Dr. Shiyan ChaoHealth Care Conference

ArubaJune 1-3, 2015

Health System in Small Island Nations

Challenges and Options

Outline

1

•Health System in Small Island Countries

2

•Economic Analysis of a Health System

3

•Lessons learned from the Carribbean

4

•Options for improving health care

The goals of health systems

• The WHO Health System Performance Framework defines the goals of health systems as:– Improving the health of the population they serve– Responsiveness, i.e., responding to people's legitimate expectations

– Fair financing, i.e., providing financial protection against the costs of ill-health.

Responsiveness

• Defined as a measure of how well the health system responds to the legitimate expectations of the population

• An increasing challenge for all:– How to define quality of care– Necessity for some and luxury for others– Demand and expectation will increased as aging

population and development of medical technology.

Fairness in Financing

• Every member of society should pay the same share of their disposable income to cover their health costs.

• Universal access and universal coverage –– On paper – In reality

General Health Financing Functions and Objectives

Revenue collection

• Raise sufficient and sustainable revenues in an

efficient and equitable manner

Pooling• Reduce Risks• Manage these

revenues equitably and efficiently

Purchasing• Provide essential

services which improves health outcomes and provides financial protection and consumer satisfaction

8

Revenue Risk PurchasingCollection Pooling

There are Many Ways to Finance a Health SystemP

riva

teP

ub

lic

Taxes

Public Charges/Resource Sales

Mandates

Grants

Loans

PrivateInsurance

Communities

Out-of-Pocket

PublicProviders

PrivateProviders

Service Provision

GovernmentAgency

Social Insurance orSickness Funds

Private Insurance or Community-basedOrganizations

Employers

IndividualsAnd Households

Source: World Bank

Common Health Financing Models

• National Health Services System• Social Health Insurance• Private Voluntary (mandatory) Health

Insurance • Community-based health Insurance• Director purchase by consumers (user fees)

Evolution of Health Financing Systems

10

Patient Out-of-Pocket

Social Insur

Gov’t Budget

Gov’t Budget

Social Insur

Patient Out-of-Pocket

Priv. insur

Low Income Countries

Middle Income Countries

High Income Countries

National Health Service

MandatoryHealth Insurance

Private InsuranceSource: Modified from A. Maeda

CommunityFinancing

Patient Out-of-Pocket

Government Budget/MOH

Total Health Spending as a Share of GDP Relative to Income

Chile

ColombiaCosta Rica

EstoniaKyrgyzstan

Sri LankaThailand

TunisiaViet Nam

05

10

15

Tota

l Health

Spendin

g (

% G

DP

)

100 250 1000 10000 25000GDP per capita (current US$, log scale)

Source: World Development Indicators, WHO 2007Note: GDP per capita in current US$; Log scale

TOTAL HEALTH SPENDING VS INCOME

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Government expenditure on health (including external financing) already major part of government expenditure

Source: World Development Indicators (2014)

Focusing on resources allocation and purchasing

• For whom to buy• What to buy• From whom • How to pay • At what price• Implications to small nations

Common Vulnerabilities in Small Economy

• Susceptibility to nature disasters and climate change

• Economies vulnerable to exogenous shocks

• Economically less diversified • Often rely on import of basic goods

and supplies

Challenges in providing health services with in a Small Nation

(less than 2 million population)

• Limited infrastructure for providing all services needed

• It is not economically and technically viable to provide all services needed

• Limited human resources to provide all services needed

• Brain drain in health work force• Limited capacity in administration, management

and research for efficiency gains

Lessons Learned from the World Bank’s Operations in the Caribbean

• Individual country development vs. regional development

• Collaboration in infrastructure planning• Collaboration in sharing technical expertise• Sharing financing mechanisms (?) • Innovations in sharing and utilization

resources (some examples)

Priorities in Health Care

• Easy access to quality care• Quality of health care: advanced technology

equipment, skilled health professionals• Equitable coverage• Choices of care• Risk sharing and protection• Sustainability

Future health care in small island nations will be expensive

• Island populations are increasingly heavier;• NCDs are growing• Populations are aging• Financing resources are not necessarily

predictable• Unmet expectations can be high

Institute for Health Metrics and Evaluation, Human Development Network, The World Bank. The Global Burden of Disease: Generating Evidence, Guiding Policy –

Latin America and Caribbean Regional Edition. Seattle, WA: IHME, 2013.

20

1. In 1990 Diarrheal Diseases ranked No. 1 and in 2010, it ranks No. 20.

2. In 1990 Forces of nature ranked No. 174 and in 2010, it ranks No. 2

Top 5 burden of diseases In 20101. Heat diseases2. Forces of Nature3. Violence4. Road injury5. Major depressive

disorder

Changing of Burden of Diseases in Latin America and the Caribbean

An example of understanding burden of diseases

Diabetes a particularly severe problem

Source: WDI, 2014

Treating NCD is Costly

Two Priorities for Dutch Caribbean Health Systems

• Improve efficiency (quality results with lower costs)

• Contain Costs (managing increased demand with in resources available)

Options for efficiency improvement

• Managed care model: – controlled and limited choices of service providers– Referral system– Managed competition

• Strategic purchasing– Provider payment methods: per case, DRGs– Defined benefit packages

On cost control

• Knowing the costs and efficiency• improving prevention efforts• Strengthening primary health care• Developing self-management programs –keeping

patients out of hospitals• Developing new approaches

Possible Future development

• Tele-medicine, Telementoring, Telesurgery; Telepsychiatry; Telenursing, Telepaediatrics; Home Health

• Medical Tourism: Can your country take a share?

2004 2006 2010 2012 20150

20

40

60

80

100

120

140

The global medical tourism industry is growing by 20-23% annually

(in US$ Billion)

“Medical Practice in the Caribbean will be marginalized in the medium term as competition now involves e—health solutions overseas such as online pharmacies, therapies …”Professor Davidson Head of School of Public Health and Health Technology in Jamaica

Key Messages• More resources do not necessarily produce

desired health results• New direction for cost-effective care:

– Patients play a central role in health management– Take advantages of the communication and

technology advancement• Improving sustainability requires do more with

less, seeking for better solutions at lower costs

Thank You!Chao.Shiyan@gmail.com