Intern Presentation

Health Financing in Central and West Asia:

Country Studies of Pakistan, Uzbekistan and Kyrgyz Republic
Yeonhee Yang
CWRD/CWPF Intern
MPH-MBA student at Johns Hopkins University
September 09, 2015
Final Version (Presentation)

Disclaimer: The views expressed in this paper/presentation are the views of the author and do not necessarily reflect the views or policies of the Asian Development Bank (ADB), or its Board of Governors, or the
governments they represent. ADB does not guarantee the accuracy of the data included in this paper and accepts no responsibility for any consequence of their use. Terminology used may not necessarily be consistent
with ADB official terms.

Outline

Background
Comparative Review of Health Financing in CW Asia
Country Studies
Recommendations
Conclusion

Outline

Background
Comparative Review of Health Financing in CW Asia
Country Studies
Recommendations
Conclusion

Health financing policy focuses on

how to move closer to UHC

Health financing is much more than a matter of raising money for health.
It is also a matter of who is asked to pay, when they pay, and how the money raised is spent.
(WHO, 2011)

Health
financing
functions

Health
financing
objectives

Health
financing
policy goal
Ultimate
health
system goal

Source: Adapted from WHO

How to raise?

How to allocate?

How to use?

Revenue collection

Pooling

Purchasing/provision

The way money is raised to pay

health system costs

The accumulation and management

of financial resources to re-distribute
the financial risk

The process of paying for health

services

Financial accessibility

Optimal use of resource

Sufficient and sustainable

resource generation

Universal Health Coverage

Improved and equitable health outcome

Analytical framework to undertake

a systemic review of health financing system

Health
financing
functions

Health
Level
financing
of
performance funding
Indicators

Health
financing
objectives

Health
financing
policy goal
Ultimate
health
system goal

How to raise?

How to allocate?

How to use?

Revenue collection

Pooling

Purchasing/provision

Level of
population
coverage

Level of
equity
financing

Sufficient and sustainable

resource generation

Degree of
financial risk
protection

Level
of
pooling

Level of
administrative
efficiency

Financial accessibility

Equity
in BP
delivery

Efficiency
in BP
delivery

Costeffectiveness
& equity in
BP definition

Optimal use of resource

Universal Health Coverage

Improved and equitable health outcome

Source: WHO-OASIS; Note: OASIS=Organizational ASsessment for Improving and Strengthening Health Financing; BP=Benefit package

There are huge gaps moving toward UHC

in Central and West Asia
In the region, fiscal space for health is low...

and burden on the direct payment

by households is high

General govt. health expenditure as % of total govt. expenditure, 2013

OOP expenditure on health as % of total expenditure on health, 2013

*Abuja Declaration (WHO): a pledge of allocating at least 15% of

annual government budget to improve the health sector.

Source: World Bank, WHO; Note: OOP=Out-of-pocket

*Result Framework for the OPH (ADB): OOP expenditure kept under 30% by 2030.

In spite of growth over the decade,

the spending on health in the region is low
Total health expenditure in US$ PPP per capita from private and public sources, 1995-2013
1200

1000

US$ PPP per capita

800

600

Low and middle income countries, 2013

400

200

1995
2000
2005
2010
2013
1995
2000
2005
2010
2013
1995
2000
2005
2010
2013
1995
2000
2005
2010
2013
1995
2000
2005
2010
2013
1995
2000
2005
2010
2013
1995
2000
2005
2010
2013
1995
2000
2005
2010
2013
1995
2000
2005
2010
2013
1995
2000
2005
2010
2013

Kazakhstan

Azerbaijan

Georgia

Armenia
Public

Source: World Bank, WHO; PPP=Purchasing power parity

Uzbekistan
Private

Turkmenistan

Kyrgyz
Republic

Tajikistan

Afghanistan

Pakistan

Low and middle income countries

 and most of expenditures are financed by

private funds, especially out-of-pocket
Proportion of total health expenditure by financing agent, 2012
100%
90%
80%
70%

Percentage

60%
50%
40%
30%
20%
10%
0%
Turkmenistan

Kyrgystan

Kazakhstan

Uzbekistan

State budget

Armenia

Social security funds

Public funds
Source: World Bank, WHO; Note: VHI=Voluntary health insurance; OOP=Out-of-pocket

Pakistan

VHI

Tajikistan

Other

Azerbaijan

Afganistan

Georgia

OOP

Private funds

Outline

Background
Comparative Review of Health Financing in CW Asia
Country Studies
Pakistan: Leaky bucket
Uzbekistan
Kyrgyz Republic

