reforming the health sector in america

San Gabriel Valley and Metropolitan Service Planning Area Health Office (SPA 3 & 4)

REFORMING THE HEALTH SECTOR IN AMERICACurrent Issues and Lessons Learned from a

Global Health Systems Perspective

Los Angeles County Department of Public Health

September 2009

SPA 3 & 4 VIEWPOINT

San Gabriel Valley and Metropolitan Service Planning Area Health Office (SPA 3 & 4)

SPA 3 & 4 BEST PRACTICE COLLECTIONRELIABLE INFORMATION FOR EFFECTIVE COMMUNITY HEALTH PLANS, PROGRAMS AND POLICIES

M. RICARDO CALDERÓN, SERIES EDITOR

Reforming the Health Sector in America September 2009

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The SPA 3 & 4 Area Health Office Best Practice Collection fulfills the Los Angeles County Department of Health Services (DHS) local level goal to restructure and improve health services by “establishing and effectively disseminating to all concerned stakeholders comprehensive data and information on the health status, health risks, and health care utilization of Angelinos and definable subpopulations”.1 Since September 2006, when the Los Angeles County Department of Public Health (DPH) became a seperate department from DHS, the SPA 3 & 4 Best Practice Collection continues to provide reliable infromation for the effective development and implementation of community plans, programs and policies. It is a program activity of the SPA 3 & 4 Information Dissemination Initiative created with the following goals in mind:

To highlight lessons learned regarding the design, implementation, management and evaluation of public health programs

To serve as a brief theoretical and practical reference for program planners and managers, community leaders, government officials, community based organizations, health care providers, policy makers and funding agencies regarding health promotion and disease prevention and control

To share information and lessons learned in SPA 3 & 4 for community health planning purposes including adaptation or replication in other SPA’s, counties or states

To advocate a holistic and multidimensional approach to effectively address gaps and disparities in order to improve the health and well-being of populations

The SPA 3 & 4 Information Dissemination Initiative is an adaptation of the Joint United Nations Program on HIV/AIDS (UNAIDS) Best Practice Collection concept. Topics will normally include the following:

1. SPA 3 & 4 Viewpoint: An advocacy document aimed primarily at policy and decision-makers that outlines challenges and problems and proposes options and solutions.

2. SPA 3 & 4 Profile: A technical overview of a topic that provides information and data needed by public, private and personal health care providers for program development, implementation, and/or evaluation.

3. SPA 3 & 4 Case Study: A detailed real-life example of policies, strategies or projects that provide important lessons learned in restructuring health care delivery systems and/or improving the health and well being of populations.

At a GlanceSAN GABRIEL VALLEY SERVICE PLANNING AREA (SPA 3)

METROPOLITAN SERVICE PLANNING AREA (SPA 4)

241 North Figueroa Street, Room 312Los Angeles, California 90012(213) 240-8049

The Best Practice Collection is a publication of the San Gabriel Valley (SPA 3) and Metropolitan Service Planning Area (SPA 4). The opinions expressed herein are those of the editor and writer(s) and do not necessarily reflect the official position or views of the Los Angeles County Department of Public Health. Excerpts from this document may be freely reproduced, quoted or translated, in part or in full, acknowledging SPA 3 & 4 as the source.

Internet: http://www.lapublichealth.org/SPA 3Internet: http://www.lapublichealth.org/SPA 4

LOS ANGELES COUNTY BOARD OF SUPERVISORS

Gloria Molina, First District

Mark Ridley-Thomas, Second District

Zev Yaroslavsky, Third District

Don Knabe, Fourth District Michael D. Antonovich, Fifth District

DEPARTMENT OF PUBLIC HEALTH

Jonathan E. Fielding, MD, MPH, MBA.Director of Public Health and County Health Officer

Jonathan E. FreedmanChief Deputy Director

Deborah Davenport, RN, PHN, MS.Director, Community Health Services

BEST PRACTICE COLLECTION TEAM

M. Ricardo Calderón, Series Editor Manuscript Author & SPA 3 & 4 Area Health Officer

Carina Lopez, MPH. Project Manager, Information Dissemination Initiative

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INTRODUCTION & HEALTH SYSTEM ISSUES

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I. INTRODUCTION

“Building the Foundation for a Healthy America” was the theme of the National Public Health Week celebrated in the United States during April 6 – 12, 2009. According to the American Public Health Association (APHA) marketing campaign, the startling reality is that “there is a nation where 7 out of 1000 children will not make it to their first birthday; 13 million children who do will live in poverty and 8 million won’t have access to health care; of those who make it, every 30 minutes one person under the age of 29 will contract HIV; and this is not a developing nation; this is not a country in civil war, famine or drought; this is the United States of America”.!!!

