Innovations in health care financing

Abstract

This volume contains thirteen papers prepared for the World Bank Conference on Innovations in Health Care Financing, held in Washington, D.C., on March 10−11, 1997. Together these papers provide conceptual and practical policy prescriptions for financing health care systems in developing countries. Health care financing is a serious concern for these countries: they contain 84 percent of the world's population and 93 percent of its disease burden but account for just 18 percent of its income and 11 percent of global health spending. Moreover, developing countries have the capacity to raise less than 60 percent of the revenues raised by industrial countries. With 5 percent of their gross domestic products devoted to health spending, split almost evenly between public and private sources of spending, raising and managing health sector revenues is a major challenge. The papers in this volume provide an overview of the health care financing issues that are most relevant for developing countries and presents case studies illustrating their experiences with various revenue generation and management techniques. The overview paper by George Schieber and Akiko Maeda describes demographic, epidemiological, service delivery, and health expenditure patterns for the world's industrial and developing countries, analyzes from both conceptual perspectives and real−world experiences the range of public and private revenue−raising instruments, and provides general perspectives for health financing reforms in each of the world's six developing regions. Bengt Jonsson and Philip Musgrove analyze the issues and experiences with government financing of health services in both industrial and developing countries. These issues are highlighted in Igor Sheiman's case study of recent health insurance reform in the Russian Federation. Deborah J. Chollet and Maureen Lewis discuss private health insurance as a mechanism for financing health services, emphasizing underlying characteristics of insurance markets as well as the need for regulation. Nadwa Rafeh presents an example of the evolution of private health insurance in Egypt. Two revenue−raising methods of particular importance to developing countries are user charges and informal rural risk−pooling arrangements. Paul J. Gertler and Jeffrey S. Hammer analyze user charges and review their effects on revenue raising, equity, and efficiency from conceptual, empirical, and country perspectives. Joseph Wang'ombe summarizes Sub−Saharan Africa's experience with user charges. Andrew Creese and Sara Bennett discuss the conceptual underpinnings of and real−world experiences with informal rural risk−sharing arrangements. Sirilaksana Khoman presents an example of one of these arrangements, the health card used in Thailand. How revenues are managed has important implications for the efficiency with which such revenues are used. By providing individuals with strong incentives to manage health care funds, managed competition and medical savings accounts are two recent innovations that have important demand−side effects. Alain C. Enthoven describes the basis for managed competition, discusses how managed care is a logical concomitant to managed competition, and analyzes the applicability of these methods to developing countries. Andre Cezar Medici, Juan Luis Londono, Oswaldo Coelho, and Helen Saxenian describe the experiences with managed competition and managed care in Latin America and the Caribbean. Len Nichols, Nicholas Prescott, and Kai Hong Phua discuss the conceptual and operational bases for medical savings accounts, describe real−world experiences with these accounts, and analyze the necessary conditions for implementing these accounts in developing countries. Phua also provides an in−depth analysis of Singapore's experience with medical savings accounts.