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SecondAnnualUHCFinancingForum
GreaterEfficiencyforBetterHealthandFinancialProtection
Backgroundpaper(Forumedition)
Washington,D.C.April20-21,2017
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Thisisabackgroundpapertothe“SecondAnnualUHCFinancingForum:GreaterEfficiencyforBetterHealthandFinancial
Protection”.ThispapersetsthestageforthepresentationsanddiscussionsattheForumandwaspreparedundertheguidanceoftheForumTechnicalWorkingGroup.Theinformationprovidedinthisdocumentdoesnotnecessarilyrepresenttheviewsorpositionofthe
organizationsrepresentedontheTechnicalWorkingGroup.
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ContentsI. ExecutiveSummary........................................................................................................................3
II. Introduction...................................................................................................................................6
III. Whatisefficiency?.....................................................................................................................7
IV. Sourcesofinefficiency................................................................................................................9
1) Doingtherightthings...............................................................................................................11
i. Mixofhealthinterventionsandpackages...........................................................................11
ii. Preventionversustreatment...............................................................................................12
iii. Thebalancebetweengovernance,administration,publichealthfunctionsandpersonalservices.........................................................................................................................................13
iv. Inter-sectoralandmulti-sectoralaction...............................................................................13
v. Financialprotectionandservicecoverage...........................................................................14
2) Doingtherightthingsintherightplace...................................................................................15
3) Doingthingsright.....................................................................................................................17
i. HealthServices.....................................................................................................................18
ii. HealthSystemsandtheHealthFinancingComponent........................................................22
V. Identifyingthemostimportantsourcesofinefficiency...............................................................24
VI. Measuringandmonitoringinefficiency...................................................................................25
1) Macro-efficiency.......................................................................................................................25
2) Efficiencyincomponentsofthehealthsystem.......................................................................27
VII. Strategiestoimproveefficiency...............................................................................................32
1) Technicaloptionsforimprovingefficiency..............................................................................33
2) Whatwedonotknow..............................................................................................................43
i. Payingforresults..................................................................................................................43
ii. Theprivatesectorandefficiency.........................................................................................46
iii. Humanresourcestrategiesforefficiency............................................................................46
iv. Costsofimprovingefficiency...............................................................................................47
v. Politicaleconomyissues.......................................................................................................47
VIII. Efficiencyandequity................................................................................................................48
IX. Conclusions..............................................................................................................................49
X. Recommendations.......................................................................................................................53
XI. References................................................................................................................................55
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I. ExecutiveSummaryThenatureandextentofinefficiencyinhealth
Theconceptofefficiencyinhealthincludesdoingtherightthings,intherightsettings,andintherightway.Efficienthealthsystemsproducethebestpossiblehealthandfinancialprotectionoutcomesfromtheavailableresources.
Inefficienciesexistinhealthsystemseverywhere:
§ Doingthewrongthings(e.g.fundinghighcost,lowimpactinterventionsbutnotfullyfundinglowcost,highimpactinterventions,particularlyintertiarycaresettings.)
§ Doingtherightthingsinthewrongsettings(e.g.relyingonhospitalsratherthanprimaryhealthcare.
§ Doingthingsbadly(e.g.leakagesandwasteintermsofpilferingofmedicinesthroughthesupplychainandmedicineslefttoexpireorstoredinpoorconditions.)
Themagnitudeofinefficienciescanbestaggering:takingallformsofinefficienciesintoaccount,countriescanwasteanestimated20%-40%oftheirhealthresources,missingtheopportunitiestouseresourcesmoreefficientlytoachievemuchmore.
Sourcesofinefficiency
Thevarioussourcesofinefficiencyinhealthhavebeenwellestablished.Manyarelinkedtothemaincost-driversinhealthsystems:medicines,humanresourcesforhealth,andhealthfacilitiesandinfrastructure,particularlyhospitals.
Thenatureofinefficiencies,however,differbysetting.Countriesmightberelativelyefficientinoneareaandlessefficientinanother.Foreachcountrytounderstandhowtoreducetheirinefficiencies,theymustassessitsmostimportantcauses(usingthetypeofchecklistprovidedinthisdocument),thendecidewhicharemostfeasibletoaddresstechnicallyandpolitically.
Countriesthenneedtodevelopstrategies,atime-tableforchange,andastrategytomonitorprogress.
Animportantimplicationisthatcountrieswillneedtochooseindicatorstotracktheirprogressthatrelatetotheareasofinefficiencytheyareabouttotackle.
Improvingefficiency
Manyoptionsforimprovingefficiencyexist,andallcountriescantakeactionstoachievebetterhealthandfinancialprotectionusingtheiravailableresources.
Someoftheoptionslieinthehealthfinancingsystem.Theyincluderaisingrevenuemoreeffectively,usingthetaxsystemtoreduceconsumptionofproductsthatharmhealth,reducingfragmentationinpooling,ensuringthatpooledfundspurchasetheinterventionsthatdeliverthegreatestimpactforthemoney,andmodifyingproviderpaymentmechanismstoencouragebothefficiencyandquality.
Othersolutionsrequireactionsinthewiderhealthsystem.Forexample,improvingmedicines-relatedefficiencycertainlyinvolvestheabilitytobuyatthelowestcost,butmayalsoincludethecapacitytotestandensurequalitythroughoutthedistributionchain,tomodifyregulationsorlegislationtoencouragetheuseofgenerics,anddemand-sidestrategiestoovercomeconcernsinprescribersandpatientsaboutthequalityofgenerics,andtoencouragerationaluseofallmedicines.
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Thepoliticsofimplementingpoliciestoimproveefficiencycanbecomplexbecausechangesmayfaceoppositionbypowerfulstakeholders.
Someofthepossiblesolutionsaremorelikelytoproducerapidreturnsthanothers.Theseinclude,butarenotlimitedto:
§ taxationtoreduceharmfulproductconsumption;§ improvingbudgetflexibilitytoimprovetimelyreleaseandexpenditureofavailablefunds;§ introductionofgenericmedicinespolicies,andtransparent,competitivebidding(where
possible)forpurchases.§ allowhealthworkersatlowerlevelstotakeonmoreresponsibilityasappropriate(task
shifting
Othersmayneedshort-terminvestmentsbutrequirelonger-termcommitmentbeforetheresultsstarttobeseen.Forexample,movingtowardsactivepurchasing(purchasingbasedonanexplicitassessmentofneeds,pricesandvalue)requiresstaffskillsandcomputerizedinformationsystemsthatmightrequiretimetodevelop.
Toaccompanytheseactions,internationalcollaborationisneededtocontinuallysearchfortechnologiesthat“shiftthefrontier”,identifyingfurtheropportunitiestoimprovehealthandfinancialprotectionatlowcost.Thismayinvolvetranslatingexistingtechnologiestolow-costsettings,ordevelopingnewapproaches,suchasvaccinesforHepatitisCandHIV/AIDS.
Controversiesandmissinginformation
Despiteknowingalotaboutthenatureofinefficiencyandpossibletechnicalsolutions,thereisstillasurprisingamountthatisnotknown,orthatengenderssubstantialdisagreement.
Remarkablylittleisknownaboutwhatworksatthesystemiclevel.Howcanhospitalefficiencybeimproved?Whatistheappropriateroleoftheprivatesectorinimprovingefficiency?Whattypesofincentiveskeepstaffmotivatedandensurequality,butareaffordable?Theevidenceissimplynotyetconclusive,whichmeansthesequestionscannotyetbeanswereddefinitively.
Partoftheproblemisthatmanystudiesofspecificinterventions,forexample,results-basedfinancing,havefocusedonserviceutilizationandquality,withlittleexaminationofcosts.Thisresearchtrendmakesitverydifficulttodeterminewhethertheseinterventionsareagooduseofscarceresourceseveniftheywork,andiftheycanbefinancedinthelongterm.
Inothercases,themethodsforundertakingthenecessaryanalyticalworkarenotparticularlyuseful.Forexample,healthtechnologyassessmentbasedoncost-effectivenessanalysisisfrequentlyusedtohelpguidedecisionsabouttherightinterventionmix.Itisappropriateforhigh-incomecountrieswherethequestioniswhethersmallchangesinexpenditure,ontopofwell-establishedexistingpackagesofservices,arewarranted.ThistypeofHTAisnotparticularlyusefulinmanylowerincomesettingsbecausethechangesneededarenotmarginal.Techniquesforassessingwhatmixofinterventionsshouldbeavailableatprimarylevel,forexample,havethecapacitytotakeintoaccountthefactthatcostsandimpactvarywithfactorssuchasscaleandscopeofinterventions,andwhetherthestaffneededtodelivercost-effectiveinterventionsareavailable.HTAisalsooflimiteduseinassessingtheappropriatemixbetweenpersonalandpopulationbasedhealthservices,andbetweengovernanceandpublichealthfunctionsandpopulation-basedandpersonalhealthinterventions.Theseareasneedfurtherdevelopment.
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Afinallimitationtocountrieswantingtotakeontheefficiencyagendaisthatthedataneededtoformallyassessthemajorcausesofinefficiencyandtomonitorprogressisextremelylimited.Thisispartlybecausefewcountriescurrentlyundertakeregularassessmentsoftheirefficiency,sotheindicatorsthatareavailablearemostlycollectedforotherpurposes.
Recommendations
Countries§ Undertakeanassessmentofthemajorcausesofinefficiencyandthosethatarefeasibleto
changeintheshort,mediumandlonger-term.§ Developandimplementastrategyforimprovingefficiencyintheshorttomediumterm–this
shouldbepartofahealthfinancingstrategyalthoughsomeoftheactionswillneedtoextendbeyondhealthfinancing.
§ Starttoputinplacethebackgroundinvestmentstoensurethelonger-termoptionscanbeundertaken–e.g.legislation,consultation,computerizedinformationsystems,staffskills.
§ Undertakebothpoliticalandtechnicalanalysisto identifywhichreformshavethegreatestchanceofsuccess,thenbuildsupportandnegateopposition.
§ Develop a set of efficiency indicators specific to the country’s main causes of healthinefficiencies,anddevelopanagendaforachievingmorefortheavailableresources.
§ Investinmethodstocollectindicatordataandtoevaluateprogressregularly.§ Identify areas of possible inter-sectoral or multi-sectoral actions that would achieve the
largesthealthimpacts,andthepoliticalfeasibilityofinfluencingothersectorstoimplementthem(perhapsincollaborationwiththeMinistryofHealth).ThiswouldhelptheMinistryofHealth target the key ministries and make the best use of their own limited time andresources.
Internationalcommunity(includingresearchersinallcountries)§ Routinelyassessthecostsaswellasimpactofeffortstoimproveefficiencysothatcountries
candetermine theefficiency and financial sustainabilityofdifferentoptions for improvingefficiency.
§ Developanagendatoidentifythecost-effectivenessofeffortstoredresshealthinequalitiesaspartoftheefficiencyandequitydiscussion.
§ Developmethodswhichcanbeusedtohelpcountriesdeterminewhichofthemyriadofinter-sectoralormulti-sectoralactionstoimprovehealthshouldbegivenprioritywiththelimitedtimeandfinancialresourcesavailabletoaMinistryofHealth.
§ Continue to invest in the technologies that might “shift the frontier” of possibilities”,identifyingfurtheropportunitiestoimprovehealthandfinancialprotectionatlowcost,suchasvaccinesforHepatitisCandHIV/AIDS.
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II. Introduction
TheseriesofAnnualForumsonFinancingUniversalHealthCoverage(UHC)focusonhealthfinancingactionstosmooththepathtowardsUHC–definedformallyastheambitionthatallpeoplewillobtainthehealthservicestheyneed,ofgoodquality,andwithoutfinancialhardshiplinkedtopayingforthemout-of-pocket(WHO2010a).ThefirstForumin2016dealtwithrevenuegeneration,orhowtoraisefundstomeettheneedsanddemandsofthepopulationforgoodqualityhealthservicesandfinancialprotection,whicharekeycomponentsofUHC.Thisisimportanttocountriesatallincomelevels,althoughtheabsoluteneedforadditionalrevenueisparticularlyhighinpoorercountries.Insomecountries,theshortageoffundsissoseverethatmeaningfulprogresstowardsUHCwillnothappenwithoutsubstantialincreasesinrevenuegeneration.ThisiswhyrevenuegenerationwasthetopicofthefirstForum.
ThesecondAnnualForumonFinancingforUHCturnstothequestionofhowtousetheavailableresourcesinthemostefficientway.Theextentofinefficiencyandwasteinhealthcanbestaggering,andeveniftheestimatesarerelativelyimprecise,theygiveanideaoftheorderofmagnitudeoftheproblem.Acommonlyquotedfigureisthatbetween20%and40%ofallhealthresourcesmightbeeffectivelylosttovariousformsofinefficiency(WHO2010;Chisholm&Evans2010).Alongsimilarlines,theOECDrecentlyreportedtheresultsofanumberofstudiesonwaste(onecomponentofinefficiency),andshowedinselectedOECDcountries,somewherebetween20%and50%ofhealthexpendituresarelikelybeingwastedduetoinefficiencies(OECD2017).
Improvedefficiency(achievingmorewiththeavailableresources)enablescountriestoobtaingreatercoverage,andtodeliverqualityhealthservicesandfinancialprotectionforthesameexpenditures.Itcanalsoimprovehealthoutcomes.Forexample,arecentIMFworkingpapersuggeststhatAfricancountriescouldraiselifeexpectancyatbirthbyaboutfiveyearsonaverageiftheyusedtheirhealthresourcesmoreefficiently(Grigoli&Kapsoli2013).
Improvedefficiencycansometimesalsosavemoneyorreducetherateofincreaseofhealthexpenditures–thishasbeencalled“bendingthecurve”thatdepictstherelationshipbetweenhealthexpendituresandGDPovertime(Coady,FranceseandShang2014;OECD2017).This,however,doesnotalwayshappen.Manyefficiencyreformsrequireupfrontinvestmentsbeforetheystarttoshowtheimprovementsinhealthand/orfinancialprotectionthatareorganizationofwhatisdone,orthewaythingsaredoneaspirestoachieve.
Recognizingthatthehealthsectormustcompetewithothersectorsintheallocationofpublicfinances,MinistriesofFinancehavesometimesbeenreluctanttoincreaseallocationstoMinistriesofHealthwhichareperceivedaseithernotfullyspendingthefundstheyalreadyhave,ornotusingthemefficiently(Gillingham2014;Tandonetal.2014).Investmentsinothersectorsaresometimesconsideredtooffergreatervalueformoney.Therefore,improvingefficiencyinhealthcanalsohelptoconvinceMinistriesofFinancetoallocatemorepublicfundstohealth:byachievingmorewithexistingresources,additionalresourcesmaybecomeavailable.
ImprovingefficiencyandhealthfinancingstrategiesisjustapartofprogresstowardsUHC.Withinthehealthsector,furtherrequirementsinclude:sufficientmotivatedhealthworkersoftherighttypelocatedclosetopeople;goodqualityinfrastructure,appropriatelylocated;afocusonhealthservicequality;sufficientessentialmedicinesandotherhealthproducts;highqualityleadershipandgovernance;andtimely,accurateinformation.Progresscanalsobefacilitatedbypromotingkeyinter-sectoralactions:bothactionsinothersectorsthatimprovehealth,andactionsinthehealthsectorthatimproveincome,educationanddevelopmentmoregenerally–whichin
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turnfeedbackintohealthimprovements.Whilerecognizingthis,thefocusonthisForumisonhealthfinancingandachievingmorewiththeavailableresources.
Themainobjectiveofthepaperistohighlightwhatisknownandwhatisnotknownaboutthemaincausesofinefficiencyinhealthandwhatcanbedonetoreducethem.TheagendaoftheForumwasdevelopedinresponsetothisanalysis,focusingonareaswhereeitherknowledgeisstillinadequateforinformeddecisionmaking,orwherethereiscontroversyordisagreementamongexperts.
Thenextsectionofthispaper(Section2)beginsbydefiningtheeconomicconceptofefficiencyandhowithasbeenusedinhealth.Section3thenidentifiesthecommonsourcesofinefficiencyinhealth,animportantstartingpointforcountriesseekingtoachievemorewiththeavailableresources.Section4considersindicatorsthatcanbeusedtoidentifywhichformsofinefficiencyarethemostimportantineachsettingbeforedevelopingpoliciestoredressthem,andthentotrackprogressinreducinginefficiency.
Section5turnstoidentifyingrecognisedtechnicalsolutionsplusareaswheretherearestillimportantgapsinknowledge.Italsoconsiderswhatisknownabout“how”toensurethedesiredstrategiesareimplementedtakingintoaccountthepoliticaleconomyofefficiencyreforms.
Makingahealthsystemmoreefficientdoesnotnecessarilymeanthatitwillbecomemoreequitable.Forexample,expandingcoveragebyfirsttargetingpeopleinisolatedareasratherthanthoseinmoredenselypopulatedsettingsmightnotbethemostefficientoptionintermsofimprovingpopulationhealthlevelsorprovidingfinancialprotection,yetacountrymayconsiderthisapproachtobedesirableonequitygrounds.Thebulkofthispaperfocusespurelyonefficiencybutturnstothequestionofequityandpossibletrade-offswithefficiencyinSection6.
Thefinalsection(Section7)summarizesthemainfindingsofthepaper,highlightingareaswherethereisinsufficientevidencetoguidepolicy,wherethereiscontroversy,andwheretherearepossiblequickwinsintermsofimprovingefficiency.
III. Whatisefficiency?
FormaldefinitionsofefficiencyfromeconomicsandhealtheconomicsaresummarizedinBox1.Inessence,ahealthsystemthatisefficientproducesthemixofhealthservicesthatmaximizestheoutcomessocietyexpectsfromitshealthsystem,usuallypopulationhealthimprovements,usesthemixofinputsthatcoststheleast,andcombinestheseinputstoproducethemaximumpossibleoutputs.Itwouldnotbepossibletogetmorehealthforthesamelevelofexpenditurebyeitherchangingthemixofinputs,gettingmoreoutofthechosenmixofinputs,orproducingadifferentsetofhealthgoodsandservices.Box1:FormalDefinitionsofEfficiency
Generaleconomicsdefinesthreetypesofefficiency.Technicalefficiencyisachievedwhenaparticularsetofinputsachievesthemaximumpossibleoutput(s).Technicalefficiencycouldbeachievedwithaveryexpensivesetofinputs,soproductiveorproductionefficiencyiswhentheinputsusedtoproducethisoutputhavetheleastcost,whileallocativeefficiencyrequirestheproductionofthesetofoutputsthatpeoplevaluethemostforthegivenresources(e.g.seeHollingsworth2008).
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Healtheconomicshastypicallydefinedonlytwosortsofefficiency-allocativeandtechnical.Allocativeefficiencyhasbeendefinedasrequiringthatthehealthgoodsandservicesproducedarethosethatmaximizesociety’sobjectivesforthehealthsector,usuallytranslatedintosomemeasureofpopulationhealthstatusorimprovement.1Technicalefficiencyistakentomeanachievingthemostwiththeavailableinputs.Thequestionofwhatmixofinputsintheproductionprocessistheleastcostmix(productionefficiencyingeneraleconomics)isfrequentlysubsumed,sometimesimplicitly,intotechnicalefficiencyandsometimesintoallocativeefficiency(Yip&Hafez2015;seeCylus,Papanicolas&Smith2013forausefuldiscussionofthevarioustypesofinefficiencyandhowtheyhavebeenusedinhealth).
Ratherthanusetheformaldefinitionsofefficiencyasanorganizerforthediscussion,we
followaframeworksuggestedbyYip&Hafez(2015)whichfocusesonthekeypolicyquestionsfacingcountriesseekingtoimprovetheefficiencyoftheirhealthsystems:
1. Doingtherightthings(allocativeefficiency:whatmixofinterventionsmaximizehealthoutcomesfortheavailableresources?);
2. Doingthemright(acombinationoftechnicalandproductiveefficiency:arethemixofinputsthelowestcostmix,anddotheyachievethemaximumpossibleoutputs?).Weaddanadditionalcategory–doingtherightthings“intherightplaces”.Decisionson
whichcaresettingservicesshouldbedeliveredhaveasignificantimpactontheabilityofhealthsystemstoimproveormaintainhealthandfinancialprotection.Commontrade-offsarebetween:thedifferentlevelsofcare(e.g.community,primary,secondary,tertiary);dayversusinpatientcare;long-terminstitutionalcareversushomecare;andsocialcareversusmedicalcare.Adequatecoordinationandcontinuityofcare,bothwithinandacrosslevels,arecriticalelementstoensuringthatservicesaredeliveredintherightcaresettings.
Althoughhigh-incomecountrygovernmentsoftenurgelineministriestoimproveefficiency
inthefaceofbudgetcuts,ortorestrainexpendituregrowth,themainobjectiveofimprovingefficiencyinlowandlower-middleincomecountriesisnottoreduceoverallspendinginhealthorcutbudgets.ItistomakebetteruseofavailableresourcestoachievefasterprogresstowardsUHC,betterhealthandgreaterfinancialprotection.Thisiswhythepaperfrequentlyusestheterm“achievingmorewiththeavailableresources”todescribetheterm“efficiency”.
ThishastwoimplicationsforthewayefficiencyisconsideredinthecontextofUHC.First,thetraditionalwayofconsideringefficiencyfocusesonhealthoutcomesforpatientsorapopulation.Inthiscontext,increasingcoveragewithhealth-sectorinterventionsisonlyonepathwaytoimprovinghealthoutcomes.Multi-sectoralorinter-sectoralapproachesarealsoimportantandneedtobeconsideredinanyassessmentofthemostefficientwayofimprovingpopulationhealth.TheyarediscussedinSection3.
