Health Financing Country Profiles in the Western Pacific Region

Health financing country profiles in the Western Pacific Region

1995–2011

Health financing country profiles in the Western Pacific Region 1995–2011 WHO Library Cataloguing-in-Publication Data

Health financing country profiles in the Western Pacific Region: 1995-2011

1. Delivery of health care – economics. 2. Health expenditures. 3. Healthcare financing. I. World Health Organization Regional Office for the Western Pacific.

ISBN 978 92 9061 674 0 (NLM Classification: W74)

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The designations employed and the presentation of the material in this publication do not imply the expression of any opinion whatsoever on the part of the World Health Organization concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. Dotted lines on maps represent approximate border lines for which there may not yet be full agreement.

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All reasonable precautions have been taken by the World Health Organization to verify the information contained in this publication. However, the published material is being distributed without warranty of any kind, either expressed or implied. The responsibility for the interpretation and use of the material lies with the reader. In no event shall the World Health Organization be liable for damages arising from its use. Contents

Foreword...... v

Acknowledgement ...... vi

Introduction ...... 1

Australia ...... 6

Brunei Darussalam...... 11

Cambodia...... 15

China...... 20

Cook Islands...... 26

Fiji ...... 30

Federated States of Micronesia ...... 34

Japan...... 38

Kiribati...... 43

Lao People’s Democratic Republic ...... 47

Malaysia ...... 53

Marshall Islands...... 57

Mongolia...... 61

Nauru...... 66

New Zealand...... 70

Niue...... 74

Palau...... 78

Papua New Guinea...... 82

Philippines ...... 87

Republic of Korea...... 93

Samoa...... 98

Singapore ...... 102

Solomon Islands...... 107

Tonga...... 111

Tuvalu...... 115

Vanuatu...... 119

Viet Nam ...... 123

iii iv Health financing country profiles in the western pacific region, 1995–2011 Foreword

he WHO Western Pacific Region continues to face many challenges in ensuring that millions Tof people, particularly poor and vulnerable populations, have financial protection against illness to prevent financial hardship from out-of-pocket payments or a decision not to seek health services . The development and improvement of health financing policies and their monitoring and evaluation are important to a country’s journey towards universal health coverage, which is defined as all people having access to quality health services that are needed without enduring financial hardship paying for these services . WHO supports countries as they move closer towards universal health coverage through the development of their health financing systems . The third edition of the Health Financing Country Profiles for the Western Pacific Regionprovides summary descriptions of the health financing systems of 27 countries in the WHO Western Pacific Region . A cross-country comparison and individual country profiles of health expenditure trends from 1995–2011 are analysed in the context of each country’s health financing system, current issues and developments in health financing reform .

Shin Young-soo, MD, Ph .d . Regional Director

Foreword v Acknowledgement

he third edition of Health financing country profiles for the Western Pacific Region provides an T update to the second edition with new health financing developments in the Western Pacific Region and more recently available data on health expenditures . Health financing country profiles for the Western Pacific Region is a product of the Health Care Financing unit of the WHO Regional Office for the Western Pacific, led by Ke Xu, within the Division of Health Sector Development under Division Director Vivian Lin . Annie Chu, Ding Yan and Ke Xu contributed to the technical updating of the report . Chris James and Nouria Brikci provided technical input to each profile . Marc Lerner edited the report . The Health Care Financing unit would like to thank the following for their valuable comments: Henrik Axelson, Valeria De Oliveira Cruz, Enkhee Erdenchimeg, Chandika Indikadahena, Ben Lane, Clement Malau, Thi Kim Phuong Nguyen, Lucille Nievera, Ann Robins, Paulinus Sikosana, Paul Chun Soo, and Thongleck Xiong . The unit would like to also give special thanks to Henk Bekedam who initiated the Health Financing Country Profiles for the Western Pacific Region project and supported the production of each edition during his tenure as the previous Director of the Division of Health Sector Development . Financial support from the Australia Government, Department of Foreign Affairs and Trade, formally the Australian Agency for International Development; Japan, Ministry of Health, Labour and Welfare; the Republic of Korea, Ministry of Health and Welfare; and the United Kingdom of Great Britain and Northern Ireland, Department for International Development, contributed to this publication .

vi Health financing country profiles in the western pacific region, 1995–2011 Introduction

s countries in the WHO Western Pacific Region undergo rapid economic development, health A financing plays an increasingly important role in efforts to progress towards universal health coverage, a vision of health sector development in which everyone has access to quality health services with financial protection . Experiences can be shared and lessons can be learnt from countries that are diverse in their geographic, economic and socio-demographic backgrounds as other countries, regardless of their backgrounds, undertake their own paths towards universal health coverage . The WHO Health Financing Strategy for the Asia Pacific Region 2010–2015 provides eight strategic areas to help countries move towards universal health coverage, including raising more money for health and gaining more health for the money . The strategy outlines four target indicators to monitor and evaluate progress towards universal health coverage: 1 . ut-of-pocket o (OOP) spending should not exceed 30%–40% of total health expenditure (THE) . 2 . otal t health expenditure should be at least 4%–5% of gross domestic product (GDP) . 3 . over 90% of the population should be covered by prepayment and risk-pooling schemes . 4 . Close to 100% of vulnerable populations should be covered by social assistance and safety net programmes .

The Health financing country profiles for the Western Pacific Region provides concise overviews of the health financing systems of Member States of the Western Pacific Region . The third edition of Health financing country profiles for the Western Pacific Region covers 1995 to 2011 . Health expenditure trends across and by countries are analysed using WHO National Health Account data, country health financing systems and policies, and recent developments .

Data The health expenditure and associated macroeconomic data used in these profiles come from the WHO Global Health Expenditure Database (http://www.who.int/nha/database). The standardized system of health accounts ensures accurate cross-country comparisons of health expenditures over time . It is important to note that in a few cases the data may differ from country-generated data due to methodological differences, although WHO works closely with governments to ensure consistency whenever possible . Note also that data are aggregated at the national level .

Introduction 1 Health expenditure: cross-country comparisons

As an introduction to the more detailed country-by-country profiles, the figures below provide simple cross-country comparisons in relation to some key health expenditure percentages in 2011 . The first figure shows health expenditures as a percentage of GDP, disaggregating total health expenditures into general government and private health expenditures . Few low-income countries have health expenditures of less than 4–5% of gdp .

Health expenditure as % of gross domestic product (GDP)

as % of GDP 8

0 FJI KIR NIU JPN SOL PHL SGP NZL VUT TUV BRN AUS KOR LAO FSM COK PNG MYS NRU TON PLW CHN MHL KHM VNM MNG WSM

GGHE as % of GDP PvtHE as % of GDP

AUS Australia KHM Cambodia NZL new Zealand SLB solomon Islands

BRN Brunei Darussalam KIR kiribati NIU niue TON Tonga

CHN China KOR republic of Korea NRU Nauru TUV Tuvalu

LAO lao People’s COK Cook Islands PHL Philippines VNM viet Nam Democratic Republic

FJI Fiji MHL marshall Islands PLW Palau VUT Vanuatu

FSM Federated State MNG mongolia PNG papua New Guinea WSM samoa of Micronesia

JPN japan MYS malaysia SGP Singapore

2 Health financing country profiles in the western pacific region, 1995–2011 The second figure shows differences in the structure of total health expenditure across countries in the Western Pacific Region .

Structure of total health expenditure

TUV NIU SOL COK FSM WSM VUT NRU BRN TON MHL NZL KIR JPN PNG PLW AUS FJI KOR MNG CHN MYS LAO VNM PHL SGP KHM

0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100

Government line ministries Social Security Funds Other Private OOP

The third figure shows each government’s priority to health, as the share of general government health expenditure (GGHE) in total government expenditure, across countries . Of the 27 countries with health expenditure data available below, 16 spend more than 10% of their total government expenditure on health .

