Fiscal space, public financial management and health financing: sustaining progress towards universal health coverage
WHO’s Department of Health Systems Governance and Financing convened representatives from national health and finance ministries and other relevant government bodies, partner agencies, foundations, initiatives and civil society organizations, to discuss priorities and opportunities for enhancing productive engagement between finance and health authorities to enable countries to sustain progress towards universal health coverage. This meeting showcased ongoing work as part of the jointly agreed upon collaborative agenda.
Health financing reforms are at the core of strategies to move towards universal health coverage (UHC). There is not one solution to every context, and this chapter synthesizes theory, lessons and practice into principles that can be applied to guide country-level financing reforms. It highlights the pitfalls on the path to UHC, and addresses the key challenge of how to extend access and financial protection to the informal sector that comprises the majority of the population.
Financial protection is a key dimension of universal health coverage, one of the health targets in the Sustainable Development Goals (SDGs). Financial protection therefore needs to be monitored within the framework of the SDGs. Financial protection means people are not exposed to financial hardship when they pay for health services. Indicator 3.8.2 of the SDGs concerns the proportion of the population not financially protected against the costs of health services.
Purchasing refers to the arrangements in place, and mechanisms used, to allocate pooled funds to health service providers. Providers use these funds to deliver defined benefits to the population. Purchasing is a core function of any health system.
Purchasing can have a major impact on health system performance, in particular the efficiency and quality of services, and reducing inequities in service use.
All countries face decisions about what to include in a publicly-funded benefit package for health. Decisions concern which health services to include, as well as related rules such as a requirement to use the referral system, making co-payments, or being subject to waiting lists. Benefit package design is a key instrument to steer the health systems towards UHC. Decisions about priority services take into account information on cost-effectiveness, impact on financial protection, and equity in access across a population. Ensuring the effective delivery of benefits also requires coordination with policies on revenue raising, pooling, purchasing, and service delivery.
Health financing for universal coverage
Universal health coverage (UHC) aims to ensure that everyone, everywhere, can access quality health services without facing financial hardship as a result. Every year 100 million people are pushed into poverty and 150 million people globally suffer financial catastrophe annually because of out-of-pocket expenditure on health services. Financial protection is at the core of UHC and improving financial protection is a central focus of health financing policy.