Recommendations

Conclusion

In PAK, poverty gains are fragile

and health outcomes lag behind
Economic indicators

The 18th Constitutional Amendment

GDP per capita: US$ 1,275
Sixth most populous country in the world, reaching 182.1 million people
62.1% of population lives in rural area
60.1% of population is considered as the vulnerable
Administrative unit:
Four provinces: Punjab, Sindh, Baluchistan, KP
One federal capital territory: Islamabad Capital Territory
A group of federally administered tribal areas (FATA)

(30 June 2011)

Granted provinces long-promised autonomy and

empowerment in many parts of health system
The Ministry of Health was devolved to the
provinces
Health service delivery is primarily a provincial
matter while the federal government plays a
supportive and coordinating role
(created Ministry of Inter Provincial Coordination)

Health indicators

Life expectancy: 66 years

Infant mortality rate per 1,000 live births: 69.0 (LIMC: 44.0)
Under-five mortality rate per 1,000 live births: 112.6 (LMIC: 93.4)
Maternal mortality rate per 100,000 live births: 170 (LMIC: 240)
Births attended by skilled health personnel: 52% (LMIC: 34%)
Measles immunization among 1-year-old: 61% (LMIC: 76%)
Density of health workforce per 10,000 population;
Physician: 8.3 (LMIC: 7.9)
Nursing/midwifery personnel: 5.7 (LMIC: 18.0)

Burden of disease by cause group, 2012

Pakistan

20,789

LMIC

16,641

5,000

11,796

13,554

4,893

4,611

10,000 15,000 20,000 25,000 30,000 35,000 40,000

DALYs per 100,000 population

Group I: Communicable, maternal, perinatal and nutritional conditions

Group II: Noncommunicable diseases
Group III: Injuries

Source: World Bank, WHO; Note: LMIC=Lower-middle-income countries; DALY=Disability-adjusted life year

10

Total health spending in PAK is

extremely low, compared to other LMICs
Pakistan

Lower-middleincome countries

Selected health financing index

2000

2012

2000

2012

Total health expenditure as % of GDP

3.0%

2.8%

4.0%

4.1%

Total health expenditure, per capita (US$ PPP)

$80.6

$122.4

$99.5

$217.5

General govt. health expenditure as % of total govt. expenditure

3.5%

4.7%

6.1%

6.2%

General govt. health expenditure as % of total health expenditure

21.7%

36.9%

21.7%

36.9%

OOP expenditure as % of total health expenditure

63.4%

54.8%

58.6%

54.8%

OOP expenditure as % of private expenditure on health

81.0%

86.8%

81.0%

87.2%

Private prepaid plans as % private expenditure on health

9.6%

12.2%

0.3%

0.6%

External resources for health as % total expenditure on health

0.8%

4.9%

2.7%

3.2%

Source: World Bank, WHO

11

Public financing system is highly fragmented,

and the use of private services has increased
Tax-financed

Source/
collection

MoD

Purchasing

MoD

Provision

Population

Province / district
administrations

Federal budget

Pooling

Military
Health
Care
system

Social security

Several vertical
programs
through MoIPC

PDoH

Each
autonomous
body

Each
institution

PDoH

Each
autonomous
bodies

ESSI
(province level)

Contracted
networks of
health
providers

Contracted
networks of
health
providers

3-tier public
providers
The 18th
amendment
in 2011

Employers
contributions

(BHU, MCHC,
RHC, THQ,
DHQ, provincial
tertiary care)

Coverage

Coverage

Coverage

Coverage

Military

Each
province

Autonomous
bodies
employers

ESSIregistered
employers

(2.0%)

(4.4%)

(9.7%)

(Gov employee: 4.9%)

Private funds
Households
OOP

Private
providers
(Fee-forservice)

*except from private employers

(0.6%) and safety nets (0.2%)

Uninsured*: 78.1%
(Coverage)

Source: Authors compilation; Note: MoD=Ministry of Defense; MoIPC=Ministry of Inter Provincial Coordination; PDoM=Provincial department of Health; ESSI=Employees Social Security
Institute; BHU=Basic Health Unit; RHC=Rural Health Center; MCHC=Maternal and Child Health Center; THQ=Tehsil Headquarters Hospital; DHQ=Districts Headquarter Hospital

