Oslo
8 March 2002

Seminar on Stewardship of Health Systems at the Board of Health

Dear Colleagues,

Journalists often ask "How good is our health system?". The answer depends on the perspective of the respondent. All will have their views: A minister of health defending the budget in parliament; a minister of finance attempting to balance multiple claims on the public purse; a harassed hospital superintendent under pressure to find more beds; a health centre doctor or nurse who has just run out of antibiotics; a news editor looking for a story; a mother seeking treatment for her sick two-year old child; a pressure group lobbying for better services.

When I joined WHO in 1998, I wanted us to help better find the real answer to this question. In 2000, we dedicated the World Health Report to producing evidence on Health Systems' Performance. Our message was that all health systems can be improved, whether they spend $40 per capita on health or $4000. The same principles are valid for all countries.

The first task was to define what is meant by a good system. Our Member States agreed that it should enable populations to be healthier. It should also respond to their expectations. And it should be financed fairly. Then we needed ways to judge how well different systems perform.

We now have much progress to report. The next task is to help the systems work better: to decide what needs to be done, and then to make sure that those concerned are able to make it happen. That is why I am concerned with stewardship.

I will focus, today, on the practice of stewardship, a word we introduced in the World Health Report 2000, and that has growing acceptance. But let me start with some general principles.

Whatever standard we apply, we can see that health systems in some countries perform well, while others perform poorly. This is not due just to differences in income or expenditure: performance can vary markedly, even between countries with very similar levels of health spending.

France, Austria, Norway, Sweden, and Denmark all spend between $2200 and $2500 per person per year on health. Yet they ranked number one, nine, 11, 23 and 34, respectively in WHO's first global health systems performance assessment, published in 2000.

In contrast, Costa Rica, the United Sates, Slovenia and Cuba ranked number 36 to 39, with per capita health expenditures ranging from $4187 to $131.

The way health systems are designed, managed and financed affects people’s lives and livelihoods. The difference between a well-performing health system and one that is failing can be measured in levels of disability, impoverishment, humiliation, despair and death.

What are the factors that make a difference? One is the way in which different aspects of public policy - including health services - impact on people’s health. That is why, for me, a health system encompasses all actions whose primary intent is to improve health.

Our work to date has led us to some important conclusions:

• The ultimate responsibility for a country's health system performance lies with government. The health of people is always a national priority: government has a continuing responsibility for safeguarding their health. The responsible management of health services to promote people's well-being is the very essence of good government.

• Many governments do not use their health system funds as well as they could. The result is a large number of preventable deaths and lives stunted by disability. The impact of this failure is born disproportionately by the poor

• Health systems are not just concerned with improving people’s health but also with protecting them against the financial costs of illness. The challenge facing governments in low income countries is to reduce the impact on poor people of their out-of-pocket payments for health care. They need to expand pre-payment schemes - spreading financial risk and reducing the spectre of catastrophic health care expenditures by those who are seriously ill.

• Many national health ministries focus exclusively on the public sector. They disregarding the private finance for - and provision of - care. This is often much larger than the public spend. Governments need to harness the energies of the private and voluntary sectors. This will help them achieve better health systems performance, and offset the effects of market failure.

Many of you will be aware of the debate stimulated by our work on health system performance. We were not surprised. By publishing the assessments, even though data were incomplete, we encouraged discussion and debate among Member States. Now we are involved in an intense process of consultation and peer-review, to lead to improved performance assessment techniques for 2003.

The work has also aroused interest in means for improving health system performance. There are four key elements that need attention:

• Delivery of essential services;

• The human and physical resources needed that make the services available;

• The raising and pooling of funds to pay for health services; and, most critically,

• Establishing how resources will be used, by different parties, to deliver the services and achieve results.

It is this last point - stewardship - which we are here to discuss today.

Stewardship is about ensuring the health and well-being of the population. It requires the careful and responsible management of the resources that promote people's well-being.

In practice, this means that the steward provides leadership to all involved: setting the ‘rules of the game’ to help them behave in ways that reflect the public interest, monitoring how they behave, and ensuring corrective action is taken when required. Good stewardship is based on clear standards, applied well within the local context, in ways that are as effective and efficient as possible.

So, who are the stewards? The government's responsibility is continuous and permanent. This must be the case even when health services are in private hands. Government is usually the main ‘steward’. Other stakeholders from a range of sectors are also involved.

These new stakeholders come from the public and private sectors. For example, health reforms in Eastern Europe during the 1990’s resulted in new and independent local governments, insurance agencies, private drug companies and private health care providers. They all have some role in stewardship of health system action.

Health systems are becoming more complex. Many Ministries of Health do not have direct control of health services. They are faced with the unfamiliar and more complicated task of ‘steering’ rather than ‘rowing’ in the health system.