Despite the best efforts, the best minds, the best research, the best science, the best funded programs and the fact that the U.S. spends more on health care than any other country in the world, Americans are not as healthy as people from other countries and their health system is failing and falling behind other health systems in both the developed and developing world. In fact, the “U.S. life expectancy has reached a record high of 78.1 years, but still ranks 46th behind Japan, most of Europe, South Korea and Jordan; a baby born in the U.S. is more likely to die before its first birthday than a child born in almost any other developed country; the U.S. is among the top 10 countries that have the most people with HIV/AIDS and one in 20 residents in the Washington, D.C. is HIV-positive; and disparities persist with ethnic minority populations having nearly eight times the death rate for key health conditions, such as diabetes,

than that of non-minority populations” (APHA 4/2009). In addition, the U.S. health system performance as a whole ranks 36th (World Health Organization [WHO] 2002); 33% of children born in the U.S. are expected to develop type 2 diabetes; and for Blacks and Hispanics this number jumps to 50% (Centers for Disease Prevention and Control [CDC] 2000).

The need for health reform in America should not be questioned…..should not be doubted….and should not be opposed. Health reform is a long-over due issue that must be addressed with determination and urgency. Americans deserve better healthcare access and quality, more fairness in the distribution of services, and enhanced effectiveness and sustainability of essential services. The critical issue, therefore, is not whether health reform is needed but how do we reform the health sector in America? Is there a blue print or a right approach to health sector reform? Is there a model from a country that we could follow? Is there evidence-based information that can provide us with insight and guidance during the process? Can we avoid known pitfalls, dangers and failures of health sector reforms from other settings? A review of current issues and lessons learned utilizing a global health systems perspective can be useful to better inform, alert and guide American health decision and policy makers on health sector reform.

II. HEALTH SYSTEM ISSUES

Some health systems around the world perform well and others perform poorly. The difference in performance is not due just to differences in income or expenditure since performance varies markedly even among systems with the same income or expenditures.

The critical difference lies in the way systems are “designed, managed and financed” resulting in higher or lower rates of death, disability, impoverishment, humiliation and despair among populations served (WHO 2000).

Currently, systems around the world face multiple demands from a variety of stakeholders and population groups. Some of these demands include, but are not limited to, the following: How can systems ensure access to health care while operating with limited resources and cost constraints? How can systems balance the need for personal and public health, or more specifically between prevention and curative services? To what extent should new technologies be adopted versus resources allocated for primary care? How can healthcare services reach vulnerable, underserved and difficult to reach populations? What should the appropriate balance be between public and private health care? How can systems maintain and enhance a well-trained healthcare

Definition of a Health Care System:“A health care system is one that includes all the activities whose principal purpose is to promote, restore or maintain health. Health care systems should be analyzed and compared in their performance with relation to four functions: management, resource creation, service delivery and financing”. World Health Organization 2000.


LESSONS FROM HEALTH SECTOR REFORMS

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performance, countries have focused on major elements of health sector reform such as decentralization, public/private mix and changes in finances, priority-setting, integration of services, regulation and sector wide approaches (WHO 2003). However, the distinguishing feature between health systems is the degree to which they rely on government or private mechanisms to finance and provide care. Based on this feature, there are three predominant models of health care systems around the world; that is, tax-based, social insurance-based, and voluntary private insurance-based systems (Bruce J. Fried and Laura M. Gaydos, 2002).

In predominantly tax-based systems, such as Canada, Italy, New Zealand, United Kingdom, Sweden and Spain, funds are generated from payroll taxes, collected by government, and transferred to regional authorities that act as third-

according to the risk characteristics of individuals and groups and poor people with expected high healthcare costs cannot afford coverage resulting in over 40 million people without health insurance coverage (Bruce J. Fried and Laura M. Gaydos, 2002).

