Part III: Purchasing Health Services 9 Part IV: Purchasing Inputs 12 Part V: Supply, Demand, and Markets 15 Part VI: Legal and Regulatory Issues 18
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Spending Public Disclosure Authorized Buying Wisely Health Services for the Poor Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Editors Alexander S. Preker John C. Langenbrunner Spending Wisely Buying Health Services for the Poor Spending Wisely Buying Health Services for the Poor Edited by Alexander S. Preker and John C. Langenbrunner SWEDISH INTERNATIONAL DEVELOPMENT COOPERATION AGENCY Stockholm Canadian Agence International canadienne de Development développement Agency international Gatineau, Quebec THE WORLD BANK Washington, D.C. © 2005 The International Bank for Reconstruction and Development / The World Bank 1818 H Street, NW Washington, DC 20433 Telephone 202-473-1000 Internet www.worldbank.org E-mail [email protected] 1 2 3 4 08 07 06 05 The findings, interpretations, and conclusions expressed herein are those of the author(s) and do not necessarily reflect the views of the Board of Executive Directors of the World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of the World Bank concerning the legal status of any terri- tory or the endorsement or acceptance of such boundaries. Rights and Permissions The material in this work is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. The World Bank encourages dis- semination of its work and will normally grant permission promptly. For permission to photocopy or reprint any part of this work, please send a request with com- plete information to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, USA, telephone 978-750-8400, fax 978-750-4470, www.copyright.com. All other queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, World Bank, 1818 H Street NW, Washington, DC 20433, USA, fax 202-522-2422, e-mail [email protected]. ISBN 0-8213-5918-5 eISBN 0-8213-5919-3 Library of Congress Cataloging-in-Publication Data Spending wisely : buying health services for the poor / Alexander S. Preker, John Langenbruner. p. cm. Includes bibliographical references and index. ISBN 0-8213-5918-5 1. Poor—Medical care—Finance. 2. Poor—Medical care—Economic aspects. I. Preker, Alexander S., 1951– II. Langenbruner, John, 1951– RA418.5.P6S67 2005 338.4′33621—dc22 Contents Acknowledgments xiii Acronyms and Abbreviations xv Introduction 1 Part I: The Conceptual Framework 2 Part II: Making Strategic Purchasing Pro-Poor 7 Part III: Purchasing Health Services 9 Part IV: Purchasing Inputs 12 Part V: Supply, Demand, And Markets 15 Part VI: Legal And Regulatory Issues 18 PART I. THE CONCEPTUAL FRAMEWORK 21 1. Managing Scarcity through Strategic Purchasing of Health Care 23 Alexander S. Preker The Evolution of Health Systems and Collective Financing of Health Care 23 Reform Trends in Public Spending on Health Care 29 Continued Need for Strong Public Policy in Managing Scarce Resources 30 The Purchaser-Provider Split 33 Getting Value for Public Money Spent on Health Care 38 Forthcoming Books on Resource Allocation and Purchasing in the Health Sector 39 References 39 2. For Whom to Buy? Are Free Government Health Services the Best Way to Reach the Poor? 47 Davidson R. Gwatkin The Beneficiaries of Government Health Service Expenditures 48 Focusing Government Services on the Poor 52 Encouraging the Better-Off to Pay for Their Own Services 55 Conclusions 58 Notes 58 References 59 v vi Contents 3. What to Buy? Revisiting Priority Setting in Health Care 61 Katharina Hauck, Peter C. Smith, and Maria Goddard Some Approaches to Priority Setting 61 Economic Evaluation 62 Equity Issues 64 Practical Constraints 67 Conclusions 73 References 73 4. From Whom to Buy? Selecting Providers 79 Fernando Montenegro-Torres and Cristian Baeza Defining and Identifying Eligible Providers and Matching the Intervention 79 Can the Purchaser Buy the Desired Intervention from the Eligible Providers? 83 References 87 5. How to Pay? Understanding and Using Payment Incentives 89 John C. Langenbrunner and Xingzhu Liu Payment System Types and a Conceptual Framework for Incentives 89 Which Payment System Should Be Chosen? 