The Czech Republic experienced how difficult these challenges can be after the country libralised the economy during the early 1990s. The government pulled back as a large number of insurance companies began to provide health insurance. But, the government had not put in place a comprehensive regulatory structure for this new privatised financial landscape, and when several insurance companies went bankrupt, resources were wasted and many people were left exposed without proper insurance. This hard-earned lesson has led to a much more active role for the Ministry of Health and the building up of a comprehensive regulatory system. By now, protection is in place against insurance failure, the Ministry has the ability to monitor the system and get early warning and it provides guidance for providers in negotiations with insurance companies.

People - whether served by health systems, or working as providers, are faced with a bewildering array of choices as they decide how to use their scarce resources. Their expectations are changing. They want more certainty about the effectiveness of their health care and more influence over ways in which it is provided.

Some people seek to take part in wider health policy decisions. Demands for freedom of choice and greater quality of care may be made at the same time as pressures for reduced spending on care.

It can be difficult to square the circle. Stewardship is not easy.

How can stewards best handle conflicting demands? First, they must try to avoid short-term thinking. Fire-fighting can easily overwhelm them, and detract from a focus on the vision for health systems, and their long-term goals. A focus on current crises leaves little time for anticipating - and responding to - future health needs.

Second, they must avoid ‘tunnel vision’ - focusing on one subset of issues in isolation from the overall health system.

Third: they must be careful when responding to noisy groups who appear in the media or stand out within the system. Stewards must be careful to check the evidence before making decisions about resource allocation - even when politicians or interest groups are lobbying hard for an increase in their areas of concern .

Fourth - they must avoid depending on legislation and command-and-control regulation as the main instruments for stewardship. In general, a judicious mix of ‘carrot and stick’ is needed to sustain real change.

Finally, stewards must try not to ‘turn a blind eye’ to undesirable activities that undermine the quality, probity and equity of the health system. Although they may be difficult to confront, the short term pain of tackling them quickly is usually much less than the long-term consequences of their neglect.

There are certain experiences to be gained.

How best to improve stewardship of health systems?

First - be inclusive. There are many stakeholders within any country's health system. We work within a constantly changing economic and political framework. We want stewards to help ensure that we share the evidence base for what we do. We want them to provide direction so that we work in synergy and harmony. We want them to help us know when we are succeeding, and to identify ways in which we could do better.

South Africa learned this when they set out to reform its health finance system during the mid-1990s. The challenge was to democratize and decentralize a system that was highly inequitable and also near collapse without losing at least some central control and coordination. The process involved a very broad participation by stakeholders. This, together with the fact that the authorities appreciated the need to reconcile the technical inputs with the political process the reform of health insurance necessarily is, was the secret for its success. The resulting health insurance system has been praised for its flexibility and fairness.

Then - apply the lessons of experience. That means knowing what works, where, when and how. Clearly, there is no ‘ideal’ recipe for health system stewardship.

However, some requirements are needed by the stewards of all health systems. WHO has been searching them out.

The first requirement is high quality information. A health system steward needs reliable information on current and future trends in health and health system performance; on the context within which it functions; and on ways in which it might be improved. Such information should be drawn from both national and international evidence and experience, and synthesized to make it useful.

The second requirement is a set of strategic options. This is more than a shelf-full of bulky policy documents. It means the articulation of health system goals. Defining the roles of public, private and voluntary sector actors. Identifying the policy instruments and structures needed to achieve those goals. Providing guidance on health system spending to different cost centres. And, importantly, the means for monitoring performance.

The third requirement is mechanisms to steer the health system: getting the right balance of powers, incentives and sanctions to steer health system actors in the right direction. Stewards need powers commensurate with their responsibilities. The power must be well used. They must set fair rules, offer realistic incentives and impose sanctions when necessary. They must act to protect the rights and entitlements of the general public.

The Netherlands has over the past few years introduced a variety of strategies to oversee its mixed public/private finance and provision system. They include an equitable allocation formulae, a standardized package of benefits that all insurance companies are required to observe, and a system to monitor performance of both providers and insurers.

The fourth requirement is that stewards influence the system through alliances, coalitions and effective communication. Key stakeholders need to be identified for critical policy functions, and be influenced to play these roles through negotiation, persuasion, advocacy and functioning professional networks. Stewards also need to be able to engage in frank and public dialogue with civil society.

Spain is building up a network of tools to monitor and guide the health performance of its autonomous provinces. The central government has little direct influence in Spain's federal governing structure, but provides input through its performance control. It is a system which the Spanish Health Department is developing in partnership with WHO.