III. LESSONS FROM HEALTH SECTOR REFORMS

All systems in the world have, are, and will undergo efforts to reform aiming to contain cost increases, increase efficiency, maintain equity and improve quality (Klein 1995). However, healthcare reform is an ongoing, dynamic process. In Germany, the centenarian system has undergone more than a dozen

reforms in the last 20 years to combat cost control. The common worldwide pressures fueling health sector reforms include rising health care costs, aging populations, and allocation and payment mechanisms for unlimited advanced technological procedures. Country responses to these challenges range from a big bang approach in the United Kingdom (UK) seeking to remake a centrally run, tightly budgeted National Health Service by embracing market concepts to deal with healthcare purchases and providers, to more gradual and incremental reforms in Germany. The United States is somewhere in between the UK and Germany with market driven shifts from traditional unmanaged fee-for-service to various forms of managed care (Bruce J. Fried and Laura M. Gaydos, 2002).

Nevertheless, the crucial issue in health sector reform is the “no one size fits all model”. There is no blueprint or set of right approaches to health sector development. Reforms vary according important country differences rooted in cultural, social and political factors. Reforms vary according country responses to the national health situation, the resources available and the capacity and motivation of people and health workers to adapt to change (WHO 2003). The position of the Canadian economist Robert Evans in 1986 holds still true today; that is “…nations do not borrow other nations institutions. The Canadian system may be “better” than the American. Even if it is better, I am not trying to sell it to you. You cannot have it. It would not fit because you do not see the world, or the individual, or the state as we do. The point is that by examining other people’s

Definition of Health Sector Reform:“Health sector reform is a significant and intentional effort to improve the performance of the health care system. A health care system is defined by its performance results (efficiency, quality, and access) and performance goals (health status of the population, citizen’s satisfaction, protection against financial risk)”. Roberts et al 2004.

Definition of Health Sector Reform:“Health sector reform is a “sustained, purposeful and fundamental change” – “sustained” in the sense that it is not a “one shot” effort that will not have enduring impacts; “purpose ful” in the sense of emerging from a rational, planned and evidence-based process; “fundamental” in the sense of addressing significant, strategic dimensions of health systems”. Peter A. Berman, Ph.D. A Decade of Health Sector Reform in Developing Countries. Washington, D.C., 2000.


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HEALTH CARE PARADIGMS

experience you can extend your range of perceptions of what is possible”. At the same time, William Hsiao’s recommendation back in 1992 deserves serious attention and consideration: “rather than trying to duplicate another nation’s health care system, health care policy makers must look to specific features of other systems that could be shaped and refined for use in their own systems”. In this manner, we could view the health system of the United States through the wide-angle lens of an international perspective and better understand the critical factors affecting the system.

IV. HEALTH CARE PARADIGMS

It is important to recognize that no pure version of any system exists in any country in the world. Most healthcare systems feature a mix of elements. The United States is a predominantly private system with about 50% of public finances (Medicare for the elderly and disabled and Medicaid for lower income people). This private insurance model comprises employment-based or individual purchase of private health insurance in a market place mainly characterized by private ownership of the factors of production. Germany, The Netherlands, Japan and Canada follow a social insurance (Bismarck) Model with compulsory universal coverage within a Social Security System, employer and individual contributions through non-profit insurance funds, and public or private ownership of production factors. In Germany and Netherlands the social insurance model is complemented by private insurance for a portion of the population, and in Japan employers

play a large role in financing the compulsory national health system. In terms of the UK, the National Health Service (Beveridge) Model providing universal coverage, general tax-based financing, and national ownership or control of healthcare production, private insurance exists side by side with the National Health Service. Consequently, the Healthcare Services Continuum proposed in 1972 and again in 1989 by the health policy scholar Odin Anderson is still valid. The boundaries of the continuum are set by the level of centralization of decision making, particularly over funding, and the degree to which a nation centralizes financing and planning. In addition, the relative size of the public sector determines its position in the continuum as well as the extent to which it intervenes in the operations of the economy itself.

