What Does UHC Cost and Who Will Pay?

By David Collins, Jean Kagubare — Management Sciences for Health

This article was originally published on Devex on November 18, 2016.

As finance advisers in global health, we are regularly in conversations with health ministers in low- and middle-income countries who have been charged with the commendable but daunting task of achieving universal health coverage for their citizens.

In other words, they must ensure that all people obtain the health services they need without suffering financial hardship when paying for them, with special emphasis on serving the poor and disadvantaged. Our conversations often boil down to some key questions: How much will it cost, who will pay, and how do we ensure that funds are used effectively and responsibly?

The answers to these questions depend to a great degree on local circumstances — such as the types and quantities of services needed, the degree of decentralization of governance and the mix of public and private health care providers. For example, a country with high malaria prevalence will need to focus partly on preventing and treating that disease; a country with decentralized health systems will need to take local decision-making and financing into account; a country with a large private health sector will need to find ways to involve it in providing services to the poor.

A woman at a provincial health services department in Sri Lanka. Photo Credit: Simone D. McCourtie/World Bank)

The global health NGO where we work, Management Sciences for Health, is involved in a variety of projects related to health financing. These projects taught us a few useful lessons.

Here are a number of interventions that can help overcome some of the major challenges that stand in the way of achieving UHC.

1. Better planning and more effective and equitable allocation.

UNICEF has developed a tool to project the costs of the expanded national community health program in Sierra Leone. This tool is the first of its kind and allows managers to understand the costs of comprehensive packages of community health services over 10 years. It also helps managers estimate the costs of scaling up as well as prepare investment cases to attract financing.

2. Equitable financing.

Many NGOs and other institutions are working with governments and donors to develop and strengthen equitable financing systems. In Indonesia, the National Tuberculosis Program developed 25-year projections of costs and funding options based on government and insurance financing, which is being used for planning and advocacy.

3. Incentives.

Results-based financing is proven to be an effective strategy for increasing the quality of health services. Unlike traditional payment mechanisms, RBF directly rewards health care providers with financial incentives based on the results they have achieved according to pre-determined performance targets. Increasingly used in low- and middle-income countries, RBF has been shown to strengthen health systems, improve provider and facility efficiency and increase both access to and use of priority health services in the areas of maternal and child health, HIV/AIDS, and malaria, among others.

In the Democratic Republic of the Congo, through the IHP project funded by USAID and managed by MSH, health facilities that have implemented RBF showed remarkable improvements in quantity and quality of health services. For example, the use of curative services in health centers more than doubled over 18 months — from 21 to 43 percent. The average quality score of health centers jumped from 33 to 62 percent. In comparison, facilities in DRC-IHP health zones not using RBF rated 48 percent for the same period. Hospital ratings for facilities using RBF nearly doubled, from 42 to 81 percent.

4. Accountability.

More needs to be done to improve controls and checks and balances, but improving transparency and holding managers accountable to the government and the public is also essential. Because health care planning and financing in many countries is managed at the local level, a priority for improving accountability is to develop regular, comprehensive, local annual reports on the state and developments of health care. South Africa developed simple District Health Expenditure Reviews, so planners and managers could see how government funding was being used across facilities and services, as well as comprehensive annual district reports. Both of these innovations helped local government to improve the planning and accountability for the delivery of health services.

Despite the efforts made by governments and donors, access of poor families to quality health services remains a major challenge. Many actors are working hard to improve planning, financing, performance, and accountability in several countries. But this work must be greatly expanded before UHC can move from a dream to a reality.

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