Frequently asked questions
Financing source
Do we include insurance benefits or insurance premiums under NHA?
(See PG 10.18) Actually, both insurance benefits and insurance premiums are included in the accounts. The benefit figure is used to estimate total personal expenditure on health, and the premium figure (together with any subsidies) is used to calculate national health expenditure. The difference between premiums and benefits, which is called the net cost of health insurance, is classified among the administrative functions. If this figure is negative, a financing source in FS.2.4.2 (ICHA code) should be established to channel funds from retained earnings to current operations. However, entities cannot finance losses from retained earnings for long without becoming insolvent, so it is prudent to check for the existence of subsidies from government or from external sources as a form of revenue of insurance companies.
How are funds coming from lotteries accounted for?
(See PG 11.15) In some countries, government programmes or the activities of nongovernmental organizations are partially funded by lotteries explicitly designed to produce health care funds. However, because lottery players are not obliged to participate, and do so with the intent of winning money rather than funding health care, it is appropriate to treat lottery revenue as though it were general revenue. That is, the recipient programme or nongovernmental organization is treated as the financing agent, and government as the financing source (see paragraphs 4.23 to 4.25 of the Producers’ Guide).If these lotteries are of particular policy significance they can be assigned their own subcategory in the FS (funding sources) classification schedule under territorial government funds FS.1.1.
How are funds from special taxes treated?
(See PG 11.16) If a special tax (such as a transaction tax) is earmarked for health care purposes –– even if it is levied on non-health activities such as bank transactions –– it should still be treated as though it were general revenue, because it is essentially fungible with general tax revenue. Thus, the recipient government programme is treated as the financing agent, and the government as the financing source (see paragraphs 4.22 and 4.23 of the Producers’ Guide). As with lotteries, if the special tax has policy significance it can be assigned its own subcategory within FS.1.1.
Where are the funds transferred from the central government to regional governments recorded?
(See PG 11.17) The distinction between a financing source and a financing agent is that the financing agent controls the use of the funds. When a grant-in-aid is used as a non-specific fiscal transfer from government unit A to government unit B, unit A should be considered to be the source and unit B to be the financing agent for the purposes of the health accounts. So, if the regional government has the discretion of dividing the money among various functions (including health), then the regional government is the financing agent and the central government is the financing source.
Why does my NHA show different figures for household spending than does the household survey?
There may be several answers to this question. First, the definition of what comprises household spending may differ between the household survey and the national health accounts. Often a household survey will try to measure all outlays by households for health care. Thus “household spending” in the survey most closely matches “household funds” (FS.2.2) in the financing sources dimension. But category FS2.2 includes payroll deductions for health care (FS.2.2xHF.1.2 or FS.2.2xHF.2.1) in addition to cash payments made by households. The cash payments include copayments and purchases of noninsured services (FS.2.2xHF.2.3) plus cash purchase of insurance premiums (FS.2.2xHF.2.1 or FS.2.2xHF.2.2). Thus, no single category from the health accounts exactly matches what is being called “household spending for health” in the household survey.
Another possible answer is that the household survey was not used for all of the pieces of household spending for health in the NHA. For example, social insurance premium figures may have been taken from the Insurance agencies, or other types of substitutions may have been made (See PG paras 10.13 and 11.32 for a discussion and example of this).
Finally, it is possible that the household survey includes types of spending that are outside the boundaries of the health accounts. Perhaps the survey includes an estimate of informal transportation costs and the NHA has been defined to exclude this type of expenditure.