Alternatives in Healthcare Financing: Examples from Low and Middle Income Countries

Author(s): Sania Nishtar1
Affiliation(s): 1President, Heartfi le, Pakistan
Summary (max 100 words): Pakistan currently principally uses three modes of financing health taxation, out of pocket payments and donor contributions of which the latter is the least significant in terms of size. The government spends 0.6 of its GDP and 11.6% of its development budget on health. Less than 3.6% of the employees are covered under the social security scheme and there is a limited social protection mechanism, which collectively serves the health needs of 3.4% of the population. The main issues in health financing include low spending, lack of attention to alternate sources of financing and issues with fund mobilization and utilization. With respect to the first, recently proposed health reforms make a strong case for promoting the reallocation of taxbased revenues and developing sustainable alternatives to low levels of public spending on health. With respect to alternative sources of health financing, the proposed reforms as articulated in the Gateway Paper lay stress on exploring policy options for private health insurance, broadening the base of Employees Social Security, creating a Federal Employees Social Security Programme, developing social health insurance within the framework of a broad-based social protection strategy, which scopes beyond the formally employed sector, establishing a widely inclusive safety net for the poor; mainstreaming philanthropic grants as a major source of health financing; developing a conducive tax configuration; generating greater corporate support for social sector causes within the framework of the concept of Corporate Social Responsibility and developing cost-sharing programmes, albeit with safeguards. The Gateway Paper regards efficient fund utilization a priority and lays stress on striking a balance between minimizing costs, controlling costs and using resources more efficiently and equitably in other words, getting the best value for the money, on the one hand, and increasing the pool of available resources, on the other. Specific interventions such as the promotion of transparent financial administration, budgeting and cost controls and enhancing the capacity to overcome onerous financial management procedures and decentralizing decision-making are underscored as a priority as is the need for ensuring greater financial procedural clarity at the federal-provincial-district interface.

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