Provider payments, incentives and motivation

• What mechanisms do we currently rely on to motivate providers to provide high quality services

• What are the problems? Do we need to use the old system better or reform it?

• What can we measure that we can base payment on? How robust are our measures?

• Who is likely to oppose reform (or components of reform) and what actions are they likely to take?

How Finance and Payment Mechanisms Relate to the

Flow of $$

• Financing

• Fundholding

• Payment

• Where $$ for health comes from (e.g.,taxes)

• Who pools & manages the $$ (e.g. MOF/MOH, DHA, Social or Private Insurance Funds)

• How providers of care are paid for the services they render = provider payments

Government of Zimbabwe

External FinanceDonor & Lenders

PUBLIC

Private Sector

Households

PRIVATE

Sources of Funds

MOH&CH Budget

Other Ministries

Local Government

Social DimensionsFund (SDF)

Health Services Fund(HSF)

Private Insurance

Out of Pocket other thanHSF

Funding Mechanisms

Public Providers MOH&CW

Public ProvidersOther Ministries

Mission Providers

Private Providers

Providers

Flow of Funds- Zimbabwe

Sources of Funds:Public Taxation1. Income Tax = direct taxes2. Sales Taxes = indirect taxes

User Fees paid Out-of-Pocket3. Charged by government facilities4. Charged by private sector

Formal Insurance5. Social Insurance6. Private Insurance

Community Based Health Funds7. Health Fund Card for basic health care

8 Revolving Drug Fund

External Sources9. Donor Funds

Structure of Revenue for 2 CountriesSource Cote d’Ivoire (%) Peru (%)

Direct Tax 11.4 19.3

Indirect Tax 15.7 46.8

Import duties, etc. 26.7 21.5

Managed Soc

Sec./Payroll

16.6 5.6

Non-Tax (fees, donors)

29.6 6.8

Total 100.0 100.0

Shift in Public Health Revenue Sources in Russian Federation, 1992-95

(source: Igor Sheiman, 1997, in Innovations in Health Care Financing, p.67

Source 1992 1993 1994 1995

General Revenue Budget--Federal budget--Regional & local budget

Mandated payroll tax

100.0

17.8

82.2

----

88.9

9.5

79.4

11.1

76.5

9.1

67.4

23.5

73.9

6.3

67.6

26.1

Total 100.0 100.0 100.0 100.0

Mandated Payroll Tax Contribution RatesSource: World Bank and Chintz, Balancing Competition and Solidarity in Health Financing, in Saltman,

Critical challenges for European Health Policy, forthcoming, Open Univ. Press

Country Public Sector Revenue from

Mandated Payroll Taxes

(%)

Total Contribution

Rates (%)

Employer Share (%)

Employee Share (%)

Bulgaria 9.0 50 50

Czech Republic

13.9 66 33

Estonia 13.0 100 00

Latvia 6.1 84 16

Romania 8.5 50 50

Russian Federation

26 3.6 100 00

Slovakia 13.5 66 33

Slovenia 12.8 50 50

Links between reforms and health system goals

Goals (positive & negative effects)

Efficiency Quality Equity Client Respon-siveness

Sustain-ability

Financing

Provider Payments

Organiza-tional Change

Regula-tions