Second,theconceptofUHCacknowledgesthatpeoplevaluenotonlythehealthimprovementsthatresultfromappropriateuseofhealthservicesbutalsotheassurancethatusinghealthserviceswillnotresultinseverefinanciallosses.This“valueofinsurance”-whereinsuranceisinterpretedinthebroadsenseofareductionintheriskofpeopleneedingtofindthefundsforhigh,unexpectedhealthcostsinthefuturethroughsomeformofprepaymentandpooling-hasbeenwellacceptedineconomicsashavingtwocomponents.Thefirstisthewelfarebenefitassociatedwithpeopleknowingtheywillnotsufferunexpectedfinanciallossesintheeventofillness,andthe
1Sometimestheassumedmaximispopulationwelfare(seePalmer&Torgerson1999)orthevalueofthehealthimprovement(aninterpretationofQALYs).
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secondisthewelfarebenefitofknowingthattheywillbeabletoaffordtousehealthservicesthatwouldhavebeenunaffordableintheabsenceofinsurance(seeNyman1999).2
Todate,littleattentionhasbeenpaidtounderstandingthisbroaderconceptofefficiencyinthecontextofasocietyseekingtoimprovebothaspectsofUHCatthesametime–coveragewithqualityhealthservicesofalltypes,andcoveragewithfinancialprotection.Arecentexceptionisthedevelopmentofanextendedcost-effectivenessanalysis,whichseekstounderstandtheimplicationsofvariouschoicesofinterventionmixes,notonlyonhealthoutcomesbutalsoonimpoverishment,oneconsequenceofalackoffinancialprotection(seeVerguetetal.2013;Verguetetal.2014;Verguetetal.2015;Shrimeetal.2015).ThisisalsodiscussedfurtherinSection3.
IV. Sourcesofinefficiency
Countriescannotmakeinformedchoicesaboutwhichinefficienciestheycantacklewithoutidentifyingthemostimportantcausesinagivensetting;thepragmaticwayofachievingthisistostartwithoneofthechecklists,whicharebasedonananalysisoftheliteratureoncountryexperiences.Table1providesachecklistbasedonanapproachtakenbyWHOin2010(WHO2010a).ThischecklisthasbeenmodifiedtoincorporatemorerecentexperienceandsomemanagerialandadministrativeinefficienciesthatwerenotconsideredintheWHOreport,drawingonrecentworkbytheOECD(OECD2017).
Thetableisorganizedaccordingtothethreekeypolicyquestionsdiscussedearlier:doingtherightthings,doingthemintherightplacesanddoingthemright.Thesectionondoingthingsrightbuildsfromhealthsysteminputs(medicinesandothermedicalproducts,healthworkforce,infrastructureandequipment)totheoutputsandoutcomestheyproduce(healthservices).Italsoincludesinefficiencieswithintheoverallhealthsystemmanagement,organizationandgovernanceandwithinthehealthfinancingsystem.Table1:CommonCausesofInefficiency
DoingtherightthingInefficiencycouldresultfromanimbalancebetween:population-basedpromotionandpreventionversuspersonalandcurativeservices;highcost,lowimpacthealthservicesversuslowcost,highimpactservices;governanceandpublichealthfunctionsversusotherhealthservices.NotdoingtherightthinginthecontextofUHCcanmanifestalsoasinadequateattentiontofinancialprotectioncomparedtotheavailabilityandqualityofhealthservices,orviceversa.
Doingthingsintherightplace
Inefficiencieswouldcommonlyincludeservicesbeingprovidedathigherlevelinstitutionsthatcouldbedonewiththesamequalitybutwithlowercostsatlowerlevelsofthesystem(e.g.avoidableoutpatientspecialistvisitsandemergencydepartmentvisits),avoidableinpatientadmissionsorlongerthannecessarylengthofstay,oracuteinpatientsurgerieswhichcouldbeperformedinday-care.
2Formoreinformationontheextentofhealthshocksonconsumptionandtheabilitytosmoothconsumptionwithinsurance,seeforexample,Limwattananonetal.2015,Wagstaff&Lindelow2010,Chetty&Looney2006.
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Doingthingsright–inefficienciescanbelinkedtohigher-costinputschosen,orinputsnotachievingtheirmaximumpotentialA. Inputs
1. Medicines:a) Under-utilizationofgenericsorpayingtoomuchforanyspecificmedicine;b) Useofineffectivemedicines,thewrongmedicines,orusingthematthewrongtime;c) Overuseorunnecessaryuse.
2. Infrastructure(e.g.healthfacilities)andequipment:a) Inappropriatehealthfacilitysize,particularlyhospitals,foroptimalefficiency;b) Underorover-capacityinhealthfacilities;c) Equipmentthatispurchasedandcannotberepairedorisnotusedoptimally.
3. Personnel:inappropriatemixbetweendifferentcadres;locatedinthewrongplaces;demotivatedworkerswithlowproductivity(e.g.lowvisitsperhealthworkersperday,highratesofabsenteeism);poorqualityofcareprovided.
4. Inappropriatemixofinputs:e.g.healthworkersbutnomedicinesorothermedicalproducts,alowercostmixofinputsispossibletoachievethesameoutputs.3
B. Outputsandoutcomes
5. Healthservices:a) Unnecessary,tests,procedures,treatments/surgerycomparedtoneed;b) Medicalerrorsandlowqualitycare,includingdoingtheinterventionsatthewrong
time(e.g.late)meaningtheinputsandoutputsdonotachievethedesiredoutcomes;c) Underuseofneededhealthservices(prevention,treatment,rehabilitation,palliation;
includesmedicines)leavingpatientsvulnerabletounnecessarydisease,suffering,andpossibleincreasedmedicalcostssubsequently.
C. HealthSystemStructure,OrganizationandGovernanceincludingtheHealthFinancing
System6. Waste(includingexpiredmedicines),corruption,fraud.7. Sub-optimalpublicfinancialmanagementpracticesincludinglatedisbursementsfrom
theMinistryofFinance,alargenumberoflineitemsorinflexibilityacrosslines,lowbudgetexecutionrates.
8. Inefficiencyinraisingrevenues(forhealth),particularlywhenrevenueraisingforhealthisindependentfromgeneralgovernmentrevenuecollection.
9. Fragmentationinthesystem:inpooling,butinthebroaderhealthsystemaswell-e.g.procurement,supplychains,laboratories,servicedelivery.Thiscanbeassociatedwithdomesticdecisionssuchasestablishingseparateinsuranceschemesfordifferentpopulationgroups,ortodecisionsmadebyexternalpartnerstobypassexistingnationalsystemsandestablishparallelsystemsandstructurese.g.financialflows,audit,M&E,servicedelivery,laboratories.
10. Administrativeinefficiency:higher-than-necessarycostsfortheservicesoffered,includinginhealthinsuranceagencies.
3Therearesomeoverlapsinevitablybetweenthevariousformsofinefficiency.Forexample,healthworkerswithoutmedicinesordiagnostictestsmightbelinkedtoadministrativeefficiency,whileusinghighercostinputstoachieveresultsthatlowercostinputscouldachieveisoneaspectofhealthworkforcemanagementaswell.
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1) DoingtherightthingsWithresourcescarcity,doingtherightthingsrequiresexplicitdecisionsaboutwhich
interventionsshouldbeavailable,andwithinthat,thebalancebetweenpreventionandtreatment,governanceandpublichealthfunctionsandpersonalhealthservices,andwhattypesofinter-sectoralactionstoimprovehealthshouldbepursued.TheseissuesarediscussedbrieflyinturnfollowingtheorderofTable1.
i. MixofhealthinterventionsandpackagesMostoftheliteratureondoingtherightthingshasfocusedontheappropriatemixofhealth
interventionsusingcost-effectivenessanalysis.Theliteratureonthecost-effectivenessofspecificinterventionsoragroupofinterventionsforaparticularhealthproblemisvast,toovasttoreferencefullyhere(e.g.Cambianoetal.2015;Edejeretal.2005;Mocketal.2015;Kimetal.2015;Ortegonetal.2012;Rozeetal.2015;Whiteetal.2011).Thereislessanalysiscomparingtheefficiencyoffundingasetofdifferenttypesofinterventionsacrosspriorityhealthproblems,thesortofanalysisrequiredifcountriesaregoingtodevelopanessentialpackageofhealthservicesfromscratchormodifytheirpackagebasedonthebestpossibleevidence.4Fromthefewanalysesthatareavailable,theevidenceshowsthatmanycountriesarenotfullyfundinghealthinterventionsthatarelowcost,highimpactintermsofpopulationhealthbenefits(suchaschildhoodimmunizations)whilehighcost,lowimpactinterventions(suchasformsoftertiarycareforchronicdiseases)doreceivefunding(Chisholmetal.2012;Evansetal.2005;Laxminarayanetal.2006;Jamisonetal.2006;WHO2017a).
Inthesecases,reallocationofresourcestowardsthelowcost,highimpactinterventionswouldimprovepopulationhealthforthesameexpenditure.Therearefewexplicitanalysesofthelikelygainsofdoingthis.OneexceptionistheWHO(2010)estimatethatswitchingbetweeninterventionsinthismannercouldproducethesamehealthbenefitsatbetween16%and99%ofthecurrentcosts(dependingonthehealthproblembeingstudiedandthecountry).5
Thereareanumberoftechnicalandpracticalproblemswithmuchofthecost-effectivenessliteraturethatlimititsvaluetocountrieswishingto“dotherightthing”bychangingtheirinterventionmixesordevelopingapackageofinterventionstowhichallpeoplewillbeguaranteedaccess.First,muchoftheanalysisasksifnewinterventionsshouldbefundedwithnoguidanceaboutwhatinterventionsshouldbereducedifresourcesarescarce.Thefundamentalquestionofwhichmixofinterventionswouldmostimprovepopulationhealthwiththeavailableresourcesisrarelyasked.Second,thecost-effectivenessofanygiveninterventiondependsonmanylocation-specificfactors,includingcoststructures,diseasepatterns,thepopulationagepyramid,whatothertypesofinterventionsarebeingundertakenthatmightinteractintermsofcostsoreffects,andcurrentlevelsofcoverage.Itisnotnecessarilyappropriatetoextrapolatetheresultsofastudyundertakeninonecountrytoothercountries,whosevariablesmaydiffersubstantially.Third,costsandeffectscanchangeovertimewithchangesindiseasepatternsandcosts,andtechnologicalinnovations.
Itwouldbedifficultforanycountrytoundertakestudiesofthecost-effectivenessofallpossiblehealthinterventions–promotion,prevention,treatment,rehabilitationandpalliation,aswellaspersonalandpopulation-based–intheirownsettings,andupdatethemfrequently,even
4Bymodify,wemeanaddandsubtract.Traditionalincrementalcost-effectivenessanalysislooksatwhatservicesshouldbeadded,butrarelyisguidancegivenaboutwhatshouldbereducedtomakewayforthenewinterventionwhenadditionalresourcescannotbefound.5Theseestimatesdidnottakeintoaccountthetransactioncostsinvolvedinmakingthechanges.
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withgoodtechnicalcapacities.Internationalinitiativessuchasthevariousiterationsofthediseasecontrolprioritiesproject(DCP)andtheWHO-CHOICEprojecthavesoughttocollatetheinformationoncost-effectivenessfromawidevarietyofinterventionsinwaysthatcouldhelpcountries,particularlythosewithlimitedtechnicalcapacity,understandwhichinterventionscouldbegivenhighpriorityintheirsettings(Jamisonetal.2006;Mocketal.2015;Ortegonetal.2012;WHO2017a).WHO-CHOICEalsoreportsresultsatdifferentlevelsofcoverage,takingintoaccountpossibleinteractionsbetweeninterventionsintermsofcostsandeffects.6
Thereareseveralwell-acceptedlessonsfromthistypeofwork.Incountrieswithahighburdenofcommunicablediseaseandhighmaternalandchildmortality,packagesinvolvingpreventionandtreatmentformaternalandneonatalcare,childhealth,HIV/AIDS,tuberculosisandmalariaarehighlycosteffective(Laxminarayanetal.2006).Mostcountriescurrentlyseektomakethesepackagesuniversallyavailable,evenatlowlevelsofincomepercapita.Otherinterventionsthatseemtoberelativelycost-effective(e.g.preventionoftrafficaccidents,reductionoftobaccouse,surgicalwardsindistricthospitals,treatmentofacutemyocardialinfarctionandsomesecondarypreventionforcardiovascularevents)arenotyet,however,universallyavailableinlowandmiddle-incomecountries.ThereasonswhytheyarenotwidelyavailableareconsideredfurtherinSection6.
Thishighlightsanotherproblemwiththisliterature–itrarelyconsiderstheresourceenvelope.Financialconstraintspreventmostlowandlower-middleincomecountriesassuringuniversalcoveragewithalltheinterventionsthattheliteraturesuggestsarecost-effective:thisisafailureoftheliteraturemorethanafailurebycountries.
Moneyisnot,however,theonlyconstraint,atleastintheshort-to-mediumterm.Othersincludethenumber,skillmixandlocationofhealthworkers,andthetypeofhealthinfrastructureavailable,includinglocationandtypeofhospitals,primarycarefacilitiesandcommunityfacilities.Effortstodevelopasetofguaranteedhealthservicesmusttakeintoaccountalloftheseconstraints.Thisrequiresarelativelycomplicateddecision-makingprocess.Formally,itwouldrequiresomeformofprogrammingmodelratherthansimplycomparingcost-effectivenessratios,althoughasecond-bestalternativeistocomparethenon-financialresourceneedsofanyproposedsetofcost-effectiveinterventionswiththeavailablenon-financialresourcestoassessthefeasibilityofimplementation.
ii. PreventionversustreatmentPartofthecost-effectivenessliteraturehasfocusedonpreventioneitherbyitselfofin
comparisontotreatmentofvarioustypes(e.g.DiabetesPreventionProgramResearchGroup,2012;Chisholmetal.2012;Granichetal.2012;Jamisonetal.2006;Kuykenetal.2015;WHO2017a).Theresultsarenotparticularlysurprising:sometypesofpreventionareverycost-effectiveandsomearenot.Sometypesoftreatmentarecost-effectiveandsomearenot.Preventionisnotalways“better”thancureinthesenseofproducingmorehealthforthemoney,althoughoftenitis.Sometimes,thoughnotalways,expenditureonpreventionresultsinanetsavingoffuturetreatmentcosts.7Thedecisionaboutfundingpreventionortreatmentneedstobetakenonacase-by-casebasis,andeachcountrywillendupwithitsownmixdependingonfactorssuchasdiseasepatterns,coststructures,andhealthworkercapacities.Itisnotpossible,therefore,tooffergenericguidanceastowhatshare
6Thisallowsforeconomiesanddiseconomiesofscale,economiesofscope,andinteractionsbetweeninterventionsintermsofeffectiveness.7Thatisthepresentvalueofthecostsoftheinterventionarelowerthanthepresentvalueofthesavingsinthefuturecostsoftreatment,rehabilitationandpalliation.
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ofhealthexpendituresshouldbeallocatedtopreventionandpromotionratherthansubsequenttreatment,rehabilitationandpalliation.
iii. Thebalancebetweengovernance,administration,publichealthfunctionsandpersonalservices
Improvingandmaintaininghealthrequiresanumberofactionsbeyondensuringprevention,treatment,rehabilitationandpalliationattheindividuallevel.Population-basedpromotionandprevention(suchaspublichealtheducationcampaigns),forexample,issomethingthatisunlikelytobeachievedwithouttheinvolvementofgovernment.Thesetofadditionalactivitiesthatrequiregovernmentinvolvement(generallyincludingfunding),areoftencalledessentialpublichealthfunctionsorservices.Thesecanbedefinedwithdifferingdegreesofaggregation(e.g.WHO2017band2017c;CDC2017)andgenerallyinclude:diseaseandoutbreaksurveillanceandcontrol;population-basedhealthpromotion;linkingpeopletopersonalservices;developingthehealthworkforce;settingandenforcingstandardsinservicedelivery;andhealthresearch.
Sometimesthegovernanceandadministrativeactivitiesrequiredtokeepahealthsystemfunctioningarealsoincluded,includingdevelopingandimplementingplansforthehealthsector,developingandenforcinglegislationandregulationsasappropriate,interactionswiththecommunityandpromotinginter-sectoralactiontoimprovehealth.Countriesstruggletofindtheappropriatebalancebetweenfinanceforroutineadministration,governanceandtheotherpublichealthfunctionsinthefaceofcontinualdemandforpersonalservicesforindividualpeople.
Scientificallyvalidguidanceontheappropriatebalancetoensureefficiencyisdifficulttofind.Thecost-effectivenessliteratureexaminessomeofthesefunctions,mostlyrelatingtopopulation-basedhealthpromotionorlegislationandregulationtocontrolthingsthatareharmfultohealthsuchastobaccoortraffic(e.g.Ortegonetal.2012;Goetzeletal.2014;Masonetal.2014;Gordon&Rowell2015).Beyondarguingthatmanyinterventionsarecost-effectiveorthatmorehealthpromotionofvarioustypesshouldbeimplemented(e.g.Lobsteinetal.2015),thereislittleguidancewhatpersonalhealthservicesshouldbecuttomakeroomfortheincreasedexpenditureintheseareas.
iv. Inter-sectoralandmulti-sectoralactionIthaslongbeenunderstoodthatmanyfactorsoutsidethehealthsectorinfluencehealth
(suchasincome,education,inequalities,environmentaldegradationandgenderandsocialnorms)andthathealthalsoinfluencesmanyexternalfactors(suchastheabilitytoearnandtogotoschool)(Grossman1976;Cumper1984;Wilkinson1997;CommissiononSocialDeterminantsofHealth2008;Marmotetal.2008).Asaresult,thereisincreasingliteraturearguingthata“wholeofgovernment”or“multi-sectoral”approachisneededtocomplementhealthservicedeliverytoimprovehealthandreducehealthinequalities(e.g.Marmotetal.2008;Carey,CrammondandKeast2014;WHO2014).Thisbuildsonthealreadylargeliteraturearguingfor“inter-sectoral”actions(thehealthministryworkingbilaterallywithothersectors)toimprovehealth(e.g.Dahlgren1994;WHO1997;Adamsetal.2014;Daviesetal.2014).
Thereisalsoagrowingliteraturedocumentingwhereinter-sectoralormulti-sectoralactionshavebeentaken,andhowmorecouldbefacilitated(e.g.Anafetal.2014;Larsenetal.2014;Dawson,Huikuri&Armada2015;deAndradeetal.2015;DeLeeuw&Peters2015).Asyet,however,thereisverylittleinformationthatcanbeusedtoguidegovernmentsindecidingwhetheritismore
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efficienttoallocatemoreresourcestoothersectorsattheexpenseoffinancingthehealthsector.Partoftheproblemisthatactionsoutsidethehealthsectorcanimprovehealthalongsideotheraspectsofhumanwelfare,suchaseducationalattainment,theenvironmentandincomeearningcapacities.Cost-effectivenessanalysiscapturesonlytheimpactsonhealthsoisnotanappropriatetooltoguidesuchbroaddecisions.
Cost-benefitanalysishassometimesbeenusedinthesecases,convertingallbenefitsincludingreducedmortalityandmorbidityintomoneyterms.Livessavedaretranslatedintoamonetaryvalue,frequentlyusingamethodknownasthevalueofastatisticallifewhichisbasedonanassessmentofthevaluethatindividualsplaceonamarginalchangeintheirriskofdeath,mostcommonlyrevealedbythesalarypremiumtheywouldaccepttoworkinamoredangerousoccupation(e.g.Kniesner,ViscusiandZiliak2014;Laxminarayanetal.2014;Viscusi2015).Theapproachhasastrongfollowingforitsuseinvaluinghealthbenefitsassociatedwithinterventionssuchastransportimprovements,andintheassessmentofhealthinterventions.However,theappropriatenessofstatisticallifevaluemethodsarewidelydebatedbyhealtheconomistsanddislikedbyhealthprofessionalswhoconsiderthathumanlifeispriceless(e.g.Alberini&Ščasný2013;Angevine&Berven2014).
Anarrowerperspectiveformultisectoralorinter-sectoralanalysisistodeterminewhichofthepossibleoptions(whicharenotcurrentlybeingundertaken)theMinistryofHealthshouldfocusoninitsefforttoconvinceothersectorstotakeactiontoimprovehealth.Mostoftheexistingliteratureonthesocialdeterminantsofhealthimpliesthatthehealthsectorshouldseektohaveallofthemimplemented,butaminister’stimeisscare,asisthetimeoftheministrystaffandthefundstheywouldhaveavailabletosupporttheseactions.Fromthehealthperspective,itismoreefficienttotargettheactivitiesinothersectorsthatofferthegreatesthealthimprovementsfortheirinvestmentsinmoneyandtime.Theliteratureofferslittleguidanceonthis,withtherecentexceptionofapaperthatsoughttoidentifythehealthandnon-healthinterventionsthathadthebiggestimpactonlifeexpectancyin54lowerincomecountriessince1990basedonaformofregressionanalysis(Hauck,MartinandSmith2016).Interestingly,ofthenon-healthinputs,genderequalityhadthebiggestimpactonlifeexpectancywhileprimaryschoolenrolmentalsohadanimportanteffect.Thisisapromisingstart,butmoreworkneedstobedonetohelpindividualcountriesunderstand,lookingforward,whattypeofspecificinterventionsoutsidethehealthsectorarelikelytoimprovehealththemost.Forexample,mostcountriesreachedclosetouniversalprimaryenrolmentduringtheMDGera,soincreasingenrolmentmorewouldnothavelargeimpactsinthefuture.
v. FinancialprotectionandservicecoverageAsarguedearlier,discussionsaboutdoingtherightthingsinthefaceoffinancialconstraints
inhealthhavegenerallyassumedthattheoutcomeofinterestisanimprovementinhealth.Whenitisrecognizedthatpeoplealsovaluefinancialprotection,thereisanotherefficiencytrade-off:betweenusingscarcefundstoincreasecoverage(and/orquality)withexistinghealthinterventions,therebyimprovinghealth,orimprovingfinancialprotectionbyreducingout-of-pocketpayments.Littleattentionhasbeengiventohowtoaddressthistrade-offtodate.
