Better HealtH ServiceS Project:Health Equity Funds: Implementing Pro-poor Health Financing

tecHnical Brief

august 2011 the project brief is made possible by the support of the american People through the United States agency for international Development (USaiD). the contents of this project brief are the sole responsibility of Urc and do not necessarily reflect the views of USaiD or the United States Government

Background

Health Equity Funds (HEFs) are a pro-poor health financing scheme that targets identified poor

households in a given area and provides financial and social support so that these households can better access government health services. HEFs cover not only the direct costs of health services and medications for the poor but also reimburse patients for transport and their caretakers for food expenses during patients’ hospitalizations. About 35% Cambodians are poor, as defined by the Ministry of Planning, and thus eligible for HEFs.

An important part of the Royal Government of Cambodia’s social health protection strategy, HEFs have resulted in a substantial increase in the poor’s utilization of public health services.

University Research Co., LLC (URC) has been supporting the implementation of HEFs in Cambodia since 2003 as part of two projects funded by the U.S. Agency for International Development (USAID): Health Systems Strengthening in Cambodia (2002–2008) and Better Health Services (BHS, 2009–2013)1. These projects have both worked directly with the Cambodian Ministry of Health (MOH) to strengthen capacity through coordinated activities that address both clinical and support services (i.e., health financing, quality improvement, MOH planning, supervision, and health information systems). URC is a global company that has been dedicated to improving the quality of health care, social services, and health education worldwide for 45 years.

BHS’s approachUSAID’s BHS Project supports HEFs as a key social protection strategy in 34 operational districts (ODs) in 17 provinces/municipalities covering a geographic area that includes 44% of the population of Cambodia (see map). The approach has proven successful by many measures and continues to evolve with pilots, some described below, exploring management through local governance and integration of HEFs with other social health protection mechanisms, such as community-based health insurance (CBHI), voucher initiatives, and social health insurance programs for government employees and private sector workers in key industries.

a couple with their newborn in the postpartum ward

2 Better Health Services Project: HEF: Implementing Pro-poor Health Financing

Current work on HEFs at the system and operational levels includes:

¡ National and local technical assistance, monitoring, and in some cases, funding of HEFs. URC developed and implemented a model in 34 ODs that has been replicated by other HEFs throughout the country. By 2012 URC expects to assume responsibility for monitoring Belgian Technical Cooperation HEFs in nine additional ODs.

¡ Building consensus and negotiating roles and responsibilities of local stakeholders through the development of memorandums of understanding, the introduction of general quality standards at health facilities, and monitoring processes.

¡ Developing a database information system for screening clients, tracking utilization, and monitoring costs incurred at HEF- and CBHI-supported facilities.

¡ Developing a mechanism and standard process for measuring quality improvement, setting minimum quality standards before becoming eligible to receive HEFs, and linking formal periodic quality assessments at facilities to levels of payment for services provided to the poor.

¡ Supporting local community networks to provide consumer feedback and ownership in HEF activities. As an independent, third party representative of the poor, HEFs provide client feedback to providers at HEF-supported facilities to further reduce financial and other barriers.

Key achievements to Date increased use of health services by the poorBy reducing financial barriers, HEFs have increased the use of public health services by the poor in HEF-supported areas. Overall utilization rates of health centers in Cambodia are low, with the common assumption that utilization by the poor prior to HEFs was lower than by the non-poor due to financial constraints.

As a result of HEFs, the numbers of health center contacts and in-patient hospitalizations by the poor have increased significantly (Figures 1 and 2). The utilization rate of hospital services by the poor has more than tripled (Figure 3) and now exceeds the utilization rate of the non-poor.

Provinces with Urc-supported Hefs

Ang RokarPreah Sdach

Peareang

Cheung

Kandal

Kirivong

Kratie

Chhlong

Sen Monorom

Memut

Ponhea Krek-Dambae

Ratanak KiriPreah Vihear

Kampong Thom

Sampov Luon

BattambangBakan

Sampov Meas

Smach MeahcheySre Ambel

Ou Chrov

Mongkel Borei

Sangkae

Sihanoukville

Aogko-Chum

Mung Russey

Preah Net

Preah

Stong

Boribo

Kampong Tralach

Tbong Kmum

Kampong Chhnang

figure 1. Number of health center contacts by HEF beneficiaries in URC-supported districts

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

2008 2009 2010

HEF Contacts

Non-HEF Contacts

figure 2. Number of inpatient cases supported by HEFs in URC-supported districts

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

2008 2009 2010

HEF Cases

Non-HEF Cases

Better Health Services Project: HEF: Implementing Pro-poor Health Financing 3

model of HEF payments tied to the results of quarterly quality assessments. The pilot and results to date are described in Table 1.

