80 28 139 na
2008 77 26 125 na
WHO Health Statistics: 2013
Private per capita health spend per annum as % of total spend (average exchange rate US$)
Botswana Lesotho Namibia Zimbabwe
2011 39 26 43 na
2010 36 29 42 na
2009 28 33 50 na
2008 25 35 46 na
WHO Health Statistics: 2013
Private health insurance plans as % of private health expenditure
Botswana Lesotho Namibia Zimbabwe
2011 79.9 61.1
2010 79.9 61.1
2009 71.2 61.2
2008 72 63.6
WHO Health Statistics: 2013
DISCUSSION OF SURVEY RESULTS
BLTZ Survey (handout to be provided)
Thank You