Arecentexceptionhasbeencalled“extendedcost-effectivenessanalysis”.Itexaminestheimpactofdifferenttypesofinterventionsonhealthoutcomesasinstandardpractice,butalsoconsiderstheirimpactonafinancialprotectionindicatorsuchastheincidenceofimpoverishmentlinkedtoout-of-pockethealthpayments(Verguetetal.2013;Shrimeetal.2015;Verguetetal.2015a;Verguetetal.2015b).Theinformationonbothtypesofoutcomesarepresentedseparatelyratherthanseekingtoputrelativeweightstothetwocomponents.
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Tousethistypeofanalysis,decision-makerswouldneedtoconsiderpairsofoutcomes(healthimprovementandfinancialprotection),andimplicitlyattachweightstotherelativevalueofeachwhendecidingwhattypesofhealthservicestosupport.Therearesomeproblemswiththisapproach.Forexample,itisevenmorecontextualtoaspecificcountrythannormalcost-effectivenessanalysisbecauseout-of-pocketpaymentlevelsandtheirdistributionacrosstypesofhealthservices,andincomesvarygreatly.Theanalysishasalsobeenappliedtohealthinterventionsandnotyettointerventionsaimedspecificallyatreducingoutofpocketpaymentsorstrengtheningpoolingarrangement.However,itisaninterestingdevelopmentthatcancontributetounderstandingatleastsomeofthetrade-offsinvolvedindecisionsaboutefficiencyanddoingtherightthings.8
2) DoingtherightthingsintherightplaceDoingtherightthingsalsorequiresanassessmentofwhichcaresettingsarethemost
efficientforservicestobedelivered.Iftherearenoeffectsonquality,servicesshouldbedeliveredintheleastcostlycaresetting.Commonexamplesofservicesbeingprovidedininappropriatecaresettingsinclude(i)acuteinpatientadmissionswhichcouldhavebeenavoidedorshortenedthroughtheavailabilityofadequateambulatorycare(includingdaycare),home-basednursingcareorsocialcareand(ii)outpatientspecialistoremergencycarevisitsforserviceswhichcouldhavebeenprovidedinprimarycare.Althoughsomeoftheseservicedeliveryandorganizationmodelsarenotyetwidelyavailableinlower-incomecountrieswherepatients(particularlythepoor)sometimesdonotobtainanytypeofformalcareatall,experiencesfrommoredevelopedcountriescanprovideimportantlessonstopreventcommonsetbacksanddesignchallengesinachievinggreaterefficiencyastheselower-incomecountriesdeveloptheirservicedeliverysystems.
Evidenceofavoidablehospitaladmissionsincludeadmissionsforconditionsthatarenotsevereenoughtowarrantanadmission(andthuscouldbetreatedatlesscostlycaresettings)aswellasforambulatorycare-sensitiveconditionswhichcouldhavebeenavertedthroughtheprovisionofadequatepreventativecareinlowerandlesscostlycaresettings.Forexample,thelargevariationinadmissionsforlow-mortalityconditions(e.g.asthmaexacerbation)fromtheemergencydepartmentindicatesthatsomeoftheseadmissionsmaybeunnecessary(Sabbatini,NallamothuandKocher2014;).Inaddition,studiesshowthatcostlyhospitalizationsforambulatorycaresensitiveconditions(e.g.diabetes)couldbeavoidedthroughaccesstoadequatepreventionandearlytreatmentinprimary/communitycare(James,BerchetandMuir2017;Rosanoetal.2013).Thereiswidevariationinageandsex-standardizedhospitaladmissionratesforAsthmaandCOPD(bothambulatorycaresensitiveconditions)acrossOECDcountries(Figure1).AsthmaadmissionratesarehighestforKorea,theUnitedStatesandSlovakrepublicwhileCOPDadmissionratesarethehighestforHungaryandIreland.InEstonia,avoidablechronicobstructivepulmonarydisease(COPD)andasthmaadmissionsconstituted76.9%ofadmissionsforlowerchronicrespiratorydisease,whileavoidablecongestiveheartfailure(CHF)andhypertensionadmissionscomprised84.3%ofadmissionsforhypertensionandotherformsofheartdisease(WorldBank2015).
8Anothermoretechnicalissueisthattheextentofimpoverishmentduetoout-of-pockethealthpaymentsdoesnotreallyreflecttheex-antevalueofthefinancialprotection,butmoretheresultofnothavingsufficientfinancialprotection.
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Figure1:AsthmaandCOPDhospitaladmissioninadults,2013(ornearestyear)
Source:OECDHealthStatistics2015
Aprolongedlengthofstayinhospitalsisanotherindicationofcarethatisnotbeingdeliveredinappropriatecaresettings.Oftenpatientscanremaininthehospitalduetotheneedfornursingorpalliativecare,whichtheyareunabletoaccessinothercaresettings.Forexample,inEstonia,about32.6%ofhipfracturepatientsremainhospitalizedbeyondtheinternationalstandardof28days,whilethepercentageofstrokepatientsremaininginacuteinpatientcarebeyondtheinternationalstandardof56-daysis6.91%(WorldBank2015).Home-basednursingcarehasbeenshowntobemoreefficient(achievingatleastthesamequalityofcareatlowercost)thaninstitutionalcareforthefrailelderly(deJongeetal.2014).Whilethefrailelderlyoftenprefertoremainathome,theycannoteasilytraveltouseoffice-basedprimarycareservices.Thissometimesresultsinhospitalizationthatwouldnothaveoccurredinthepresenceofhome-basedprimarycareservices(e.g.Stall,NowaczynskiandSinha2013).Similarly,theavailabilityofsocialcareservices(institutionalorhome-based)whichprovideservicessuchasassistancewithactivitiesofdailylivinghasbeenshowntosignificantlyaffecttheextentofdelayeddischargesfromhospitals(NationalAuditOffice2016).Inadequatecoordinationwithoralackofaccesstosocialcareleadstoa“defaulttodoctor”phenomenon,whichinturncreatesadditionalpressuresonmedicalstafftime,whichtheyareill-equippedtohandle(Dorell2015).
Surgeryformanyconditionsmaybeperformedinlesscostlydaycaresettingsinsteadofacuteinpatientcaresettings,whileachievingthesameresults.Forexample,almostallcataractscouldberemovedwithambulatorysurgery.Despitetheseopportunities,daycaresurgeriesarenotfullyused,eveninhigh-incomecountries.AlthoughwelloverhalfoftheOECDcountriesnowconductover90%ofcataractsurgeriesindaycaresettings,somestillhaveratessubstantiallylower–31%reportedforPoland,50%forHungaryand72%inAustria(James,BerchetandMuir2017).
Thereisalsoconsiderableevidenceofunnecessaryuseofoutpatientspecialistandemergencydepartmentsinbothlowandhighincomesettings,whereunnecessaryisdefinedasvisitswhichcouldhavebeentreatedinlesscostlylevelsofthesystemwithnoreductioninoutcome.Forexample,inEstoniaarecentstudyshowedthatapproximately20%ofvisitswithoutpatientspecialistsfordiabetespatientsandnearly70%ofvisitsforhypertensionpatientscouldhavebeen
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treatedinprimarycare9(WorldBank2015).Emergencydepartmentvisitsper100populationvariedfrom10to70inOECDcountriesinrecentyearssuggestinginefficiencyinatleastsomecountries.Recordreviewsfromanumberofthesecountriessuggestedthatbetween12%and56%ofthesevisitscouldhavebeentreatedinlesscostlysettingswithoutanydeclineinqualityofcare(James,BerchetandMuir2017).Bypassinglesscostlyprimarycareprovidersformoreexpensivehospital-basedcareisalsoacommonphenomenoninlowandmiddle-incomecountriesincludingChina,Kenya,NamibiaandTanzania(Wuetal.2016;Nshimirimanaetal.2016;Lowetal.2001;Kahabukaetal.2011).
Thedeliveryofcareininappropriatecaresettingsisdrivenbyanumberoffactors.Theliteraturesuggeststhatthesefactorsmayinclude:
• Systemdesignfactors(e.g.organizationalseparationofhealthandsocialcare,weak
gatekeepingfunctionsofprimarycareproviders,lackofaccesstoprimarycareprovidersafterhours,etc.);
• Contractingandfinancing(e.g.weakfinancialincentivesforsolvingmedicalproblemsinprimarycare,strongfinancialincentivesforincreasingthevolumesofoutpatientspecialistandinpatientcare,etc.);
• Clinicalandprofessionalmechanismsandprocess(e.g.lackofadherencetoclinicalguidelinesandpathways);and
• Healthsysteminputs(e.g.shortageofhomenursingproviders,lackoffullyfunctionale-platformforelectronicmedicalrecordsandpatientreferralcoordination)(WorldBank2015).
InEstonia,weakprimarycareincludingweakmanagementofpatientswithchronicdiseases,
lowadherencetoevidence-basedpractice,limitedservicescopeandknowledgegapswereshowntobeparticularlyimportantcontributorstoavoidablespecialistvisitsandhospitaladmissions.Asaresultofthesefactors,lowtrustofprimarycareprovidersamongpatientsmaycontributetoself-referralsandbypassing.InKenya,forexample,patientspreferredtobypassthelesscostlyprimarycaregatekeepersandgodirectlytomoreexpensivehospitalsbecauseofperceivedpoorcommunication,longwaitingtimesandbeingtreatedwithoutdignityandrespectinprimarycare(Nshimirimanaetal.2016).
Adequatecoordinationandcontinuityofcarewithinandbetweencaresettings(e.g.receiptoffollow-upcareafterahospitaladmission)isalsocriticaltopreventingfurtherdeteriorationinpatient’shealth,whichinturnmayrequirerepeatoutpatientspecialistoremergencydepartmentvisits,orreadmissionstoacuteinpatientcare.Thisincludescoordinationwithendoflifepalliativecarewheremanagedcarebypalliativeteamshasbeenshowntoreducehospitalizationrates(e.g.Reyniersetal.2014;Seowetal.2014).
3) Doingthingsright
Oncedecisionshavebeenmadeaboutwhichinterventionsshouldbeavailable,wheretheyshouldbeavailable,andthebalancebetweenexpandingservicesandexpandingfinancialprotection,thenextquestionishowtogetthemostoutofthedifferenttypesofinterventionsforthelowestcost.HerewediscussbrieflytheelementsincludedinTable1under“doingthingsright”.
9Thisindicatorlooksatspecialistvisitsbypatientswhoseconditionsareconsidereduncomplicatedbasedontheprimarydiagnosesmade.Ofthese,visitswereconsideredavoidableifpatientspresentedtoaspecialistnotspecifiedinnationalEstonianguidelines.Ifseveralvisitswerebilledunderthesameclaim(e.g.,pertainingtoonecarecycle),thedecisiononwhetherthesevisitswereavoidablewasmadebasedontheprimarydiagnosiscodeassignedtotheclaim.
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i. HealthServices
ProbablythebestdocumentedsourceofinefficiencyfromTable1relatestomedicineswhichaccountforsomewherebetween20%and60%ofallhealthexpendituresinlowandmiddleincomecountries,andaround18%inhighincomesettings(Niessen&Khan2016).Widespreadover-prescriptionandoveruseofmedication,andincorrectprescriptionanduse,particularlyofantibiotics,iswelldocumented(e.g.Kalyangoetal.2015;Lietal.2012;Hollowayetal.2013;Maoetal.2015;OECD2017).Holloway(2011)andHollowayandDijk(2011)suggestthatglobally,lessthan50%ofpatientsreceiveappropriatemedication(comparedtotreatmentguidelines)fortheirconditions:evenfewerinlowandmiddleincomecountries-40%ofpatientsinthepublicand30%intheprivatesectorsrespectively.
Lowadherencetorecommendedtherapywastesresourcesbecauseofanincreasedneedforsubsequentmedicalcare(Pereiraetal.2014;Ryanetal.2014;Ali,Abou-TalebandMohamed2016;Choudhryetal.2016).Therearemanydeterminants,butlowadherenceismorelikelywithlong-termtherapythanforanacuteepisode,andalsowhereoutofpocketpaymentsformedicinesarerelativelyhigh.Anincreasingliteratureontheaffordabilityofmedicinessuggeststhat,ingeneral,affordabilitydeclineswithlevelsofnationalincomeperhead(e.g.Cameronetal.2009;Cameronetal.2012;Jiangetal.2015;Iyengaretal.2016;Khatibetal.2016).10Inlowandmiddleincomecountries,medicinesfrequentlyhavetobepaidforout-of-pocket,sothelackofaffordabilitytranslatesintoreducedadherencetoafullcourseoftreatmentand,forsomepeople,aninabilitytopurchaseandbenefitatallfromneededtherapy(Luetal.2011;Niesen&Khan2016).
Thelackofaccesstomedicinesthatpeopleneedisalsorelatedtomanycountriespayingtoomuchformedicines.Pricesforthesamemedicinesvarysubstantially,evenacrossEuropeanandOECDcountries,forbothgenericsandbrandnamemedicines(Cameronetal.2012;Simoens2012;Vogler&Kilpatrick2015;OECD2017).11Whilesomevariationsinpricescanbeexpectedgiventhedifferencesacrosscountriesinthesizeofthemarket(population,diseaseprevalence)andtransportcosts,Iyengaretal.(2016)illustratetheremarkablevariabilityinpricesacrossOECDcountries.Asanexample,thepriceforacourseofSofosbuvir(forHepatitisC)rangedfromUS$37,729toUS$64,680,withamedianofUS$42,017.Inastudyof46largelylowandmiddleincomecountries,publicsectorpricesforselectedgenericswerebeen5and17timesabovetheinternationalreferenceprice,withoriginatorbrandsalmost30%higher(Cameronetal.2012).Thegapbetweenthepricespaidandtheinternationalreferencepriceintheprivatesectorwasevengreater.SimilarresultswerefoundmorerecentlyinChina(Jiangetal.2015).Otherstudiesrevealcountrieswherebrandnamepricesarenohigherthantheequivalentgeneric,suggestingthosecountriesarepayingtoomuchfortheirgenericmedicines(Cameron&Laing2010;Vogler&Kilpatrick2015).
Reducingoveruseandinappropriateuse,andreducingthenegotiatedpriceformedicines,freesupresourcesthatcanbereinvestedinwaysthatimprovehealthorfinancialprotection,althoughsometimesthepharmaceuticalindustrylowersthepriceofsomemedicines,butincreasesthepricesofothers.Policiestoreplaceoriginatorbrandpurchaseswithgenericorbiosimilarmedicinesalsoresultinsavings.12Whileanumberofcountries
10Evenifthesecountriescannegotiatelowerprices(notallcan),thedifferenceinpricebetweenricherandpoorercountriesislessthanthedifferenceinaveragehouseholdincomesmeaningthataffordabilityfallswithdeclinesinnationalincomepercapita.11OECD(2017)pointsoutthatpricecomparisonscanbedifficultbecauseofdifferencesinpackagingacrosscountriesaswellasthesecretnatureofsomeofthediscountsthatcountriesnegotiate.12“Abiosimilar(alsoknownasfollow-onbiologicorsubsequententrybiologic)isabiologicalmedicalproductwhichismostanidenticalcopyofanoriginalproductthatismanufacturedbyadifferentcompany.Biosimilars
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havegenericpoliciesofvarioustypes,marketpenetrationismuchlowerthanoptimalfromtheperspectivepurelyoffreeingscarcehealthresourcesbyswitchingfromhighercosttolowercost,equivalenteffect,options(Dylst,VultoandSimoens2014;Hassalietal.2014;OECD2017).Estimatesoftheproportionalcostsavingfromswitchingfromspecificbrandnametogenericmedicinesinclude51%inPakistanand53%inChina(Cameron&Laing2010);between4%and23%inAustria(Heinzeetal.2015)andbetween11%and73%in17lowandmiddleincomecountries(Cameronetal.2012).Indollarterms,Haasetal.(2005)suggestedthattheUScouldsavearound$9billionannuallybyintroducingagenericspolicy,whileMulcahyetal.(2014)suggestthesavingsfromswitchingtobiosimilarswouldbelower-around4%ofcurrentspendingonbiologicals-butstillsubstantialataround$44.2billionfrom2014to2024.
Inefficienciesrelatedtoinfrastructurehavelargelyfocusedonhospitals,andlessfrequentlyonlowerlevelhealthfacilities.Theconsiderablevariationinefficiency(measuredessentiallyastheratioofhealthfacilityoutputstotheirinputs)acrosshealthfacilitieshasbeenextensivelydocumentedincountriesatallincomelevelsthroughtheuseoffrontierproductionfunctionanalysis(e.g.Kirigiaetal.2011;Besstremyannaya2013;Kiadaliri,JafariandGerdtham2013;Duetal.2014;Jehu-Appiahetal.2014;Kittelsenetal.2015).13Inefficiencyinthiscontextgenerallymeansthatthesamethroughputofpatientscouldbehandledwithfewerinputs(comparedtothemostefficienthospitals).Anumberofthestudiesinlowerincomecountrieshaveidentified“over-staffing”ininefficienthospitals(KirigiaandAsbu2013;Kirigia,SamboandLambo2015),whichcanbelinkedtotheinappropriatemixofinputsdescribedinTable1asoneofthecausesofinefficiency.Overstaffingcouldalso,however,beinterpretedasshowingthatthesamestaffandinfrastructurecouldcopewithmorepatients,suggestingunder-utilizationoftheinfrastructureandstaff.
Someofthesestudiesalsoexaminedeconomiesofscaleoroptimalhospitalsize.Frequently,inefficienthospitalsaresmallerthantheirefficientcounterparts,althoughastudyfromSouthAfricashowedthatsomehospitalswere“toolarge”andsome“toosmall”comparedtotheefficientsetofhospitals(Preyra&Pink2006;Kristensenetal.2012;Leleu,MoisesandValdmanis2012;Kirigia,SamboandLambo2015).AstudyfromtwoprovincesinCanadashowedthattheoptimalhospitalsizevariedbyprovincesoitisreasonabletoassumevariationacrosscountries(Asmild,Hollingsworth&Birch2013).InsomeoftheseminalworkonhospitalcostfunctionsandeconomiesofscaleintheUSA,LaveandLave(1984)suggestthatitisdifficulttoidentifyoptimalsizeofhospitalsfromcross-sectionaldatabecausethenatureofsmallandlargerhospitalscanbequitedifferent.Theyarguethattheoptimalsizedependsonthescopeandcomplexityoftheservicesoffered,sothereislittlegenericguidancethatcanbegiventocountriesabouttheoptimalsize.Detailedstudiescontrollingforscopeandcomplexityofserviceswouldneedtobedoneineachsetting.Questionsofpossible“over-staffing”could,however,beexaminedinotherwaysdiscussedmoreinSection4.
Theavailabledatafromlowandmiddle-incomecountriesonhospitaloccupancyratesalsosuggestssubstantialinefficienciescanexistindistricthospitals.Astudyof18countriesin2007reportedanaveragebedoccupancyrateindistricthospitalsof55%,rangingfrom20%to98%(Chisholmetal.2010).InBotswana,districthospitalbedoccupancyratesin2009werebetween40%and61%,butatthesametimethetworeferralhospitalshadoccupancy
areofficiallyapprovedversionsoforiginal"innovator"products,andcanbemanufacturedwhentheoriginalproduct'spatentexpires”,Wikipedia,accessed8February2017.13ThesemethodsarediscussedmorethoroughlyinSection4inrelationtotrackingprogressinimprovingefficiency.
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ratesof143%and222%respectively,suggestingefficiencyandprobablyqualitygainsfromencouragingadmissionsintodistricthospitalsratherthanreferralhospitals(Seitio-Kgokgweetal.2014).
Healthcaredeemedtobeinappropriate,ineffectiveorharmful,sometimescalled“unnecessary”care,hasbeenwidelydocumentedinhighincomecountries(OECD2017;Sainietal.2017;Brownleeetal.2017).Unnecessarytreatmentorinvestigationsarethosewhichhavelittlelikelihoodofimprovingthepatient’squalityordurationoflifeorwhichhavemorechanceofdoingharmthangood.Thelistofcommonformsofunnecessarytreatmentincludesimagingforlowerbackpainandheadaches,antibioticsforupperrespiratorytractinfections,preoperativetestingforlowriskpatients,cardiacimaginginlowriskpatients,inductionoflabour,caesareansectionandsometypesofcancerscreening(Hurley2014;OECD2017;Brownleeetal.2017).
Ineffectivecareincludes:theuseofvitaminandmineralsupplementsaimedatpreventingcardiovasculardisease;antipsychoticprescriptioninolderpatientswhichincreasetheirriskoffalls;orinterventionsundertakenatthewrongtime,ornotatall.Anextremeversionofineffectivecareiscarethatisharmfultopatients,includingmedicalerrors.Ineffectiveandharmfulcarecanleadtosubsequentoutpatientvisits,hospitaladmissionsandotherformsoftreatmentthatcouldhavebeenavoided,andattheextreme,toavoidabledeaths.Reducingallformsofunnecessary,inappropriateandharmfulpatientmanagementsavesmoney(sometimesalsoimprovinghealthoutcomes)thatcanbere-investedintointerventionsthatimprovehealthand/orincreasefinancialprotection.