In 2009, BHS surveyed all existing health center user fees in BHS-supported areas with HEFs. Using the survey results, BHS and the MOH established a list of standard services and HEF reimbursement rates for health centers. This standardized reimbursement schedule is now used by all HEFs, simplifying the process whereby HEFs purchase services from health centers and reducing the burden of negotiating prices with individual facilities or districts.

In Banteay Meanchey Province where HEFs in three ODs cover 42 health centers, BHS advanced this process a step further to link HEF reimbursements at health centers to the quality of care. In this pilot, HEFs provide a higher reimbursement rate based on a stepped schedule. Monthly HEF payments are made to individual health centers based on the results of the quarterly quality assessments, and payments are adjusted by a factor as shown in the table below: the higher a health center scores on its assessment, the higher the payment will be for the services provided to HEF clients. This sliding scale was developed to both reward higher performing health centers and to allow under-performing health centers that had not met the minimum 65% score for HEF eligibility a chance to participate in HEFs (lowering eligibility criteria in the dynamic pricing scheme to 50%) and an incentive to improve the quality of services provided at their facility.

As of early 2010, all 42 of these health centers were using the standard prices paid by the HEF adjusted according to the average of their recent quality assessment scores. Between October 2009 when the pilot began, and the third quarter of 2010, health centers in all three pilot ODs improved their

figure 3. Utilization rate of hospital services in URC-supported districts

0%

1%

2%

3%

4%

5%

6%

7%

2008 2009 2010

Overall Utilization Non-poor UtilizationHEF Utilization

figure 4. Proportion of facility-based deliveries by the poor and non-poor in URC-supported districts

0

20%

30%

40%

50%

60%

70%

80%

2008 2009 2010

HEF Deliveries

Non-HEF Deliveries

10%

table 1. Schedule for reimbursement based on quality assessment score

Assessment: Average Result

Price Adjustment Factor

>90% to 100% 1.4

>80% to 90% 1.2

>70% to 80% 1.0

>60% to 70% 0.8

50% to 60% 0.6

<50% No purchase of services

HEFs are also contributing to the dramatic increases in facility based births in Cambodia (Figure 4). In 2010, 70% of poor women covered by HEFs gave birth in a public hospital or health center compared to only 40% of non-poor women. This represents a 45% increase in facility births for poor women since 2008.

improved quality of careThe BHS Project found that providers are significantly more interested in quality improvement when it is linked with HEF eligibility and provides additional funds for incentives and facility improvements. In collaboration with the Quality Assurance Office of the MOH and provincial health departments, BHS is piloting a dynamic pricing

4 Better Health Services Project: HEF: Implementing Pro-poor Health Financing

SucceSS StoRy

Mother receives Hef support for a complicated delivery

Mr. and Mrs. Phalla Houn live in Sambour Village, Kompongprang Commune, Pearaing District in Prey Veng Province. Both of them work hard to support their family, but paying jobs are irregular. Mrs. Houn was hospitalized in early 2010 for a complicated delivery, and both she and the baby are doing well after staying in the hospital for several days. While at the hospital, Mrs. Houn was identified as poor and given a temporary HEF card. She expressed her appreciation to the HEF Monitor, “Without their support, we would not have been able to afford the user fees at the hospital. a satisfied new Hef cardholder and family

70%

75%

80%

85%

90%

Baseline Q1-2010 Q2-2010 Q3-2010 Q4-2010

Monkol BoreyO'ChrovPreah Net Preah

figure 5. Average quarterly quality assessment scores of health centers in three districts piloting a dynamic pricing model of HEF payments

quality assessment scores (Figure 5) and in some cases, due to the stepped system, received higher HEF reimbursement levels. Based on these results, BHS is expanding this dynamic pricing model to Battambang, Phnom Penh, Preah Sihanouk, and Pursat provinces in 2011 and 2012.