12

In all aspects, PAKs health financing

performance is low
High

Level of
funding

Level of
population
coverage

Level of
financial risk
protection

Level of
equity in
financing

Level of
pooling across
the financing
system

Level of
efficiency and
equity in the
delivery of BP

Degree of
costeffectiveness
and equity
consideration
in BP scheme

Low

Level of
administrative
efficiency

---

Share of OOP medical spending in household

budgets by income quintiles, 2005-2006

Shocks faced by
the poor/vulnerable, 2005
Law and order
3%

Economic
shocks
28%

Trends of proportion of external resources

for health, 2000-2013

Family matters
4%

Health shocks
54%

Agricultural
shocks
4% Natural
calamities
7%

- 54.8% of external resources were not allocated to any

provinces or to any programs in 2012

- 11% of the government health expenditures are used in

administrative work in 2012
Source: Authors analysis based on PSLSMS, PSNS, HIES, NHA, etc; Note: OOP=Out-of-pocket

13

PAK: Problem tree for health financing

Poor and inequitable
health outcome

Constrained economic
growth

Inequity to access
appropriate health service

Increased poverty gap due to

catastrophic health expenditure

Effects

Core Problem

Financial hardship for the poor/vulnerable

Protection through
pre-paid mechanism
is limited

Causes

Public services
are de facto
paid

No statutory
explicit BP
scheme

No VHI
mechanism

VHI-unfriendly
environment
(lack of regular capacity
and affordability)

Various investment
level on health
across provinces

Capacity of risk
distribution is weak and
less effective

Highly frequent
pooling system
(institutional /
provincial level)

Predominant play of
private sectors w/o curb
on high cost expansion

Scarcity of
public
health
facilities

Poor quality of
services and
distrust for public
health providers

Extremely low public funding

Low
revenue
collection

No earmarked tax
for health

Source: Authors analysis; Note: BP=Benefit package; VHI=Voluntary health insurance

High inefficiency
of public resource
management
No government
purchasing
power

Weak integrated
health sector policy
and planning
No monitoring and
evaluation

No
established
referral
patterns

No regulation
of payment
for private
sector

No effective control
of multi-channel
payment system

Public sectors are

choked pipes
Lack of incentives to
improve efficiency in
service delivery

14

Outline

Background
Comparative Review of Health Financing in CW Asia
Country Studies
Pakistan
Uzbekistan: Rocky road from the Semashko model
Kyrgyz Republic

Recommendations

Conclusion

15

Overall health outcomes in UZB are commensurate

with those in LMICs, facing double burden of disease
Economic indicators

Semashko model in the Soviet period

GDP per capita: US$ 1,878

Population is 30.2 million, accounting for about 40% of Central
Asias total
63.8% of population lives in rural area
Ranked 102 out of 169 countries on the UNDPs Human
Development Index
Administrative unit:
12 regions (viloyats)
One autonomous republic: Karakalpakstan
One administrative capital: Tashkent

Highly centralized planning with minimum

discretion allowed to local managers and a strong
emphasis on curative services
Characterized by a large network of providers, a
high degree of specialization, and input-based
financing
Made tangible progress, including financial
protection through universal access to basic health
services and success in fighting infectious
diseases

Health indicators

Life expectancy: 69 years

Infant mortality rate per 1,000 live births: 36.7 (LIMC: 44.0)
Under-five mortality rate per 1,000 live births: 63.9 (LMIC: 93.4)
Maternal mortality rate per 100,000 live births: 36 (LMIC: 240)
Measles immunization among 1-year-old: 97% (LMIC: 76%)
Density of health workforce per 10,000 population;
Physician: 25.3 (LMIC: 7.9)
Nursing/midwifery personnel: 119.4 (LMIC: 18.0)
Pharmaceutical personnel: 0.4 (LMIC: 4.2)

Burden of disease by cause group, 2012

Uzbekistan

6,840

LMIC

14,571

16,641

5,000

2,713

13,554

4,611

10,000 15,000 20,000 25,000 30,000 35,000 40,000

DALYs per 100,000 population

Group I: Communicable, maternal, perinatal and nutritional conditions

Group II: Noncommunicable diseases
Group III: Injuries

Source: World Bank, WHO; Note: LMIC=Lower-middle-income countries; DALY=Disability-adjusted life year