Theevidenceofover-useisfrequentlycomplicatedbythefactthatpatientsdifferintermsofneed,butformanyoftheseexamples,theevidenceofwidevariationsintheiruseacrosscountries,adjustingforpopulationdifferences,istakentoimplyover-servicinginatleastsomeofthecountries.Forexample,thenumberofCTexaminationsper1000populationvariedfrom31.9inFinland,to254.7intheUSA,with15ofthe28countriesabovetheOECDaverageof131.6(2014data;OECD2017).
ForCaesareansectionandtheuseofantipsychoticsinelderlypatients,therearestandardsofneedthatenableanassessmentofoveruse–15-20%ofdeliveriesforCaesareansand0%foranti-psychotics(reportedinOECD2017).In2014,ratesofdeliveryusingCaesareansectioninOECDcountriesvariedfrom15.3per100livebirthsinIcelandto51.1inTurkey,withanOECDaverageof27.5.Theaveragerateincreasedbetween2007and2014,althoughitfellin12ofthe32countriesforwhichinformationwasavailable(OECD2017,Figure2.2).
Innon-OECDcountries,ratesofCaesareansectionarealsoincreasingandinmanyarealreadyabovetherecommendedrange(Yeatal.2015;Betranetal.2016).Theaverageacrossthecountriesclassifiedas“lessdeveloped”usingtheHumanDevelopmentIndexin2014wasalreadyalmost21%,rangingfrom1.7to56.4per100livebirths(Betranetal.2016).Oftheestimated6.2millionunnecessaryCaesareansectionsannuallyacrosstheworld,50%occurinBrazilandChinaalone(Berwick2017).
Scatteredexamplesofothertypesofunnecessary,inappropriateandharmfuluseofhealthservicesinlowandmiddle-incomecountriesexist.Presumptivetreatmentoffeverswithanti-malarialmedicationinsomecountrieswastesresourcesandisnolongernecessary,giventheavailabilityofinexpensiverapiddiagnostictests(Ochodo,GarnerandSinclair2016).Otherexamplesinclude:theoveruseofmedicineswhenprescriberssellthem(officiallyorunofficially)andthelongerlengthofhospitalstaylinkedtopaymentperday(Chenetal.2014;Gao,XuandLiu,2014;Rahmanetal.2014;Zhangetal.2015b);substantialoveruseofantibiotics,forexample,inchildrenwithacutediarrhoea,inIndiaandThailand(Brownleeetal.2017);andunnecessarycardiacproceduresinBrazilandIndia(Brownleeetal.2017).Thereisnoreasontobelievethatovertreatmentandinappropriate
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treatmentisanylessinlow-incomesettingsthaninhigh-incomecountriesforpeoplewhocanpayorwhosecostsarecoveredbygovernmentorinsurance.
AdverseeventsthatcouldhavebeenpreventedarealsodocumentedinanumberofOECDcountries;thesecanleadtotheneedforadditionaltreatmentandsometimesresultinunnecessarydeaths(OECD2017).Ratesofpreventableadverseeventsinhospitalsacrossthe10studiesreportedbytheOECDrangedfrom1.0%to8.5%.Similarevidencefromlowandmiddleincomecountriesislessreadilyavailable,althoughthereisevidencethatanumberofcountries,includingChina,aredevelopingapproachestoimprovepatientsafetyandconsideringstaffperceptionsoftheproblemasthebasisfordevelopingpossiblesolutions(e.g.Wangetal.2014;Zhouetal.2015).
Under-useofnecessaryservicesexistsalongsideoveruseglobally,inthesamecountry,andeveninthesamepatient(Sainietal.2017).Underuseisprobablymorewidespreadinlowandmiddle-incomecountriesthaninhigh-incomesettings.Indirectevidenceofunderuseisfoundinthefiguresthat1.5millionchildrendieeachyearfromvaccinepreventabledeaths,andanestimated84%ofpre-termdeathsarepreventablewithappropriatecare(Glasziouetal.2017).
Moredirectevidencecomesfromanassessmentofparticulartypesofinterventions.Mostoftheannualestimatedunmetneedforsurgicalinterventionsof320millionprocedureswasinlowandmiddle-incomecountries(Glasziouetal.2017).Forexample,inthe“leastdeveloped”groupofcountriesbasedontheHumanDevelopmentIndex,theaveragerateofCaesareansectionin2014wasonly6%ofalldeliveriescomparedtotherecommended10-15%(rangeacrosscountriesfrom1.4to41.1%).IntheAfricancountriesforwhichdatawereavailable,theaverageratewasonly7%suggestingthatmanywomenwhoneedaCaesareansectionstilldonotobtainthisimportantlife-savingintervention.
Underuseisinefficientinthesensethatbyfailingtoaccessappropriate,low-cost,effectiveinterventions,manyoftheaffectedpeoplewillneedtousemorehealthservicesinthefuture,atalaterstageinthenaturalhistoryofthedisease,leadingtounnecessarydeathsandmorbidity.
Problemswiththehealthworkforcehavebeenwidelydocumented.Inhighincomecountries,insufficientdomesticproductionhasledtotheneedtoimporthealthworkersfromothercountries,whichcanhaveunintendedeffectsonefficiencyifthearrivalsdonothaveagoodcommandofthelocallanguageorculture(Aluttis,BishawandFrank,2014;CrispandChen2014).Inlowandmiddle-incomecountries,thereisasevereshortageofhealthworkers.Only5of49high-needcountriesareachievingtheminimumthresholdof23nurses,doctorsandmidwivesper10,000populationneededtodeliveranessentialsetofmaternalandchildhealthservices(CrispandChen2014;WHO2017e).Theshortageofhealthworkersismuchmoreacuteinremoteandruralareas,atrendnotlimitedtolowerincomecountries(Morrelletal.2014;Abimbolaetal.2015;WHO2017e).
Themixofskillsalsovariesconsiderablyacrosscountries,suggestingpossibleinefficiencyatleastinsomesettings.Forexample,Indiahasaratioofapproximatelyoneallopathicdoctortoeachnurseandmidwife(Rao2014).Althoughthereisnogoldstandard,mostcountrieshaveconsiderablyfewerdoctorspernurseandmidwife–e.g.Indonesiahad0.16;Thailand0.23atthetimeofRao’sIndiastudy(Rao2014;WHO2017f).
Communityhealthworkersbecamepopularinthe1970sinanefforttomoveservicesclosertothepeoplewhoneededthem.Theirnumberdeclinedinthe1980s,butarecentsurgeininteresthasoccurred,linkedtotheneedtogetservicesclosetopeopleandhelpmitigateshortagesinothertypesofhealthworkers(Perry,ZulligerandRogers2014).Anumberof
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apparentsuccesseshavebeenreported,includingladyhealthworkersinPakistan(Yousafzaietal.2014);Ethiopiaisintheprocessnowofexpandingthenumberanddistributionoftheircommunityextensionworkers(Nejmudinetal.2011).Alargenumberofstudiesoftheseworkers’efficacyhaveproducedinconsistentresults.WHOisdevelopingasetofguidelinesforcommunityhealthworkerprogramsandlastyearcalledforexpressionsofinteresttoundertakesystematicreviewsofthevariousstudiestohelpitinthisprocess(WHO2017g).
Otherproblemsaffectingtheefficiencyofhealthworkersinlowandmiddleincomecountriesarelinkedtomotivation,absenteeism,retentionanddualpractice(Abimbolaetal.2015;Hotchkiss,BanteyergaandTharaney2015,Witteretal.2015).Absenteeismreducesthenumberofservicesthehealthworkercanprovide,whilehighturnoverofstaffrequiresretrainingandrelearningthatalsoreducesefficiency(Daouk-Öyryetal.2014).Limitedinformationisavailableontheextentofabsenteeism–twostudiesfromTanzaniasuggestedsubstantiallostproductivityfromabsenteeism.Kurowskietal.(2004)estimatedthattherewasa26%reductioninhealthworkerproductivitybecauseofunexplainedabsencesandbreaks,whileManzietal.(2012)reportedthat44%ofthestaffwerenotavailableatthetimeofthestudyvisit,andnursesworkedonlyfor57%oftheirallottedtimebecauseofbreakstakenwhileonduty.Comparabledataonthesefactorsarenotpubliclyavailableacrosscountries,soitisdifficulttomakegeneralizationsontheirimportance–althoughhealthministrieswillwanttotrackthesevariablesintheirsearchforgreaterefficiency.
In2010,salariedhealthworkersaccountedforjustover42%ofgovernmenthealthexpendituresglobally,lowerinAfricaandSouth-EastAsiacomparedtoEuropeandtheAmericas(Hernandez-Peñaetal.2013).Intermsoftotalhealthexpenditures,remunerationofhealthworkersinthegovernmentsectoraccountedfor34%whileindependenthealthworkerremunerationaccountedforanother10%globally.Whenfundsareshort,ministriesofhealthfrequentlyprioritisepayinghealthworkers,leadingtoreportsofhealthworkersbeinginpost,butdeprivedoftheinputssuchasmedicinesthattheyneedtodotheirwork(Moszynski2016).However,thereislittlesystematicdataonthistypeofinefficiencyinthemixofinputsacrosscountries.
ii. HealthSystemsandtheHealthFinancingComponentWasteintheformoffraudandcorruptionoccursinhealthsystemsatanumberoflevels(seeOECD2017).Inservicedelivery,patientscanmakewrongfulinsuranceclaimsandproviderscanbillforpatientsorservicestheydidnotprovide.Theopportunitiesareparticularlyhighinprocurement,includingthebiddingprocess,andinthesubsequentdistributionoftheinputsthatwereprocured.Inhumanresourcemanagement,thisextendstotakingbribesinreturnforanofferofemployment,oremployingfriendsandrelativeswhomightnotbethebestpersonforthejob.
ATransparencyInternationalReportquotedbyOECDsuggeststhatathirdofrespondentsacrossthe28participatingOECDcountriesbelievedtheirhealthsystemswerecorruptorextremelycorrupt,withNGOs,themilitaryandtheeducationsystembelievedtobelesscorruptthanthehealthsystem(TransparencyInternational2013;OECD2017).Forty-fivepercentofglobalrespondents(103countries)consideredtheirhealthsystemstobecorruptorextremelycorrupt,andinthiscasehealthfaredworsethanreligiousorganizationsandthemedia,inadditiontoNGOs,themilitaryandtheeducationalsystem.
Arecentstudyoffraudinthehealthsectorsuggeststhatsomewherebetween3%and10%ofhealthexpendituresarelostannually,withameanof5.6%.Extrapolatingtotheworld,corruptionandfraudisestimatedtocosttheworld$426billionannually,resourcesthat
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couldbeusedtoimprovecoveragewithneededhealthservicesandwithfinancialprotection.14
Poorpublicfinancialmanagementpracticesalsolimittheefficiencyofgovernmenthealthsystems.Therearemanyproblems,includingunpredictablebudgetallocations,fragmentationinrevenuestreamsandfundingflows,unpredictableorlatedisbursementfromMinistriesofFinancetolineministriesandfromcentralministriestosub-nationalunits,lowbudgetexecutionrates,andinadequatefinancialaccountabilityandtransparency(Brixietal.2012;Foxetal.2013;Cashinetal.2017).Thesepracticesresultintheavailablemoneynotbeingspent,inpoorspendingbecausemoneyarriveslateorcannotbetransferredbetweenlineitems,orinleakagesbecauseoflimitedtransparency.Toillustrateonlyonepartofthis,recentpublicexpenditurereviewsfrom6Africancountriessuggestunderspendsoftheapprovedbudgetrangefrom$10to$120millionayear(WHO2016).Inpercapitaterms,thistranslatesintolossesofpotentialspendingofbetween$1and3.50annually.Datafromtwocountriesallowedacomparisonofexecutiononsalariesversusothertypesofexpenditure.Almosttheentirebudgetforsalarieswespent,whileexpenditureontheinputsneededtokeepthehealthsystemrunningranataround40%.Additionalsourcesofwasteinasystemarelinkedtoadministrativeformsofadministrativeinefficiencysuchashigherthannecessaryadministrativecosts,bureaucraticredtapeanddelays,complexsystemsthattaketimetonegotiate,andincreasinglyhealthcareprovidersspendingtheirtimeonadministrativeissuesratherthaninteractingwithpatientsorthepopulation(OECD2017).Informationontheextentofadministrativecostsinhealthsystemsisdifficulttofindforlowandmiddle-incomecountriesinparticular.Itexistslargelyforhealthinsuranceadministrationbuteventhen.Forexample,intheearly2000s,socialhealthinsuranceadministrationcostsaveraged3.8%oftotalinsuranceexpendituresin15high-incomeOECDcountries,datacomingfromcountryhealthaccountstudies.Thelowestproportionwassomewhereunder2%inEstonia(rangingfrom1.1to1.9%dependingontheyear)andthehighestaround7%inLuxembourg(yearlyrangefrom6.6to7.0%).Twoofthethreemiddle-incomecountriesforwhichdatawereavailablehadadministrationcostsoflessthan3%oftotalinsuranceexpenditures(GeorgiaandTurkey)butinMexicotheywerealmost17%.
Administrativecostsinprivateinsurance,againusingcountryhealthaccountsdata,wereingeneralsubstantiallyhigher,consistentlyover10%in14ofthe23high-incomecountriesforwhichdatawerecollated,reachingasmuchas30%.Ontheotherhand,inNewZealandtheywereonly5%.Thevariabilityintherangeofadministrativecostsacrosscountriesandtypesofinsurancesuggestssomearesubstantiallymoreefficientthanothersandtherearepossiblegainstobemadefromreducingtheshareofinsuranceexpendituresgoingtoadministration.
Thefinalsourceofinefficiencydiscussedhereisfragmentationwithinsystems.Infinancingsystems,thiscanmanifestitselfintermsofmultiplepayersandpurchasersfordifferenttypesofhealthservicesordifferentpartsofthepopulation.Thisisfrequentlycausedbyfragmentationinfundpools–healthinsuranceco-existingwithgovernmentfinancingandprovision,ormultipleinsurancepoolseachofwhichpurchasesservicesfortheirclients.Suchfragmentationleadstohigheradministrativecostsandhigherpricesthancouldbenegotiatedbyasinglelargepayer.Fragmentationcanalsobeanobstacletoequitable
14Globalhealthspendingin2014wasUS$7.6trillion(WHOGlobalHealthExpendituredatabase).
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coverage-poorerpopulationgroupsarecoveredbyschemesthatarelesswellfundedthanthosefortheformalsectororgovernmentemployees,forexample,soofferasmallerrangeofhealthservices(Tucmeanu2014;Mengetal.2015;Kutzin,YipandCashin2016).
Inbroaderhealthsystems,examplesoffragmentationincludelaboratoriesfortuberculosisseparatetothoseforHIV/AIDS;multipleprocurement,purchasing,distribution,accounting,monitoringandservicedeliverysystems;orpatientsrequiringlongtermcarebeingpushedbetweennursinghomesandhospitalsbecausedifferentpartsofgovernmentpayforthedifferenttypesofcare,andeachseekstominimizetheirowncosts(Sidibé&Campbell2015,Raoetal.2014).Someoftheseissuesarefoundincountriesatallincomelevels(e.g.Hall2015;Lewis2015),butanadditionalfeatureofmanylowandlowermiddle-incomecountriesisthefragmentationassociatedwithinflowsofdevelopmentassistanceforhealthwhereexternalpartnershavechosentoestablishsystemsparalleltothosethatalreadyexistedratherthanstrengtheningandsupportingexistingsystems(e.g.Kienyetal.2014;Panter-Brick,EggermanandTomlinson2014;Gostin&Friedman2015).TheproblemsassociatedwithhowtobestpreservethehealthgainsassociatedwiththeseprogramsarenowbeingfacedincountriestransitioningfromfundingfromGavi,GlobalFundandsomebilateralaidagencies.
Thequestionofwhetherdecentralizationisaformoffragmentationassociatedwithinefficiencyisstillcontroversialdespiteyearsofexperience.Decentralizationpolicieshavebeenwidelyimplemented,notjustinhealth,withthegoalofimprovingoneormoreofthefollowing:efficiency,servicequality,management,responsivenesstolocalneedsandequity(Saltman,BankauskaiteandVrangbaek2004).Thereismixedevidence.Somestudiesfindthatithasbeenassociatedwithincreasedaccountabilityofgovernmenttocitizens,orwithimprovementsinmanagementthatthenresultedinhighercoveragewithhealthservicesandimprovedhealthoutcomes(Alves,PeraltaandPerelman2013;Loubiereetal.2009;Samadietal.2013)Otherstudiesshowlittleimpactofhighercostsandincreasedinequalitiesbetweenlocalgovernmentunitsduetodifferencesinfiscalcapacity(Azfar,KähkönenandMeagher2001;Atkinson&Haran2004;Saltmanetal.2007;Langenbrunner,XuandChu2016).Therehavealsobeensuggestionsthatrenewedcentral-levelfinancingwouldimproveequityandefficiencyindecentralizedsettings(Langenbrunneretal.2016).
Oneofthereasonsforcontradictoryresultsisthatdecentralizationtakesmanyforms,andcanhavemanycomponentseachrequiringlocalgovernmentcapacity–e.g.raisingrevenue,planning,purchasingorprovidingservices,monitoringandevaluation,audit.However,thetopicremainscontentiousandwillbediscussedatthisForum.
V. IdentifyingthemostimportantsourcesofinefficiencyNotallcountrieswillhaveeachofthesourcesofinefficiencydescribedinTable1,andeven
wheretheyexist,theirrelativeimportancewillvaryacrosssettings.However,someinefficiencyexistsineverycountry–everycountrycouldachievemorewiththeavailableresources(WHO2010a).Thereislittleglobalguidanceavailableonhowtoidentifythemostimportantsourcesinaspecificsetting,whichiswhythissectionhasspentsometimeexplainingthecommoncausesofinefficiencyandtheirsources.Thiscanbeastartingpointforcountriesthinkingthroughwhichonesarethemostimportantintheirsettings,andwhichtheywouldtacklefirst.Indicatorsofinefficiencycanhelpprovideevidenceinsupportofdiscussionsaboutthemostimportantsourcesofinefficiency
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andsubsequentpolicydevelopment,sotheyarediscussedinthenextsection.
VI. Measuringandmonitoringinefficiency
Therearetwobroadapproachestomeasuringinefficiencyinhealthsystems.Thefirstseekstoobtainasinglescoresummarizingtheefficiencyofacountry’sentirehealthsysteminasimilarwaytothemeasurementofhospitalorhealthfacilityefficiencydescribedearlier.ThesecondapproachfocusesonmeasuringefficiencyrelatedtothedifferentcomponentsofahealthsystemandthepossiblesourcesofefficiencydescribedinSection3.Theformerwecallmacro-efficiencyandthelatter,micro-efficiencyanalysis.Theyarediscussedbrieflyinturn.
1) Macro-efficiencyFigure1depictstherelationshipbetweenlifeexpectancyatbirthandtotalhealthexpenditure
percapitain2014.Lifeexpectancyriseswithhealthexpenditurepercapita,thoughatadecreasingrate.Thereisalsoconsiderablevariabilityaroundtheaverageregressionlinewithcountrieswithsimilarexpendituresachievingverydifferentlevelsoflifeexpectancy.Thistypeofanalysis,sometimeswithlevelsofattainmentonotherhealthindicators(e.g.maternal,childorinfantmortality),orwithlevelsofcoverageonkeyinterventions(e.g.withchildhoodimmunizations)ontheverticalaxis,hasbeenusedasevidencethatsomecountriesaremoreefficientthanothersintranslatingexpenditureintohealthoutcomesorcoverage(WHO2010a;WHO2016).
Figure1:Lifeexpectancybyhealthexpenditurepercapita,2014
Manyfactorsotherthanhealthexpendituresobviouslycontributetotheobservedvariationsinlifeexpectancy,includingdifferencesininitialdiseaseburden,populationagestructuresanddistribution,coststructures,availabilityofinfrastructureandhistoricalpatternsofspendingon
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healthandsocialservices.Withoutcontrollingforthesefactors,itisnotpossibletostatecategoricallythattheobserveddifferencesarelinkedtodifferencesininefficiency.
Moreformalmethods(mostcommonlydataenvelopmentanalysis(DEA)andstochasticfrontierproductionfunctionanalysis(SFA))havebeendevelopedtomeasuretherelativeefficiencyofcountryorsubnationalhealthsystems(orhealthfacilities)andtocontrolfor,orexaminetheimpactof,possibledeterminantsofoutcomeinadditiontoexpenditure(e.g.Hollingsworth2003,2008,2016;Joumardetal.2010;Pang2005).Essentially,theyshifttheregressionlineuptothetopofthescatterplot,obtainingafrontierofthemostefficientperformers,giventheirlevelsofexpenditure(andotherdeterminants).Thoseonthefrontierarethemostefficient(generallygivenascoreof1),andthosebelowitaredeemedinefficientcomparedtothebestperformers,withascorebetween0and1dependingonhowclosetheyaretothefrontier.15
In2016,Hollingsworthidentifiedover400studiesapplyingthesetechniquestohealthissuesinthelast30years(DEAmorefrequentlythanSFA).Themethodswereinitiallyappliedtohealthfacilities,particularlyhospitals,butsincetheappearanceofthe2000WorldHealthReport,whichrankedhealthsystemefficiencyacrosscountriesusingSFA,theyhavebeenwidelyappliedtostudiesofthecomparativeefficiencyofhealthsystems(WHO2000,Sunetal.2017).
