This paper is based on a detailed and critical review of the literature relating to health care financing in the African context. The objectives are to:
* Provide an overview of the equity challenges, particularly in relation to poverty concerns, of current health care financing mechanisms in Africa;
* Provide a brief critical review of major recent developments in health care financing in Africa; and
* Identify key issues in promoting equitable and poverty-reducing health care financing options in the African context.
It is important to stress that health care financing mechanisms differ in each African country and that there are no ‘one-size-fits-all’ solutions. This paper attempts to identify some common trends and challenges, illustrate important issues in relation to particular health care financing options through reference to specific country experience and propose principles and possible actions that require further consideration within each country-specific context.
Resource allocation and health financing
This paper is based on a detailed and critical review of the literature relating to health care financing in the African context. The objectives are to: * Provide an overview of the equity challenges, particularly in relation to poverty concerns, of current health care financing mechanisms in Africa; * Provide a brief critical review of major recent developments in health care financing in Africa; and * Identify key issues in promoting equitable and poverty-reducing health care financing options in the African context. It is important to stress that health care financing mechanisms differ in each African country and that there are no ‘one-size-fits-all’ solutions.
This study found that international financing for malaria control has increased by 166% (from $0.73 billion to $1.94 billion) since 2007 and is broadly consistent with biological needs. African countries have become major recipients of external assistance, but countries where malaria continues to pose threats to control ambitions are not as well funded. Twenty-one countries have reached adequate assistance to provide a comprehensive suite of interventions by 2009, including twelve countries in Africa. However, this assistance was inadequate for 50 countries, representing 61% of the worldwide population at risk of malaria - including ten countries in Africa and five in Asia that co-incidentally are some of the world’s poorest countries. Approval of external funding for malaria control does not correlate with gross domestic product, the study found. In conclusion, funding for malaria control worldwide is 60% lower than the US$4.9 billion needed for comprehensive control in 2010. This includes funding shortfalls for a wide range of countries with different numbers of people at risk and different levels of domestic income. More efficient targeting of financial resources against biological need and national income should create a more equitable investment portfolio that with increased commitments will guarantee sustained financing of control in countries most at risk and least able to support themselves.
Africa has enjoyed a growth momentum since 2000 after the wasted years of the 1980s and much of the 1990s. However, eradicating poverty will require huge resources, which existing funding strategies will be unable to generate. Global commodity prices have fallen sharply; capacity to mobilise domestic revenues is waning; and aid has been insufficient in plugging funding gaps. Revenue bargains in which states extract revenues from citizens in exchange for investments that impact positively on well-being may be key to financing Africa’s development. They can substantially increase revenues, nurture effective state-citizen relations, force companies to pay correct taxes, push fragmented systems of service provision in the direction of universalism, improve policy space and make aid more effective.
In this study, researchers conducted a whole-system analysis - integrating both public and private sectors - of the equity of health-system financing and service use in Ghana, South Africa and Tanzania. They used primary and secondary data to calculate the progressivity of each health-care financing mechanism, catastrophic spending on health care, and the distribution of health-care benefits. Overall, health-care financing was found to be progressive in all three countries, as were direct taxes. Indirect taxes were regressive in South Africa but progressive in Ghana and Tanzania. Out-of-pocket payments were regressive in all three countries. Health-insurance contributions by those outside the formal sector were regressive in both Ghana and Tanzania. The overall distribution of service benefits in all three countries favoured richer people, although the burden of illness was greater for lower-income groups. Access to needed, appropriate services was the biggest challenge to universal coverage in all three countries. These findings raise questions over the appropriate financing mechanism for the health care of people outside the formal sector. Physical and financial barriers to service access must be addressed if universal coverage is to become a reality.
Health financing reforms in low- and middle- income countries (LMICs) over the past decades have focused on achieving equity in financing of health care delivery through universal health coverage. This systematic review assesses progress towards equity in health care financing in LMICs through the use of benefit incidence analysis (BIA) and financing incidence analysis (FIA). A total of 512 records were obtained and 24 were judged appropriate for inclusion. Twelve of the 24 studies originated from sub-Saharan Africa. The evidence points to a pro-rich distribution of total health care benefits and progressive financing in sub-Saharan Africa. In the majority of cases, the distribution of benefits at the primary health care level favoured the poor while hospital level services benefit the better-off. Studies evaluated in this systematic review indicate that health care financing in LMICs benefits the rich more than the poor but the burden of financing also falls more on the rich. There is some evidence that primary health care is pro-poor suggesting a greater investment in such services and removal of barriers to care can enhance equity. The results overall suggest that there are impediments to making health care more accessible to the poor and this must be addressed if universal health coverage is to be a reality.
The pace of redressing inequities in the distribution of scarce health care resources in Namibia has been slow. This is due primarily to adherence to the historical incrementalist type of budgeting that has been used to allocate resources. Those regions with high levels of deprivation and relatively greater need for health care resources have been getting less than their fair share. To rectify this situation, which was inherited from the apartheid system, there is a need to develop a needs-based resource allocation mechanism. Principal components analysis was employed to compute asset indices from asset based and health-related variables, using data from the Namibia demographic and health survey of 2000. The asset indices then formed the basis of proposals for regional weights for establishing a needs-based resource allocation formula.
The pace of redressing inequities in the distribution of scarce health care resources in Namibia has been slow. This is due primarily to adherence to the historical incrementalist type of budgeting that has been used to allocate resources. Those regions with high levels of deprivation and relatively greater need for health care resources have been getting less than their fair share. To rectify this situation, which was inherited from the apartheid system, there is a need to develop a needs-based resource allocation mechanism.
The purpose of this study is to examine the vertical and horizontal equity of the premium collection of the Ghanaian National Health Insurance Scheme (NHIS), which was introduced to help ensure universal coverage. Horizontal inequity was measured through the effect of the premium on redistribution of ability to pay of members. The extent to which the premium could cause catastrophic expenditure was also examined. The results showed that revenue collection was both vertically and horizontally inequitable. The horizontal inequity had a greater effect on redistribution of ability to pay than vertical inequity. The computation of catastrophic expenditure showed that a small minority of the poor were likely to incur catastrophic expenditure from paying the premium a situation that could impede the achievement of universal coverage. The author provides recommendations to improve the inequitable system of premium payment to help achieve universal coverage.
A minimum yearly average increase in resources of US$ 3.9 billion is needed to scale up maternal and newborn health services within the context of the Millennium Development Goals, although annual costs increase over the time period of the model. When more rapid rates of scale-up are assumed, this minimum figure may be as high as US$ 5.6 billion per year. The 10-year estimated incremental costs range from US$ 39.3 billion for a moderate scale-up scenario to US$ 55.7 billion for the rapid scale-up scenario. These projections of future financial costs may be used as a starting point for mobilizing global resources. Countries will have to further refine these estimates, but these figures may serve as goals towards which donors can direct their plans. Further research is needed to measure the costs of health system reforms, such as recruiting, training and retaining a sufficient number of personnel.