16

Government health expenditure in UZB are

higher than peer groups, but cant lower costs
to households
Uzbekistan

Lower-middleincome countries

Selected health financing index

2000

2012

2000

2012

Total health expenditure as % of GDP

5.3%

6.1%

4.0%

4.1%

$103.5

$305.6

$99.5

$217.5

General govt. health expenditure as % of total govt. expenditure

8.7%

9.6%

6.1%

6.2%

General govt. health expenditure as % of total health expenditure

47.5%

51.1%

21.7%

36.9%

OOP expenditure as % of total health expenditure

52.3%

46.0%

58.6%

54.8%

OOP expenditure as % of private expenditure on health

99.7%

94.0%

81.0%

87.2%

Private prepaid plans as % private expenditure on health

0.6%

5.6%

0.3%

0.6%

External resources for health as % total expenditure on health

6.7%

1.4%

2.7%

3.2%

Total health expenditure, per capita (US$ PPP)

Source: World Bank, WHO; Note: PPP=Purchasing power parity

17

Inefficiency inherited from the former

Soviet system
Tax-financed

Source/
collection

Viloyat and tumans/city administrations

Private funds

Republican budget

(Region)

Pooling

Viloyat health department,

Viloyat finance department

Republican budget

Purchasing

Viloyat health department,

Viloyat finance department

Ministry of Health

Purchasing-provider spilt
capitation rate
(rural)

Provision

Households
OOP

Partially
Integration
line-item budgeting
& Self-financing

(city)

SVPs
Polyclinics

Viloyat/city
hospital

Republican
health facilities

SRBs
Coverage

Population

General population

Prevalent
Informal payments

Source: Authors compilation; Note: OOP=Out-of-pocket; SVP=Rural physician point; SRB=Outpatient clinics of central rayon hospital

18

results in households having financial

impediments in seeking healthcare
High

Level of
population
coverage

Level of
funding

Level of
financial risk
protection

Level of
equity in
financing

Level of
pooling across
the financing
system

Level of
efficiency and
equity in the
delivery of BP

Degree of
costeffectiveness
and equity
consideration
in BP scheme

Low

Level of
administrative
efficiency

---

Share of OOP medical spending in household

budgets by income quintiles, 2003
4.0

Financial barriers to health care

in Ferghana, 2001

0.60

3.8
3.4

0.50
Informal-to-formal payments

3.0
3.0
% of total expenditure

Incidence of informal payment

in rural areas, 2005

2.5
2.3
2.0

1.0

Poorest

0.49
0.45

0.44
Q2

0.40

0.30

Q3

0.26

0.24
0.19

0.20

0.18

0.10

Richest

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

% of those seeking health care in the past 30 days

0.0
Poorest

Q2

Q3

Q4

Richest

0.00
Poorest

Q2

Q3

Q4

Richest

State
doctor

Private
doctor

Source: Authors analysis based on Living Standards Assessment, Cashin et al. etc; Note: OOP=Out-of-pocket

Did not seek health care because not enough money

Finding the money to pay for health care was difficult
Needed to borrow money to pay for health care

19

UZB: Problem tree for health financing

Poor and inequitable
health outcome

Constrained economic
growth

Inequity to access
appropriate health service

Increased poverty gap due to

catastrophic health expenditure

Effects

Core Problem

Financial hardship for the poor/vulnerable

Protection through
pre-paid mechanism
is limited

Informal payment is
prevalent

Causes

Lack of
medical
supplies

Low salary
of health
workers

Shallow
BP scheme

Insufficient public funding

Low level of
external aids

Inefficient
government
revenue

Various investment
level on health
across oblast

Inefficient
resource
management

No government
purchasing
power

Capacity of risk
distribution is weak and
less effective

No VHI
mechanism

Frequent
pooling system
(vlioyat level)

Primary care is underutilized

Lack of quality
in primary care

No established
referral
procedure

VHI-unfriendly
environment
(lack of regular
capacity and demand)

Rigid input-based
financing in hospital
(line-item budgeting)

Source: Authors analysis; Note: BP=Benefit package; VHI=Voluntary health insurance

No monitoring
and evaluation
(data scarcity)

20

Outline

Background
Comparative Review of Health Financing in CW Asia
Country Studies
Pakistan
Uzbekistan
Kyrgyz Republic: Regional leader in health system reform

Recommendations

Conclusion

21

KGZ was quicker to embrace change and

develop comprehensive reform programs

Major changes in health

financing functions

Integrated the Health Policy Analysis and

Monitoring Unit under MoHs structure (2006)
Introduction of the Mandatory
Health Insurance Fund
(MHIF) and purchaserprovider spilt

Introduction of State
Guarantee Benefit
Package (SGBP) and
official co-payments

Replacement of line-item
health financing with new
provider payment methods
for the use of MHIF
Hospital: case-based
payment
PHC: capitation