On the other hand, health reforms are gradually evolving along converging tracks in which the best elements of a system are preserved and other strategies are selectively adapted. This is happening in the UK National Health System with the introduction of market concepts; in Germany and The Netherlands Social Insurance Systems with the infusion of competition within government regulations; and in the U.S. with the increase in government regulations to counterweight competitive free market principles. This common ground of convergence reflects a blend between free market and government regulations advocated as “managed, quasi, internal market, or a hybrid approach” that is consistently emerging in countries around the world (Saltman & Figueras 1997). In this hybrid approach, the introduction of market-style reform elements co-exist within regulated systems and the market is no longer seen as good or bad but rather as a policy tool to enhance system performance. In addition, the market is becoming or is seen as less antagonistic and more as an integral part and driving force in social policy (Scheil-Adjung 1998). The market does not replace government. Instead, the market is managed by government, and government allows market forces a much larger role than before. This is considered the Third Wave of healthcare reforms between fully competitive markets and complete government control, alike political developments pioneered by centrist leaders like Bill Clinton in the U.S., Tony Blair in the UK, and Gerhard Schroder in Germany.

There are, however, limits to this convergence trend and the existing difference between healthcare

Thematic Components of Health Sector Reform in Latin America and the Caribbean (LAC):• Health Care Financing• Organization and Management of Health Care and Health Services• The Human Component (The Forgotten Area of Health Reform: Human Resources for Health)

LAC Health Sector Reform InitiativeUnited States Agency for International Development (USAID).


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DISCUSSION AND CONCERNS

systems probably will not disappear. We must keep in mind the striking philosophical roots between countries. In the U.S., more emphasis is placed on individual responsibility, free choice and pluralism. In other nations, preserving equitable access to health care for the entire population is emphasized more. This brings us to the heart of the matter; that is, the question whether “health is a right or not”. The response from each country to this question determines the healthcare model that it follows. Even reformed systems keep their own trademarks since systems are reflections of the “society” in which they evolve and, in the final analysis, like politics, all health care is local. The truth of the matter is that there is no best system or right or wrong system. There is no gold standard. The convergence trend is shrinking and there are limits to such convergence. Ideally, healthcare reform should involve gradual rather than radical

change, and the goal should be to identify and design politically feasible incremental changes that have a reasonably good change of making things better (Enthoven 1990).

V. DISCUSSION AND CONCERNS

A broad range of approaches to health care reform has taken place all over the world in search of the ideal health system. In an effort to control escalating health care costs, the U.S. shifted from traditional indemnity fee-for-service system into managed care plans, Germany and Canada tightened supply-side cost control mechanisms through expenditure caps, and Japan implemented demand-side measures such as increased patient co-payments. The common course of action for these and other countries has been a “blend of free-market competition and government

regulation” in the form of managed markets or regulated competition that still has be evaluated. In any event, the fact of the matter is that the ideal health system does not exist and each system has its advantages as well as its shortcomings, i.e., waiting lists in UK and Canada, over-prescription in Japan, and over 40 million uninsured in the U.S. Paradoxically, the U.S. spends more money in healthcare than any other country but does not fare better in terms of outcome measures. Life expectancy is lower, infant mortality is higher, and proxy indicators of the quality of healthcare is lower in the U.S. than in many other countries.

The U.S. argues that the comparison of infant mortality and life expectancy rates does not reflect adequately the quality of the U.S. healthcare since the U.S. population is more heterogeneous, poverty rates among children are higher than Japan and Western Europe, and the drug, drinking and smoking habits and other lifestyles contributes to higher infant mortality and lower life expectancy. From a strictly financial, resource allocation or return on investment standpoint, the fact is that the level of healthcare expenditures and health outcomes does not appear to be strongly related. Demographic and lifestyle factors must be taken into consideration; however, such differences should not be used to dismiss the lessons learned and best practice solutions regarding how other nations design, manage and finance their healthcare systems and how that contributes to better health outcomes (Bruce J. Fried and Laura M. Gaydos, 2002).

There is no doubt that the U.S. healthcare system is unique. The quality of U.S. healthcare is considered to be among the best in the world.