Goverment priority to health (GGHE as a % of general government expenditure)

AUS BRN CHN COK FJI FSM JPN KHM KIR KOR LAO MHL MNG MYS NIU NRU NZL PHL PLW PNG SGP SOL TON TUV VNM VUT WSM

0 2 4 6 8 10 12 14 16 18 20 22 24 26

Introduction 3 The countries presented through these profiles may belong to the same broad geographical area but are economically and structurally very diverse . A few common threads however emerge from these profiles .

Firstly, the main health financing challenges faced by Pacific island countries are very different to those faced by low- to middle-income Asian countries . The small population sizes of most Pacific island countries constrain the ability of those countries to raise sufficient domestic resources to finance all needed tertiary-level health services, particularly in light of the substantial and increasing burdens of noncommunicable diseases (NCDs) . This results in a continuous need for overseas referrals, which further strains the financial sustainability of their health financing systems . This contributes, in nearly all cases, to donor dependence . Determining how to develop a revenue-raising mechanism able to sustain the system is therefore one of the most pressing challenges these countries face . In contrast, while the health systems of low- and lower middle-income Asian countries in the Western Pacific Region are able to provide most needed specialized care in-country, their health financing systems often rely heavily on household OOP payments . This can lead to households facing severe financial hardship when accessing services, or indeed not accessing services at all .

Secondly, most of these countries are engaged on the journey towards universal health coverage, although the route chosen differs: some rely mainly on government revenue as in Brunei Darussalam, while others rely on a mix of sources – taxation and social health insurance (SHI) as in Mongolia – or mostly on private expenditures, as in Singapore . Some are further behind in terms of offering financial protection to their population as the share of OOP payments continue to dominate THE, as for example in Cambodia, the Lao People’s Democratic Republic and the Philippines .

Finally, all countries face the dual challenge of increased technological developments and the prevalence of NCDs, putting financial pressure on their ability to provide good-quality services at a reasonable cost . The need to prioritize health services will increase as will the need to raise additional resources .

4 Health financing country profiles in the western pacific region, 1995–2011 Definitions and methodology

All health expenditure and gross domestic product (GDP) figures are expressed in current US dollars . The following key terms are frequently used .

General government health expenditure (GGHE) This equals the total outlays by government entities to purchase health services and goods . It includes both recurrent and investment expenditures made during the year . It can include funds spent on social health insurance, as well as spending by ministries of health . It may also include health expenditures by other government agencies, such as ministries of defense, education and local government . Categorized by financing agents, GGHE includes expenditures from government line ministries, which include central and federal (ministry of health or other ministries); state, provincial and regional and local and municipal authorities; and extra budgetary agencies, principally social security schemes .

Private health expenditure (PvtHE) This equals the total outlays of health by private entities . In the Western Pacific Region, these are typically in the form of direct household out-of-pocket (OOP) payments for health services . Private health expenditure can also be in the form of private insurance, and health services directly funded by private enterprises and from non-profit institutions .

Total health expenditure (THE) This is the sum of general government and private expenditures on health, equating to all health expenditures in a country . Note that both government and private health expenditures can be comprised of external sources of funds, as well as domestic sources . These are referred to in this document as external resources for health .

External resources These are those financing sources, channeled towards health by all non-resident institutional units that enter into transactions with resident units, or have other economic links with resident units, explicitly labelled or not to health, to be used as means of payments for health goods and services by financing agents in the government or private sectors . It includes donations and loans, in cash and in-kind resources .

Introduction 5 Australia

Health expenditure trends

Australia is a high-income country with a population of 22 6. million people in 2011 . Gross domestic product (GDP) per capita was US$ 65 913 in 2011 . The predominant source of health- care financing is general government health expenditure GGHE( ), which is mainly financed through general taxation . In 2011, total health expenditure (THE) was 9 0%. of GDP, equivalent to US$ 5955 per capita . OOP (out-of-pocket) payments made up 19 .8% of THE; GGHE was 68 .5% of the . GGHE amounted to US$ 4080 per capita and represented 16 8%. of general government expenditure (GGE) and 6 2%. of gdp . Figures 1–5 show historical trends in health expenditure . THE has been on an upward trend . The structure of health expenditure has remained broadly similar over the years, with the Government accounting for roughly two thirds of the . The Government’s priority to health has remained relatively constant for the past few years .

Health financing system

Australia has a mixed health delivery and health financing system . The public sector provides most of the inpatient services and accounts for two thirds of the country’s hospital beds . However, private medical practitioners provide most out-of-hospital medical services as well as dental services and allied health services such as physiotherapy . Health services are financed largely by the Government, with supplemental funding from copayments by private insurance schemes and household OOP payments . A large portion of the Australian Government’s health funding is directed to one the three major national subsidy schemes – Medicare, the Pharmaceutical Benefits Scheme (PBS) and the 30% private health insurance (PHI) rebate . Medicare provides all eligible Australian residents free or low-cost health services . It is administered by Medicare Australia and managed by the Department of Health . Medicare is financed largely by general government revenue, although individuals also make financial contributions through a taxation levy known as the Medicare levy, which is taxed at 1 5%. of an individual’s salary 1. Medicare covers a large range of outpatient services including consultation fees, tests and examinations . In addition, Medicare’s eligible patients admitted into public hospitals automatically receive treatment by doctors and specialists nominated by the hospital and are not charged for receiving treatments . However, they can also opt to be treated as private patients and choose their preferred doctors . Medicare then pays 75% of the Medicare schedule fee for services and procedures provided by the treating doctor . All Australians who have a current Medicare card are covered under the PBS, which covers the medicine costs for a majority of conditions through government subsidies . Like Medicare, the

1 . see Extended Medicare Safety Net (https://ama com. .au/extended-medicare-safety-net, accessed on 31 March 2013) for full details of services .

6 Health financing country profiles in the western pacific region, 1995–2011 AUS–Figure 1. General trends in health expenditure per capita at exchange rate

6000 GGHE

PvtHE 5000

4000

3000

2000 Current US$ per capita (at exchange rate) 1000

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

AUS–Figure 2. General trends in health expenditure as % of GDP

9 GGHE as % of GDP 8 PvtHE as % of GDP

% of GDP 4

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

AUS–Figure 3. Trends in the structure of total health expenditure (THE)

100 GGHE 90 OOP

80 Other private

% of total health expenditure 30

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Australia 7 AUS–Figure 4. GGHE as % of government spending

36 34 32 30 28 26 24 22 20 18 16 14 12

GGHE as a % of general government expenditure 10 8 6 4 2 0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

AUS–Figure 5. External resources for health as % of THE

50 % of THE 40

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

8 Health financing country profiles in the western pacific region, 1995–2011 scheme is managed by the Department of Health and administered by the Department of Human Services 2. To achieve an improved balance between the public sector’s and private sector’s involvement in the delivery and financing of health care, the Australian Government is encouraging individuals to take out private health insurance (PHI), while preserving Medicare as the universal safety net . Hospital coverage and general treatment coverage are the types of PHI coverage available . PHI provides coverage for treatment as a private patient in a public or private hospital and for services such as physiotherapy, optometry, general dental and podiatry services that are not covered under Medicare . PHI allows some people to access health services that may have been unaffordable . Families and individuals that pay PHI premiums are eligible for federal government rebates on phi . Rebate recipients will be treated consistently subject to age and income 1. Since 2005, higher rebates are offered to people aged 65 and above . An Extended Medicare Safety Net (EMSN) was also introduced in 2004 to provide further financial assistance by meeting 80% of the OOP cost of medical services provided out of hospital once an annual threshold is reached, except for a few services that have a cap . For concession cardholders and families eligible for Family Tax Benefit A, the threshold is Aus$ 610 70. (as at 1 January 2013) . For all other Medicare cardholders, the threshold is Aus$ 1221 90. (as at 1 January 2013) . The private sector operates in parallel to the public sector . Services by private medical practitioners are financed by household OOP payments and private insurance . About half of the population has ancillary private insurance, which typically provides coverage for non-medical services provided by hospitals, such as physiotherapy, dental treatment and the purchase of spectacles .