Overtime,thetechniqueshavebecomeincreasinglysophisticatedintheirtreatmentofrandomnoiseintermsofmeasurementerrors,samplenoise,specificationerrors,cross-countryheterogeneityandreturnstoscale(seeOlesen&Petersen2016;Greene2004&2008;Hamidi&Akinci2016).DEAcannowdealwithbothmultipleinputsandoutputs,andrecentstudieshaveevenmergedDEAwithSFAfordifferentstagesoftheanalysisofthedeterminantsofinefficiency(e.g.Berengueretal.2016).Inessence,however,theyalltreatdeviationsfromthefrontierthatarenotexplainedbythedifferencesininputsasinefficiency,thenseektounderstandthefactorsotherthanhealthsysteminputslinkedtothevariationsinefficiency.
Thereareanumberofproblemswiththisformofmacro-analysisfromapracticalpolicyperspective.First,theefficiencyscoresandrankingsaresensitive,sometimesverysensitive,tothemodelspecificationandthedatausedforinputs,outputsanddeterminants(Frogner,Frech&Parente2015;Gearhart2016a&2016b).Whencountriesaregroupedintodifferentcategoriesofperformers,thereismoreconsistency–e.g.somecountriesmostlyfallinthegroupwiththehighestefficiencywhileothersgenerallyfallintheleastefficientgroupregardlessofthemodelspecification(althoughthereisstillsomemovementbetweengroupsdependingonthemethodsused)(DeCos&Moral-Benito2014;Medeiros&Schwierz2015).Inthiscase,thepolicyfocuscanbeonthecountriesthatareconsistentlyfoundtobeinthelowestefficiencygroupalthoughlittlecanbesaidaboutcountriesthatmovebetweengroups.
Secondly,themodelsassumethatcountriesonthefrontierareefficient,whenmoremicro-levelworksuggestsformsofinefficiencyexistinallcountries.
Thirdly,noneofthemodelsasyetcapturethelagsthatmustbeimportantintranslatinginputsintooutputsandoutcomes.Thisisnotsimplyaquestionofusingpanelratherthancross-sectionaldata.Itrelatestotheassumptioninbothcasesthatexpendituresineachgivenyearproducehealthbenefitsinthatyearratherthanoveraperiodofyearsinthefuture.Tocapturethis,modelswherecurrentoutcomesareafunctionofhealthexpendituresinpreviousyearsaswellasthisyearwouldberequired.
Fourthly,themethodsandapproachesareverydifficultforthetypicalpolicy-makertounderstand,sotheresultsaresometimesdistrusted(Hollingsworth2016).
15Differentalgorithmsarepossibleinthisprocess–e.g.inDEA,efficiencycanbemeasuredintheoutputspacebymovingverticallyuptothefrontier,intheinputspacebymovinghorizontallytothefrontier,orasamixofthetwo.
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Finally,andperhapsmostimportantly,theresultsrarelyhelppolicy-makersidentifyhowtheycanimproveefficiencyorpoliciesfordoingso.Thisisbecausethevariablesthatcanbeenteredintothemodelstoexplaindifferencesinefficiencyneedtobeavailableandcomparableacrosscountries.TypicalexamplesaretheGinicoefficientofincomeinequalityandaveragelevelsofeducationalattainment,variablesthatarenotunderthedirectcontrolofthehealthsector.
Thesemodelscan,however,beausefulstartingpointtothinkaboutwhichcountryhealthsystems(orwithinacountry,whichsubnationalsystems,hospitals,orprimarycarefacilities)seemtosufferfromthemostinefficiency.However,tounderstandthecausesofinefficiencyandthendevelopsolutions,moremicro-variablesneedtobeexplored.
2) EfficiencyincomponentsofthehealthsystemTable2reportssomeoftheindicatorsproposedintheliteraturethatdescribeaspectsofthe
causesofinefficiencydescribedinTable1,withthesourcesalsoindicated.
Table2:PossibleEfficiencyIndicatorsfortheSourcesofInefficiencyinTable1
Domainofinefficiency
Indicatorssuggested Source
Doingthewrongthings
Shareofpublicspendinginremoteareas,as%ofGGHE
WBFSD;Tandon&Cashin(2010)
Shareofpublicspendingthatgoestothepoorest40%ofthepopulation
WBFSD
Shareofnationalspendingonpharmaceuticals Smith&Nguyen(2013)
%offundingallocatedaccordingtoastrategicplanforthehealthsectororaccordingtodistributionofburdenofdisease
Tandon&Cashin(2010)
Doingthingsinthewrongplace
Shareofpublicspendinginprimarycare,as%ofGGHE
WBFSD;Yip&Hafez(2015)
Numberofoutpatientvisitsattertiaryhospitalsper100population
OECD(2017)
Shareofavoidablehospitaladmissionsforcertainconditions(asthma,COPD,diabetes,hypertension,CHF)
Marshall,LeathermanandMattke(2004)
Shareofavoidablespecialistvisitsforcertainconditions(diabetes,hypertension)
WorldBank(2015)
Delayeddischarges/returntousualplaceofresidence(hipfracture,stroke)
CompendiumofPopulationHealthIndicators–NHSDigital(2015);OECD(2017)
%ofsurgeriesconductedinambulatorysettings(cataract,tonsillectomy,inguinalherniarepair,cholecystectomy,laparoscopic)
OECD(2017)
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SpendingBadly:Inputs
Medicines
Under-utilizationofgenericsorpayingtoomuchforanyspecificmedicine
PercentageofdrugspurchasedbytheMoHthataregenericorgenericsmarketsharesbyvolume(%)
WBFSD;OECD(2017);Heredia-Ortiz(2013)
Averagemedicinecostperencounteroraveragenumberofmedicinesprescribedperencounter
WHO/INRUD
Useofineffectivemedicines,thewrongmedicines,orusingthematthewrongtime
Cholesterol-loweringdrug&antidepressantconsumption
OECD(2017)
Percentageofprescriptionsinaccordancewithclinicalguidelines
WHO/INRUD
Overuseorunnecessaryuse
Percentageofencounterswithanantibioticorinjectionprescribed
Desalegn(2013);Hu,Liu&Peng(2003);Wangetal.(2014);Ferreiraetal.(2013)
Meannumberofdrugs/prescription WHO/INRUD;Bashrahil(2010);Ferreiraetal.(2013)
PercentageofmedicinesprescribedfromanEssentialMedicineListorformulary
WHO/INRUD;Desalegn(2013)
Personnel
Inappropriatemixbetweendifferentcadres;locatedinthewrongplaces;demotivatedworkerswithlowproductivity;poorqualityofcareprovided.
Averageratioofcommunityhealthworkertopopulation
McIntyre&Meheus(2014)
Absenteeismrateforhealthworkers WBFSD,Tandon&Cashin(2010);Heredia-Ortiz(2013);Okweroetal.(2010)
Healthworkerdensityinurbanvsruralareas Yip&Hafez(2015);Lannes(2015)
Ratioofdoctorstototalhealthpersonnelortonursesandmidwives
Heredia-Ortiz(2013)
Densityofphysicians/nurses(per1,000population) Heredia-Ortiz(2013);Lannes(2015)
Staffturnoverorretentionofhealthworkforce Dieleman&Harnmeijer(2006);Lannes(2015);Meessen,Soucat&Sekabaraga(2011)
Infrastructure(e.g.healthfacilities)andequipment
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Inappropriatehealthfacilitysize,particularlyhospitals,foroptimalefficiency
Numberofhospitalbedsper100,000 OECD(2010);Smith&Nguyen(2013)
Bedoccupancyrate WBFSD;Heredia-Ortiz(2013);WHO(2010)
Turnoverrateforacutecarebeds OECD(2010)
Wrongscaleandscopeofhospitals Heredia-Ortiz(2013);WHO(2010)
Numberofadmissions,discharges
WHO(2010)
Underorover-capacityinhealthfacilities
NumberofconsultationsperdoctorOrnumberofoutpatientvisitsorinterventionsprovidedperfulltimeequivalentworkerorperfacility
OECD(2010);Dieleman&Harnmeijer(2006)
AveragePHCserviceutilizationrate Tandon&Cashin(2010)
Equipmentthatispurchasedandcannotberepairedorisnotusedoptimally
Inappropriatemixofinputs:e.g.healthworkersbutnomedicinesorothermedicalproducts
Availabilityofessentialmedicineslistorkeymedicinestopractitioners
WHO/INRUD
SpendingBadly:OutputsandOutcomes
Healthservices
Inappropriateandunnecessarycare
Averagelengthofstay(ALOS)forhospitalvisitsorforspecificadmissions(followingAMI,cancer)
WBFSD;OECD(2010);AustraliaNationalhealthperformancereporting;Heredia-Ortiz(2013);Cylus,Papanicolas&Smith(2013)
Relativestayindex(numberofdaysspentinhospitalforselecteddiagnostic-relatedgroups(DRGs)dividedbytheexpectednumberofdaysspentinhospital)
Davisetal.(2013);AustraliaNationalhealthperformancereporting
Caesareansectionrates OECD(2017)
MRI/CTscanexamsper1,000population OECD(2017)
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Averageconsultationtime WHO/INRUD
Underuse Proportionofinfantsthatdidnotreceive3dosesofDTP3immunization
WHO/WorldBank(2015)
ProportionofHIVpositiveadultsandchildrenwhodonotreceiveantiretroviraltreatment
WHO/WorldBank(2015)
Proportionofpregnantwomenwhodonotreceive5antenatalcarevisits
WHO/WorldBank(2015)YipandHafez(2015)
Proportionofpeoplewithhypertensiontreatedandcontrolled
Glasziouetal.(2017)
Medicalerrorsandlowqualitycare
Unplannedreadmissions Davisetal.(2013);OECD(2017);AustraliaNationalhealthperformancereporting
30daymortalityrate(hospitalorforspecificconditionssuchasAMIorIschemicstroke)
Davisetal.(2013);Husseyetal.(2004)
Rateofhealthcareassociatedinfections AustraliaNationalhealthperformancereporting
Postoperativepulmonaryembolism(PE)ordeepveinthrombosis(DVT)inhipandkneesurgeries
OECD(2017)
Postoperativesepsisinabdominalsurgeries OECD(2017)
Obstetrictrauma,vaginaldeliverywith(orwithout)instrument
OECD(2017)
Foreignbodyleftinduringprocedure OECD(2017)
Incidencerateforpertussis,measles,andHepatitisB(vaccine-preventablediseases)
Husseyetal.(2004)
Maternalmortality,childmortality Sajedinejadetal.(2014)
SpendingBadly:HealthFinancingandHealthSystemOrganization
Waste,corruption,fraud.
Healthbudgetexecutionrates WBFSD
Percentageofmedicinesandothers(incl.IVfluids)destroyedduetoexpiration,breakageand/orinappropriatestorageconditions
WBFSD;Heredia-Ortiz(2013);Okweroetal.(2010)
Degreeofcorruption(internationalbenchmarknotspecifictohealthsector)
Tandon&Cashin(2010)
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Arehealth-specificanti-corruptionpoliciesinplace? WBFSD
Informalpaymentsinhealth,as%oftheOOPexpenditure
WBFSD
%ofgovernmenthealthfundingthatreachesservicesdelivery
TandonandCashin(2010)
Inefficiencyinraisingrevenuesforhealth,particularlywhenrevenueraisingforhealthisindependentfromgeneralgovernmentrevenuecollection.
Governmentrevenueas%ofGDP TandonandCashin(2010)
ElasticityofhealthexpenditurewithrespecttoGDP TandonandCashin(2010)
Healthbudgetas%oftotalgovernmentbudget TandonandCashin(2010)
Internationalhealthassistanceas%oftotalandgovernmenthealthspending
TandonandCashin(2010)
Fragmentationinthesystem:inpooling,butinthebroaderhealthsystem
Arethereadequatedonorcoordinationmechanismstoalignexternalfinancingwithgovernmentpriorities,processes,andthehealthbudget?
WBFSD
Howareproviderspaidanddoesthepaymentmodalitycreateincentivesforcostcontainment,qualityofservicedeliveryorprovisionofservicestospecificgroupsofpeople?
WBFSD,McIntyreandMeheus(2014)
Administrativeinefficiency:higherthannecessarycostsfortheservicesoffered,includinginhealthinsuranceagencies.
Healthsectoradministrativecost,as%ofgovernmenthealthexpenditure
WBFSD
Whattypeofbudgetingprocessisusedinthecountry,e.g.,input-basedoroutput-based,andhowdoesthisaffectproviders’/purchasers’abilitytoallocateresourcestobeinlinewithpriorities?
WBFSD;TandonandCashin(2010)
The list is long, and certainly not exhaustive. For example, an indicator of the extent ofunderuseofneededservicescouldbedefinedforalldiseasesandtypesofinterventionsfocusingonthatdisease,suchasscreeningforcertaintypesofcancers,andsubsequenttreatment.
Someoftheindicatorssuggestedintheliteraturearealsodifficulttoobtain,particularlyinlower income countries, andwould require additional expenditures to establish andmaintain thesystemstocollectandanalysethemroutinely,forexample:theextentofinformalpayments(surveys);share of public expenditures going to the poorest 40%of the population (utilization surveyswithinformationonhouseholdexpendituresorincomes);percentageofmedicinesprescribedaccordingto national guidelines (surveys or observation of encounters);wrong scale and scope of hospitals(production function analysis based on intense data collection); and degree of corruption (publicexpenditurereviewsorspecialformsofaudit).
Othersaredifficulttointerpretbecauseamoveinonedirectiondoesnotunequivocallymeananincreaseordecreaseinefficiency.Theymaystillbeuseful,however,andinternationalyardsticksderivedfrommulti-countrycomparisons,particularlythoseofsimilarcountries,couldbeusedtomake
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thesejudgements.16Examplesarehealthworkerdensity,distributionofhealthworkerstoruralareas,averagelengthof inpatientstay,andtheshareofnationalspendingonprimarycareormedicines.Eventhoughitispossibletodetermineifacountry’sscoresarehigherorlowerthanthatofsimilarcountries,itisdifficulttobesureifmoreorlessisgoodorbad.Theanalysisismostusefulwhenthereareoutliers–wherethevariableinquestioninonecountryissubstantiallyhigherorlowerthaninothercountries.
Anothersetisreadilyeasytointerpretandmostcountriesshouldbeabletomeasurethemwithoutgreatadditionalexpense.Fromthevariables inTable2,twelvefall intothiscategory.Thisdoesnotmeanthattheyarethemostimportanttomonitororthatthesetofvariablesisthebesttounderstandtheoverallefficiencyofthesystem,butonlythattheyshouldbeabletobemeasuredroutinelyincountriesatallincomelevels.Examplesincludeabsenteeismratesforhealthworkers,theproportionofpregnantwomenwhodonotreceive4antenatalconsultations,infantcoveragewith3doseDTP,post-operativesepsisinabdominalsurgery,Caesareansectionrates,budgetexecutionratesand bed occupancy rates. Higher-income countries with established measurement systems canobviouslymonitoramuchgreaternumberandothercountrieswillchoosetodevelopthesystemstomonitorotherindicatorsdependingontheareasofinefficiencytheychoosetotackle.
Theadvantageofthemicro-efficiencyoverthemacro-efficiencyapproachisthattheindicatorsareeasierforpolicy-makers,healthworkers,patientsandthepopulationtounderstand.Theyarealsodirectlyrelevanttotheanalysisofthemostimportantcausesofinefficiencyinacountry,whichinformsthepolicydebateaboutwhattodoaboutthem.
Thedownsideofusingadashboardofindicatorsisthatitcanbedifficulttounderstandifasystemisgettingmoreorlessefficientunlessallindicatorsimproveatthesametime.Eventhen,itwillnotbeclearifeffortstoimproveefficiencyinonearearesultinlowerefficiencysomewhereelse,inareasthatarenotbeingmeasured.
Weobservethatfewcountrieshavedevelopedaspecifiedsetofindicatorswithwhichtheytrackefficiencyandimprovementsovertime.Itisimportantthattheydoso,perhapsusingTable2asastartingpointandtakingintoaccounttheircapacitytomeasureandanalyseandthecostsofobtainingeachvariable.Theremaywellneedtobedifferentsetsfordifferentactors–e.g.ahospitalmanagermayrequireasetofrelativelyspecificindicatorswhiletheMinisterofHealthmightrequireabroadersetthatsummarizesefficiencyacrosstheentirehealthsystem,butincludeslessdetailontheindividualcomponents.Withoutanappropriatesetofindicators,itwillbedifficulttodetermineifthestrategiestoimproveefficiencyhavebeensuccessful.
VII. StrategiestoimproveefficiencyOncethemajorsourcesofinefficiencyhavebeenidentified,thenextstepistodevelopand
implementstrategiesforincreasingefficiency.Understandingthereasonswhyinefficienciesexistcanhelptoidentifyappropriatestrategiesforreducingthem,sointhissectionweturntoavailabletechnicalsolutions.Thelistofpossiblesolutionsdrawsonpoliciescommonlyputinplaceinresponsetothereasonswhyinefficienciespersist.Remarkably,thereislittleknownaboutwhat
16TheWorldBankGroupisintheprocessoftryingtoprovidetherangeofvaluesformanyoftheseindicatorssocountriescandeterminewheretheyareinrelationtoothercountries.
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worksatthesystemlevelandthesectionconcludesbyidentifyingsomeofthekeyunresolvedandcontroversialissues.
1) TechnicaloptionsforimprovingefficiencyTable3buildsonTable1,suggestingreasonsforeachpossiblesourceofinefficiency,andsolutionsthathavebeenidentifiedintheliteraturebasedonconsiderablecountryexperience.Solutionsdirectlylinkedtohealthfinancingarehighlightedinbold.Thesesolutionshavebeendrawnfromanextensivereviewoftheliteraturereportingonwhattypesofinterventionshavebeenimplementedwiththeintentionofimprovingefficiency.Thelistis,however,unlikelytobecomprehensive–theliteratureisvastanditispossiblesomeoptionshavebeenmissed;somestrategiesmighthavebeenimplementedatcountrylevelwithoutaformalevaluation;andotherevaluationsmightnothavebeenpublishedormadepublic.Readersareencouragedtoindicatetotheauthorsotheroptionsthatshouldbeincludedinanylistthatcountriescanusetoidentifypossiblesolutionstotheirproblems,particularlythoseforwhichthereisgoodevidencethattheyworkordonotwork.
Table3:PolicyOptionsforImprovingEfficiency17
SourceofInefficiency CommonReasonsforInefficiency
PossibleSolutions
1. Doingthewrongthings:Highcost,lowimpactinterventionsfundedattheexpenseoflowcost,highimpact;inappropriatemixbetweenlevelsofcare;prevention,promotionversustreatment;publichealthandgovernancefunctionsversuspersonalservices;mixofintersectoralactionsorintersectoralversushealthservices
Difficulttoobtainthenecessarytechnicaldatatoguidedecisions;noclearyardsticksfordecidingwhatisenough(preventionvstreatment;publichealthandgovernancevspersonalservices);political,healthworkerorcommunitypreferences(typesofinterventions,levelsofcare);financialinterests(littlepreventionfundedbyinsurance).
Increasedcountrycapacitytogenerateandusekeyepidemiologicinformationonburdenofdiseasetoguidedecisions;furtherdevelopmentofmethodsforassessmentofintegratedpackagesandforincorporationoffinancialprotection;patientempanelment;gatekeeping;increasedservicedeliverycapacityandqualityatlowerlevelsofcare;healthtaxesandfinancialincentivesforpersonalactiononprevention;civilsocietyorganizationsandprofessionalassociationspromotingadequateproviderbehavior.
17ThisTablebuildsonanapproachtakeninWHO(2010).
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2.Doingthingsinthewrongplaces:Inappropriateuseofhigherlevelversuslowerlevelsettingsforinpatientandoutpatientcare(includingdaysurgery),overuseofhealthversussocialcareandinstitutionalizedversushome-basedlong-termcare.
Insufficientinformationontheefficiencyofdeliveryofpackagesatdifferentlevels;organizationalseparationofhealthandsocialcare,weakcoordinationofcare,includingreferralsystems,poorqualityatlowerlevelsofcare,financialincentivesacrosscaresettingsthatpromotecareathigherlevels.
Methodstoassesstheefficiencyofpackagesdeliveredatdifferentlevelsofthesystem;coordination/integrationofhealthandsocialcare;patientempanelmentandgatekeeping;clinicalpathways;increasedservicedeliverycapacityandqualityatlowerlevelsofcare,includingITinnovationse.g.,tele-medicine,e-consultations);providermanagementnetworks(e.g.,primarycarenetworks);appropriateblendingofpaymentmethods.
3. Spendingbadly:highercostinputschosenorinputsnotachievingtheirmaximumpotential
HealthServiceDelivery1. Medicines:
a) under-utilizationofgenericsorpayingtoomuchforanyspecificmedicine;
b) useofineffectivemedicines,thewrongmedicines,orusingthematthewrongtime;
Nogenericspolicy;provider/patientperceptionsthatgenericsarepoorquality;financialincentivestoprescribebrandedmedicines;poorpurchasingpracticesorcorruption;lackofknowledgeofinternationalprices;highmark-upsortaxesonmedicines.
Inadequateregulation/administrationtocontrolsubstandardmedicines;poorknowledgebyproviders;demandorlowadherencefrompatients.
Genericspolicyandessentialmedicineslistforhealthfacilitiesaccompaniedbyqualitycontrols;informationongenericstoproviders/populationwithqualitycontrolsystem;financialincentivesforprescribinggenericsandnotbrandedmedicines;activepurchasingwithappropriatecompetitivebidding;centralizedprocurement;multi-yearprocurementframeworks;increasedtransparencyinpurchasesandtenders;zerotaxesonessentialmedicines;monitoringandpublicationofmedicineprices.Increasedgovernmentcapacitytoregulatemedicinestoensuresafetyandquality;informationexchangeforprovidersandthepopulation.
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c) overuseorunnecessaryuse.
Financialincentivestoprescribeandsellmore;industrypromotion;consumerdemand.