In the next several months, BHS will introduce another element into the model to increase local ownership and responsibility for the quality assessments, as well as to

improve regularity and sustainability of the process. The cost of the quality assessments will be paid by each health center rather than by the central level through a deduction to each health center’s HEF direct benefit payments. Completion of the quarterly quality assessments will become a requirement for continuation of HEF direct benefit reimbursements. Each health center’s assessment in the quarter will be conducted by two assessors: one from the OD level and one from another health center in the same OD, introducing a peer-to-peer feature into the model.

In addition to these quality improvement interventions at the health facility level, BHS has also worked closely with local authorities to develop representation and advocacy mechanisms for the poor to reduce both financial and non-financial barriers to care. Through HEF’s third-party mechanism, patients can report abuses and seek relief from such abuse, which motivates them to seek care.

Taken together, these quality improvement mechanisms by BHS and local partners have already resulted in:

¡ Increased responsibility on the part of local health system managers to measure and improve quality,

¡ Increased accountability and transparency of health services to users and their communities, and

¡ Improved provider-patient interactions.

reduced household debt for health careWith the support of HEFs, fewer households are falling into debt to pay for their health care. An analysis of data

Better Health Services Project: HEF: Implementing Pro-poor Health Financing 5

Health equity fund monthly monitoring

BHS routinely performs household surveys in its role as HEF Monitor. The February 2011 survey in Saenmonorom Operational District (OD), Modulkiri Province, found that the mother of a 13-year-old patient, hospitalized in January, had made an informal payment. Such payments are not allowed in HEF-covered facilities. The Monitor reported the matter to the hospital Director via the routine HEF monthly monitoring report.

The Director immediately investigated the claim, identified the staff member who had requested and received the payment, had the staff member remit an equal sum to the hospital, and gave the mother her money back through the HEF Operator. The mother was very grateful to the HEF Operator and Monitor for supporting the claim, for

a Hef patient and his mother from Mondulkiri Province

following through with the hospital, and for finding “justice and good intervention with this issue for all of the poor families living in Saenmonorom OD.”

on household debt for health care from two Cambodian Socio-Economic Surveys (CSES 2004 and 2007)2 shows that household debt for health care has fallen across the country, but that this effect is more pronounced in areas where HEFs provide support. This difference suggests that 55% fewer households (poor and non-poor) had a debt for health care in operational districts with a URC-implemented HEF (Figure 6). The results of a bed census URC conducted in 2009 revealed that the estimated reduction in household debt for health care among poor households is even greater, at 71%.

In areas with an HEF, households that have become indebted for a health care episode appear to cope better

with the debt, as indicated by lower remaining health care debt when compared to the household’s original debt amount. Where there is no HEF, the remaining health care debt levels are much higher.

Greater confidence in public health services HEFs have contributed to confidence on the part of the poor that they will receive the care they are entitled to when they use public health facilities. URC’s bed census in 2009 found that:

¡ 79.5% of pre-identified HEF inpatients were 100% certain that they would receive benefits before leaving for a health facility. An additional 12.5% expressed 75% certainty. Thus, 92% of beneficiaries seeking care had a high level of confidence that they would receive the benefits they expected.

¡ 73.7% of HEF beneficiary respondents reported that they were not at all ashamed of being identified as poor. Only 15.8% reported being ashamed.

¡ 79.9% of HEF beneficiaries reported that they felt the care they had received from a public facility was the same as that received by non-poor patients. A small percentage of HEF beneficiaries (2.5%) reported that their care was better than that of paying patients, while another small percentage (5.6%) reported that it was worse.

figure 6. Percentages of Households with Debt for Health Care as Measured by the Cambodian Socio-Economic Surveys of 2004 and 2007

5.17%

4.35%

2.06%

3.93%

1.95%

2.67%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

2004 ODs withNo HEF

2007 ODs withNo HEF

2007 All ODswith HEF

2007 All ODs withHEF and Pre-ID

2007 All ODs withHEF and Post-ID

2007 URC ODswith HEF

(Pre and Post)

SucceSS StoRy

6 Better Health Services Project: HEF: Implementing Pro-poor Health Financing

next StepsThe BHS Project has been quite successful in having the Cambodian MOH to take over many of the costs of HEFs, including paying for all of the direct benefits in 24 ODs and paying for the management costs in 15 ODs. By the end of 2010, all HEF direct benefits, except those in Phnom Penh, were provided by the Cambodian MOH, and by mid-2011, the Ministry will also cover Phnom Penh. These are major steps in program sustainability.