Way forward

One of the key challenges to Australia’s health financing system is managing the rise in health-care costs as a result of advances in medical technology . In addition, there are some concerns over the equity of health access . Given that some areas of surgery are now performed predominantly in the private sector, Australians living in rural areas who face limited availability of private inpatient facilities – and thus have substantially lower levels of private health fund membership – must wait, often for months, for elective surgery in the public system .

Selected references

• Armstrong BK, et al . (2007) . Challenges in health and health care in Australia . Medical Journal of Australia 187(9): 485-489 . (http://www .mja com. .au/public/issues/187_09_051107/arm11047_ fm .html#0_pgfId-1091923, accessed 21 February 2013) . • Australia Government, Department of Health . Private health insurance; 2013 . (http://www .health . gov .au/internet/main/publishing nsf/Content/private-1. , accessed 21 February 2013) . • Australia Government, Department of Health . About the PBS; 2013 . (http://www pbs. gov. .au/info/ about-the-pbs, accessed 21 February 2013) . • Australia Government, Department of Health . The Extended Medicare Safety Net; 2013 . (ht tp:// www .health .gov .au/internet/main/publishing .nsf/Content/EMSN_Landing_Page, accessed 21 February 2013 . • Australia Government, Department of Human Services . Payments and services; 2013 . (http://www . medicareaustralia gov. .au/about/index .jsp, accessed 21 February 2013) .

2 . Australian Medical Association (https://ama com. .au/extended-medicare-safety-net, accessed on 31 March 2013) .

Australia 9 AUSTRALIA 1995 2000 2005 2006 2007 2008 2009 2010 2011

GDP and health expenditures per capita (in current currency unit) ▪ Gross Domestic Product (GDP) – US dollar 21 583 21 268 36 983 39 076 46 282 48 341 45 585 57 262 65 913 – Australian dollar 29 116 36 684 48 429 51 892 55 311 57 631 58 448 62 424 63 901 ▪ Total Health Expenditure (THE) – US dollar 1 565 1 713 3 136 3 330 3 956 4 237 4 118 5 174 5 955 – Australian dollar 2 111 2 955 4 107 4 422 4 728 5 052 5 281 5 640 5 773 ▪ Government Health Expenditure (GGHE) – US dollar 1 029 1 145 2 098 2 217 2 671 2 875 2 822 3 545 4 080 – Australian dollar 1 389 1 975 2 747 2 945 3 192 3 428 3 618 3 864 3 956 ▪ Private Health Expenditure (PvtHE) – US dollar 536 568 1 039 1 113 1 285 1 362 1 297 1 629 1 875 – Australian dollar 723 980 1 360 1 478 1 536 1 624 1 663 1 776 1 818 ▪ Out-of-pocket expenditure (OOP) – US dollar 252 339 584 621 714 769 765 967 1 177 – Australian dollar 340 585 765 825 853 916 981 1 054 1 142 Health expenditure ratios THE as % of GDP 7.3 8.1 8.5 8.5 8.5 8.8 9.0 9.0 9.0 GGHE as % of GDP 4.8 5.4 5.7 5.7 5.8 5.9 6.2 6.2 6.2 PvtHE as % of GDP 2.5 2.7 2.8 2.8 2.8 2.8 2.8 2.8 2.8 GGHE as % of GGE 12.9 15.1 16.7 16.8 17.2 16.5 16.8 16.8 16.8 GGHE as % of THE 65.8 66.8 66.9 66.6 67.5 67.9 68.5 68.5 68.5 OOP as % of THE 16.1 19.8 18.6 18.7 18.0 18.1 18.6 18.7 19.8 Other private as % of 18.1 13.4 14.5 14.8 14.5 14.0 12.9 12.8 11.7 THE External resources 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 as % of THE All data for 2011 are provisional data Health Expenditure and GDP figures are expressed in current US dollar based on the average exchange rate for that year.

10 Health financing country profiles in the western pacific region, 1995–2011 Brunei Darussalam

Health expenditure trends

Brunei Darussalam is a high-income country with a population of 405 938 people in 2011 . Gross domestic product (GDP) per capita was US$ 41 118 in 2011 . The predominant source of health-care financing is general government health expenditure GGHE( ), which is mainly financed through general taxation . In 2010, total health expenditure (THE) was 2 .4% of GDP, equivalent to US$ 993 per capita . Out- of-pocket (OOP) payments made up 14 .8% of THE; GGHE was 85 .0% of the . GGHE amounted to US$ 845 per capita and represented 8 8%. of general government expenditure (GGE) and 2 1%. of gdp . Figures 1–5 show historical trends in health expenditure . THE has been on an upward trend since 2003 . The structure of health expenditure has stayed almost uniform during the period with the Government accounting for more than 80% of the . Figure 4 shows that the Government’s priority to health has remained relatively constant .

Health financing system

Brunei Darussalam has a publicly administered and publicly financed health system . The Ministry of Health is the main agency responsible for the delivery of health care, health-care information and all health care-related services in the country . Citizens enjoy free medical and health care provided by the country’s four government hospitals, 16 health centres and 64 primary care facilities . In remote areas that are not accessible or are difficult to access, travelling health clinics and the Flying Medical Services provide health-care services . In addition to the government hospitals in every district, there are two private hospitals, one of which is open only for employees of Brunei Shell Petroleum . The Government funds most health services . Funding for health is allocated by the Ministry of Finance and administered by the Ministry of Health . User fees currently constitute a very small percentage of the total funds available to health care . Since the Government provides and pays for comprehensive health-care services, OOP payments are typically very small for most households .

Way forward

One of the key challenges facing Brunei Darussalam is managing the rising cost of medicines and other medical needs while maintaining the high standards of health service delivery .

Brunei Darussalam 11 BRN–Figure 1. General trends in health expenditure per capita in US$ at exchange rate

1000 GGHE 900 PvtHE 800

700

600

500

400

300

Current US$ per capita (at exchange rate) 200

100

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

BRN–Figure 2. General trends in health expenditure as % of GDP

4.5 GGHE as % of GDP 4 PvtHE as % of GDP

3.5

2.5

% of GDP 2

1.5

0.5

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

BRN–Figure 3. Trends in the structure of total health expenditure (THE)

100 GGHE 90 OOP

80 Other private

% of total health expenditure 30

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

12 Health financing country profiles in the western pacific region, 1995–2011 BRN–Figure 4. GGHE as % of government spending

36 34 32 30 28 26 24 22 20 18 16 % of government spending 14 12 10 8 6 4 2 0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

BRN–Figure 5. External resources for health as % of THE

50 % of THE 40

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Brunei Darussalam 13 Selected references

• Brunei Darussalam Health; 2004 . (http://www .bruneidirecthys .net/about_brunei/health .html, accessed 21 February 2013) . • Department of Policy and Planning, Ministry of Health, Brunei Darussalam (2009) . Health Information Booklet . (http://www .moh gov. .bn/satisticshealthguidelines/download/HIB_2009 .pdf, accessed 21 February 2013) .