Major Elements in Health Sector Reform Process:

• Decentralization• Public-Private Mix and Changes in Financing• Priority-Setting in Health Services• Integration of Services• Regulation• Sector Wide Approaches (SWAPs)

World Health Organization 2003.

Characterization of Health Sector Reform Policies in Latin America and the Caribbean 1995 – 2005:

• Expansion of medical insurance• Contracting Out to Private Providers• Decentralization• Devolution• Granting autonomy to health care facilities• Basic Packages of Services

International Society for Equity in Health, 2006.


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DISCUSSIONS AND CONCERNS

Health care coverage is neither universal no comprehensive. Over 40 million people lack health insurance coverage and millions more have no adequate coverage. In contrast, nations with universal coverage have combined “compulsion and subsidization”; individuals are required to have health insurance; insurers are required to cover everyone; and cross-subsidization across risk allows for entire populations to have health insurance (Fuchs 1991). The U.S. regards “compulsion and subsidization” as the two basic premises of social insurance. Ironically, national health insurance is denounced as a form of socialism although it was introduced in Germany and Japan as an antidote to the spread of socialism (Ikegami 1991 & Starr 1992). Other healthcare systems, therefore, rely on public financing to a greater extent that the U.S. The share of U.S. public health expenditures increased from 42% in 1990 to approximately 46% today while the average for other nations is 75%. In 1997, the public/private financing as a share of total health expenditures was 82/18 in the UK, 79/21 in Japan, 78/22 in Germany, 76/24 in Netherlands, 75/25 in Canada, and 44/56 in the U.S.

Around the world, governments are much more active participants in healthcare than in the U.S. They finance healthcare, set overall funding levels, establish uniform fee schedules for physicians and annual budgets for hospitals, guarantee universal coverage, implement uniform benefits levels, and exert a powerful influence on cost-control measures. Why is then so much opposition to an enhanced government role in the U.S. health system? Powerful interest groups support the trillion-dollar U.S. health care industry. There is a diffusion of power among different

U.S. government bodies and among different levels of government. Americans have an inherent mistrust in an expanded government. In fact, these were at least three of the failure factors that contributed to the rejection of the Clinton Reform Plan in the 1990s in which the U.S. turned away from dramatic health system change including a broader role for government.

Again, the “perfect” system does not exist nor does a “pure” system. No health care system is either completely free-market, competitive system or a whole regulatory system. A combination of both features exists in most of the systems. A combination influenced and determined ideologically by each country according to its position whether health care is or is not a right. Where health care is considered a public good, universal access and larger government role are expected. Where health care is not “fully” considered a public good, a significant share of the population without health insurance is tolerated. The U.S., unlike other nations, has a marked ambivalence about whether health care is a right to which Americans are entitled. The problem in America is not related to the performance, or lack thereof, of the managed care system but rather the failure of the society to reach the consensus that other countries have achieved. Americans continue to feel uncomfortable embracing a “health care consensus”; that is, a clearly articulated social ethic that health care is a social good that should be made available to all (Uwe Reinhardt 1997).

Finally, lessons from around the world demonstrate that in nations with universal and comprehensive health insurance, the existence of national health insurance does not necessary

mean that the government controls the practice of medicine, nor does it necessary involve limits on the patient’s choice of provider, or that the government-mandated health insurance system has to be run by the government. Health systems can be designed, managed and financed according the simple rule that all individuals must contribute according to their ability to pay. The principle guiding such systems and guaranteeing universal access is that of cross-subsidization of the sick by the healthy and the lower income by the higher income earners. Achieving better health outcomes in any country

Pitfalls of Health Sector Reforms:

• “Not all health system changes are health sector reform.

• The most serious critique of health sector reform is that it has actually harmed public health, basic services provision and equity.

Health sector reforms must be designed to achieve improved equity of access and coverage, better efficiency in the use of health sector resources, improved quality of health services, and sustained financial soundness”.

Peter A. Berman, Ph.D. & Thomas J. Bossert, Ph.D., 2000


CONCLUSIONS AND RECOMMENDATIONS

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or population appears to be more related to ideological, moral and ethical issues (the right to health care by every member of any society, agreed upon levels of government role and compulsion for the good of all, subsidization from the healthy and wealthy to the sick and poor) than to the amount of expenditures and available resources.