Appropriatefinancialincentives–e.g.separateprescribingfromsales;increaseinformationtoprovidersandpatients;regulateandenforcestandardsforindustrypromotion.
2. Infrastructure(e.g.healthfacilities)andequipment:a) Inappropriatehealth
facilitysize,particularlyhospitals,foroptimalefficiency;
b) Underorover-capacityinhealthfacilities;
c) Equipmentthatis
purchasedandcannotberepairedorisnotusedoptimally.
Lackofinformationaboutappropriatesize;patientschoosetogotohigherlevelsofcare.
Toofewfacilitiesforthedemandormaldistribution;patientschoosehigherlevelfacilities–overandundercapacitycoexist;poormanagement;financialincentivesforhighadmissionandlonglengthofstay.
Donationsofequipmentthatcannotbeservicedlocallyorwheresuppliesandmaintenancearetooexpensive;poorprocurementpractices;corruption.
Monitoringefficiencyofhealthfacilities;gatekeeping;increasedservicedeliverycapacityandqualityatlowerlevelsofcare.
Masterplansforstreamlininginfrastructure;gatekeeping;increasedservicedeliverycapacityandqualityatlowerlevelsofcare;appropriateblendinganduseofpaymentmethods;improvedmanagementcapacitywithappropriateincentives.
Refusalofdonationsofnewtechnologywherebudgetswillnotbeabletopaysuppliesandmaintenance;improveddonorpractices;improveprocurementpracticesandcontrolsofcorruption.
3. Healthservices:a) Unnecessarytests,
procedures,orunderutilizationofthesecomparedtoneed;
b) medicalerrorsandlowqualitycare.
Poormanagement&control(perhapslinkedtoinsufficientmanagementresourcesorinadequateinformationonpatterns);financialincentivestoover-service;defensivemedicine.
Inadequateproviderknowledge;insufficientdatacollectionoruseofdatabymanagers;noincentivesforquality;poorinfrastructure;lowqualityincludinghygiene;poorcompliancewithinfection
Improvemanagementandavailabilityanduseofdata;clinicalguidelines;financialincentivestopreventoveruseandtopromotequality.
Continuoustrainingforproviders;improveddataavailabilityanduse(e.g.clinicalaudits);clinicalguidelines;incentivesforquality(contracting,providermonitoring,paymentsystems,
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preventionandcontrolstandards.
complaintsystems);investmentininfrastructure,enforcementofminimumstandardsofservicequalityincludingmandatoryinspectionsandclosedownofunsafefacilities;accreditation.
4. Personnel:a) Inappropriatemix
betweendifferentcadres;
b) Locatedinthewrong
places;
c) Demotivatedworkerswithlowproductivityandpoorqualityofservices(e.g.lowvisitsperhealthworkersperday,absenteeism).
Poorplanning;inappropriatetrainingintakes(canbelinkedtostudentdemand);outmigrationorlackofretentionofsomecadres;resistancebyvariouscadrestolessskilledpeopletakingmoreresponsibility.
Incentivesinsufficientforsomelocations;
Poorwagesandincentivestructures;poormanagementandsupervision;poorworkingconditions;recruitmentandpromotionnotbasedonmerit.
Healthworkforceplanningbasedonlabourmarketassessmentandlinkstotrainingintakes;HRHtrainingandrecruitmentalignedwithbroaderhealthsystem’sobjectives;strategiesandincentivestorecruitandretainkeyhealthworkersinremoteandunderservedareas;skill-taskmatching,includingtaskshifting;
Revisesalarystructuresandincentivesforunderservedlocations.
Salaryandincentivestructuresinlinewithsystemobjectives;regulationofdualpractice;improvedmanagement,supervisionandworkingconditions;multi-disciplinaryteams,eliminate“cronyism”inhiringandpromotion(establishclearprocessforhiring,deploying,andpromotionofhealthpersonal).
5. Inappropriatemixofinputs:e.g.healthworkersbutnomedicinesorothermedicalproducts.
Poormanagementorbudgetingpractices;inflexiblecontractswithworkers.
Improvedmanagementofinputsforservicedelivery;budgetpracticesprovidinggreaterflexibilityofuseofinputs.
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7. Waste(includingexpiredmedicines),corruption,fraud.Lowbudgetexecutionratesareaformofwastebecausetheavailablefundsarenotused.
Poorprocurement,inventorycontrolpractices;poorstorageandtransport;lackoftransparencyandaccountabilitywithappropriatemanagement,auditandlegislation;inadequatesupervision;poormanagementorinflexiblelineitembudgetsleadingtolowbudgetexecution(canalsorelatedtodelayeddisbursementfromministriesoffinance).
Improvedprocurement,supplychainmanagement,inventorycontrol,storageofsuppliesofdrugs;improvedregulationandgovernancewithsanctionsforcorruptionandfraud;codesofconduct;improvedpublicfinancialmanagementincludingbudgetpracticesandresourcetrackingandaccountability.
8. Inefficiencyinraisingrevenuesforhealth,particularlywhenrevenueraisingforhealthisindependentfromgeneralgovernmentrevenuecollection.
Efficiencyofraisinggeneralgovernmentrevenuesisbeyondthehealthsector.Inefficiencyincollectingchargesleviedbyministriesofhealthorhealthinsurancepremiums–poormanagement,poorinformationsystems,lackofmotivationofstafftocollectrevenues,inabilitytoenforcepaymentofcontributions,inabilitytoidentifytheindigentwhodonotpay,corruption.
Feeandpremiumsystemsenforceableatlowcost,improvedskills,managementandinformationsystemsfortrackingpaymentsandserviceuseparticularlyinnationalhealthinsurancesystems;organizational/staffincentivestocollectfees/premiums;user-friendlywaysforpeopletopaycontributions;methodsofidentifyingtheindigent;corruptioncontrol.
9. Fragmentationinthesystem:inpooling,butinthebroaderhealthsystemaswell-e.g.procurement,supplychains,laboratories,servicedelivery.
Donorpractices(developingsystemsfor:channellingandtrackingfunds;procurementanddistribution;employment;servicedelivery;monitoringandevaluation)outsidegovernmentstructures;powerstructuresintheministryofhealth;responsibilitiesinafederalsystem(e.g.centralgovernmentresponsibleforhospitals,lowerlevelgovernmentforotherservices);pressurefromthealreadyinsuredtomaintaintheirbenefitswhenhealthinsurancefortheinformalsectorisdeveloped.
Organizationalorvirtualintegrationasappropriate–e.g.standardizedinformation,budgetingandaccountingsystems,planning,M&Eacrossfragmentedunits.Riskadjustmentacrosspools.
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10. Administrativeinefficiency:higherthannecessarycostsfortheservicesoffered,includinginhealthinsuranceagencies.
inflexiblestaffcontracts;lackofincentivesforefficiency;inadequatetrainingandknowledgeofmanagersandstaff;highstaffturnover.
contractsystems;incentivesforefficiency;improvedknowledgeandcapacitiesofstaff;policiesandincentivestoretainstaffwherehighstaffturnover
MostoftheoptionsconsideredinTable3involvemakingchangestoexistingstrategiesthat
eitherobtainmorefortheexistingresourcesorensurethesameoutcomesforfewerresources.TheyrepresentmovementtowardsthefrontieridentifiedinFigure1.Thereareothertypesofinterventionsthathavethepotentialtoshiftthefrontierbyexpandingthetechnicaloptionsforimprovinghealthandfinancialprotection.SomeexamplesareprovidedinBox2,althoughtheremainderofthissectionfocusesontheoptionslistedinTable3.
Box2:ShiftingtheFrontier:InnovationsinHealth
Alongsideeffortstodeliverhealthservices,productdevelopersandpractitionersareadvancinginnovationstoensurethatpeopleinlow-resourcesettingshaveaccesstonewapproachesforlife-savinginterventionsthatvastlyexpandcurrentoptions.Manyoftheseinnovativetechnologies,systems,andservicesseektoprovideaffordablesolutionsspecificallydesignedtoaddresstheneedsofvulnerablepopulationsaroundtheworld.Onenecessityfortheprovisionofqualityhealthcareisdatamanagement.Digitalhealthinformationsystemsbreakdownbarriersthatpreventtechnologiesandsystemsfromscaling,andenablesupportforplatformsthatcanbereused,adapted,andbuiltupon.Forexample,anationalelectronicimmunizationregistrybeingdevelopedinTanzaniaandZambiabytheBetterImmunizationDataInitiativeautomaticallysendsimmunizationinformationtohealthcareworkersinadvanceofvaccinationdayswithinformationregardingthenumberofchildrendueforvaccines,whichimmunizationstheyneed,andthevolumeofvaccinestockorsuppliestheclinicshouldhaveonhand.Thissystemminimizesmissedvaccines.Vaccinesareamongthemostpowerfullifesavingtoolsforchildrenunderfive.Withaccessibilitytobetterdata,healthworkersareequippedtomakebetterdecisionsaboutvaccinedeliveryandachievehigherimmunizationcoveragerates.Similarly,redesigningbiomedicaltechnologiesforuseinlow-resourcesettingswillacceleratelivessavedandaverthealthcarecosts.Forexample,oneinnovationunderdevelopmentisbetterrespiratoryratemonitorsandportablepulseoximeterstoimprovetimelydetectionandtreatmentofpneumoniaamongchildrenunderfive.Difficultiesindiagnosingpneumoniaamongyoungchildreninlow-resourcesettingsoftenleadtounnecessarytreatmentdelaysandincreasedriskofdeath.Innovationsindiagnostictechnologiescanhaveasignificantimpactwhenbettermonitoringleadstoexpandedcoverage.ArecentstudyconductedbyPATH,Harnessingthepowerofinnovationtosavemothersandchildren,modelledtheimpactofinnovativepneumonia-detectiontechnologieswhicharemorereliableandeasiertousethanexistingtools,estimatingthatjustoveronemillionlivescouldbesaved(PATH2016).18
18PATH.IC2030:Harnessingthepowerofinnovationtosavemothersandchildren.2016.http://www.path.org/publications/detail.php?i=2647;ModellingwasappliedtowardincreasedinterventioncoveragewithinthecontextofUSAID'sActingontheCallmodel.
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Innovativeapproachesareevenmoreimportantwherenotoolcurrentlyexiststoexpandcoverageforexistingproducts.ExtendingcoveragefortheHepatitisBvaccinewouldsaveupto6millionlives,forthehaemophilusinfluenzatypebvaccinewouldsaveupto1.7millionlives,forthepneumococcusvaccinewouldsaveupto1.8millionlives,fortherotavirusvaccinewouldsave900,000lives,andforthehumanpapillomavirusvaccinewouldsave500,000livesoverthenext10years(WHO2013).19Additionalbenefitsarelongerandmoreproductivelives,higherearnings,andavertedhealthcarecosts,withapotentialofupto$44returnacrossthelifespanofanimmunizedchildforevery$1invested(Ozawaetal.2016).20PrioritizinginnovationwithinaUHCframeworkwillenablecountriestotakeadvantageofarichsetofemergingtoolsthatcanenabledramaticchange,includingreducedmortalityandmorbidity,inclusiveandsustainablegrowththroughcosteffectiveness,andimpressivegainsinhealthoutcomes(LancetCommissiononInvestinginHealth2013).21Rapidadoptionandscaleofhealthinnovationsiscriticaltofosterthesegains,asisafocusedstrategyandfurtherpoliticalcommitment(Atun2012).22Throughinnovation,UHCcanbedeliveredwiththegreatesthealthvalueformoney,providingpeopletheopportunitytoleadhealthier,moreproductivelives.Source:PATH
AnimportantobservationfromTable3isthatonlyaminorityofthesolutionsaretotallywithintheremitofhealthfinancingwithitsfunctionsofrevenuegeneration,poolingandpurchasing/provision.BecausethisForumisspecificallyonhealthfinancing,webeginwithwaysthatthehealthfinancingfunctioncancontributetoimprovingefficiency.Itisnotintendedtodescribeallthedetailsofhowtoimplementthevarioushealthfinancingstrategiesrelatedtoefficiency,buttooutlinethebroadareaswherethereisagreementthatthesolutionswork.Oncecountrieschoosethetypeofstrategytheyareinterestedinimplementing,technicalworkwouldthenneedtobeundertakentodesignthespecificdetails,buildingonaverylargeliterature.
Afterthehealthfinancingoptions,thepaperconsidersbrieflysomeoftheadditionalstrategies,onthegroundsthatifacountryisseriousaboutreducinginefficienciesitwillneedtouseamixofmeasuresthatinclude,butarenotexclusivetohealthfinancing.
Onepartoftheefficiencyofrevenuegenerationisthecostofenforcementandadministration,togovernment,householdsandfirms,sometimescalledadministrativeefficiency.Asecondpartistheyieldgeneratedfromatax,orproductionefficiency.Thethirdpartisthecostsoftheeconomyofchangesinbehaviourandeconomicoutputresultingfromaparticulartax–forexample,peopleworkinglessbecauseofhighmarginaltaxratesontheirincome,typicallycalleddeadweightlosses(e.g.Okafor2012;Thompson,BeattyandThompson2012;Scott2014).Financedepartments,sometimesworkingwithexternalagenciesliketheIMF,theWorldBankandRegionalDevelopmentBanks,constantlyseektoreducethecostsofenforcementandadministrationandincreaseyields.Generalizationsarethatcorruptionincreasesadministrativecosts,andincomebased19WorldHealthOrganization.GlobalVaccineActionPlan.SecretariatAnnualReport.Geneva,2013.20Ozawa,S.etal.ReturnOnInvestmentFromChildhoodImmunizationInLow-AndMiddle-IncomeCountries,2011–20.HealthAffairs.2016,35:2199-207.21LancetCommissiononInvestinginHealth.Globalhealth2035:aworldconvergingwithinageneration.Lancet.2013;382:1898–1955.22RAtun.Healthsystems,systemsthinkingandinnovation.HealthPolicyandPlanning.2012;27(suppl4):iv4-iv8.
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taxesaredifficulttocollectwhenthereisalargeinformalsector(e.g.Imam&Jacobs2014).Indirecttaxesyieldmorethanincometaxesonindividualsinthesesettings.Thresholdsatlevelsthatexcludesmallenterprisesavoidhighcostsofenforcementrelativetoyieldsandimproveequity.Varioustypesofreformscanincreaseyieldoradministrativeefficiencyincluding,forexample,theestablishmentofsemi-autonomousrevenuecollectionagenciesatnationaland/orsub-nationallevels(VonHaldenwang,VonSchillerandGarcia2014).
Thisisrarelysomethingthatisconsideredbythehealthsectorexceptwhenthecollectionofhealthinsurancepremiumsoruser-chargesispartofitsmandate.Drawingfromthepublicfinanceliterature,itisdifficulttousetheincometaxsystemtocollecthealthinsurancepremiumswhenthereisalargeinformalsector,soothermethodsneedtobedevised.Variousinnovationsfrombroadertaxationcouldalsobeuseful,includinglocatingagenciesthatcollectpremiumsclosertothepeoplethatwillpaythem,orlicencingfacilitiesthatarewelldistributedinthecountrytocollectthem.However,theexperienceinThailandsuggeststhattheadministrativecostsofcollectionoftheoriginal30Bahtco-paymentfromtheinformalsectorwerehighandoutweighedtheyield,somethingthatcanapplyalsotocollectionofpremiumsfromtheinformalsector(Limwattanonetal.2011).Forthisaswellasequityreasons,thereisabroadconsensusthathealthinsurancecoverageofbasicservicesshouldbefinancedfromgeneralrevenue,whilecontributionsareaconditionforeligibilitytoawidersetofhealthservices.
Thegeneralconsensusonpoolingisthatsmallpoolsareinefficientintermsofhighadministrativecosts,andtheycanresultininequitiesifonepartofthepopulationiscoveredwithmoreandbetterservicesandhighfinancialprotectionthanothers(e.g.Raoetal.2014;Mengetal.2015;Kutzin,YipandCashin2016).Itis,however,sometimesdifficulttomergeexistingpoolsforpoliticalreasons,andcountriesmovingtowardshealthinsurancefromscratcharebestadvisedtoavoidcreatingdifferentpoolscoveringdifferentpopulationgroupswithdifferentbenefits(Hanvoravongchai&Hsiao2007;Knauletal.2012).
ThequestionofhowtopurchaseinputsandservicesisimportanttomanyoftheefficiencyproblemsinTable3.Therearefourcomponents.Thefirstinvolvesachoiceoftheappropriatemixofpersonalhealthinterventionsavailableintherightplaces,themixbetweengovernance,publichealthandpersonalhealthservices,andtheappropriatemixofinter-sectoralandmulti-sectoralactionsinsupportofhealthsectorstrategies.Possiblemethodstoassesstheefficiencyofthedifferentoptions,andtheirweaknesses,werediscussedearlierbutmanycountriesareintheprocessofassessingtheappropriatemixofservicestoguaranteetoeveryoneandwheretheyshouldbeprovided.Redirectingresourcesfromunnecessaryandharmfuloverusedservicestolow-costhigh-impactservicesthatareunderusedaddressestwosourcesofinefficiencyatthesametime–over-andunder-use–andnegativelists,orlowvaluelistsofinterventionsthatshouldnotbeusedorwillnotbecoveredbypayersareoneofthepossibleoptionsofdoingthis(Elshaugetal.2017).
Reducingtheproportionofpatientswhobypasslowerlevelservicestousemorecostlyservicesatsecondaryortertiarylevelsbecauseoftheirperceivedbetterqualityisanotherpartofensuringthattheneededservicesareprovidedintherightplace.Thisrequiresnotonlyhavingsomeformofgatekeeping,butalsostrengtheningthequalityofprimarycareservices.Box3outlinessomerecentdevelopmentsonsupporttocountriesseekingtodeveloptheirprimaryhealthcare.
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Box3:SupportingPrimaryHealthCare
ThePrimaryHealthCarePerformanceInitiative(PHCPI)isaglobalpartnershiptohelpcountriesbuildhigh-performingprimaryhealthcaresystemsinlow-andmiddle-incomecountries.ThePHCPIpartners—theBill&MelindaGatesFoundation,theWorldBank,theWorldHealthOrganization,AriadneLabs,andResultsforDevelopment—worktosupportcountriestoachievethehealthSDGsthrough collecting better primary health care data, unearthing and sharing best practices, anddeployingdataandevidencetomakeimprovementsinthequality,effectivenessandefficiencyofprimarycareservices.High-performingprimaryhealthcaresystemsarecriticaltoensuringthattherightthingsaredoneintherightsettings:
× Primarycare isthefront lineofhealth–closetopeopleanddeliveringessentialhealthserviceslikevaccinations,maternalandnewborncare,andfamilyplanning;
× Good primary care helps patients manage chronic diseases, avoiding unnecessaryhospitalizationsandcareandtimeawayfromfamilyandwork;
× Primaryhealthworkersformtheearlywarningsystemfordetectingandstoppingdiseaseoutbreaksbeforetheybecomedeadlyepidemics–thisisthefirstlineofdefenseagainstepidemics;
× Whentherightthingsaredoneintherightway,primaryhealthcaresystemscancoverthelargemajorityofhealthneedsinwaysthatareresponsive,safe,ofqualityandtrustedbythepeopletheyserve.
High-performingprimaryhealthcaresystemsarealsothebackboneofefficienthealthsystems.Inbothhighandlowincomesettings, ithasbeenshownthatstrongprimaryhealthcarepreventsmanyillnessesandcatchesothersearlywitheffectivelow-costtreatment,therebykeepingpeopleoutofhospitalandreducingsubsequenttreatmentcosts(e.g.Kruketal.2010;Kringosetal.2013).Effectiveservicedeliverymeansthatpatientsreceivetherightpreventivecareortreatment,attherighttime,intherightplace,andwithrespect.DoingthisrequiresattentiontofivePHCsystemsfeatures(adaptedfromStarfield1992):
× First-contactaccess:Primaryhealthcaresystemsshouldserveastheentrypointintothehealthcaresystem,wherepeoplecanaccessaffordablecareformosthealthneeds.
× Comprehensiveness: Primary health care systems should deliver a broad spectrum ofpreventative, promotive, curative and palliative care – for example, throughmultidisciplinary teams that contain health professionals with varied, complementaryskills.
× Continuity: Primary health care systems should support long-term patient-providerrelationships–allowingproviderstocareforpatientsateverystageoflife.
× Coordination: Primary health care systems should coordinate an individual’s journeythroughcomplexhealthsystems.
× Person-centeredness:Primaryhealthcaresystemsshouldbeorientedaroundtheneedsofpeopleandcommunities.
ThePHCPIrepositoryofpromisingpracticesexplainshowleadinglowandmiddleincomecountriesputthesefivefeaturesintopracticetoimprovethequalityandefficiencyoftheirprimaryhealthcaresystems:http://phcperformanceinitiative.org/tools/promising-practices
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Thesecondcomponentinvolvesdevelopwaysofpayingforthechosenservices(Honda2014;Maedaetal.2014;Tangcharoensathienetal.2015;Xu,ChengandColón-Ramos2015;Bastanietal.2016;Kutzin,YipandCashin2016).23Providerpaymenthasbeenshowntobeapowerfultooltoinfluencethebehaviourofproviders,andinturntheprovisionofcare.Ingeneral,theevidenceshowsthatnosingleproviderpaymentmethoddeliversvalueformoneyinallsettings.Forinstance,capitationencouragesefficiencybutmayleadtounder-provisionofservicesandincreasedreferrals.Ontheotherhand,fee-for-servicecanleadtooverprovisionofservicesandcanleadtocostescalation.Therehasbeenalsobeengrowinginterestinperformance-basedfinancinginhealthinrecentyears;althoughthemorerecentevidenceonqualityofcareandefficiencyisscattered–seethenextsectionofthispaperonwhatwedonotknow.