BRUNEI 1995 2000 2005 2006 2007 2008 2009 2010 2011 DARUSSALAM GDP and health expenditures per capita (in current currency unit) ▪ Gross Domestic Product (GDP) – US dollar 16 346 18 351 26 248 30 975 32 443 37 415 27 390 31 010 41 118 – Brunei dollar 23 169 31 636 43 688 49 216 48 895 53 024 39 841 42 283 51 723 ▪ Total Health Expenditure (THE) – US dollar 482 551 691 711 783 877 834 915 993 – Brunei dollar 683 951 1 150 1 130 1 180 1 243 1 213 1 247 1 250 ▪ Government Health Expenditure (GGHE) – US dollar 375 477 582 598 661 754 710 781 845 – Brunei dollar 532 822 968 949 997 1 069 1 033 1 066 1 063 ▪ Private Health Expenditure (PvtHE) – US dollar 107 74 109 114 121 123 124 133 149 – Brunei dollar 151 128 182 181 183 174 180 182 187 ▪ Out-of-pocket expenditure (OOP) – US dollar 105 74 108 113 120 121 122 132 147 – Brunei dollar 150 127 180 179 181 172 178 180 185 Health expenditure ratios THE as % of GDP 2.9 3.0 2.6 2.3 2.4 2.3 3.0 2.9 2.4 GGHE as % of GDP 2.3 2.6 2.2 1.9 2.0 2.0 2.6 2.5 2.1 PvtHE as % of GDP 0.7 0.4 0.4 0.4 0.4 0.3 0.5 0.4 0.4 GGHE as % of GGE 4.2 6.3 6.9 6.7 6.7 7.3 7.5 8.8 8.8 GGHE as % of THE 77.9 86.5 84.2 84.0 84.5 86.0 85.2 85.4 85.0 OOP as % of THE 21.9 13.3 15.7 15.8 15.3 13.8 14.7 14.4 14.8 Other private as % of 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 THE External resources 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 as % of THE All data for 2011 are provisional data Health Expenditure and GDP figures are expressed in current US dollar based on the average exchange rate for that year.

14 Health financing country profiles in the western pacific region, 1995–2011 Cambodia

Health expenditure trends

Cambodia is a low-income country with a population of 14 3. million people in 2011 . Gross domestic product (GDP) per capita was US$ 897 in 2011 . Out-of-pocket (OOP) expenditures and general government health expenditure (GGHE) are the main sources of health-care financing and account for 56 .9% and 22 .4% of the country’s total health expenditure (THE), respectively . General government health expenditures are financed through general revenues and development assistance for health . In 2011, THE was 5 7%. of GDP, equivalent to US$ 51 per capita . GGHE amounted to US$ 11 per capita and represented 6 .3% of general government expenditure (GGE) and 1 .3% of gdp . External resources for health are 15 .8% of the . Figures 1–5 show historical trends in health expenditure . THE has been increasing over the last decade . General government spending on health has slightly increased since 2007 . OOP payments remain the main source of health financing . GGHE as percentage of general government spending, which reflects the Government’s priority to health, has been about 6% since 2007 .

Health financing system

Cambodia has a mixed health delivery and health financing system . Health services are provided by the Government in public health facilities, by not-for-profit nongovernmental organizations that may operate independently or be contracted by the Government to provide health services to various districts, and by the for-profit private sector . Official user fees were introduced in 1996 for public health facilities, primarily to regulate unofficial charges believed to be widely prevalent . Official fees are set by individual health facilities on the principle of affordability and in consultation with the local community . The three main sources of health financing in Cambodia are household OOP payments, government funding derived from general revenue, and international donors . OOP payments account for the largest share of THE, mainly comprised of payments for drugs and user fees in the private and public sectors . From 2004 to 2007, catastrophic incidence declined in all economic quintiles, with the greatest declines observed in the higher quintiles . In 2007 about 50% of health services were sought from private providers, while 17% of health services were sought from public providers 1. The central Government uses a substantial part (70%) of its health budget for the procurement of drugs and medical equipment, and allocates the remainder to provincial governments (30%) . Each province maintains its own independent budget, which is used mainly to finance salaries and operational costs of public health facilities . Donor funding for health may be directed to central or provincial government or directly to nongovernmental organizations .

1 . Ministry of Health, Cambodia (2011), Cambodian demographic health survey and Cambodian socio-economic surveys analysis–Out-of-pocket expenditure on health

Cambodia 15 KHM–Figure 1. General trends in health expenditure per capita at exchange rate

50 GGHE

PvtHE 40

Current US$ per capita (at exchange rate) 10

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

KHM–Figure 2. General trends in health expenditure as % of GDP

10 GGHE as % of GDP 9 PvtHE as % of GDP 8

5 % of GDP 4

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

KHM–Figure 3. Trends in the structure of total health expenditure (THE)

100 GGHE 90 OOP

80 Other private

% of total health expenditure 30

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

16 Health financing country profiles in the western pacific region, 1995–2011 KHM–Figure 4. GGHE as % of government spending

36 34 32 30 28 26 24 22 20 18 16 % of government spending 14 12 10 8 6 4 2 0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

KHM–Figure 5. External resources for health as % of THE

50 % of THE 40

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Cambodia 17 The Government’s long-term aim is to achieve universal health coverage . The Strategic Framework for Health Financing 2008–2015 provides the overall policy framework for Cambodia’s health financing . The strategic framework stresses the need to remove financial and other barriers to access to health services for the poor and to protect the poor and the non-poor from the effects of catastrophic expenditures on health care . A draft Health Financing Policy sets out the general policy direction . In addition, a revised Health Financing Charter will provide a legal framework and maps out the steps that need to be taken in order to implement the health financing strategy towards universal coverage . Social health protection schemes include the Health Equity Funds (HEFs), which target the poor, and community-based health insurance (CBHI) . There are plans to extend health insurance to the formal private sector and civil servants through the National Social Security Fund (NSSF) . HEFs were introduced in 2000 . Under these schemes, poor patients are eligible to receive reimbursement for transport and food costs in addition to free care at public health facilities . HEFs also reimburse providers on a fee-for-service basis for the fees providers have forgone when treating poor patients . HEFs covered 2 45. million poor people, about 76% of their target population, in 2012 and are planned to expand to full coverage in 2015 . Various CBHI schemes operate in Cambodia, but coverage is limited . Households typically pay a low-cost premium in exchange for coverage for health charges for a stated list of medical benefits delivered at contracted public health facilities . The CBHI system then reimburses the contracted facilities, typically under a capitation scheme . Most of the remaining funds are provided by international donors . Finally, some large employers (rubber plantation estates and garment manufacturing units) have their own health facilities to provide health care for employees, while others reimburse the costs incurred at health facilities .

Way forward

The Cambodian health financing system is complex and fragmented . The main challenge for the Government in its drive to progress faster towards universal health coverage will be to harmonize different schemes and ensure pooling of risks and resources across all groups . As noted above, a new national health financing policy is in its final stages of development . To implement the health financing policy, the 1996 Health Financing Charter will be revised .

Selected references

• Annear P (2008) . Mid-term review of implementation: strategy on health care financing for countries of the Western Pacific and South-East Asia region (2006–2010) . • Ir P and Bigdeli M (2009) . Health financing strategies to improve access to health services for the poor in Cambodia: from pilot to policy and action—a case study of health equity funds . Annex in a high level meeting on promoting health equity: evidence, policy, and action . Phnom Penh, Cambodia . • Ministry of Health, Cambodia (2013) . Cambodian demographic health survey and Cambodian socio-economic surveys analysis – out-of-pocket expenditure on health . Phnom Penh, Cambodia . • Ministry of Health, Cambodia (2013) . Annual health financing report 2012 . Department of Planning and Health Information . Phnom Penh, Cambodia . • Ministry of Health, Cambodia (2010) . Second health sector support program 2009–2013, 2009 Annual Performance Monitoring Report . Phnom Penh, Cambodia .

