Health System Financing EPI 5180. Health Policy and Financing. Policy objective – securing access for its citizens to some or all effective treatments. Financing objectives: Mobilizing funds for when they are needed Sharing risks Subsidizing access, where needed, for those with low income.
Countries using taxation as major source of funds
Countries that use SHI include: Germany, many other countries in Eastern and Central Europe, Japan, South Korea
Pros – can contribute to financial sustainability and referral patterns and reduce unnecessary use of services
Cons – cost recovery potential of user fees is limited, particularly without retention of fees at the point of collection; equity suffers, especially through the failure of adequate exemption policies
Countries: South and South East Asia, Africa, countries of Central and Eastern Europe, and the former Soviet Union
Allocative efficiency – Asks are we doing the right thing?
Technical efficiency – Asks what is the optimal combination of resources in anyone activity to produce maximum output or minimum costs
Royal Canadian Mounted Police
Equalization payments enable provinces to provide reasonably comparable levels of public services at reasonably comparable levels of taxation.
The three territories receive additional federal support through Territorial Formula Financing to assist them in providing public services
Table 1 Distribution of Public Sector Health Expenditure by Source of Finance, 1975 and 2009
Source: National Health Expenditures Database, Canadian Institute for Health Information
Notes: * includes workers compensation boards and premiums to the Quebec Drug Insurance Fund
Province/Territory Expenditure per capita Expenditure as % of GDP
Source: National Health Expenditure Database, Canadian Institute for Health Information
Positive – funding can be directed towards policy
greater degree of predictability
Negative – reallocation among lines not easy, reduces flexibility
Positive – Subjective and flexible
Negative – Can be myopic (political, inconsistent and not predictable)
Report on Citizens’ Dialogue on the Future of Health Care in Canada, June 2002