Health Equity Financing Pilot project
Dr. Sania Nishtar
SI, FRCP, PhD
Catastrophic Expenditures- “a medical
poverty trap”
• Health costs are the most important precursor to poverty after
illiteracy and unemployment .
• According to a recent WHO estimate, every year some 100
million people become impoverished and a further 150 million
face severe financial hardship as a result of health care payments.
• Equity in Asia-Pacific Health Systems (EQUITAP) studied
eleven countries in Asia and found that 78 million people fell
below the $1.08 poverty line as a result of health payments
OOP health spending- an impetus for
catastrophic expenditures
• High health costs, where out-of-pocket (OOP)
spending is common and high, can be catastrophic for
the households.
• OOP acts as a financial barrier to essential health care,
is a source of impoverishment, and exacerbates
inequity.
• OOP health spending constitutes a principal means of
financing health care throughout much of Asia and
Pacific.
Financial catastrophe- specific threshold?
• There is no complete consensus regarding the specific threshold’
for defining financial catastrophe,
• Most agree that it should be measured in relation to a
household’s capacity to pay’ and that may result with health care
payments at or exceeding 40 percent of a household’s capacity to
pay in any year…….
Tested means and strategies
• Both developed and developing countries have explored various
options to finance their health system to protect the people from
catastrophic expenditures.
• The means and strategies tested and implemented ranges from
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National and social health insurance schemes,
Medical saving schemes,
Community-based health insurance schemes
Formal cost sharing or user-fees
Establishment of Health Equity Funds
Health Equity Fund strategy
Health equity fund strategies have been developed to
 improve access to health care services for the poorest by paying the provider
on their behalf and is to
 remove, as much as possible, the multiple barriers faced by the poor
(HEF) strategy is build around on two principles
i. a specific fund is allocated to compensate selected health facilities for the
services provided
ii. management of the fund is entrusted to a purchasing body that is
independent of the health facility. This body—the health equity fund
operator—fulfils the functions of targeting.
Rationale in the context of Pakistan
• More than 60% of the population is employed in the informal
sector.
• The only option to pool for risk for this segment of the
population over and above what the government provides free in
hospitals is through social protection mechanisms.
• Existing government systems in this area have a narrow base—
Zakkat and Bait-ul-Mal account for less than 1% of the total
health spending.
• The potential within philanthropy is not fully tapped.
Rationale for the pilot project
It is envisaged that if a mechanism to efficiently and
transparently manage and transfer funds is created and if donors
have the visibility of use of their contributions, the base of social
protection as a financing instrument can be significantly
enhanced.
Goal
To develop a sustainable and replicable health financing
model to protect the poor against catastrophic spending
in health
Objective
To pilot a technology-based cash transfer intervention to
protect the poor against catastrophic health expenditure
Services Points
• The pilot project will test objective in a pilot setting using the
case-control, quasi experimental evaluation model
• In the intervention site health equity fund and a technology platform
will be made available for use by Medical workers, who will seek
urgent support on behalf of a patient in a situation where the
person runs the risk of spending catastrophically on health.
• In a control site patients will seek social protection assistance
through the existing channels
Performance Indicators
Equity
• Number of poor protected from catastrophic expenditure
Fair financing
• Number of assisted patients protected against catastrophic
expenditure in the intervention site
Responsiveness
• Number of the patients who were satisfied with the system in the
intervention site
i. Reduction in time to secure social protection assistance
ii. Decrease in resources required to get approvals
Technology platform
The technology platform is being designed with
following as core considerations:
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Standards compliance
Scalability
Cost efficiency
User friendly
High level data security
High level integration capacity
@
Internet
SMS
Email
Fax
Telephone
In
Person
Service Request
Clearing House
Manages
Fund
Fund
generated by
Philanthropy
Donors
Service Payment
Hospital
Pharmacy
Laboratory
Feedback on
Utilization to Donor
@
Users without
Access to Web
Email
SMS
Fax
Telephone
In Person
Interface
through the
Mediator
Donors
Mediator
Service Requesters
Data
IP Network
IT Application
Service Providers
Securely
connected to the
Internet
Moderator
System Administrator
Approving Manager
Universal Access to the IT System by all Class of Users
Support Level
Eligibility Index
Service Request Form
Algorithm to
Determine
Eligibility Index
Eligibility Index
With the user of Technology and Pre-defined Criteria
the Decision on Eligibility and the level of Support is
Determined Instantly
Candidates for assistance
• Conditions that incur one time cost and cause catastrophic
expenditure
• Non-emergency and non-chronic conditions for which the state
and the hospitals are not providing support
• Intervention that can enhance quality of life
• Conditions for which one time costs are approximately below
Rs. 50,000
• preferably curable and life threatening conditions
• Conditions where the hospital is not able to underwrite costs
• Conditions that preferentially afflict the poor
• Intervention which increases productive years of life
• An area where the NGO can continue to support over the long
term.
Up-scaling the pilot
• If the project is successful, it can be
• Up-scaled in the existing model with Heartfile continuing to
manage and build the equity pool; additional features can be
introduced in the financing design such as by opening a credit
line for patients who run the risk of spending catastrophically by
paying lump sums and by introducing changes in philanthropyrelated legislation
• Offered to the GOP for channeling existing Zakaat funds for
heath
• Replicated in other countries with modification
What value does this project bring?
• This project is being gauged in comparison with
a) the existing state-run social protection system—Bait-ul-Mal
b) social protection systems in health established by the private sector; e.g., by the
Aga Khan Foundation and Shaukat Khanum Hospital system
• In comparison with Bait-ul-Mal, the system
i.
ii.
iii.
eliminates duplication and abuse because of the capability to electronically
track
reduces opportunities for patronage because of the reliance on multiple
checks to ascertain eligibility as opposed to relieance solely on the Zakaat
from criteria, which being endorsed by counselors.
mitigates reliance on the efficiency of the social welfare officer to process
and handle requests
What value does this project bring?
• In comparison with social protection systems established by the
private sector, this system will
• Provide better visibility to donors; it will be configured to ensure
that donors have the ability to view the use of their funds on a
transaction basis and have the ability to instruct the demand
specific use of their funds.
• Enable the donors to have full view of the administrative costs
incurred and above a certain category, will be able to request for
audit of any transaction or demand processing