18 Health financing country profiles in the western pacific region, 1995–2011 • Ministry of Health, Cambodia (2008) . Cambodia strategic framework for health financing 2008–2015 . Phnom Penh, Cambodia . • Ministry of Health, Cambodia (2008) . Health strategy plan 2008–2015, Accountability, Efficiency and Quality Equity . Phnom Penh, Cambodia . • WHO Western Pacific Region (2009) . Promoting health and equity: evidence, policy and action – cases from the Western Pacific Region . (http://www wpro. who. int/publications/. PUB_9879290614272/ en/index html. , accessed 21 February 2013) .

CAMBODIA 1995 2000 2005 2006 2007 2008 2009 2010 2011

GDP and health expenditures per capita (in current currency unit) ▪ Gross Domestic Product (GDP) – US dollar 308 295 471 538 632 749 744 795 897 – Cambodian riel 755 084 1 131 413 1 928 067 2 208 450 2 563 464 3 036 206 3 080 343 3 327 708 3 639 848 ▪ Total Health Expenditure (THE) – US dollar 19 19 33 30 28 41 47 48 51 – Cambodian riel 46 514 71590 134 370 124 474 112 488 164 195 195 393 200 774 207 849 ▪ Government Health Expenditure (GGHE) – US dollar 3 4 7 6 6 8 10 10 11 – Cambodian riel 7 879 14 625 29 540 26 519 24 958 30 815 39 557 43 241 46 653 ▪ Private Health Expenditure (PvtHE) – US dollar 16 15 26 24 22 33 38 38 40 – Cambodian riel 38 635 56 965 104 831 97 955 87 530 133 380 155 836 157 533 161 197 ▪ Out-of-pocket expenditure (OOP) – US dollar 13 13 20 17 15 25 29 28 29 – Cambodian riel 31 965 50 932 81 048 70 967 61 140 101 811 119 303 118 796 118 244 Health expenditure ratios THE as % of GDP 6.2 6.3 7.0 5.6 4.4 5.4 6.3 6.0 5.7 GGHE as % of GDP 1.0 1.3 1.5 1.2 1.0 1.0 1.3 1.3 1.3 PvtHE as % of GDP 5.1 5.0 5.4 4.4 3.4 4.4 5.1 4.7 4.4 GGHE as % of GGE 7.1 8.7 11.6 8.5 6.6 6.4 6.3 6.1 6.3 GGHE as % of THE 16.9 20.4 22.0 21.3 22.2 18.8 20.2 21.5 22.4 OOP as % of THE 68.7 71.1 60.3 57.0 54.4 62.0 61.1 59.2 56.9 Other private as % of THE 14.3 8.4 17.7 21.7 23.5 19.2 18.7 19.3 20.7 External resources 14.9 8.6 18.5 22.7 24.5 20.0 19.4 20.1 15.8 as % of THE All data for 2011 are provisional data Health Expenditure and GDP figures are expressed in current US dollar based on the average exchange rate for that year.

Cambodia 19 China

Health expenditure trends

China is a lower middle-income country with a population of 1 36. billion people in 2011 . Gross domestic product (GDP) per capita was US$ 5403 in 2011 . Since 2008, general government health expenditure (GGHE) has been the largest source of health financing . The expenditures are mainly financed through social health insurance SHI( ) . Nonetheless, out-of-pocket (OOP) payments remain an important source of financing . In 2011, total health expenditure (THE) was 5 1%. of GDP, equivalent to US$ 278 per capita . OOP payments made up 34 8%. of THE; GGHE was 55 9%. of the . GGHE amounted to US$ 155 per capita and represented 12 5%. of general government expenditure (GGE) and 2 9%. of gdp . Figures 1–5 show historical trends in health expenditure . THE has been increasing relatively rapidly in the last decade . After peaking in 2001 at nearly 60 .0%, OOP payments have been on a downward trend . At the same time, the government share of THE has increased from 35 6%. in 2001 to 55 .9% in 2010 . Figure 4 shows that the Government’s priority to health has declined from 1995 to 2001, but has been slightly increasing since 2006 .

Health financing system

China has a three-tier health service delivery system, including primary health-care facilities, secondary hospitals and tertiary hospitals . Since China’s health system reform in 2009, Chinese the government put special emphasis on primary health care, and one of the Government’s five implementation plans is to improve the grass-roots health services system 1. The Government is main source of health financing in China . The contribution of OOP payments to THE has been declining in recent years as a result of China’s political commitment to health system reforms with increased government funding and the drive to achieve universal health coverage within 10 years . China currently has three main SHI schemes: the New Rural Cooperative Medical Scheme (NRCMS), Urban Employees Basic Medical Insurance (UEBMI) and Urban Residents Basic Medical Insurance (URBMI) . As a whole, 61 2%. population has NRCMS, with 18 5%. and 16 2%. of the population insured by UEBMI and URBMI respectively in 2011 .2 Under all three schemes, providers commonly are paid on a fee-for-service basis under a fees schedule set by the Government . However, for high-tech services, hospitals can set the prices, which may vary among the level of hospitals .

• New Rural Cooperative Medical Scheme (NRCMS) The New Rural Cooperative Medical Scheme (NRCMS) was set up in 2003 with the aim of providing medical coverage for China’s rural population . All rural populations are eligible to join the NRCMS, which is administered and operated by respective rural counties . Enrolment is currently voluntary .

1 . state Council of the People’s Republic of China (2009) . Notice on the publishing of health system reform key implementation plan in recent years (2009-2011) .[Chinese] . http://www gov. cn/zwgk/2009-04/07/content_1279256. .htm 2 . ministry of Health of p .rChina . . Abstract of 2012 China Health Statistics . http://www .moh gov. cn/zwgkzt/ptjty/201206/55044/files/3ca7756121334b7a870a25ac79988f23. .pdf

20 Health financing country profiles in the western pacific region, 1995–2011 By 2011, universal health coverage of the rural population was nearly achieved with 97 5%. of the rural population receiving insurance from NRCms 2. NRCMS premiums come from three sources – the central Government, local governments and individuals . The contribution rates are flat rates and vary by county . The pooling of funds is done at the county level . All county programmes cover at least a portion of inpatient expenses, with patients cost sharing about 30%–40% . For outpatient services, there is cost sharing by patients for only some high-cost services .

• Urban Employees Basic Medical Insurance (UEBMI) The Urban Employees Basic Medical Insurance (UEBMI) scheme is mandatory for all urban employees in both public and private companies . Each local government has a dedicated insurance management department that is responsible for managing the locality’s UEBmi . It is estimated that 67% of urban employees were covered under UEBMI by the end of 2008, and in 2011 there were 252 million people insured by UEBmi 2. Premiums are set at 8% of an employee’s monthly payroll, of which employees contribute 2% while their employer provides the remaining 6% . The pooling of funds is done at the municipal city level . Patient share about 20% of the cost for inpatient services . For outpatient services, after exhausting an individual Medical Savings Account, a deductible is applied up to a certain threshold, after which 85% of the remaining amount is reimbursed up to an upper ceiling .

• Urban Residents Basic Medical Insurance (URBMI) Urban Residents Basic Medical Insurance (URBMI) is a newly established, government-subsidized voluntary insurance scheme, primarily targeting urban residents who have been unemployed for a long-time, elderly people without pensions, students, and all children regardless of their parents’ employment status . It is financed by household or individual contributions in addition to government subsidies with local governments having autonomy in determining the financing level and the details of the schemes . This has led to large variations in financing levels across regions due to differential financing capacities .3 By 2011 there were 221 million people insured by URBmi 2. The pooling of funds is done at the municipality level . Similar to NRCMS, patients share about 30%–40% of the cost of inpatient services and some high-cost services for outpatient services .