Pooling of funds at
oblast level

1991 1996

1998

Health Reform Programs

Kyrgyz Republics
independence

2000

Launch of Additional
Drug Package (ADP)
providing drug benefits
to citizens enrolled in
the MHI

2002

2004

Manas (1996-2006)

Reforming the health care delivery system with the aim of

strengthening primary health care, developing family
medicine and restructuring the hospital sector
Reforming health financing, including introduction of
outcome-based payment methods
Improving medical education and developing human
resources
Improving the provision with pharmaceuticals
Improving quality of care
Strengthening public health
Introducing new health management methods in the
context of greater autonomy of health facilities

Source: Authors compilation

Established the Health Policy Analysis Center,

in close collaboration with MHIF (2009)

Pooling of funds at
national/republican level
(single payer system)
Improvement of
purchasing
arrangements of the
MHIF and the Ministry of
Health
Expansion of copayment exemptions
enrolled in the MHI

2006

2008

State program for NCD

prevention (2013-2020)
National program for TB
(2012-2016)

Salary
increase
for health
workers

2010

Manas Taalimi (2006-2010)

Lessons from Manas
Improving equity and
accessibility of health services
Reducing the financial burden
on the population
Increasing effectiveness of the
health system
Improving quality of care
Increasing responsiveness and
transparency of the health
system

2012

Perinatal program (20082017)

State program for HIV
prevention (2012-2016)

2014

2016

Den Sooluk (2012-2016)

Improving quality of care
Creating a strong link between
program activities and their
impact on health gains in four
priority areas;
Cardiovascular disease
Maternal and child health
TB
HIV infection
Maintaining hard-fought gains in
financial protection, access and
efficiency of health services

22

Most of health financing indicators in KGZ

are ahead those in other LMICs
Lower-middleincome countries

Kyrgyz Republic

Selected health financing index

2000

2012

2000

2012

Total health expenditure as % of GDP

4.7%

7.0%

4.0%

4.1%

76.1

$208.6

$99.5

$217.5

General govt. health expenditure as % of total govt. expenditure

12.0%

12.2%

6.1%

6.2%

General govt. health expenditure as % of total health expenditure

44.3%

60.2%

21.7%

36.9%

OOP expenditure as % of total health expenditure

49.8%

35.2%

58.6%

54.8%

OOP expenditure as % of private expenditure on health

89.3%

88.5%

81.0%

87.2%

Private prepaid plans as % private expenditure on health

0.0%

0.0%

0.3%

0.6%

External resources for health as % total expenditure on health

6.0%

12.2%

2.7%

3.2%

Total health expenditure, per capita (US$ PPP)

Sector-wide approach to coordinate the external funds

20.0

15.2
Percentage (%)

Annually
0.6%

has been gradually decreasing the donor dependency

15.0
10.0

8.7
6.7

6.7

5.0
0.0

3.3
2006

3.9
2007

2008

2009

2010

2011

2012

2013

External resources for health (% of total expenditure on health)

Health expenditure, total (% of GDP)
Health expenditure, public (% of GDP)

Source: World Bank, WHO; Note: PPP=Purchasing power parity

23

by squeezing efficiency gains out of the system

and using the savings to improve the coverage
Tax-financed

Source/
collection

Local budget (rayon/city

and ayilokmottu (rural))

Social security

Private funds

Social Fund
Republican budget

Households

(earmarked
2% payroll tax)
Complimentary

Pooling

Republican MHIF
(nation-level pool)

SGBP administered by republican MHIF (single-payer)

Purchasing

Health services not

included in the SGBP

Coverage

General population

Coverage

Population

FGPs, oblast and rayon hospitals,

private pharmacies, etc.

SGBP:
Type, scope and
conditions for providing
health services free and
based on benefits

Source: Authors compilation;

Note: MHIF=Mandatory Health Insurance Fund; SGBP=State-guaranteed benefit package; PHC=Primary health care; FGP=family group practices

Service coverage

Provision

Co-payment

Contract (PHC: capitation, hospital: case-based payment)

24

The KGZ health reform is successful,

but more efforts will be required
The financial protection and access improved significantly
Total OOP payments share of total household expenditure, 2003-2009
8.0%

% who needed but did not seek care due to distance or

affordability, 2000-2009
11.2%

12.0%

7.1%

10.0%
5.5%

6.0%
4.9%
4.4%

5.2%5.3%

5.0%
4.2%

3.9%
3.6%

4.0%

3.6%

4.5%
3.9%4.0%

8.0%
6.3%
6.0%

2.9%

4.4%

4.0%

2.0%

3.1%

2.0%
0.0%
Poorest

3
2003

2006

Richest

0.0%
2000

2003

2006

2009

2009

but the financing system is not targeted well to diseases or the poor
Coverage of co-payment exemptions policies, 2010

