FINANCING OPTIONS

IN HEALTH CARE

Suneeta Singh
New Delhi Office
The World Bank
 1. Universal coverage
2. Equal access
3. Control of expenditures
4. Efficient use of resources
5. Equity in finance
6. Consumer choice

COMMON GOALS
OF HEALTH SYSTEMS
 Private goods
goods

goods

Negative externalities
Positive externalities
goods

Public goods
TYPES OF GOODS
 Charity
Public money

Insurance :
public / private

Personal
money

WAYS IN WHICH
MONEY IS ORGANIZED
 FINANCING

IS DISTINCT FROM

PROVISION
WAYS IN WHICH
MONEY IS ORGANIZED
TYPES OF GOODS

MEANS OF PROVISION
PUBLIC SECTOR

PUBLIC PRIVATE MIX

NGO SECTOR

PRIVATE SECTOR

MEANS OF PROVISION
 Service Delivery
Public NGO Private
♦
Immunization by ♦
Cataract surgery ♦
STD treatment at a
the government under the NPCB NACO franchised
Public
health system at an NGO run private clinic
camp

♦
Medical benefits ♦
Group insurance ♦
Reimbursement of
Financing

through the scheme for charges for medical

Risk
pooling Employees State workers registered treatment by private
Insurance Scheme with SEWA doctor through
Mediclaim
♦
User charges for ♦
Private financing ♦Free bypass surgery
deliveries at a (charity) of NGOs at a private hospital
Private
public hospital working in leprosy
work

PUBLIC PRIVATE MIX

IN PROVISION AND FINANCING

PUBLIC PRIVATE PARTNERSHIPS IN HEA;LTH : WB

• Moderate levels of overall spending on health (4.5% GDP)
(middle 20% of countries)

• Low public expenditures on health (0.8% GDP; 3.9% of govt spending)

(bottom 10% of countries)

• High proportion of private health expenditure (87% private; 3.8% GDP)

(highest 10% of countries)

HOW DOES INDIA’S FINANCING LOOK

PUBLIC PRIVATE PARTNERSHIPS IN HEA;LTH : WB

 Sources
Public Private
Central State and Third Party Households Total
Uses Government Local (Employers)
Government
Primary Care 4.3 5.6 0.8 48.0 58.7
Curative 0.4 3.0 0.8 45.6 49.7
Preventive 3.9 2.7 .. 2.4 9.0
& Promotive
Secondary 0.9 8.4 2.5 27.0 38.8
and Tertiary
Care
Non-service 0.9 1.6 .. .. 2.5
Provision
TOTAL 6.1 15.6 3.3 75.0 100

Distribution of Health Spending by Sources and Uses

(Percent of Total Health Spending)

PUBLIC PRIVATE PARTNERSHIPS IN HEA;LTH : WB

 Richest 20% 15%

1/6
60%-80% 19%

Middle 20% 19%

20%-40% 18%

Poorest 20% 21%

0 200 400 600 800 1000 1200 1400 1600

Visits Per 1,000 Population

1/5
Public Private

All India: Public and Private Sector Shares

of Outpatient Care by Income Quintile

PUBLIC PRIVATE PARTNERSHIPS IN HEA;LTH : WB

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%
1986-87 1995-96

All Govt. Sources All Non-Govt. sources

All India: Changes in Utilization (%) of

Public & Private Facilities for Hospitalization
(NSSO 42 & 52 Rounds)
PUBLIC PRIVATE PARTNERSHIPS IN HEA;LTH : WB
eneral tax financing
issues : cost control

ocial insurance
issues : resource allocations
cost control due to aging populations
luralistic
issues : cost control
gaps in coverage

FINANCING IN OTHER SETTINGS