• Medical Financial Assistance Program (MFA) In addition to these three medical insurance schemes, China also introduced a Medical Financial Assistance programme in 2003 to offer protection to both the urban and rural poor who fall below the poverty line . The MFA contributes the premiums of NRCMS and UEBMI on behalf of MFA- eligible people and reimburses the copayments of medical expenditures for those who cannot afford their medical bills . By the end of 2009, the MFA had supported 12 .8 million urban poor to participate in URBMI and another 43 7. million rural poor to participate in NRCms . 154 .3 billion RMB (US$ 24 5. million) was invested in MFA, with 103 300 million RMB for rural residents 2.

3 . li, C ., Yu, X ., & Yu, m . (2010) . The Comparative analysis of urban resident basic medical insurance schemes of four cities in eastern and western China . Chinese Health Economics, 7, 12e13 .

China 21 CHN–Figure 1. General trends in health expenditure per capita at exchange rate

300 GGHE

PvtHE 250

200

150

100 Current US$ per capita (at exchange rate) 50

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

CHN–Figure 2. General trends in health expenditure as % of GDP

5 GGHE as % of GDP

4.5 PvtHE as % of GDP

3.5

2.5 % of GDP

1.5

0.5

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

CHN–Figure 3. Trends in the structure of total health expenditure (THE)

100 GGHE 90 OOP

80 Other private

% of total health expenditure 30

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

22 Health financing country profiles in the western pacific region, 1995–2011 CHN–Figure 4. GGHE as % of government spending

36 34 32 30 28 26 24 22 20 18 16 % of government spending 14 12 10 8 6 4 2 0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

CHN–Figure 5. External resources for health as % of THE

50 % of THE 40

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

China 23 Way forward

China’s health reform has focused on several priorities . One of the major priorities is to improve the health insurance system, for example by integrating the three main health insurance schemes . Primary health care is another key area of reform that involves strengthening service delivery at the different levels of facilities, access to essential medicines and the role of the general practitioner . As a majority of hospitals in China are public, public hospital reform is another main area of focus for the overall health reform and aims to improve public hospital efficiency and the quality of health services . Within the past decade, China has increased government expenditure on health and made significant progress towards universal health coverage . In the early stages of the reform, China will continue to address some challenges, such as the integration of health insurance schemes and of public health services in primary-level health facilities .

Selected References

• Ministry of Health of p .rChina . . Abstract of 2012 China health statistics . (http://www .moh gov. . cn/zwgkzt/ptjty/201206/55044/files/3ca7756121334b7a870a25ac79988f23 .pdf, accessed 21 February 2013) . • Li C Yu X and M Yu (2010) . The Comparative analysis of urban resident basic medical insurance schemes of four cities in eastern and western China . Chinese Health Economics, 7, 12(13) . • Ministry of Health of p .rChina . . Abstract of 2012 China health statistics . (http://www .moh gov. . cn/zwgkzt/ptjty/201206/55044/files/3ca7756121334b7a870a25ac79988f23 .pdf, accessed 1 November 2013) . • State Council Evaluation Group for the UREMI Pilot Program (2008) . Report on UREMI pilot programmes [Chinese] . • State Council of the People’s Republic of China (2009) . Notice on the publishing of health system reform key implementation plan in recent years (2009–2011)[Chinese] . (http://www gov. cn/zwgk/2009-04/07/content_1279256. htm. , accessed 21 February 2013) .

24 Health financing country profiles in the western pacific region, 1995–2011 CHINA 1995 2000 2005 2006 2007 2008 2009 2010 2011

GDP and health expenditures per capita (in current currency unit) ▪ Gross Domestic Product (GDP) – US dollar 596 939 1 716 2 052 2 629 3 384 3 717 4 396 5 403 – Chinese yuan 4 981 7 773 14 065 16 364 20 003 23 511 25 394 29 765 34 909 ▪ Total Health Expenditure (THE) – US dollar 21 43 80 93 114 157 191 219 278 – Chinese yuan 177 359 659 745 871 1 088 1 307 1 481 1 796 ▪ Government Health Expenditure (GGHE) – US dollar 11 17 31 38 54 78 100 119 155 – Chinese yuan 89 138 255 303 409 544 686 804 1 004 ▪ Private Health Expenditure (PvtHE) – US dollar 10 27 49 55 61 78 91 100 123 – Chinese yuan 87 222 403 442 462 545 621 677 792 ▪ Out-of-pocket expenditure (OOP) – US dollar 10 26 42 46 50 63 72 77 97 – Chinese yuan 82 212 344 367 384 440 489 523 625 Health expenditure ratios THE as % of GDP 3.5 4.6 4.7 4.6 4.4 4.6 5.1 5.0 5.1 GGHE as % of GDP 1.8 1.8 1.8 1.8 2.0 2.3 2.7 2.7 2.9 PvtHE as % of GDP 1.8 2.9 2.9 2.7 2.3 2.3 2.4 2.3 2.3 GGHE as % of GGE 15.2 10.9 9.9 9.9 10.9 11.6 12.1 12.1 12.5 GGHE as % of THE 50.5 38.3 38.8 40.7 46.9 49.9 52.5 54.3 55.9 OOP as % of THE 46.4 59.0 52.2 49.3 44.1 40.4 37.5 35.3 34.8 Other private as % of THE 3.1 2.7 9.0 10.0 9.0 9.6 10.0 10.4 9.3 External resources – – – – – – – – – as % of THE All data for 2011 are provisional data Health Expenditure and GDP figures are expressed in current US dollar based on the average exchange rate for that year.

China 25 Cook Islands

Health expenditure trends Cooks Islands are a self-governing territory in free association with New Zealand . It had a population of 20 414 people in 2011 . Gross domestic product (GDP) per capita was US$ 11 168 in 2011 . The predominant source of health-care financing in Cooks Islands is the general government health expenditure, with support from external donors . In 2011, total health expenditure (THE) was 4 .3% of GDP, equivalent to US$ 614 per capita . Out- of-pocket (OOP) payments made up 7 .5% of THE; general government health expenditure (GGHE) was 92 5%. of the . GGHE amounted to US$ 568 per capita and represented 14 3%. of general government expenditure (GGE) and 4 .0% of gdp . External resources for health are 6 .3% of the . Figures 1–5 show historical trends in health expenditure . As health care is predominantly financed though general taxation, OOP health expenditures as a share of THE are relatively small . Figure 4 shows that the percentage of general government spending on health has remained at a stable 12% of total government expenditure since 2003 .

Health financing system

Health services in Cooks Island are mainly provided and financed by the Government and provided by clinics, health centres and one general hospital in Rarotonga . User fees are charged for inpatient and outpatient health services on a tiered fees-for-service (FFS) basis based on citizenship, residency and age groups . Citizens and permanent residents below 16 or above 60 years old are eligible to receive a wide range of health-care services for free, while visitors pay the highest fee schedule for both consultation and inpatient services . Private health services are mainly provided by private general practitioners . Access to tertiary services overseas must be made through the main referral hospital in Rarotonga, usually to New Zealand . Resident Cook Islanders and permanent residents are eligible to enjoy overseas treatment for free . In 2012, the total health budget was approximately New Zealand dollar (NZD$) 11 3. million (NZD$ 755 per capita) . A majority of the budget was allocated towards hospital health services, followed by outer island health services and community health services 1.

Way forward

Cook Islands main challenges for the coming years will centre on the continued increase in health expenditures and the related need to rationalize the cost and system of referral . Dependence on external resources, specifically New Zealand, should also be addressed .

1 . who and Ministry of Health, Cook Islands (2012) . Cook Islands, Health care delivery profile 2012, (http://www wpro. who. .int/ health_services/service_delivery_profile_cook_islands .pdf, accessed 21 February 2013) .