Countriesshoulddecidewhicharethemostappropriateblendsofpaymentmethodsusewithineachcaresetting,andhowthesepaymentmethodblendsalignacrosscaresettingstoachieveitsownpolicyobjectiveswithregardstoprovisionofcare,costandquality,(Cashinetal.,2009).“Blending”differentpaymentmethodswithincaresettingsisdonetoencouragecertaindesiredoutcomesaswellastomitigatethenegativeincentivesofindividualpaymentmethods(BelliandHammer1999;DranoveandSatterthwaite2000).Forexample,inprimarycare,capitationandFFSpaymentsareoftencombined.TheFFSpaymentsareusedprimarilytoencouragetheprovisionofcertainpriorityservices(e.g.vaccinations),servicesandprocedureswhichrequirecostlysupplies(e.g.injectablemedicines),aswellasserviceswhichlieontheborderbetweenprimaryandspecialistcare(e.g.woundcare,drainageofabscesses,removalofbenignlesions)andthustendtobereferred(Robinson2001).Incombinationwithcapitationpayments,primarycareprovidersarestillencouragedtolimitthevolumeofservicesprovidedtoachievecostsavings(LangenbrunnerandWiley2002;LangenbrunnerandSomanathan,2011).Similarly,theblendsofpaymentmethodsacrosscaresettingsshouldbetakenintoaccounttoensurethatincentivesarealignedwithhealthsystemobjectives(e.g.encouragingbettermanagementofpatientsattheprimarycarelevel,reducingincentivestoincreasevolumesinoutpatientspecialistandacuteinpatientcare,increasingincentivesforcoordinationwithprimarycareafterdischarge,etc.).
Thethirdcomponentinvolvesstrengtheningcontractingandprovidermonitoringcapacitiesofthepurchaserinordertoenforcetheintendedbehaviourchangesofnewpaymentmethods(Cashinetal.,2009).Providercontractscanhelpcontributetohealthsystemobjectivesbytakingadvantageofprovisionsrangingfromethicalcodesanddatadisclosurerequirementstocostandvolumecapsandrisksharingmechanismstoreducetransactioncostsandshapeproviderbehaviors.Inaddition,purchaserscanestablishandusetransparentcriteriafromwhomtocontract,forexample,accreditationand/orminimumvolumerequirementstofosterqualityofcare.Providermonitoringenablescontinuousqualityimprovementbyhighlightingareasofcaredeliverythatneedoptimization,andbysettingcommontargetsfortheseareas.Whenemployingpaymentmethodsthatencouragecostreduction(e.g.capitation,bundledpayments,etc.),useofqualitymonitoring,inadditiontoriskadjustment,isessentialtoensurethatprovidersarenotcuttingcostsinwaysthatjeopardizepatienthealth.Providermonitoringcanincludeactivitiessuchasclinicalaudits,regularcollectionofdataonspecificqualityindicators(e.g.adherencetoclinicalguidelines,adverseevents,patientsatisfaction).Basedonthemonitoringresults,purchaserscanholdprovidersaccountableaccordinglybyrewardinghigher-levelperformersand/orsanctioninglower-levelperformers.
Finally,thefourthcomponentinvolvesempoweringpatientstoholdpurchasersandprovidersaccountablethroughformalrepresentationofconsumersinpurchasingorganizations,
23Thisissometimescalledstrategicoractivepurchasing.
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developmentofpackagesofcarewithformalcoverageguarantees,establishmentofpatient’srightslegislation,chartersorethicalcodesandthedevelopmentofaformalmechanismtoreceiveandrespondtopatientcomplaints(Busseetal.2007).
Improvedpublicfinancialmanagement(PFM)wouldcontributetoreducingmanyoftheformsofinefficiencyidentifiedinTable3.Theseincludereducingthefundsreturnedtothetreasurybecausetheyhavenotbeenusedinthefinancialyear,helpingtocontrolcorruption,fraudandothertypesofwaste,andlinkingpublicexpendituresmorecloselytoresults(Fritz,SweetandVerhoeven2014;Barroy,SparkesandDale2016;WHO2016;Cashinetal.2017).DespitetheconsiderableattentiongiventoassessingPFMsystemsoverthelastdecade,itisnotclearthatreformshavebeenuniversallysuccessful(Hepworth2015).Thiscanbelinkedtothepoliticaleconomyofreforms,somethingthatistakenupinthenextsection.
WeusemedicinestoillustratesomeoftheotherstrategiesfromTable3thatcancomplementhealthfinancingchangestoachievemorewiththeavailableresources.Manystrategieshavebeenshowntoincreaseefficiencyinavarietyofsettingsrangingfromestablishingandenforcinganessentialmedicineslistwhichusesgenericstothemaximumextent,increasingthetransparencyandinformationavailableformedicineprocurementsothatcountriespaytherightpriceandcorruptioniseliminated,developingthecapacitytomonitormedicinesafetyandqualitynotjustwhenmedicinesarelicencedorregisteredbutoncetheyenterthedistributionsystem,eliminatingincentivesforover-prescriptionsuchasseparatingprescribingfromsales,andvarioustypesofstrategiestoimproveproviderandpatientknowledgeaboutgenerics,appropriateandtimelyprescriptions,andtheimportanceofadherence(e.g.Holloway2011;Hollowayetal.2013;Atavetal.2014;Chenetal.2014;Hassalietal.2014;Hurley2014;Choudhryetal.2016).Itis,however,clearthatitissimplertoimplementthesepoliciesinthepublicthanintheprivatesectorwhereregulationssometimesdonotexistandwheretheydo,enforcementisdifficult(e.g.VanNguyenetal.2013;Sheikh&Uplekar2016).
ThereissimplytoomuchliteraturedescribingattemptstoimprovetheefficiencyintheothercomponentsofhealthsystemstoreportitallherebutarecentWHOpublicationsuggeststhat,inadditiontoconsideringhealthfinancing,itisusefultoworkthroughthehealthsystemfunctionsofgenerationofhumanandphysicalinputs,governance/stewardshipandservicedelivery(Sparkes,DuránandKutzin,J.2017).Theythensuggestlookingforinefficienciescommontoeachfunctionandinefficienciesthatpreventtheintegrationofactivitiesacrossfunctions.WeturnnowtodiscussingsomeoftheareasonwhichthereisnoconsensusandwherefurtherevidenceanddiscussionatthisForumwouldbevaluable.
2) WhatwedonotknowSomerecentdevelopmentsthatmayimproveefficiencyinhealtharestillintheirinfancy.Forexample,thequestionofwhetherelectronicmedicalrecordsimproveefficiency,andifsoinwhatcircumstances,isstillbeingexplored(e.g.Nguyen,BellucciandNguyen2014;Campanellaetal.2015).Thistypeofquestioninnotdiscussedherewherethefocusisonareasofdisagreementorwherethereissimplynotenoughinformationonlongstandingquestionstomakeinformeddecisions.
i. PayingforresultsManyexperimentshavebeenundertakenwithformsofresults-basedpaymentsthat
supplementincomesforstafforinstitutionsinreturnforasetofagreedoutputs(e.g.Rudasingwa,SoetersandBossuyt2015;Das,GopalanandChandramohan,2016;Spisaketal.2016).Similarly,
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therehavebeenrecentexperimentswithformsofvalue-basedpayment24asareplacementforfee-for-serviceintheUSwiththebroadergoalofimprovingcontinuityofcareandprovidercoordinationaswellasreducingthegrowthofcosts(e.g.Conradetal.2014;Dambergetal.2014;Carey2015;Press,RajkumarandConway2016).Analternativeiscalledpopulation-basedpayment.Bundledandpopulation-basedpaymentsarerelativelynew,butthepreliminaryresultsarepromising,althoughtheyrequiretheabilitytodesignandimplementariskadjustmentsystemandtomonitorresults.AbriefsummaryisprovidedinBox4.
Box4:NewOptionsforStrengtheningProviderPaymentMechanismsforCareIntegration
Twonewpaymentmechanismsarecurrentlybeingpiloted,mostlyinhigh-incomecountries,toimproveintegrationofcare.Theyare(i)bundledpaymentsforacuteepisodesofcareandchronicconditionsand(ii)population-basedpayments(PBPs)coveringspecificservicesfordefinedpopulationgroups.Thesepaymentmethodsspanacrosscaresettingstoincreaseincentivesforprovidercoordination.
Bundledpaymentsforacuteepisodesandchronicconditions.Bundledpaymentsinvolveasingle,fixedratepaidtotwoormoreproviderstocoverallservicesdeliveredfor:(i)treatmentofanacuteepisodeofcare,or(ii)managementofthecareforpatientswithaspecificchronicconditionordisease(AmericanMedicalAssociation,2016).BundledpaymentsforacuteepisodesofcarehavebeenpilotedintheUSandEuropesincethemid-2000s.ExamplesincludeBestPracticeTariffs(BPTs)intheUK,coveringadmissionsforhipfracture,stroke,cholecystectomyandcataractsurgery,andOrthoChoicebundledpaymentsinSweden,coveringorthopedicproceduresincludinghip,kneeandspinesurgery(Srivastaetal.2016).Thesepaymentstypicallycoverthecostsofallinpatientandoutpatientservicesfromtheinitialvisitthroughtreatment,recoveryandrehabilitation,includingpost-dischargecareandanycomplicationsthatmayresultwithinacertaintimeperiodafterdischarge(PorterandKaplan2015).Bundledpaymentsforchronicconditionshavebeenimplementedtohelpimprovecoordinationofcareforthesepatientsandaimtoencourageaholistic,long-termperspectiveratherthanone-offencountersorinterventions(Srivastaetal.2016).PilotsofthesebundledpaymentsinEuropeancountrieshavefocusedonbothrare,yethigh-costdiseases,andonmorecommonchronicconditions.Thebundlestypicallycoverallservicesrelatedtothemanagementofthediseaseorcondition,inlinewithclinicalguidelinesandpathways,andcanspanmorethanonecaresetting.Forexample,undertheDutchbundledpaymentscheme,servicesincludedregularprimarycarecheck-ups,additionalconsultations,imaging,labtests,examinations(e.g.footexaminations),counselling,medications,psychosocialcare,andcoordinationofspecialistservices.Thecostsofcomplicationsfromthesediseasesaretypicallycoveredoutsideofthebundle(PorterandKaplan2015).Thepaymentistypicallytime-based(permonthoryear)since,unlikeacutecareepisodes,thecycleofcareforachronicconditioncoveredbyabundledpaymentmaycontinueindefinitely.Bundledpaymentsforacutecareepisodeshavebeenshowntoachievesignificantcostssavings,withnoorlittledeteriorationofquality.Theimpactsofbundledpaymentsonchronicconditionsarelessclear.InPortugalcostsfortreatingHIV/AIDSdecreasedwhilequalityofcarewasmaintained(e.g.,patientadherencetomedication,controlledinfectionlevels,complianceofproviderswithtreatmentguidelines,etc.).However,whilequalityimprovementswereobserved
24Value-basedpurchasing“referstoabroadsetofperformance-basedpaymentstrategiesthatlinkfinancialincentivestohealthcareproviders'performanceonasetofdefinedmeasuresinanefforttoachievebettervalue”(Dambergetal.2014).
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forbothdiabetescareprocessandpatientoutcomeindicatorsintheNetherlands,costsincreased.Reasonsforthisincreaseareunclear,butmaybeduetodelayingtheuseofspecialistcare,whichcouldhaveresultedinmorecostlycare.
Population-based-payments.Population-basedpayment(PBP)modelsinvolvesettingaprospectivebenchmarkbudget,whichformsthebasisforpaymentstogroupsornetworksofprovidersfortheprovisionofallorthevastmajorityofservicesforadefinedpopulation.ThesemodelshavebeencloselyrelatedtotheemergenceofAccountableCareOrganizations(ACO)-networksofhealthcareprovidersthatarecollectivelyaccountablefortheorganization,costsandqualityofhealthcarefortheirmembers–intheUnitedStatesandelsewhere.Similartobundledpayments,providersarepermittedtokeepatleastportionofthesavingsgeneratedbelowthebenchmarkbudget(contingentonachievingspecifiedqualitytargets)andmayberesponsibleforanycostsexceedingthetotalPBPamount.BecausePBPscoverarangeofservicesacrossprovidersandarenotlinkedtospecificcareepisodesorconditions,theyarethoughttopromotegreaterintegrationofcare,amoreholisticviewofpopulationwell-beingaswellasincentivesforinnovationstokeepcostsdown(e.g.,riskstratifiedcasemanagement,dischargeplanning,preventiveactivities,etc.).
ThelargestACOpilotsareintheUS,partofbroaderreformsmandatedbytheAffordableCareActof2010.Forexample,Medicarehascontractswithover400ACOs.ProvidersformingtheACOtypicallyincludeprimarycareprovidersandhospitals,butcanalsoincludespecialists,long-termcarefacilitiesandhomecare(Srivastaetal.2016).InEurope,examplesofPBPmodelsforACOshavebeenimplementedinGermanyandSpain.Therangeofhealthservicesprovidersarefinanciallyresponsibleforvariesacrosstheavailablemodels.IntheMedicaremodel,ACOsarefinanciallyresponsiblecostswhichincludeinpatienthospitalcare,skillednursingcare,hospiceandhomehealthservicesaswellashospitaloutpatientcareanddoctors`services.InGermany,providersareresponsibleforallheathcarecostsfortheinsuredpopulationwiththeexceptionoflong-termcare(Srivastaetal.2016).ThesizeofthepopulationthatisassignedtoanACOalsovarieswidely,rangingfrom5000to245,000patients.PBPimplementationisrelativelyrecentandanyimpactsobservedonqualityandcostshouldbeconsideredpreliminary.AsubsetoftheMedicareACOs,knownasPioneerACOs,wereabletoachieveimprovementsin28ofthe33requiredqualityindicatorsincludingcontrollinghighbloodpressure,screeningforfuturefallriskandscreeningfortobaccouseandcessation,forexample.Onanaggregatelevel,MedicareACOscontributedtoslowingthegrowthinhealthspending,thoughnotallwereabletoachievecostsavings.In2012,totalnetsavingsforMedicareinamountedto$383millionwhiletheGKmodelachievedsavingsofEUR4.6million(Srivastaetal.2016).Source:WorldBank,Forthcoming
Intermsoftheexperiencewithresultsbasedpaymentsorpaymentforperformanceinlower-incomecountries,therehavebeenmixedresults.Sometimestheyhavethedesiredimpactandsometimestheydonot.Theycanworkforsomeofthedesiredoutcomesbutnotforothers(e.g.Foxetal.2013;Mills2014;Binyarukaetal.2015;Das,GopalanandChandramohan2016).Thereisundoubtedevidencethattheyhavestimulatedstaffmotivation,qualityandefficiencyattimes,andthemoreintensiveinformationsystemstheyrequirehavealsobenefitedthewiderhealthsystem
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(Cashinetal.,2014).However,systematicquantitativeassessmentormeta-analysisacrosstheexperimentsiscomplicatedbythefactthateachexperimenthasbeendifferentinthetypeofhealthworkerstheytarget,intheoutputsforwhichpaymentistriggered,orinthewaypeoplearepaid,sodatastrictlyshouldnotbepooledwithoutsomewayofcontrollingforthisheterogeneity(MarkovitzandRyan2017).Itisalsonotcleartheextenttowhichtheseexperimentsaresustainable,asmanyofthemhavebeenfundedbydevelopmentpartners,attimesindependentofacountry’sfinancingsystemandonlywithemergingevidenceoftheprogramcosts(DeBruinetal.,2011;Eijkenaar,2013;Cashinetal.,2014).
Furtherworkisneededtobeforeitispossibletobesurewhatpaymentmechanism,ormixofpaymentmechanisms,bestencourageshighstaffmotivation,quality,andefficiency.Tocontributetothis,theWorldBankGroupiscurrentlyintheprocessofsummarizingtheirexperienceswithformsofresults-basedfinancing.
ii. TheprivatesectorandefficiencyTherehasbeenconsiderablerecentinterestintheappropriateroleoftheprivatesectorin
healthandmanyorganizationshavedevelopedstrategiesforengagingwiththeprivatesector(IFC2011;USAID2009;WorldBank2013).Systematicreviewsoftheextensiveliteraturesuggest,however,thatthereisnoevidencethateitherpublicorprivatehealthservicesareinherentlymoreefficientorofhigherqualitythantheother(Coarasaetal.forthcoming;Berendesetal.2011;Basuetal.2012).Thekeyissuesandchallengesinservicedelivery,suchassubstandardpatientsafetyandqualityofcare,excessiverelianceonhospitalsandinadequateinfrastructure,arecommonacrossthepublicandprivatesectors.Moreover,deficientsafetyandqualityhaslesstodowiththeownershipoftheproviderthanwiththeincentivesfacedbytheprovider.Thismeansthatinseekingtoexpandservicecoverage,thereisnoreasontoarguethatmorepublic,ormoreprivate,isthepreferredoption.
Opportunitiesdoexisttoengagethepublicsectoratbothhospitalandprimarycarelevelsandexamplescanbefoundofpublic-privatepartnershipsimprovingcoverageandqualitywithhospitals.Attheprimarycarelevel,engagementwiththeprivatesectorhasincludedcontracting,providernetworking,implementationofvoucherschemes,andinclusionofinformalprovidersintheformaldeliverysystem(includingprogrammesaimingatretrainingandformalizingtheirstatus)(Montagu&Goodman2016).However,whilethereseemstobeawideconsensusthatmoreeffortsshouldbeundertakentoestablishadialogueandrelationshipbetweengovernmentandprivateproviders,theredoesnotyetseemtobeagreementonhowbesttodoit.
Thereismoreagreementthatsomeinnovationsintheprivatesectorhavebenefitedthepublicsector.Theseincludeinnovationsin:businessprocessfunctionssuchasmarketing,financing,andoperating;promotionofhealthservicestothepoorthroughsocialmarketingandservicedesign;redesigningcoststructuresthatallowproductsandservicestobemoreaffordableforthepoor,byloweringoperatingcoststhroughsimplifyingmedicalservices,loweringunitcoststhroughhighervolumesandcross-subsidization;andnewoperatingstrategiesthatincreasetheavailabilityofservicesinremoteareas,mainlyachievedthroughoptimizinghumanresources,processandproductreengineering,andincreasingoutreachactivities(Bhattacharyya,etal.,2010).
iii. HumanresourcestrategiesforefficiencyConsiderableworkhasbeendoneonhumanresourcestrategiesinadditiontohowtopay
providers.Thisincludesdevelopingstrategiesandincentivesfor:continuoustrainingorretainingwherenecessary;retainingstaff;ensuringtherearesufficientstaffwiththerightskillsinisolatedanddisadvantagedareas;andtryingtocontrolharmfuleffectsofdualpractice(e.g.Asanteetal.
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2014;Rawaletal.2015;Araujo,EvansandMaeda2016;GwynneandLincoln2016;Yazbeck,RabieandPande2017).Thesestrategiesareoftenbasedonresearchonthefactorsthatmotivateordemotivatehealthworkersindifferentpartsoftheworld(e.g.Bonenbergeretal.2014;Hotchkiss,BanteyergaandTharaney2015;VanYperen,WörtlerandDeJonge2016;Wurie,SamaiandWitter,2016).
Salariesandfinancialincentivesarenottheonlyissue,buttheyareimportantinmostsettings.Inlowincomecountries,thekeyissueishowtoaddressthewiderangeofissuesthatwouldreducethehealthworkershortage,improveskillmixesandensuremotivatedworkersareatworkandlocatedwheretheyareneededfortheavailableresources.WhereMinistriesofHealth(andEducation)arehavelimitedresources,whereshouldtheystart?Thisrequiresanassessmentofwherethebiggestimpactwouldbeobtainedforgivenlevelsofexpenditure,butthisinformationisnoteasilyavailable–usingdualpracticeasanexample,therehavebeenmanyattemptstocontroltheproblemsassociatedwithpublicsectorhealthprovidersworkingalsointheprivatesector,buttherearefewgeneralizablelessonsofwhatstrategieshavehadsustainablesuccess(e.g.SandierandPolton2004).
iv. CostsofimprovingefficiencyManystudieshaveevaluatedtheimpactofattemptstoimproveefficiencyinthehealth
system,somereportedhereandsomeintheAnnextothisdocument.Rarelyarethecostsreported.Wheretheyare,informationisrelativelysparse–forexample,Conradetal.(2014)reportedthattherearesubstantialtransactioncostsinvolvedinintroducingvalue-basedpaymentsintheUSAincludingthoselinkedtochangesinthecomputerpaymentsystems(Conradetal.2014).Thereisscatteredinformationthattransactioncostsmightbehighforresults-basedfinancinginlowerincomecountries,totheextentthatBorgietal.(2015)questionediftheeffectsjustifythecosts.Allstrategiestoimproveefficiencyinvolvetransactioncosts,andthisinformationiskeyfordecisionmakersseekingtoallocatescarceresourcestointer-sectoralactions,improvethequalityandrangeofservicesavailableandincreasefinancialprotection–andimproveefficiencyatthesametime.
v. PoliticaleconomyissuesThehealthsectoriscomplex,shapedbypowerfulinterestgroupsandmanyinterestsinboth
the public and private sectors interact and collide on a daily basis (Daemmrich 2013). Efficiencyreformschallenge the statusquo in theprovisionofhealth services, and in their financingand/ororganisation,sotheynaturallytriggerbroaderpolitical,economicandethicalconcerns(Robertsetal.2004).Efficiency reformscannot, therefore,beviewedonly froma technical sideand thepoliticaleconomyaroundtheirpossiblesuccessorfailurealsoneedstobeunderstood.PerhapsthisiswhyFoxandReich(2015)arguethatsuccessfulreformsaretheexceptionratherthantheruleinhealth.