The steward's fifth requirement is to work for an enabling environment by seeking a fit between policies and the organization through which they are implemented. It means avoiding duplication and fragmentation. In Estonia, for example, the Ministry of Health has been tackling the problem of over-supply of health services. Creative organizational changes are helping different actors agree on a single strategic direction, whilst maintaining their diversity and the benefits this brings.

The final requirement for the steward is accountability - accountability of all health system actors, including stewards themselves, to the population for whom they are responsible. No population groups should be excluded. Some aspects of accountability depend on the wider climate of governance. Others are specific to the health system – such as disciplinary procedures for doctors.

How are these requirements reflected in practice?

It is obvious that generation of intelligence and the formulation of strategic policy directions are closely linked.

There is much debate about how to best organize the different functions of health systems. Information is needed about the impact of different patterns of organization on health system performance. Evidence is required on ways in which system change can be encouraged given the multiple constraints faced by reforming Governments.

The challenge for the steward is to find an appropriate balance of public and private financing, public and private service provision, and centralized management. There is no single blueprint. To help reach this balance, the steward also needs data from the systematic monitoring of health system performance, as well as the broader intelligence that comes from good information systems.

WHO works with countries to help generate reliable, independent evidence on health systems that can be trusted by policy makers and the general public. One contribution is the World Health Survey, which will help Member States obtain important information on the coverage of key interventions, levels of health and risk factors, and health expenditures. Norway is one of over 70 Member States that expects to participate in this year’s survey.

How, then, do stewards use legal, financial and administrative instruments in order to establish the right balance of powers, incentives and sanctions?

Within Europe many attempts have been made to transform public hospitals by introducing flexible management and improving operational efficiency. They have usually combined private sector management with public sector oversight and accountability. The approach is being examined in the UK, Sweden, parts of Spain and now in Norway as well. An analysis of successes and failures is enabling stewards to identify instruments that may help them initiate such transformations in their own systems.

Similarly, experience of social health insurance in Germany and the Netherlands can show stewards the value of balancing the private incentives of fund managers with clear obligations and performance standards that are monitored by the state.

Stewards may well need expertise that is based on carefully reviewed experience when building local level alliances with international and national institutions, as well as public and private entities. When these alliances work well, they can result in substantial increases in health system activity and impact for a given level of investment.

WHO can help. We support the European Health Observatory, a partnership of international agencies and several European Governments including the Government of Norway. New work has recently begun on the stewardship of purchasing.

We also help by sharing experience through meetings and workshops that bring together stewards from North and South, East and West. Important occasions include the recent Europe and the Americas Ministerial Forum on health sector reform, and the forthcoming Fourth International Conference on Priority Setting in Health Care, show ware which is being held in Oslo later this year.

WHO's work can help governments better steer national health policy. Consider the challenge of tobacco control. 168 Member States are taking part in the negotiations to develop an international legal convention for tobacco control. Tobacco-free events - like the recent Salt Lake City Olympics - help create the advocacy platform for change.

In December last year, Professor Jeffrey Sachs, presented me with. report of the Commission on Macroeconomics and Health. The report addresses the low level of current investments in the health of the world's poorest people. It was the fruits of two years' work by Professor Sachs and 17 other Commissioners, supported by a research network of several hundred scientists. It shows, quite simply, how disease is a drain on development, and how investments in health are an important pre-requisite for economic development.

The Commissioners concluded that health systems spending ten or twelve dollars per capita on health are not able to provide even the most basic health services to the people they serve. Their Report calls for a six-fold increase in health expenditures in the developing world. The Commissioners acknowledge that systems must function well enough to be able to make good use of this additional investment. Good, independent and relevant advice is essential to help countries tune up the performance of their health systems.

The steward is not able to be effective if there are no clear mechanisms for accountability. Clear targets, independent verification, and open communication of results, are essential. The stakeholders need to be able to question those providing health system stewardship - and to challenge them on what has been achieved.

WHO offers clear criteria that governments can use to benchmark their own health system performance. It also counsels governments to establish transparent procedures for assessing performance and for increasing the skills of key health sector personnel.

Last week, we had discussions here in Oslo with Health Minister Høybråten and Development Minister Fraford Johnson, I stressed the positive role Norway plays in the work to improve the worldwide efforts in meeting the health needs of poor populations. Norway certainly also has a lot to contribute in the work to strengthen the health systems of all nations, and the way they perform, whether in the South or the North.

High quality stewardship is critical if a modern health system is to perform at its best. This means management that empowers, supports, reviews and communicates; that encourages participation while sanctioning those who undermine, and that offers incentives for better performance. Within WHO we are committed to promoting health stewardship for all, and to seeing its benefits reflected in greater equity in global health. Working with committed Member States, like Norway, we are helping the stewards to make a real difference.

Thank you.