26 Health financing country profiles in the western pacific region, 1995–2011 COK–Figure 1. General trends in health expenditure per capita at exchange rate

600 GGHE

PvtHE 500

400

300

200 Current US$ per capita (at exchange rate) 100

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

COK–Figure 2. General trends in health expenditure as % of GDP

5 GGHE as % of GDP

PvtHE as % of GDP

3 % of GDP

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

COK–Figure 3. Trends in the structure of total health expenditure (THE)

100 GGHE 90 OOP

80 Other private

% of total health expenditure 30

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Cook Islands 27 COK–Figure 4. GGHE as % of government spending

36 34 32 30 28 26 24 22 20 18 16 % of government spending 14 12 10 8 6 4 2 0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

COK–Figure 5. External resources for health as % of THE

50 % of THE 40

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

28 Health financing country profiles in the western pacific region, 1995–2011 Selected references

• Ministry of Health . Patient referral policy (August 2010), (http://www .health gov. ck. , accessed 21 February 2013) . • Te Marae Ora Ministry of Health user charges schedule (October 2010) . (http://www health. gov. ck. , accessed 21 February 2013) . • WHO and Ministry of Health, Cook Islands (2012) . Cook Islands, Health care delivery profile 2012 . (http://www wpro. who. int/health_services/service_delivery_profile_cook_islands. .pdf, accessed 21 February 2013) .

cook islands 1995 2000 2005 2006 2007 2008 2009 2010 2011

GDP and health expenditures per capita (in current currency unit) ▪ Gross Domestic Product (GDP) – US dollar 5 101 5 139 9 409 9 556 11 477 11 661 10 729 12 654 14 189 – New Zealand dollar 7 774 11 312 13 364 14 735 15 616 16 590 17 168 17 557 17 961 ▪ Total Health Expenditure (THE) – US dollar 268 175 439 386 464 457 439 544 614 – New Zealand dollar 408 384 624 595 631 650 703 755 778 ▪ Government Health Expenditure (GGHE) – US dollar 244 158 414 359 427 420 408 506 568 – New Zealand dollar 372 348 588 553 581 598 652 701 719 ▪ Private Health Expenditure (PvtHE) – US dollar 23 17 25 27 37 37 31 38 46 – New Zealand dollar 35 36 36 42 50 52 50 53 58 ▪ Out-of-pocket expenditure (OOP) – US dollar 23 17 25 27 37 37 31 38 46 – New Zealand dollar 35 36 36 42 50 52 50 53 58 Health expenditure ratios THE as % of GDP 5.2 3.4 4.7 4.0 4.0 3.9 4.1 4.3 4.3 GGHE as % of GDP 4.8 3.1 4.4 3.8 3.7 3.6 3.8 4.0 4.0 PvtHE as % of GDP 0.5 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 GGHE as % of GGE 9.9 9.9 13.2 11.3 12.4 12.5 11.6 11.9 14.3 GGHE as % of THE 91.3 90.5 94.3 92.9 92.1 92.0 92.8 92.9 92.5 OOP as % of THE 8.7 9.5 5.7 7.1 7.9 8.0 7.2 7.1 7.5 Other private as % of THE 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 External resources – 2.2 21.0 5.8 16.4 7.5 3.7 5.8 6.3 as % of THE All data for 2011 are provisional data Health Expenditure and GDP figures are expressed in current US dollar based on the average exchange rate for that year.

Cook Islands 29 Fiji

Health expenditure trends

Fiji is a Pacific island country with a population of 868 406 people in 2011 . Gross domestic product (GDP) per capita was US$ 4397 in 2011 . The predominant source of health-care financing is general government health expenditure (GGHE), which is mainly financed through general taxation . In 2011, total health expenditure (THE) was 3 .8% of GDP, equivalent to US$ 168 per capita . Out- of-pocket (OOP) payments made up 21 .0% of THE; GGHE was 68 1%. of the . GGHE amounted to US$ 114 per capita and represented 9 1%. of general government expenditure (GGE) and 2 6%. of gdp . External resources for health are 7 7%. of the . Figures 1–5 show historical trends in health expenditure . THE has generally been on an upward trend . In the meantime, the structure of health expenditure has stayed almost uniform during the period, with the tendency of OOP payments occupying an increasing percentage of the . Figure 4 shows that the Government’s priority to health fluctuates at about 10% of total government spending .

Health financing system

Health services in Fiji are mainly provided and financed by the Government . According to The Fiji Islands Health System Review, “16 subdivisional hospitals, three area hospitals, 77 health centres and 101 nursing stations” provide public health services 1. Both inpatient and outpatient services are provided free, unless patients choose to be admitted to “paying wards” where a range of fees apply . While government health facilities provide medicines on the essential medicines list for free, some of these facilities still lack the resources to provide some services . The private sector is small, and “two private hospitals in Suva (and another under construction)… provide a range of specialized services, [as do] several day clinics and 130 private general practitioners located mostly in the urban centres of the two main islands, Viti Levu and Vanua Levu” 1. The private sector is financed by OOP payments and provides services at a cost to those willing to pay, with a large variation in the user fees across practitioners 1. Public health services are largely financed through general tax revenues . Other sources of funding are donor assistance for service enhancement, a small cost-recovery programme of user charges and a revolving drug fund account for community pharmacies . The trend in the past few years has been of an increase in the share of private health expenditure and a decrease in the Government’s expenditure . While no compulsory social insurance scheme exists, there are limited voluntary health insurance schemes available 1.

1 . Asia Pacific Observatory on Health Systems and Policies . Health Systems in Transition (2011):1(1) . The Fiji Islands health system review . Manila, World Health Organization Regional Office for theW estern Pacific .

30 Health financing country profiles in the western pacific region, 1995–2011 FIJ–Figure 1. General trends in health expenditure per capita at exchange rate

180 GGHE 160 PvtHE

140

120

100

Current US$ per capita (at exchange rate) 40

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

FIJ–Figure 2. General trends in health expenditure as % of GDP

4.5 GGHE as % of GDP 4 PvtHE as % of GDP

3.5

2.5

% of GDP 2

1.5

0.5

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

FIJ–Figure 3. Trends in the structure of total health expenditure (THE)

100 GGHE 90 OOP

80 Other private

% of total health expenditure 30

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Fiji 31 FIJ–Figure 4. GGHE as % of government spending

36 34 32 30 28 26 24 22 20 18 16 % of government spending 14 12 10 8 6 4 2 0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

FIJ–Figure 5. External resources for health as % of THE

50 % of THE 40

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

32 Health financing country profiles in the western pacific region, 1995–2011 Way forward

Because of increasing pressures on the predominantly publicly funded health system, the Ministry of Health is examining a range of health financing options, including social health insurance . The challenge of how to meet its service delivery gaps and improve equity in financing and access to service delivery will become more pressing if the current trend of increased private health expenditures continues .

Selected references

• Asia Pacific Observatory on Health Systems and Policies . Health Systems in Transition (2011):1(1) . The Fiji Islands health system review . Manila, World Health Organization Regional Office for the Western Pacific . • Ministry of Health, Fiji . Strategic plan 2007–2011 . Strategic Framework for Change Coordinating Office, Fiji . (http://sfcco gov. fj/index. .php?option=com_docman&task=cat_view&gid=9&Itemid=45, accessed 21 February 2013) .