Burden of disease by cause group, 2012

% coverage of population

60
50
50

47

48

KGZ

45

5,767

13,554

4,611

39

40
30

LMIC

16,641

15,300

3,421

20
0

5,000

10,000 15,000 20,000 25,000 30,000 35,000 40,000

10

DALY per 100,000 population

0
Poorest 20%

Q2

Q3

Q4

Richest 20%

Current policy (covers 47.6% of population)

Group I: Communicable, maternal, perinatal and nutritional conditions

Group II: Noncommunicable diseases
Group III: Injuries

Source: World Bank, KIHS, WHO; Note: OOP=Out-of-pocket; DALY=Disability-adjusted life year

25

The KGZ reforms can be lessons learned to

countries with overcapacity but limited fiscal space
Successes are in part due to the comprehensive approach, not a single instruments or magic bullet
Complex reforms require careful sequencing of various reform steps
Paying attention to institutional aspects was important in order to ensure sustainable benefits
Phased implementation and careful sequencing were an effective implementation approach and helped
build capacity and stakeholder support as well as learning by doing
Strong government coordination and collaboration with the development partners facilitated
harmonized support for reform design and implementation
Well-developed health information system that facilitated effective research-to-policy channels and
central budget planning
Positive policy cycle in Kyrgyz Republic

Problem
definition
and
Options
development

Political
decision

Piloting
and
Learning
from
evidence

Evaluation
and
Redesign

Scaling

Embedding
in legal,
regulatory
framework

Health information system

Source: Authors analysis, World Bank, the London School of Hygiene & Tropical Medicine

26

Outline

Background
Comparative Review of Health Financing in CW Asia
Country Studies
Recommendations
Conclusions

27

Comprehensive and sector-wide approach is

necessary for PAKs health reforms
Poor and inequitable
health outcome

Constrained economic
growth

Inequity to access
appropriate health service

Increased poverty gap due to

catastrophic health expenditure

Effects

Core Problem

Financial hardship for the poor/vulnerable

Protection through
pre-paid mechanism
is limited

Causes

Public services
are de facto
paid

No statutory
explicit BP
scheme

No VHI
mechanism

VHI-unfriendly
environment
(lack of regular capacity
and affordability)

Various investment
level on health
across provinces

Capacity of risk
distribution is weak and
less effective

Highly frequent
pooling system
(institutional /
provincial level)

Predominant play of
private sectors w/o curb
on high cost expansion

Scarcity of
public
health
facilities

Poor quality of
services and
distrust for public
health providers

Extremely low public funding

Low
revenue
collection

No earmarked tax
for health

No
established
referral
patterns

No regulation
of payment
for private
sector

No effective control
of multi-channel
payment system

High inefficiency
of public resource
management
No government
purchasing
power

Weak integrated
health sector policy
and planning
No monitoring and
evaluation

Lack of incentives to
improve efficiency in
service delivery

28

Comprehensive and sector-wide approach is

necessary for PAKs health reforms
Poor and inequitable
health outcome

Constrained economic
growth

Inequity to access
appropriate health service

Increased poverty gap due to

catastrophic health expenditure

Effects

Core Problem

Financial hardship for the poor/vulnerable

Protection through
pre-paid mechanism
is limited

Causes

Public services
are de facto
paid

No statutory
explicit BP
scheme

No VHI
mechanism

VHI-unfriendly
environment
(lack of regular capacity
and affordability)

Various investment
level on health
across provinces

Capacity of risk
distribution is weak and
less effective

Highly frequent
pooling system
(institutional /
provincial level)

Predominant play of
private sectors w/o curb
on high cost expansion

Scarcity of
public
health
facilities

Poor quality of
services and
distrust for public
health providers

Extremely low public funding

Low
revenue
collection

No earmarked tax
for health

No
established
referral
patterns

In Punjab

No regulation
of payment
for private
sector

No effective control
of multi-channel
payment system

High inefficiency
of public resource
management
No government
purchasing
power

Weak integrated
health sector policy
and planning
No monitoring and
evaluation

Lack of incentives to
improve efficiency in
service delivery

29

Flagship programs can be identified through

integration of operational focus in PAK
Federal
Project loan / result-based financing for national health insurance
Financing
institutional design

