Objective – The aim of the paper is to bring evidence and lessons from two low- and middle-income countries (LMIs) of the former USSR into the global debate on health…
Objective – The aim of the paper is to bring evidence and lessons from two low- and middle-income countries (LMIs) of the former USSR into the global debate on health financing in poor countries. In particular, we analyze the introduction of social health insurance (SHI) in Kyrgyzstan and Moldova. To some extent, the intent of SHI introduction in these countries was similar to that in LMIs elsewhere: increase prepaid revenues for health and incorporate the entire population into the new system. But the approach taken to universality was different. In particular, the SHI fund in each country was used as the key instrument in a comprehensive reform of the health financing system, with the new revenues from payroll taxation used in an explicitly complementary manner to general budget revenues. From a functional perspective, the reforms in these countries involved not only the introduction of a new source of funds, but also the centralization of pooling, a shift from input- to output-based provider payment methods, specification of a benefit package, and greater autonomy for public sector health care providers. Hence, their reforms were not simply the introduction of an SHI scheme, but rather the use of an SHI fund as an instrument to transform the entire system of health financing.
Methodology/approach – The study uses administrative and household data to demonstrate the impact of the reforms on regional inequality and household financial burden.
Findings – The approach used in these two countries led to improved equity in the geographic distribution of government health spending, improved financial protection, and reduced informal payments.
Implications for policy – The comprehensive approach taken to reform in these two countries, and particularly the redirection of general budget revenues to the new SHI funds, explain much of the success that was achieved. This experience offers potentially useful lessons for LMIs elsewhere in the world, and for shifting the global debate away from what we see as a false dichotomy between SHI and general revenue-funded systems. By demonstrating that sources are not systems, these cases illustrate how, in particular by careful design of pooling and coverage arrangements, the introduction of SHI in an LMI context can avoid the fragmentation problem often associated with this reform instrument.
In December 1989, the Government of Kenya implemented cost sharing reforms in a substantial portion of public health facilities. In September 1990 the Government suspended registration fees for out‐patient treatments, but reintroduced them in April 1992 after a lapse of a 20‐month period. Assesses the effects of these policy changes on demand for out‐patient services using a small data set from a rural district in central Kenya. Finds that, although medical services are inelastic with respect to user charges, cost sharing led to a significant reduction in out‐patient attendance: demand for out‐patient care declined by about 40 per cent. Consistent with this finding, suspension of registration fees in 1990 is associated with a 30 per cent increase in attendance. This increase occurred despite the retention of fees for diagnostic services. By March 1991, seven months after the suspension of fees, service demand had recovered remarkably and was only about 20 per cent below its original level. Further, finds that patients are more sensitive to fees for diagnostic services than they are to registration fees.