91 Discussion 102 Notes 104 References 104 6. At What Price? Affordable and Realistic Fees 107 Hugh Waters and Peter Sotir Hussey Overview of Provider Payment Methods 107 Calculating Costs—Methods and Information Available 110 Characteristics of Purchasers and Providers 114 Conclusions 115 Notes 116 References 116 PART II. MAKING STRATEGIC PURCHASING PRO-POOR 119 7. The Equity Dimensions of Purchasing 121 Paolo Carlo Belli The Evidence 121 What Does An “Equitable Distribution of Health and Health Benefits” Mean? 123 Defining Variables: Resource Allocation and Purchasing Reforms 126 Contents vii Conclusions and Recommendations 134 Notes 135 References 139 8. Reversing the Law of Inverse Care 143 Finn Diderichsen The Inverse Care Law At Work in Rich and Poor Countries 143 The Infrastructure of Inequity 144 Methodological Issues: How to Construct Resource Allocation for Equity in Access 145 References 151 9. Risk Pooling and Purchasing 153 Peter C. Smith and Sophie N. Witter Approaches to Risk Pooling 154 Practical Issues 159 Conclusions 165 Note 166 References 167 PART III. PURCHASING HEALTH SERVICES 169 10. Paying for Public Health Services: Financing and Utilization 171 Xingzhu Liu and Sheila O’Dougherty Who Should Pay for Public Health Services? 171 How Should Providers Be Paid? 178 Toward Better Financing and Payment Policies 183 References 187 11. Buying Results: Contracting for Primary Health Care Delivery 195 Benjamin Loevinsohn and April L. Harding Why Contract—Ideology or Pragmatism? 195 Approaches to Contracting 197 Study Methodology 197 Results: Contracting Can Quickly Improve Service Delivery 199 Methodological Limitations of This Review 205 Is Contracting a Sustainable Approach? 206 Recommendations 208 Note 210 References 210 viii Contents 12. Purchasing Hospital Services: Key Questions for Policymakers 213 Eric de Roodenbeke Key Criteria for Effective Purchasing Decisions 213 For Whom to Buy? 214 What to Buy? 218 From Whom to Buy 222 How to Pay? 225 At What Price? 227 Moving Forward 230 Notes 232 References 232 PART IV. PURCHASING INPUTS 235 13. Paying for Health Care Labor 237 Pascal Zurn and Orvill Adams Purchasing Health Care Labor 237 Framework for Purchasing Health Labor 237 Conclusions 246 Note 247 References 247 14. Purchasing Pharmaceuticals 251 Ulrika Enemark, Anita Alban, Enrique C. Seoane-Vazquez, and Andreas Seiter Pharmaceutical RAP in Developing Countries 251 Core Policy RAP Strategies to Increase Access to Drugs 253 Organizational and Institutional Arrangements 260 From Passive to Active Purchasing of Pharmaceuticals 263 Notes 264 References 264 15. Paying for Capital 267 Jon Sussex and Sandra Sosa-Rubi The Commercial Model 267 Capital Financing 268 Capital Charging 269 New Assets or All? 271 Notional Versus Real Capital Charges 272 Time Profiles of Capital Charges 273 Asset Valuation 274 Conclusions 276 Contents ix Notes 276 References 277 16. Paying for Knowledge and Research 279 Dean T. Jamison Priority Areas for R&D 280 RAP for R&D 281 Notes 286 References 286 17. Using Resource Profiles 287 Anders Anell Classification of Resources and Typical Imbalances Data 288 Construction of Health Care Resource Profiles 290 Discussion 295 References 296 PART V. SUPPLY, DEMAND, AND MARKETS 299 18. Single-Payer Health Insurance 301 Gerard F. Anderson and Peter Sotir Hussey Differences Between Single- and Multiple-Payer Systems 301 Two Options for Reforming Single-Payer Insurance Systems 312 Considerations Specific to Low- and Middle-Income Countries 314 Conclusions 316 Notes 316 References 316 19. Multiple Payers in Health Care: A Framework for Assessment 319 Peter Zweifel Theoretical Background 320 Complementary Agents: Their Objectives and Constraints 325 Conclusions 335 Notes 336 References 336 20. Influencing the Demand Side of Purchasing 339 Tim Ensor and Stephanie Cooper Demand-Side Barriers 340 Policy Discussion and Research Implications 348 Notes 351 References 351 x Contents PART VI. LEGAL AND REGULATORY ISSUES 357 21. Law and Regulation 359 Frank G. Feeley A Typology of RAP Arrangements 360 Regulating What Is Purchased 361 Regulating the Choice of Providers 366 Regulating the Purchasing Transaction 369 References 373 22. Quality-Based Purchasing in the United States: Applications in Developing Countries? 375 Peggy McNamara Call to Action for U.S. Employers 375 Quality-Based Purchasing By Employers 375 Barriers to Quality-Based Purchasing 377 Employer Activists 378 Generic Employer Strategies to Promote Health Accountability for Quality 380 Impact of Employer Strategies on Quality 383 Conclusions 384 Notes 386 References 386 About the Coeditors and Contributors 389 Index 401 TABLES 2.1 How Much Do the Poor Gain from Government Health Service Expenditures in Africa? 49 2.2 Financial Subsidy from Government Health Services Accruing to Poorest and Richest 20 Percent of the Population 50 2.3 Distribution of Benefits of Three Government Maternal and Child Health Programs across Socioeconomic Classes 51 4.1 Modalities between Purchaser and Provider Market Structures 85 5.1 Basis for Allocating Resources by Line Items in Former Soviet Union Republics 93 5.2 Impact of Selected Payment Incentives 102 Contents