VI. CONCLUSIONS AND RECOMMENDATIONS

This paper has reviewed global health system issues, lessons from health sector reforms and health care paradigms in an effort to inform and discuss “THE NEED FOR HEALTH SECTOR REFORM IN AMERICA”. Although a “Discussion and Concerns” section is included with information and conclusions specific to the U.S. health system, it would not be complete unless guidance is provided to improve the performance of health systems resulting in better population health outcomes; that is, an improvement in the health status and wellbeing of individuals, families and communities around the world. The following statements, contributions and recommendations (taken, adapted and/or quoted directly from the World Health Organization Report 2000: Health Systems: Improving Performance) are presented to the reader to stimulate discussion and reflection, propel continued dialogue, further develop strategies and policies, and encourage the pioneering of new combinations of innovative approaches to develop and reform health systems around the world.

A. THE CHALLENGES THAT HEALTH SYSTEMS FACE TODAY

1. Many countries are falling far short of their potential, and most are making inadequate efforts to achieve responsiveness and fairness in financing. There are serious shortcomings in the performance of one or more functions in virtually all countries.

2. Health systems failures result in very large numbers of preventable deaths and disabilities in each country, unnecessary suffering, injustice, inequality and denial of the basic rights of individuals. The impact is most severe on the poor, who are driven deeper into poverty by lack of financial protection against ill-health.

3. There are countless highly skilled, dedicate people in all systems working at all levels to improve the health of their communities.

4. Health systems have already contributed enormously to better health for most of the global population during the 20th century. In the 21st century, they have the power and the potential to achieve further extraordinary improvements.

5. Health systems can misuse their power and squander their potential. Poorly structured, badly led, inefficiently organized and inadequately funded health systems may do more harm than good.

6. The ultimate responsibility for the overall performance of a country’s health system lies with government, which in turn should involve all sectors of society in its stewardship. The careful and responsible management of the well-being of the population

–stewardship—is the very essence of good government.

7. The health of the people is always a national priority. The government responsibility for it is continuous and permanent.

8. Stricter oversight and regulation of private sector provider and insurers must be placed high on national policy agendas. Good policy needs to differentiate between providers (public or private) who are contributing to health goals, and those who are doing damage or having no effect, and encourage sanction appropriately.

9. Policies to change the balance between provider’s autonomy and accountability need to be monitored closely in terms of their effect on health, responsiveness and the distribution of the financial burden.

10. Consumers need to be better informed about what is good and bad for their health, why not all of their expectations can be met, but that they still have rights that all providers should respect.

11. Consumer interests in health are weakly protected in countries at all levels of development. The notion of “patient rights” should be promoted and machinery established to investigate violations quickly and fairly.

12. The most obvious route to increased prepayment is by raising the level of public finance for health. This is difficult if not impossible for poor nations. Governments could encourage different forms of prepayment –job-based, community-based, provider-based—as part of a preparatory process of consolidating small pools into larger ones.


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HOW TO IMPROVE HEALTH SYSTEM PERFORMANCE

13. Governments need to promote community rating, a common benefit package and portability of benefits among schemes, and to use public funds to pay for the inclusion of poor people into such schemes.

14. Insurance schemes designed to expand membership among the poor are an attractive way to channel external assistance in health, alongside government revenue. Alert stewardship is needed to prevent the capture of such schemes by lower-risk, better-off groups.

15. Mechanisms are needed in most low and middle-income countries to separate revenue collection from payment at the time of service utilization, thus allowing the great majority of financing for health to come through prepayment.

16. More pooling of finance allows cross-subsidies from rich to poor and from healthy to sick. Risk pooling in each country needs to be designed to increase such cross-subsidies.

17. Payment to service providers of all types needs to be redesigned to encourage providers to focus on achieving health system goals through the provision of cost-effective interventions to people with common conditions amenable to prevention or care.

18. On an international level, the largely private pharmaceutical and vaccine research and development industry must be encouraged to address global health priorities, rather than concentrating on “lifestyle” products for more affluent populations.

