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Public Expenditures Review in Health

Public Expenditures Review in Health. Agnes Soucat, Lead Economist . Presentation Outline. Objectives of the health sector and role of the government Objective of a PER Efficiency Analysis and PERs Equity Analysis and PERs Financing What about the health MDGs ?.

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Public Expenditures Review in Health

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  1. Public Expenditures Review in Health Agnes Soucat, Lead Economist

  2. Presentation Outline • Objectives of the health sector and role of the government • Objective of a PER • Efficiency Analysis and PERs • Equity Analysis and PERs • Financing • What about the health MDGs ?

  3. Why investing in health ? Objectives of the health sector and role of the government

  4. Objectives of the health sector • Improving health outcomes: mortality, incidence/prevalence of diseases, suffering.. • Income protection: health expenditures, catastrophic illnesses • Responsiveness and accountability: demand, quality of life

  5. The role of the Government: Rationale for public action in health • Market failures: • Public good: “commons”: non excludable, non rejectable, non competitive • Merit goods with a high level of externalities • Failures in the insurance market • Redistribution/Welfare: • Benefiting the poor • protecting the poor

  6. Priority areas for public financing in health…

  7. Specificity of the health sector • Outputs are health sector specific but outcomes are multisectoral • Levels are intricated • Multiplicity of outputs

  8. Health sector Finance Agriculture Social Protection Infras tructure Water and Sanitation Education Sector Health Outcomes Litteracy etc.. Improve Quality of Life Revenue generation Safety nets Increase and Protect Income Participation Increase Involvement

  9. Presentation Outline • Objectives of the health sector and role of the government • Objectives of a PER • Efficiency Analysis and PERs • Equity Analysis and PERs • Financing

  10. Objectives of a PER in health • Analyze the amounts of public financing flowing into health related activities whetehre publicly or privately provided, with a focus on analyzing public policies • Analyze the performance of the overall health system (public and private) in • ensuring sustainable financing and quality service delivery • Contributing to better health and protection from catastrophic expenditures in an equitable manner • N.B.: National Health Accounts focus on the accounting story while a PER focuses on the analysis of public policies

  11. Presentation Outline • Objectives of the health sector and role of the government • Objectives of a PER • Efficiency Analysis and PERs • Equity Analysis and PERs • Financing • What about the health MDGs ?

  12. Efficiency Analysis and PERs • Examples Efficiency Analysis: • Allocative efficiency: does money go to priority areas? • Technical efficiency: are the inputs minimized for a given output? • Input efficiency: Is the balance of inputs appropriate?

  13. Weak link between public spending and health outcomes * Percent deviation from rate predicted by GDP per capita Source: Spending and GDP from World Development Indicators database. Under-5 mortality from Unicef 2002

  14. Allocative Efficiency • Key questions: • Is the public spending focused on addressing market failures ie pure (or nearly pure) public goods or goods with large externalities, including failures of insurance markets ? • Is the public spending focused on activities that contribute to increased returns in education and investments, economic growth and poverty reduction? • Is the public spending focused on activities that are most likely to benefit the poor?

  15. Priority Programs (examples) • vector control: eg: snails, rats, mosquitos …. • environmental health : eg: toxic wastes, quality of water, clean air • communicable disease surveillance and management: eg Tuberculosis • Immunizations: “herd immunity”

  16. Contribution to Economic Growth and Poverty Reduction .. Improvements in health and economic take-off: changes in Per Capita GDP and IMR in Singapore Per capita GDP 1990

  17. Contribution to Economic Growth and Poverty Reduction .. IMR at the time of Economic Take-off in East Asia

  18. Contribution to Economic Growth and Poverty Reduction .. • Nutrition in agriculture based economies • Some diseases: HIV, malaria • Child mortality, fertility reduction associated with high investment in education and low dependency ratios

  19. Allocative Efficiency: Programmatic allocation : Rwanda

  20. Efficiency Analysis and PERs • Examples Efficiency Analysis: • Allocative efficiency: does money go to priority areas? • Technical efficiency: are the inputs minimized for a given output? • Input efficiency: Is the balance of inputs appropriate?