This also shifts BHS’s major role from administering the direct costs of HEFs in a number of ODs to monitoring and providing technical support to HEFs and scaling them up throughout the country. In agreement with USAID and formalized through a memorandum of understanding between the Cambodian MOH, HEF Operators (HEFOs), and URC, the BHS Project will function in the role of HEF Implementer (HEFI) for almost all HEFs in the country. This will largely involve BHS acting as the HEF monitor nationwide, which will also give the project unparalleled insight into the workings of HEFs under various models.

nurse fills out patient information in the Mother child Book

A Note on Identifying the Poor

Cambodia has instituted a standard process to regularly identify poor households using local governance structures. Commune councils, relevant departments, and nongovernmental organizations use the results to target areas with high poverty levels and

individual poor households for services and assistance. At the national level, the Ministry of Planning (MOP) provides training, monitors implementation, and gives ongoing technical support to the process. The MOP works with provincial- and district-level administrative staff who facilitate the work of the commune councils. The MOP enters data on poor households and disseminates the results of the identification process to relevant partners for action.

WHAT are the benefits? Poor households are categorised as Level 1: very poor, or as Level 2 – Poor . Households at both levels are eligible for benefits, which may include:

¡ Subsidised or free health care through HEF or CBHI schemes (both levels are eligible),

¡ Scholarships,

¡ Social concessions for land and agricultural services, and

¡ Partial or total exemption from local taxes.

Pre-identification Process 1. Establish and train commune representative group (CRG) at the commune level.

2. Establish and train village representative groups (VRGs) for each village within the commune.

3. The VRG then compiles a list of households in the village, conducts household interviews, and considers special circumstances of households. After a commune review meeting, the VRG compiles and publicly displays a first draft list of poor households in the village.

4. The VRG conducts a village consultation meeting on the draft list, receives villager feedback, and prepares and disseminates a final draft list. The VRG submits the list to the Commune Council.

5. The Commune Council reviews the draft and approves a final list.

6. Data on poor households are entered into the National Poverty Identification Database.

7. Photographs are taken of the poor household and HEF cards with photos of the household are distributed to the members of these households.

Post-identification ProcessWhen poor patients who have not been pre-identified present at public referral hospitals in need of health care and claiming inability to pay the fees, HEF performs a post-identification through a standard poverty identification interview. This interview applies pre-defined socio-economic selection criteria to measure patient eligibility. It also distinguishes two categories of poverty—very poor and poor—and grants full HEF benefits for one year to eligible patients/households and gives them a temporary HEF card.

Better Health Services Project: HEF: Implementing Pro-poor Health Financing 7

History of Social Health Protection in cambodia

Government introduces user fees Starting in 1989, the Ministry of Health (MOH) made a concerted effort to rebuild the nation’s public health system. A Health Financing Charter in 1996 established user fees for services at public health facilities and mandated an exemption system for the poor. The Charter also stipulated that facilities keep 99% of the revenue collected through user fees, with 60% available for staff as additional income and 39% for facility operational costs.

Health equity funds are introduced In 1999, HEFs we introduced in response to barriers experienced by the poor due to user fees. Early HEFs in Phnom Penh, Banteay Meanchey and Siem Reap identified poor patients after they arrived at hospital, paid their user fees and provided other benefits to hospitalized patients.

As HEFs continued to develop, efforts were made to identify the poor before they sought hospital care through a process of interviewing suspected poor households at the village level, or “pre-identification.”

In 2004, HEFs began on a pilot basis to cover charges for health centre services. HEF have since been expanded to more than 212 health centres.