19. Serious simultaneous imbalances exist in many countries in terms of human and physical resources, technology and pharmaceuticals. Many countries have too few qualified health personnel, others have too many.

20. Health system staff in many low income nations is inadequately trained, poorly paid, and work in crumbling, obsolete facilities with chronic shortages of equipment. One result is a “brain drain” of talented but demoralized professionals who either go abroad or move into private practice.

21. Overall, governments have too little of the necessary information to draw up effective strategies. National Health Accounts (NHA) offer an unbiased and comprehensive framework from which overall situation analyses can be made, and trends monitored. They should be more widely created and used.

B. HOW TO IMPROVE HEALTH SYSTEM PERFORMANCE

B.1. STEWARDSHIP: oversight; acting as the overall stewards of entrusted resources, powers and expectations, setting and enforcing the rules of the game and providing strategic direction for all the different actors involved.

22. Sound stewardship is needed to achieve better health system performance

23. Stewardship of the health system is a government responsibility. To discharge it requires an inclusive, thought out policy vision that recognizes all principal players and assigns them roles.

24. Stewardship uses realistic resource scenario and focuses on key functions and goal achievement, broken down into important population categories, such as income level, age, sex and ethnicity.

25. Stewardship calls for the ability to identify the principal policy challenges at any time, and to assess the options for dealing with them.

26. Influence requires regulatory and advocacy strategies consistent with health system goals, and the capacity to implement them cost-effectively.

B.2. SERVICE PROVISION: delivering public, personal and private health services.

27. Private provision of health services tends to be larger where country income levels are lower. Poor countries need to develop clear lines of policy towards the private sector.

28. In order to move towards higher quality care, a better information base on existing provision is required. Local and national risk factors need to be understood. Information on numbers and types of providers is a basic –an often incompletely fulfilled-- requirement.

29. An understanding of provider market structure and utilization patterns is needed so that policy-makers know why this array of provision exists, as well as where it is growing. Information on the interventions offered and on major constraints on service implementation is also relevant to overall quality improvement.

30. An explicit, public process of priority setting should be undertaken


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to identify the contents of a benefits package which should be available to all, including those in private schemes, and which should reflect the local disease priorities and cost-effectiveness, among other criteria.

31. Rationing should take the form of excluding certain interventions from the benefit package, not leaving out any people.

32. A regulatory strategy that distinguishes between the components of the private sector, and includes the promotion of self-regulation, needs to be developed. Aligning organizational structures and incentives with the overall objectives of policy is a task for stewardship, rather than one left only to service providers.

33. Monitoring is needed to assess behavioral change associated with decentralizing authority over resources and services.

B.3. RESOURCE GENERATION: creating resources through investment and training including investing in people, buildings and equipment, and generating the human and physical resources that make service delivery possible.

34. Stewardship has to monitor several strategic balances and steer them in the right direction when they are out of equilibrium.

35. A system of national health accounts (NHAs) provides the essential information base for monitoring the ratio of capital to recurrent expenditure, or of any one input to the total, and for observing trends.

36. NHAs capture foreign as well as domestic, public as well as private inputs and usefully assemble data on physical quantities (numbers of nurses, CT scanners, district hospitals) as well as their costs. NHAs in some form now exist for most countries, but they are still often rudimentary and are not yet widely used as tools of stewardship.

37. NHA data allow the ministry of health to think critically about input purchasers by all fund-holders in the health system. The concept of strategic purchasing does not apply to the purchase of health care services. It applies equally to the purchase of health system inputs –trained personnel, diagnostic equipment, vehicles, etc.

38. Where health system inputs are purchased by other agencies (private insurers, providers, households or other public agencies) the ministry’s stewardship role consists of using its regulatory and persuasive influence to ensure that these purchases improve, rather than worsen, the efficiency of the input mix.

39. Ensuring a healthy balance between capital and recurrent spending in the health system requires analysis of both public and private spending trends and a consideration of both domestic and foreign funds.

40. A clear policy framework, incentives, regulation and public information need to be brought to bear on important capital decisions in the entire system to counter ad hoc decisions and political influence.

