Heath Financing

An Introduction
Topics to be Covered
• Methods of Health Financing
• Insurance based Health System
• National Health Accounts
• Cost benefit analysis
• Cost Effective Analysis
What is financing?
• Financing is the process of providing funds for business activities,
making purchases or investing.
• There are two main types of financing available for companies: debt
and equity.
• Debt is a loan that must be paid back often with interest
• Equity does not need to be paid back, but it relinquishes ownership stakes to
the shareholder.
Health System Financing
• Health financing systems are critical for reaching universal health
coverage (SDG 3)
• Raising funds for health;
• Reducing financial barriers to access through prepayment and subsequent
pooling of funds in preference to direct out-of-pocket payments; and
• Allocating or using funds in a way that promotes efficiency and equity.
• E-Learning for Health Financing Policies
https://www.who.int/health_financing/training/e-learning-course-on-health-fin
ancing-policy-for-uhc/en/
Universal Health Coverage
• Universal health coverage (UHC) means that all people and communities can
use the promotive, preventive, curative, rehabilitative and palliative health
services they need, of sufficient quality to be effective, while also ensuring
that the use of these services does not expose the user to financial hardship.
• This definition of UHC embodies three related objectives:
• Equity in access to health services - everyone who needs services should get them,
not only those who can pay for them;
• The quality of health services should be good enough to improve the health of those
receiving services; and
• People should be protected against financial-risk, ensuring that the cost of using
services does not put people at risk of financial harm.
Models of Health Financing
• Tax based healthcare System
• Direct tax
• Indirect Taxes
• Government funded Health Systems
• Health Saving Accounts
• Insurance based Health System
Global Health Financing Model
• Cuba • USA (Mediclaim & MedicAid,
• Britain (NHS) Obama Care)
• France • Germany
• Sweden • Saudi Arabian
• Singapore • India

National Health Accounts

Health Saving Accounts
• Health Savings Account (HSA) is a tax-advantaged account created for
individuals who are covered under high-deductible health plans
(HDHPs) to save for medical expenses
• Contributions are made into the account by the individual or the
individual's employer and are limited to a maximum amount each
year.
• The contributions are invested over time and can be used to pay for
qualified medical expenses
Insurance Based Health System
• Social Health Insurance
• Private Health Insurance
• Cooperative Health Insurance
• Takaful
UK-NHS
• Health and high quality care for all, now and for future generations.
• 100% Government funded Health System
• Launched 5 July 1948 it had at its heart three core principles
• it meet the needs of everyone
•  it be free at the point of delivery
• it be based on clinical need, not ability to pay
CUBA
• No private hospitals or clinics
• All health services are government-run
• Cuba's national health system is made up of multiple tiers:
1. The community containing individuals and families,
2. Family doctor-and-nurse teams,
3. Basic work teams,
4. Community polyclinics,
5. Hospitals,
6. Medical institutes
• Health Indicators better than USA
• Average life expectancy at birth for Cubans as being 77 years for males and 81 for
females
USA
• % GDP 16.4% in 2013
• Private 37%
• Public 48% (7%) {OECD Public expenses 73%}
• Expenditure per person was $ 8,300 in 2010 and could hit $ 12,500 by 2020
• Healthcare cost Increased 6.7% from 2007-2017
• Medical inflation in USA has outpaced general price inflation by 1 point %
• Disposable income, managed care and excess medical inflation have all been
major influences on premiums in the US health insurance sector. They affect
national health expenditure and thus health insurance premiums.
USA
• Before Obama/2008 – HI premium increased by Double
• Rising 3.7 times faster than wages
• 46.3m Americans had no health insurance in 2008,
• The Affordable Care Act 2010 requires all US citizens to obtain health
insurance. Those who fail to obtain insurance face fines of $ 695 a year, or
2.5% of their income, by 2016.
• Since 2014, health insurers are prohibited from excluding pre-existing
conditions for all Americans.
• The CBI estimates that by 2020 Medicare and Medicaid could cost the US
government more than $ 1.8 trillion a year.
Germany
• 92% of the population of Germany belonged to the State health
insurance scheme GKV (Gesetzliche Krankenkasse). – Data 2012
• Compulsory for Private sector employee (Earning Below Euro50850
along with family from employer & Employee
• Civil servants have their own State scheme – called Beihilfe, however
many use Private insurance as rider
• In 2006, 18 million Germans had taken out complementary private
health insurance to pay Co-payments and disease not covered
• Both State and private health insurance in Germany is highly regulated,
French
• Universal Health Coverage Act (CMU) came into effect in 2000, health
coverage has moved from an employment to a citizenship basis, with
everyone entitled to basic health insurance coverage regardless of their
employment status
• Statutory health insurance (SHI) pays hospitals direct, with the hospital or
provider then billing citizens for their co-payment.
• State Pays – 70% for doctors fee, 60% of Med Auxiliaries, 65% Drugs
• Citizens can buy Top-Up from private Insurers
• Both companies and employees get tax relief on premiums.
• Income Below Euro 623, will get complimentary Insurance from state
Insurance vs Assurance
• Insurance refers to protection
against an event that might
happen
• Insurance provides cover against
a risk
• Example – Motor, Health, fire etc
• assurance refers to protection
against an event that will
happen
• assurance covers an event that is
definite
e.g. death, which is certain, only
the time of occurrence is
uncertain
• Assurance policies are
associated with life cover