Provincial

Sequencing of various reform steps, beyond health financing

Possible solutions may include

Increase provincial funding for health
Strengthen government purchasing power
Establish appropriate referral process
Introduce the research-to-policy channel
Improve geographical accessibility eg.
building hospitals, training heath workers
Establish the official co-payment and/or the
user-fee process
but should be carefully considered
with federal programs and/or directions

Health
financing

ADBs
operational
focus
Health
infrastructure

Health
governance
Federalprovincial
coordination

ICT, hospitals,
health workers

and long-term pipeline development in line with country partnership strategy

30

Reducing inefficiency and re-utilizing its

savings can address the core problem in UZB
Poor and inequitable
health outcome

Constrained economic
growth

Inequity to access
appropriate health service

Increased poverty gap due to

catastrophic health expenditure

Effects

Core Problem

Causes

Financial hardship for the poor/vulnerable

Protection through
pre-paid mechanism
is limited

Informal payment is
prevalent

Lack of
medical
supplies

Low salary
of health
workers

Shallow
BP scheme

Insufficient public funding

Inefficient
government
revenue

Various investment
level on health
across oblast

Inefficient
resource
management

No government
purchasing
power

Capacity of risk
distribution is weak and
less effective

No VHI
mechanism

Frequent
pooling system
(vlioyat level)

Primary care is underutilized

Lack of quality
in primary care

No established
referral
procedure

VHI-unfriendly
environment
(lack of regular
capacity and demand)

Rigid input-based
financing in hospital
(line-item budgeting)

No monitoring
and evaluation
(data scarcity)

31

Traditional
model

PPP can create efficiency incentives for

the private sector by linking payment to
specific performance criteria in UZB and KGZ

Government service

Initiator
(defines services
and area)

Selector
(who chooses
provider)

Manager

Production
Infrastructure

Source of
Financing

Government

Government

Government

Government

Government

Contracting can strengthen the public model

under UZB and KGZs situations

New PPP
model

Greater focus on the achievement of measurable results if contracts define

objectively verifiable outputs and outcomes
Using the private sectors greater flexibility, efficiency, and generally
better staff morale to improve services and expand access to needed
services
Use competition to increase effectiveness and efficiency
Allow governments to focus more on other roles that they are uniquely
placed to undertake, such as planning, standard setting, financing, regulation
and the various public health functions

Government has more

stewardship

Empirical evidence to work

well on a larger scale

Management
contracts

Government

Government

Private sector

Government

Government

Service delivery
contract
(clinical/non-clinical)

Government

Government

Private sector

Private sector

Government

Source: Authors analysis based on Loevinsohn B, et al.

32

PPP can be introduced not only in service

delivery, but also in medical supply

Target diseases on the companys pipeline

as well as national disease priority

MDR-TB

Stage 2

HIV

Stage 1

Janssen GPH

Building capacity (learning-by-doing) is a main objective

of our work. And partnership with development agencies is
central to all that we do.
Director, Janssen GPH

NGO/academia

Agreement with PATH, IPM

Royalty free license
Implement clinical trials targeted to the vulnerable
(women)
R&D expertise
Ensure access the treatment through affordable
pricing strategy
Building capacity and gains
in regard to clinical outcome,
accessibility to modern technology,
and/or information system Bi/multilateral Agencies

$30 million of drug

supply
Treatment protocols
Trainings for disease
management programs

Agreement with USAID

Implement the national part clinical targeted to
the vulnerable (women)
Engage with the global TB community to solicit
support
Collaborate with IDA (International Development Association)
A procurement agent for the Stop TB
Partnerships Global Drug Facility (GDF)
Facilitate access to quality-assured medicines

Source: Interview and news articles from Janssen Global Public Health; Note: IPM=International Partnership for Microbicides; MDR-TB=multi-drug resistant tuberculosis

33

Contribution of ADB on health financing will

support inclusiveness and reduce vulnerabilities,
through UHC achievement
ADBs Strategy 2020 Mid-term Review

By 2020, ADB will have expanded health operation

to 3-5% of its annual process
CWRD target: $XX XXXX
processing in 2015

No health intervention
in the pipeline

CWRD should be processing $XXXX XXXX

health interventions each year

Health Infrastructure

Health Financing

Health Governance

Central and West Asia

Universal Health Coverage in Asia and Pacific

Inclusive Economic Growth

Fighting poverty, improving lives
34

Acknowledgement
for the hottest EVER summer ;-)
Direct supervision of work

Life in ADB

Michiel Van der Auwera (CWPF)

Eduardo Banzon (SDCC)
Betty Wilkinson (CWPF)

Willdon Oller (BPMSD)

CWPF IS/NS
ADBK Staffs
and 2015 ADB Intern Fellows!