  21. Technical Efficiency: • Key questions • What is the relative weight of various sub-sectors (e.g. Tertiary VS Secondary VS Primary VS outreach VS community based programs ) • What is the mix of services provided (e.g. Curative Vs Preventive)

  22. Technical Efficiency:

  23. Technical Efficiency: Relative allocation to levels of care: Mauritania

  24. Inter-country comparison: measles immunization vs public expenditures

  25. Efficiency Analysis and PERs • Examples Efficiency Analysis: • Allocative efficiency: does money go to priority areas? • Technical efficiency: are the inputs minimized for a given output? • Input efficiency: Is the balance of inputs appropriate?

  26. Input Efficiency • Key questions: • Are recurrent cost at the level required by capital invested (eg unreliable, insufficient funding of key inputs (drugs)..) • Are Non-Salary Recurrent expenditures and the wage bill balanced? (e.g salaries crowding out other inputs, non salary recurrent “recycled” into staff incentives)

  27. Evolution of health budget: Mauritania Input Efficiency

  28. Input Efficiency • Evolution of health budget: Rwanda Budget of the Ministry of Health by nature of Expenditures

  29. Presentation Outline • Objectives of the health sector and role of the government • Objectives of a PER • Efficiency Analysis and PERs • Equity Analysis and PERs • Financing

  30. Equity Analysis and PERs • Examples Equity Analysis: • Physical Access • Human Resource Deployment • Availability of Drugs or other inputs • Benefit Incidence Analysis • Equity and Financing Mechanisms • Insurance Incidence • Impact of Cost Recovery

  31. Physical Access to Essential Health Services, Mauritania, 1999 Richer Poorer

  32. Availability of Nurses and Infant Mortality-Cameroon 1999

  33. Availability of Essential Drugs per Region, Mauritania, 1999 Poorer Richer

  34. BIA India ExampleWho Gets the Public Subsidy?

  35. Population covered by publicly funded health insurance, Thailand 2000

  36. Presentation Outline • Objectives of the health sector and role of the government • Objectives of a PER • Efficiency Analysis and PERs • Equity Analysis and PERs • Financing • What about the health MDGs ?

  37. Private spending equals or exceeds public spending in SSA

  38. Donors are a major source of funding in some countries Financing sources:Rwanda Financing of health services

  39. Lack of Predictability of Donor Assistance

  40. Tax finance doesn’t guarantee poor do well

  41. Presentation Outline • Objectives of the health sector and role of the government • Objectives of a PER • Efficiency Analysis and PERs • Equity Analysis and PERs • Financing • What about the health MDGs ?

  42. Ethiopia: MDGs Needs Assesment total incremental cost per capita 2005-2015

  43. Expected impact of key interventions on under five mortality rate, Ethiopia 2005- 2015 (1) Key interventions (2) Baseline (3) Target 2009 (4) Target 2015 (5) Est. reduction in U5MR Prevention/promotion LLITN) for U 5 1% 77% 84% 11.% Family planning 9% 56% 67% 6.2% Hib vaccination 0% 0% 51% 4.7% Vitamin A supplementation 56% 77% 84% 4.4% Complementary feeding 34% 63% 67% 4.3% Exclusive breast feeding 38% 63% 80% 4.3% Estimated U5 mortality reduction by 2009 is 48% and 61% by 2015 . MMR 36%

  44. Projected Government Health Expenditures as a Percent of GDP Needed for a $34 Per Capita CMH Recommended Package of Services

  45. Cost of scaling up health services incremental cost per capita 2005-2015 for reaching the MDGs

  46. Prediction on achieving MDG for child survival in Ethiopia Deaths per thousand births Achieving the Health extension/outreach service targets Achieving the family/community based service targets Achieving the clinical based service targets

  47. Conclusion : best practices • Focus on who captures public funding: particularly distribution between rich and poor • Combine routine HMIS data with with households surveys • Place public spending in the context of private expenditures (households insurance, donors) • Examine trends..dynamic analysis • Evaluate expenditures in the context of changes (e.g decentralisation, epidemiological transition, etc.) • Include recommendations on how to improve public expenditures allocation and management

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