Today, HEFs provide poor patients with payment of their user fees, transport reimbursement, and a food allowance for their carers when they are admitted to a hospital, as well as costs for health center services.

community Based Health insurance, a simultaneous initiativePilots of Community Based Health Insurance (CBHI) were initiated around the same time as HEFs were being introduced and scaled-up. CBHI provides insurance coverage for the non-poor working in the informal sector.

CBHI schemes in Cambodia are voluntary and locally-managed independent health insurance funds. Premiums are generally less than $3 per month per family and the benefits provided vary from scheme to scheme. In general, CBHIs provide free access to public health services, transport reimbursement for hospital visits and some other benefits.

HEF and CBHI schemes function as third-party purchasers of health services for enrolled households. HEFs pay public health facilities for services provided to the poor through a case-based or fee for service mechanism. CBHI schemes generally pay facilities through a capitation payment made

monthly in advance to the facility. Both schemes work to increase utilisation of public health services, provide an additional source of revenue to facilities, and act as a voice for patients to push for quality improvements using their financial leverage.

Government introduces a new form of protection – Prakas 809In 2007, the Ministry of Health introduced a Social Health Protection mechanism under the inter-ministerial Prakas 809. This enabled the MOH to subsidise public health facilities that provide services to the poor in nine ODs and six National Hospitals. These subsidy schemes provide user fee benefits to the poor who are identified through post- or pre-identification. This was the first initiative taken by the government to finance the health care costs of the very poor.

Social Health Protection coverage todaySince their introduction, HEFs have expanded rapidly and now operate in 44 of 77 ODs in Cambodia. At the end of 2010, there were an estimated 2.5 million poor people covered by a HEF.

CBHI has grown much more slowly. A total of 13 schemes are now operational, covering an estimated 150,000 people.

Coverage by Prakas 809 subsidy schemes has remained at the original levels of 9 ODs and 6 National Hospitals.

The process of pre-identification of poor households was nationalised by the Ministry of Planning through the ID Poor project. HEFs remain the biggest user of this information.

In addition to the schemes for the poor, the Cambodian government began in 2002 to establish social health protection systems for the formal sector and government sector employees with the enactment of the first Social Security Law. In 2007, a sub-decree establishing the National Social Security Fund (NSSF) was adopted, which gave rise to a fund for private sector employees under the Ministry of Labour and Vocational Training in early 2008.

university Research co., LLc SUKY MK Building, House #10

Street 214, Sangkat cheychumneas, Khan Daun Penh

Phnom Penh, cambodia

tel. 855-23-222-420www.urc-chs.com

for more information, please contact:

christophe Grundmann, PhD, Project Directorcgrundmann@urc-chs.com

tapley jordanwood, Director of Health Financing tjordanwood@urc-chs.com

or visit the Hef Document Download Site https://sites.google.com/a/urc-chs.com/hef-document-download-site/

the Plan for Universal coverageA Master Plan for Social Health Protection in Cambodia has been under development since 2002. Last revised in 2009, the Plan is still under consideration by the Council of Ministers. It offers a guide to providing effective and equitable access to affordable, quality health care for all Cambodians by 2015. It aims for a coordinated system of social health protection by proposing a consolidation of current schemes into one social health protection system that will provide universal health coverage. This same goal is stated in the second MOH Health Strategic Plan (HSP2) 2008-2015, as follows:

“By 2015 the different elements and institutions of the current health financing system will be combined under a single strategy guided by national health priorities; social health insurance mechanisms will be in place; the poor will be protected by suitable social-transfer mechanisms; government funding for health will be at a level appropriate for the adequate provision of services to the population; donor support will be harmonised and aligned with national priorities and support effective service delivery. The achievement of these objectives will make the move to universal coverage possible.”

notes1. Additional support is being/has been provided by the Royal

Government of Cambodia, the World Bank, and the Asian Development Bank.

2. Cambodia Socio-Economics Survey (CSES) 2004 and 2007. National Institute of Statistics, Ministry of Planning, Royal Government of Cambodia.

The Master Plan also proposes the establishment of the Social Health Protection Committee (SHPC) as a national coordinating body with representation of the various SHP stakeholders. The committee would be chaired by the Council of Ministers with members composed of high-ranking representatives from concerned ministries, would provide strategic policy development and coordinate implementation of the SHP Master Plan.