Support and review in the country context

Munir Abro (PRM)
Mamatkalil Razaev (KYRM)
Nargiza Talipova (CWUW)

Advisory / Interview
Susann Roth (SDCC)
Andaleeb Alam (YP)
Gerard Anderson (Professor, JHU)
Sachiko Ozawa (Assistant Scientist, JHU)
Hwayoung Lee (Postdoctoral Fellow, SNU)
Hyobum Jang (Fellowship, WHO WPRO)
Hoon Sang Lee (Senior Health Advisor, KOICA)
Enrique Esteban (Director, Janssen GPH)

35

Thank You!
Questions?
[email protected]
[email protected]
https://www.linkedin.com/in/yeonheeyang

Disclaimer: The views expressed in this paper/presentation are the views of the author and do not necessarily reflect the views or policies of the Asian Development Bank (ADB), or its Board of Governors, or the
governments they represent. ADB does not guarantee the accuracy of the data included in this paper and accepts no responsibility for any consequence of their use. Terminology used may not necessarily be consistent
with ADB official terms.

36

Appendix

37

Main characteristics

Model

Public financing: Tax-based vs. Payroll tax

Beveridge model

Bismarck model

Also known as National Health

Services
Named after William Beveridge who
designed Britains National Health
Service in 1942

Also known as Social Security

based healthcare systems
First established by Bismarck in
Germany in late 1800s

Health services almost entirely financed by tax

revenues
Government collects funds (tax) and also
(generally) is the provides (or contracts them)
health services
Pooling takes place at Ministry of Health (federal)
level
Example of single-payer system; one entity (eg.
a government-run organization) collects all health
care funds and pays out all health care costs.

Compulsory earmarked payroll contributions;

employer-based health insurance because
covers formal sector health workers in many
countries
Clear link between these contributions and a set
of defined rights for the insured population
Financing and provision are separated in many
countries

Source: Authors compilation, based on JHSPH class Health Financing in LMIC by Prof. Ozawa

38

Purchasing Mechanisms: Pros/Cons

Payment
mechanism

Characteristics

Fee-forservice

Capitation

Determined prospectively, paid

retrospectively
Payment based on quantity of
services provided

Determined prospectively, paid

prospectively
Payment based on patient head
count

Advantages

Incentive to provide services

Incentive to operate efficiently

Predictable expenses for fund
holder
Good if you have a healthy
population
Eliminates supplier-induced
demand
Moderate administrative costs

Disadvantages

Cost escalation
Incentives for Supplier-induced demand
Unpredictable expenses for fund holder

Disincentive to provide care

Avoid sick & costly patients (creamskimming)
Possible cost shifting (referral to another
provider)
Financial risk may put provider in debt

Case-based
(include DRG)

Global budget

Line-item
budget

Determined prospectively, paid

retrospectively
Payment based on patients
case/condition

Determined prospectively, paid

prospectively
Payment based on the
organizations budget
Determined prospectively, paid
prospectively
Payment based on each line in
the organizations budget

High administrative costs (DRG

classification)
Less suitable for out-patient care (difficult
to define case)
Incentive to select low risks within case
categories
Unpredictable expenses for fund holder

No direct incentives to be efficient

Disincentive to provide care

Incentive to maintain status quo

No direct incentives to be efficient
Disincentive to provide care
Resources are fixed & cannot be
reallocated

Incentive to operate efficiently

Low administrative costs

Predictable expenses for fund
holder
Permit reallocation of resources
Allow central control
Desirable when local management
is weak
Predictable expenses for fund
holder

Source: Authors compilation, based on JHSPH class Health Financing in LMIC by Prof. Ozawa; Note: DRG=Diagnostic-related groups

39

PPP in Health: Wide Range of Options

Design &
construction

Detailed
designs
Building
construction
Medical
equipment
Capital
financing

Source: IFC

Non-clinical
services

IT
equipment &
services
Maintenance
Food
Laundry
Cleaning
Security

Primary care

Primary care
Public health
Vaccinations
Maternal &
child health

Clinical
support
services

Lab analysis
Diagnostic
tests
Medical
equipment
maintenance
Ambulance
services

Specialized
clinical
services

Dialysis
Radio-therapy
Day surgery
Other
specialist
services

Hospital
management

Management
of entire
hospital or
network of
hospitals
and/or clinics

40