41. At an international level, stewardship of pharmaceuticals and vaccine inputs consists of influencing the largely private research and development industry to address

global health priorities. At national level, the key tasks are to ensure cost-effective purchasing and quality control, rational prescribing, and consumers being well informed.

42. Health financing strategies need to ensure that poor people, in particular, get the drugs they need without financial barriers at the time they are sick.

43. Major equipment purchases are an easy way for the health system to waste resources, when they are underused, yield little health gain, and use up staff time and recurrent budget.

B.4. HEALTH SYSTEM FINANCING: revenue collection, pooling of resources and strategic purchasing of interventions and services.

44. In all settings, very high levels of fairly distributed prepayment, and strategic purchasing of health interventions, are desirable. Implementation strategies, however, are much more specific to each country’s situation.

45. Poor countries face the greatest challenge. Most payment for health care is made at the time people are sick and using the health system. Out-of-pocket payment for care, particularly by the poor, should not be relied on as a long-term source of health system finance.

46. The most obvious route to increased prepayment is by raising the level of public finance for health, but two immediate obstacles appear. • The poorest countries as a group manage to raise less, in public revenue, as a percentage of national income than middle and upper income countries.

HOW TO IMPROVE HEALTH SYSTEM PERFORMANCE


• Ministries of finance in poor countries, often aware that the existing health system is performing poorly, are skeptical of its claims on public revenues.

47. Although most industrialized countries already have very high levels of prepayment, some of these strategies are also relevant to them. For its income level, the United States has an unusually high proportion of its population without health insurance protection.

48. To ensure that prepaid finance obtains the best possible value for money, strategic purchasing needs to replace much of the traditional machinery linking budget holders to service providers.

49. Strategic purchasing means ensuring a coherent set of incentives for providers, whether public or private, to encourage them to offer priority interventions efficiently.

50. Selective contracting and the use of several payment mechanisms are needed to set incentives for better responsiveness and improved health outcomes.

51. The fundamental goals of a health system are good health, responsiveness to people’s expectations (where both level and distribution matter for each of these goals) and fairness of contribution to financing the health system.

52. Achieving these goals depends on the effectiveness of four main functions of a health system: service provision, resource generation, financing and stewardship.

VII. BIBLIOGRAHY

1. World Health Organization. World Health Organization Report 2000: Health Systems: Improving Performance. Geneva, Switzerland.

2. Matcha, Duane A. Health Care Systems of the Developed World. Praeger Publishers. USA 2003.

3. Roemer, Milton I. National Health Systems of the World. Volume I: The Countries. Oxford University Press. New York, USA 1991.

4. Graig, Laurene A. Health of the Nations. Third Edition. Congressional Quarterly, Inc., Washington, D.C., 1999.

5. Fried, Bruce J. and Laura M Gaydos. World Health Systems: Challenges and Perspectives. Health Administration Press. Chicago, Illinois, USA 2002.

6. Hurrelmann, Klaus and Ulrich, Laaser. International Handbood of Public Health. Greenwood Press. West Port, Connecticut, 1996.

7. World Health Organization. Vaccines and Biologicals. Health Sector Reform (HSR): The Impact of Health Sector Development on Immunization Services. Fact Sheet 1, Expanded Programme on Immunizacion, WHO, Geneva, Switzerland, December 2003.

8. www.nphw.org. National Public Health Week. American Public Health Association (APHA). April 6 – 12, 2009.

9. Berman, Peter A. and Thomas J Bossert. A Decade of Health Sector Reform in Developing Countries: What have We Learned?. USAID Data for Decision Making Project, International Health Systems Group, Harvard School of Public Health. Washignton, D.C., 2000.

10. International Society for Equity in Health, Chapter of the Americas. Equity and health Sector Reform in Latin America and the Caribbean from 1995 to 2005: Approaches and Limitations. April 2006.

VIII. ACKNOWLEDGEMENTS

This paper is based primarily and almost entirely on the work and publication of Bruce J. Fried and Laura M. Gaydos (World Health Systems) and the WHO 2002 Report: Health Systems: Improving Performance. Their outstanding, pioneering and thought leading work and contributions to global health are hereby referenced, acknowledged and commended.

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BIBLIOGRAPHY AND ACKNOWLEDGEMENTS


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