*Health Care Financing and Planning Department of Public Health and Health Care

*Definition of Health Care FinancingHealth financing provides the resources and economic incentives for the operation of health systems and is a key determinant of health system performance in terms of equity, efficiency, and health outcomes.It includes:mobilization of funds for health care (revenue collection)pooling of resourcesallocation of funds to the regions and population groups and for specific types of health caremechanisms for paying for health care (purchase of interventions)

*Interaction among revenue raising, resource pooling, allocation and service provision

*Steps of health care system financingMobilization of funds - how heath care system raise money from households, businesses, and external sourcesPooling deals with the accumulation and management of revenues so that members of the pool share collective health risk, thereby protecting individual pool members from large, unpredictable health expenditures.

*Steps of health care system financingPooling coupled with prepayment enables the establishment of insurance and the redistribution of health spending between high- and low-risk individuals and high- and low-income individuals. Purchasing refers to the mechanisms used to purchase services from public and private providers.

*Types of health care modelsState Health system: compulsory universal coverage, national general revenue financing, and national ownership of health sector inputsState Insurance Health Care system: compulsory almost universal coverage under a social security system financed by employee, employer contributions and State grants to nonprofit insurance funds with public and private ownership of sector inputsPrivate Health Care Insurance: employer-based or individual purchase of private health insurance and private ownership of health sector inputs

*Models of health services organizationContract- between the buyer and provider of medical services with tariff payments for service. Patient usually doesn't have the opportunity for provider selectionCompensation scheme - the patient chooses provider, pays for provided service, and then mediator recoups part of expendituresIntegration - between service delivery and purchase, that is buyer is the owner of medical facilities and medical personnel employer

*Three models of medical facilities financingBudget financing (money are appropriated strictly according to the expense items) Retrospective financing (money are transferred for already provided care)Prospective financing (early payment according to agreed prices and volume of services)Combinations of mentioned models and population co-payments are also possible

*Comparison of different types of financing of outpatient facilities

Type of financingThe main characteristicsFinancing basePrices contain-ment Quality of careManage-mentPer provided service Causes the baseless increase of the volume of care, long duration of treatmentOne activityVery poorVery highVery difficult Per caseCauses an overestimation of number of cases One diagnosed caseGoodSatisfac-toryDifficultPer capita (Prospective method)The most optimal and recognized method. But at the same time it leads to the selection of wrap-up patients, to the decrease of the quality of medical care through reduction of the duration of consultations or baseless referrals to inpatient care All services per one patientVery goodSatisfac-toryVery EasySalary (Budget method)Strong control, no stimuli for effective workWorking hours Satisfac-toryLowEasy

*Methods of inpatient care financing

Type of financingCharacteristicsPer provided serviceCauses baseless increase of volume of care According to the number of days the hospital beds were occupiedCauses baseless long duration of hospital stay Case-based- According to the number of cured and discharged patientsDepends on the profile of department. Stimulates intensive work, but at the same time accelerates the early discharge of not completely treated patients Method of global budgetingEarly payment for final results according to the agreed prices and volume of services. There is an opportunity for the accumulation of saved money and their use for development. The quality of provided medical care is not agreed, so there are preconditions for loss of quality of care. There are also preconditions for selection of patients with mild forms of diseases

*Method of prospective payment according to DRGs All possible diagnoses are divided into 467 diagnosis-related groups, costs of which are determined based on the costs of previous 5-6 years DisadvantagesThe groups cant include all possible diversity of diagnoses, clinical courses and complicationsPhysicians have the opportunity for transferring patients into the more expensive and profitable groupsThere is an opportunity for selection of wrap-up patients, with mild forms of diseases, without complicationsThere is an actual danger for untimely discharge of not completely treated patients from the hospitalThere is a necessity for presence of accurate and reliable database

*Measures for keeping back pricesReduce of demand through:Co-paymentPossibility for leaving the system of obligatory medical insuranceAwards for absence of insured accidentsTax remissions for those who use private servicesReduce of supply through:Reduction of number of medical studentsReduction of number of hospitalsSubstitution policyControl of use of expensive equipment Control of supply of expensive drugs

*The main problems of Health care financing in developed and developing countriesIn developed countries the problem of financing is containing the cost of health careIn developing countries the problem presents itself how to maintain health spending and how to achieve health for all initiative

*Health Financing in IndiaThe governments fiscal effort measures as the proportion of total government expenditure spent on health identifies India as a low performerIn a global ranking of the shares of total public expenditure earmarked for health only 12 countries in the world have lower proportion spent on healthThe out-of-pocket private spending dominates with 82% spending of all spending from private sources. This is one of the highest in the world.Globally only 5 countries have a higher dependence on private financing in the health sectorAbout 10% of Indians have some form of health insurance, mostly formal sector and government employees

*Health Care PlanningPlanning finding an optimal ratios between the population needs in health care and potentials to satisfy these needs. For this reason first of all it is necessary to prove scientifically the needs of population in medical and preventive care, to develop well-grounded measurement data, to reveal tendencies in changes of population needs.The actual health needs of a population might be estimated through surveys or other research.

*Planning ObjectivesControl of proportionate development of health care facilitiesApportionment of medical personnel, equipment, etc.Improvement of methods of management

*The main principles of PlanningScientific and technological basisEconomic effectivenessPlan priorities substantiationIntegration of current and perspective plansIntegration with the plans of other spheres of economy

*The main methods of Health PlanningAnalytic- The analysis of health status of population, demographic situation in region, the assessment of medical facilities activityComparative- Comparison of present data with indices calculated for other regions or in dynamics during several yearsBalance- is used in development of inter-branch balances (e.g. between the production and consumption of medical services)Normative- use of norms of population needs in medical careExperimental for example, the approbation of results of scientific research before their implementation in practice

*The stages of Plan developmentAnalysis of the level and structure of population morbidityAnalysis of the condition of health care facilities, presence and use of medical and pharmaceutical personnelThe prognosis of demographic trends and population health needs Development of standards, and the model of final resultsImplementation of the planEvaluation of the plan