Formalmodelsofpoliticaleconomyarenowbeingappliedtohealthreformsmorefrequentlytoshedlightontheseprocesses:forexample,modelsofcompetinginterestgroupsandvotermodels(seeHauck&Smith,2015);politicalsettlementanalysis(Kelsall,Hart&Laws,2016);andstakeholderanalysis(Bumpetal.2014).Reichetal.(2016)arguethatmappingoutthevetopointsandvetoplayersiskeytoanyreforms–vetopointsare‘juncturesinthelegislativeandpolicydesignwherereformscanbeblocked’,whereasvetoplayersare the ‘individualsorcollectiveactorswhoseagreement isrequiredtomakepolicydecisions’.
Severalstudieshaveshowntheimportanceof‘events’(e.g.politicaloreconomiccrises,wars,ornaturaldisasters)intriggeringareformprocess.Thoseeventsarecrucialastheytendtochallengethepowerofinterestgroupsandcollectiveactorswithinthehealthsystemandinsomecases,theyleadtoabreakingpointwherethesystemisnolongerdeemedappropriate.Forinstance,Reichetal.
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(2016)findthatthecollapseofcommunismledtoapoliticaldiscussiononsocialprotectionsystemsand design of major health reforms promoting the development of primary health care and theimplementation of essential benefit packages. In France, the United Kingdom and Japan, thedevelopment of universal coverage financing system was integrated as part of the post-warreconstructionprocess(Stuckleretal.,2010;Reichetal.,2016).InThailand,the1977AsianfinancialcrisiswasthestimulustodeveloptheUHCSchemethatextendedcoveragewithhealthservicesandfinancialprotectiontotheentirepopulation(Patcharanarumoletal.2011),whilethe2008financialcrisiswasthestimulusforaseriesofreformsincludingthosethatincreasedefficiencyinthehealthsystem(Houetal.2013).
StudiesfromKyrgystanandMexicoshowhowhealthreformbecameapoliticalagendathatobtained the support of the population, enabling health financing changes to be pursued despiteopposition from some interest groups (Kelsall, Hart & Laws 2016; Frenk et al. 2006; Parry andHumphreys2009).Bumpetal.(2014)traceouttheopponentsandthesupportersofrecenthealthfinancingreformsinTurkeyandactivestepsweretakentobuildsupportandreducetheopponents’supportbasewhileHarris(2015)pointstotheimportanceofagroupofcivilservantsinThailandwhobuiltsupportandcombattedoppositiontotheintroductionoftheiruniversalcoveragescheme.
Beyondthis,thereislittleknowledgeofwhatfactorsallowefficiencyreformstosucceedandfail,andhowgovernmentsstrengthenedsupportandovercameopposition.Itisnotyetclearifthereare generalized lessons from experience that would help countries learn from the experience ofothers.
That being said, it is clear that there can be political obstacles to implementing even thereformsthattechnicallyseemthesimplest.Differenttypesofhospitalreformstoimproveefficiencycan be opposed by managers, clinical staff, non-clinical staff, or the community (e.g. Galetto,MarginsonandSpieser2014).Closinghospitalsorreducinghospitalsbedsinthefaceofover-capacityis likelytobeopposedbypoliticians inwhoseelectoratethehospitalsare located,bytheaffectedcommunity,andbyemployees(e.g.Bloometal.2015).Animportantrequirementforthesuccessfulimplementationofefficiencyreformsistoundertakeaformofpoliticalmappinginthedesignphase,tounderstandwhoislikelytosupportoropposethereform.Strategiesfordealingwithopposition,includingengagementwithkeystakeholders,thenneedtobedevelopedandimplementedbefore,oratthesametime,asthereformsthemselves.
VIII. EfficiencyandequityReducing inefficiency is a means of moving more rapidly towards UHC for the available
resources,therebyimprovingpopulationhealthandfinancialwellbeing.Efficiencyanalysisdoesnottypically account for the distribution of coverage and outcomes across population groups butconsiders aggregate outcomes at the population level. Improving population health and financialprotectionareanimportantgoalsofhealthsystemdevelopment,butreducinginequityisalsocriticalandthereisalargeliteratureonthenatureofinequalitiesandinequitiesinhealthandhowtoimprovethem(e.g.WHO2000;deAndradeetal.2015;Mackenbachetal.2015;Marmot2015).
Thequestionofwhetherthereisanefficiency-equitytrade-offinhealthpolicyhasalsobeenwidelydiscussedinthelasttwodecades:drawingonthisliteraturetheWorldHealthReportof2000stated that ‘equity and efficiency can be easily in conflict’ (WHO, 2000). For instance, someinterventionsdirectedspecificallytovulnerablegroupsmightbemorecostlytoimplementifthosegroups are located in a remote location or present demographic, cultural or socio-economicconstraints.Ebong&Levy(2011)comparedtheefficiencyoffacility-basedandoutreachprogramsinauniversalimmunisationcampaigninCameroon.Theformerwasmorecost-effectivethanthelatter.
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However,althoughtheoutreachprogramto increasepopulationcoveragewasmorecostly, itwasmoreeffectiveatreachingvulnerablegroups.Inthesamevein,twostudiessuggestshowedthatthemostefficientprogramsforHIV/AIDSinSouthAfricawerenotthemostequitable(Cleary,Mooney&McIntyre2010;Verguet2013).Targetingthepoorandthevulnerablecameatacostintermsoftheoverallpopulationimpact.
On the other hand, some strategies that improve efficiency can also have positivedistributionalimpacts.Strengtheninginvestmentinprimarycareisthemostobviousexample.Primarycareinterventionsareoftenthemostcost-effectivewayofreducingtheburdenofdiseaseinlow-andmiddle- income countries compared to other levels of care, and primary care tends todisproportionallybenefit thepoor (Jamisonetal.,2006;Asanteetal.,2016).ThisdoesnotalwaysmeanthattherichdonotbenefitmorethanthepoorfromPHC,butthattheypoorbenefitrelativelymorefromPHCthanfromhigher-levelservices.
Someevaluationsof trainingcommunityhealthworkersandvarious formsof task shiftinghavealsobeensuggestedtoreducedeliverycosts,increasecoveragelevelsandbenefitthepoorandpeoplelivinginremoteareas.Zachariahetal.(2009),forexample,assessedthreeprogramsoftask-shiftingtoprovideARTandtreatmentmonitoring(inLesotho,SouthAfricaandMalawi),showingareductionofcosts,increasedaccessandimprovementsingeographicandsocio-economicequity.
Benefit-incidenceandfinancial-incidenceanalysishaveincreasinglybeenusedtoassesswhichgroupsbenefitthemostfromaparticularpolicyorfinancingflow–e.g.asubsidyorvoucherschemeoraparticularlevelofcare(e.g.Asanteetal.2014;Chenetal.2015;Asanteetal.2016).Whilethisinformationisinteresting,itisnotparticularlyinformativeaboutidentifyingthemostefficientwaysofreducinginequity.
Anillustrationistherelativelylargeliteratureontargetingparticularvulnerablegroupsversusamoreuniversalapproach.Mostofthestudiesoftargetinghavefocusedontheimpact,andwhetherthepoorbenefitasintended.Sometimesthepoordonotbenefitinwhichcasethereisnoneedoffurther analysis (e.g. Coady, Grosh & Hoddinott, 2004). But where the targeted group benefits,questionsofcostsandefficiencybecomeparamount.
Therearemanycostsinvolvedintargeting-administrationoftargetingschemes,continuousupdatingoftoolsfortheidentificationofthepoor,fraudcontrolandresourcetransfercosts(Coady,Grosh&Hoddinott 2004;Dutrey 2007). These are very rarely reported even in studies that showimpact.Theevidenceonthemeritsofalternativewaystoreduceinequalitiesisanimportantmissingingredienttoevidence-basedpolicydevelopmentinthisarea.
Finally,equityconsiderationshaveinfluencedthedesignofhealthfinancingstrategiesoverthelastdecades.Receivedwisdominhealthinsurancehasbeenthatitworksmostefficientlywheninsuranceisofferedforlowfrequency,highcostoccurrences.Peoplewithchronicillnessandpeoplelivingclosetothepovertylinecansufferfinancialcatastropheorbepushedintopovertyfromhighfrequency,lowcostevents.ProtectingthesepeoplefromseverefinancialhardshiplinkedtopayingoutofpocketforhealthservicesisanequityissueatthefoundationoftheconceptofUHC.
IX. ConclusionsInefficiencycanbe found in thehealthsystemsofall countries. In lowandmiddle income
countries,itimposessubstantialcostsintermsofslowingtherateatwhichtheycanmovetowardsUHCandimprovethehealthoftheirpopulations.Inhigh-incomesettingsitcanmeanthatservicesare cut or out-of-pocket payments are increased unnecessarily at a time of financial constraint.Achievingmorehealthandfinancialprotectionwiththeavailableresourcesis,therefore,animportant
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complement to efforts to raise thenecessary resources forhealth. Proof that thehealth sector isgettingmoreefficientmayalsopersuadetheMinistryofFinancetoallocatemorefundstohealth.
Somecountryhealthsystemsaremoreefficientthanothers,butnotallsufferfromthesametypesof inefficiency. It isalsopossible tobe relativelyefficient in someareasand lessefficient inothersbuteverycountrycoulddosomethingtoensuretheyachievemorewiththeavailablehealthresources.Afirststepistoidentifythemainsourcesofinefficiency,thereasonswhytheypersist,andwhichonesareamenable to technical solutions thatarepolitically feasible to implement.Politicalanalysis to understand the likely opponents and supporters of any particular reform, and tosubsequently build support and counteract opposition, is a critical step towards maximizing theprobabilityofsuccesswithanyreformsthatareadeveloped.
Someof thetechnicalsolutionsthatcanreduce inefficiencyarewellknownandaccepted.Within the health financing system, for example, the need to reduce fragmentation in pooling bymergingpoolsorbystartingwithasinglelargepoolisone.Soaretheideasofchoosingthemixofhealth services that is the most efficient, delivered in the right places; introducing paymentmechanismsandsystemsthatencouragequality,efficiencyandresultsbasedonreliableuptodateinformation;andoptimizingpublicfinancialmanagementpractices.
Outsidethefinancingsystem,someof thepossiblesolutionsrelatedtomedicinesarewelldocumentedalthoughtherearealsoimportantstepsthathavebeenshowntobeeffectivewithhealthworkersandinfrastructure.Theseincludeshiftingtasksfromdoctorswheretheyareinshortsupplytoothertypesofhealthworkerssoastoincreasecoveragewithoutadditionalcost.
ThesolutionsofTable3wereorganizedaccordingtothreemainpolicyquestionstheyseektoaddress:doingtherightthings;doingthemintherightplaces;anddoingthemright.Governmentswillwanttoknowwhichsolutionsofferthegreatestchancesofanimmediatebenefitandwhichoneswillreaplonger-termbenefits.Table4summarizesthosethatarethemostlikelytodelivershort-termefficiencyreturns.
Table4:PossibleQuickWins
§ Organizationandmanagementofcare- Establishmanagementnetworksfor(primary)careproviders;- EstablishandenforcegatekeepingatPHC-level;- Improveservicedeliverycapacity/qualityatlowerlevelsofcare(e.g.,PHC),including
telemedicine.§ Taxpolicies:- Implementhealthtaxesandfinancialincentivesforpersonalactiononprevention;- Removetaxesonessentialmedicines.
§ PublicFinancialManagement- Modifybudgetpracticesasnecessary–e.g.movefromlineitembudgetstomoreflexible
budgeting;timelyreleaseoffunds;- Improvecontrolstopreventcorruption;- Improveregulationandgovernancewithsanctionsforcorruptionandfraud;- Promotecodesofconduct.
§ Paymentsystems- Developmoreuser-friendlywaysforpeopletopaycontributions.
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§ HumanResourcesforHealth- Improvehealthworkforceplanningwithlinksittotrainingintakes;- Improvemanagement,supervisionandworkingconditions;- Allowhealthworkersatlowerlevelstotakeonmoreresponsibilityasappropriate(task
shifting).
§ Medicines- Developandenforcegenericspolicyandessentialmedicineslistforhealthfacilitieswith
qualitycontrolwhichmightinclude:- Limitingfinancialincentivesforprescribingbrandedmedicines- Informationongenericstoproviders/populationwithqualitycontrolsystems;- Removeinappropriatefinancialincentives–e.g.separateprescribingfromsales;- Increaseinformationtoprovidersandpatients;regulateandenforcestandardsfor
industrypromotion.- Activepurchasingofmedicineswithappropriatecompetitivebidding;- Increasetransparencyinpurchasesandtenders;- Monitorandpublishmedicineprices.
§ Informationsystems- Increasecountrycapacitytogenerateandusenecessaryinformation;- Improvemanagementandavailabilityanduseofdata.
§ Infrastructure- Improveprocurementprocessesforinfrastructure;- Refusedonationswherelocalservicecannotbeassuredorwherebudgetswillnotbeable
topayforspareparts;- Ensureappropriatemaintenanceandcleanliness.
§ Politicaleconomy- Informationsharingwithkeystakeholdersonreasonsforefficiencyactions.
Thepoliticsofefficiencyimprovementsmightmeanthatsomeofthesestrategiescouldtakeconsiderablylongerthanexpectedinsomecountries,whileothersidentifiedinTable3mightbefeasibletoimplementmorequickly.Focusingonquickwinsshouldnot,ofcourse,divertattentionfromsomeofthekeylonger-termoptionssuchaschangingproviderpaymentmechanismsandintroducingmorecomprehensiveformsofstrategicpurchasing.Thelonger-termoptionsalsosometimeswillrequireimmediateinvestmentstoensurethattheycanhaveanimpact.Forexample,strategicpurchasinggenerallyrequiresstrengtheningcapacitiesintermsofpersonalskillsandcomputerizedinformationsystems.Changingproviderpaymentmechanismswillfrequentlyrequirenewormodifiedlegislationandaperiodofconsultationwithbothpatientsandproviders.
Despitetheknowledgeabouttechnicalsolutionsinsomekeyareas,someimportantgapsinknowledgeandanumberofcontroversiesremain:
A. MixofservicesThereisaconsiderablebodyofknowledgeaboutthecostsandeffectsofdifferentsortsof
healthservicesthatcanbeusefulforcountriesseekingtochoosethebestmix.Despitethis,thechoice
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ofabenefitspackagestillreliesasmuchonanassessmentofwhatisfeasiblegiventheneedsofthepopulationasonevidenceoftheefficiencyofdifferentinterventionmixes.Theareaswhereadditionalinformationiscriticalinclude:
a) Economiesofscaleandscope:Whichinterventionsshouldbedeliveredinthesamesettingwith
thesamestaff(scope)andwhatisthemostefficientlevelofcoveragefortheavailableresources(scale)?
b) The right services in the right place: What is the efficiency of different services delivered indifferentplacesandhowtodecidewhatistheappropriatemixatcommunity,primary,secondaryandtertiarylevels?Howtoensurecontinuityofcareacrossthedifferentlevelsandacrossthelife-cycle, including the balance between prevention, promotion, treatment, rehabilitation andpalliation?
c) Governance,publichealthfunctionsandpersonalservices.Whatistheefficientbalancebetweentheseactivitiesandhowmuchshouldbespentonthem?
d) Expandingcoveragewithhealthservices,improvingquality,andfinancialprotection.Howcantheefficiencyof thesealternativesbeassessedand compared inaway thatpolicy-makers canincorporateintotheirpolicychoices?
e) Inter-sectoral ormulti-sectoral actions.What guidance can be offered toministries of healthaboutwhere their limited time andmoney should be focused if theywant to influence othersectorstotakeactionsthatimprovehealth?
B. Incentivesforefficiencyandqualitya) Arethereformsofvalue-basedpaymentthatbetterencourageefficiency,qualityandresultsthan
existing payment systems. How much do they cost, do they have unintended negativeconsequences and could they be routinely incorporated into health systems without externalfinancing? This is not simply an unresolved question but a controversial issuewhere there arestrongproponentsandopponents,forexample,ofdifferentformsofresults-basedpayment.
b) Whatcapacitiesdocountriesneedtohavetobegintopurchasestrategicallyandwhatsystems(forexample,budgeting,accountingand legalsystems)needtobe inplacetosupport it?Whathasbeentheexperiencewhereitacountryhassoughttomovetowardsstrategicpurchasingwithoutthe requisite systems in place and is it feasible tomove forward in very resource-constrainedsettings?
C. MeasurementThere are major gaps in the availability of data to identify the extent and sources of
inefficiencyincountries,particularlylower-incomecountries,partlybecausefewcountriesroutinelymonitor theirownprogress in reducing inefficiencyandpartlybecause routinehealth informationsystemsproduceonlyafewofthenecessaryindicators.a) Howcancountriesdeterminewhichindicatorsarecriticaltotheirowneffortstoachievemore
withtheavailableresourcesandwhataretheinvestmentcostsofensuringtheycanbemonitoredregularly?
D. Politicaleconomya) Aretheregeneralizablelessonstobelearnedaboutwhysomeefficiencyreformsworkandothers
fail,orreformsworkinonecountryandnotinanother?b) Arethereapproachesthatwouldbeusefulforallcountriestotakewhendevelopingtheagenda
for improving efficiency tomaximize the chances of success, such as involving civil society orparliamentarians?
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E. Theefficiencyandsustainabilityofoptionstoimproveefficiency
Littleinformationisavailableonthecostsofthedifferentoptionsforimprovingefficiencytoincludealongsidethebenefitstoallowanassessmentofthemostefficientwayofimprovingefficiencyto be determined. Studies of payment for performance provide one example, and most of theliteraturehassimplereportedresults.
a) Howcancountriesrapidlyassessthecostsofthevariousoptionsforimprovingefficiency?Isthereanywaytheglobalcommunitycanassist?
F. Equityandefficiency
Some types of efficiency improvements can improve equity and some can exacerbateinequities.Sometimesitdependsonhowtheinterventionisdeliveredratherthanonthediseaseorhealthconditiontargetedorthetoolbeingused.Whatisrarelyassessedarethecostsandeffectsofdifferent ways of improving equity – recognizing that improving equity is a legitimate goal ofgovernment,andtheyshoulddoitinthemostefficientway.
b) How can countries rapidly assess the costs and impacts of the various options for reducinginequalitiesinhealth?Isthereanywaytheglobalcommunitycanassist?
X. RecommendationsEvery country has inefficiencies in their health systems and every country has technical
optionsforreducingthem.Basedonanassessmentofwhatisknownandwhatismissing,anumberofrecommendationsforimmediateactioncanbeformulated.Theyaredividedintoactionsthatneedtobetakenbycountriesandthosewheretheinternationalcommunityincludingfinancialpartnerswithlow-incomecountriesandresearcherscanassist.
Countries
§ Undertakeanassessmentofthemajorcausesofinefficiencyandthosethatarefeasibletochangeintheshort,mediumandlonger-term.
§ Developandimplementastrategyforimprovingefficiencyintheshorttomediumterm–thisshouldbepartofahealth financingstrategyalthoughsomeof theactionswillneedtobebroaderthanhealthfinancing.
§ Starttoputinplacethebackgroundinvestmentsthatneedtobemadetoensurethelonger-termoptions canbeundertaken–e.g. legislation, consultation, computerized informationsystems,staffskills.
§ Undertakeapoliticalaswellasatechnicalanalysistoguidewhichreformshavethegreatestchanceofsuccess,thenbuildsupportandnegateopposition.
§ Developasetofefficiencyindicatorsrelatingtothemaincausesofinefficiencyinthecountryandtheagendaforachievingmorefortheavailableresources.
§ Investinmethodstocollectthemandtoevaluateprogressregularly.§ Identifytheareasofpossibleinter-sectoralormulti-sectoralactionsthatwouldachievethe
largesthealthimpacts,andthepoliticalfeasibilityofinfluencingothersectorstoimplementthem(perhapsincollaborationwiththeministryofhealth).ThiswouldhelptheMinistryofHealth target the key ministries and make the best use of their own limited time andresources.
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Internationalcommunity(includingresearchersinallcountries)
§ Routinelyassessthecostsaswellasimpactofeffortstoimproveefficiencysothatcountriescandeterminetheefficiencyofdifferentoptionsforimprovingefficiency.Anassessmentofthefinancialsustainabilityofthedifferentoptionsisalsohelpful.
§ Developanagendatoidentifythecost-effectivenessofeffortstoredresshealthinequalitiesaspartoftheefficiencyandequitydiscussion.
§ Developmethodswhichcanbeusedtohelpcountriesdeterminewhichofthemyriadofinter-sectoralormulti-sectoralactionstoimprovehealthshouldbegivenpriorityforthelimitedtimeandfinancialresourcesavailabletoaMinistryofHealth.Thiswouldfeedbackintoitem5above.
§ Continue to invest in the technologies that might “shift the frontier” of possibilities”,identifyingfurtheropportunitiestoimprovehealthandfinancialprotectionatlowcost,suchasvaccinesforHepatitisCandHIV/AIDS.
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XI. References
Abimbola,S.,Olanipekun,T.,Igbokwe,U.,Negin,J.,Jan,S.,Martiniuk,A.,Ihebuzor,N.andAina,M.,2015.HowdecentralisationinfluencestheretentionofprimaryhealthcareworkersinruralNigeria.Globalhealthaction,8.
Adams,A.M.,Ahmed,T.,ElArifeen,S.,Evans,T.G.,Huda,T.andReichenbach,L.,2014.InnovationforuniversalhealthcoverageinBangladesh:acalltoaction.TheLancet,382(9910),pp.2104-2111.
Alberini,A.andŠčasný,M.,2013.Exploringheterogeneityinthevalueofastatisticallife:Causeofdeathv.riskperceptions.EcologicalEconomics,94,pp.143-155.
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