FIJI 1995 2000 2005 2006 2007 2008 2009 2010 2011

GDP and health expenditures per capita (in current currency unit) ▪ Gross Domestic Product (GDP) – US dollar 2 540 2 075 3 655 3 747 4 077 4 256 3 381 3 687 4 397 – Fijian dollar 3 572 4 416 6 181 6 487 6 565 6 783 6 613 7 073 7 884 ▪ Total Health Expenditure (THE) – US dollar 78 79 132 144 152 154 146 155 168 – Fijian dollar 109 169 223 249 246 245 285 297 301 ▪ Government Health Expenditure (GGHE) – US dollar 63 67 107 113 114 116 102 109 114 – Fijian dollar 88 143 181 195 183 185 199 209 205 ▪ Private Health Expenditure (PvtHE) – US dollar 15 12 25 31 39 38 44 46 53 – Fijian dollar 21 26 42 54 62 60 86 88 96 ▪ Out-of-pocket expenditure (OOP) – US dollar 10 8 16 20 24 24 32 30 35 – Fijian dollar 14 17 26 34 38 38 62 58 63 Health expenditure ratios THE as % of GDP 3.1 3.8 3.6 3.8 3.7 3.6 4.3 4.2 3.8 GGHE as % of GDP 2.5 3.2 2.9 3.0 2.8 2.7 3.0 2.9 2.6 PvtHE as % of GDP 0.6 0.6 0.7 0.8 0.9 0.9 1.3 1.2 1.2 GGHE as % of GGE 9.5 11.3 10.7 10.4 10.2 10.9 10.3 10.8 9.1 GGHE as % of THE 80.4 84.6 81.4 78.4 74.6 75.6 69.9 70.2 68.1 OOP as % of THE 12.4 9.8 11.8 13.7 15.4 15.5 21.8 19.6 21.0 Other private as % of THE 7.2 5.6 6.8 8.0 9.9 8.9 8.3 10.2 10.9 External resources 5.8 7.5 8.4 5.7 3.4 5.9 6.0 8.6 7.7 as % of THE All data for 2011 are provisional data Health Expenditure and GDP figures are expressed in current US dollar based on the average exchange rate for that year.

Fiji 33 Federated States of Micronesia

Health expenditure trends The Federated States of Micronesia is a Pacific island country with a population of 111 538 people in 2011 . Gross domestic product (GDP) per capita was US$ 2852 in 2011 . The predominant source of health-care financing is general government health expenditure GGHE( ), which is mainly financed through general taxation and is largely supported by external donors . In 2011, total health expenditure (THE) was 13 8%. of GDP, equivalent to US$ 383 per capita . Out-of-pocket (OOP) payments made up 9 .0% of THE; GGHE was 90 .8% of the . GGHE amounted to US$ 347 per capita and represented 19 8%. of general government expenditure (GGE) and 12 5%. of gdp . Figures 1–5 show historical trends in health expenditure . THE has been on an upward trend since 1999 . The Government’s contribution to THE has been falling since 2004 but still accounted over 90%, while the contribution from OOP payments has been increasing . Figure 4 shows that the Government’s priority to health has been on an upward trend .

Health financing system

Health services in the Federated States of Micronesia are largely financed and administered by the Government, with substantial financial support from donors . The Division of Health is mainly responsible for health planning, donor coordination, and technical and training assistance, as well as the provision of preventive medicine and public health programmes . Each of the four state governments in the country maintains its own health services autonomously . There is a main public hospital in each state serving residents of the urban (state) centres and numerous dispensaries serving residents who live in the outer islands . Health services are highly subsidized by the state governments . In comparison to the public sector, the private sector is comparatively small and consisted of one private hospital and six private clinics in 2011 . Patients requiring tertiary health services are referred to overseas hospitals in Guam, Hawaii and the Philippines . Health services are financed through a mixture of external donor funding, including Compact of Free Association funding and United States of America federal programmes, the government budget, and private expenditure . External donor funds account for a large share of public expenditure on health and are distributed to both national and state governments . Private health financing includes household OOP payments to private facilities, expenditure by private companies to provide health care to their employees and expenditure by nonprofit institutions serving households . MiCare is the country’s main health insurance scheme, but enrolment is not mandatory . All individuals who are government employees and their dependents, students attending country post-secondary institutions, former members of the MiCare Plan, and individual employees of the participating entities and their dependents are eligible to enrol in the plan . Given that participation of eligible individuals in MiCare has remained optional since the inception of the programme, the plan covers only a small portion of the population .

34 Health financing country profiles in the western pacific region, 1995–2011 FSM–Figure 1. General trends in health expenditure per capita at exchange rate

400 GGHE

350 PvtHE

300

250

200

150

100 Current US$ per capita (at exchange rate)

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

FSM–Figure 2. General trends in health expenditure as % of GDP

14 GGHE as % of GDP

PvtHE as % of GDP 12

8 % of GDP 6

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

FSM–Figure 3. Trends in the structure of total health expenditure (THE)

100 GGHE 90 OOP

80 Other private

% of total health expenditure 30

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Federated States of Micronesia 35 FSM–Figure 4. GGHE as % of government spending

36 34 32 30 28 26 24 22 20 18 16 % of government spending 14 12 10 8 6 4 2 0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

FSM–Figure 5. External resources for health as % of THE

50 % of THE 40

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

36 Health financing country profiles in the western pacific region, 1995–2011 Way forward

The vision of MiCare is ultimately to extend medical coverage to more citizens at affordable rates . However, the financial dependence on donors and the continued need to refer patients outside of the islands for tertiary services are the main challenges facing the health system . In view of the financial pressures on the overseas referral system, theG overnment is considering alternative overseas medical locations .

Selected references

• Division of Health, Department of Health and Social Affairs, Federated States of Micronesia (2010) . Federated States of Micronesia national health expenditure 2005–2008 . (http://who int/nha/country/. fsm/fsm_nha_2005-08 pdf. , accessed 21 February 2013) . • Federated States of Micronesia health insurance plan: MiCare (2008) . (http://micareplan fm. , accessed 21 February 2013) .

FEDERATED STATES 1995 2000 2005 2006 2007 2008 2009 2010 2011 OF MICRONESIA GDP and health expenditures per capita (in current currency unit) ▪ Gross Domestic Product (GDP) – US dollar 2 071 2 178 2 283 2 304 2 324 2 368 2 507 2 648 2 782 ▪ Total Health Expenditure (THE) – US dollar 189 170 277 275 279 306 336 365 383 ▪ Government Health Expenditure (GGHE) – US dollar 180 160 258 254 259 277 305 334 347 ▪ Private Health Expenditure (PvtHE) – US dollar 9 10 18 21 20 29 31 32 35 ▪ Out-of-pocket expenditure (OOP) – US dollar 9 10 18 20 19 29 30 31 34 Health expenditure ratios THE as % of GDP 9.1 7.8 12.1 11.9 12.0 12.9 13.4 13.8 13.8 GGHE as % of GDP 8.7 7.3 11.3 11.0 11.1 11.7 12.2 12.6 12.5 PvtHE as % of GDP 0.4 0.5 0.8 0.9 0.9 1.2 1.2 1.2 1.3 GGHE as % of GGE 11.3 10.9 19.1 18.3 18.8 19.8 18.9 18.6 19.8 GGHE as % of THE 95.2 93.9 93.4 92.5 92.9 90.4 90.7 91.3 90.8 OOP as % of THE 4.8 6.1 6.4 7.2 6.7 9.4 9.1 8.4 9.0 Other private as % of THE 0.0 0.0 0.2 0.2 0.4 0.2 0.2 0.2 0.2 External resources 61.6 71.5 71.4 69.4 72.2 67.2 74.3 74.6 68.7 as % of THE All data for 2011 are provisional data Health Expenditure and GDP figures are expressed in current US dollar based on the average exchange rate for that year.

Federated States of Micronesia 37 Japan

Health expenditure trends Japan is a high-income country with a population of 128 .0 million people in 2011 . Gross domestic product (GDP) per capita was US$ 46 064 in 2011 . The predominant source of health-care financing is general government health expenditure GGHE( ), which is mainly financed through social health insurance (SHI) . In 2011, total health expenditure (THE) was 9 .53 of GDP, equivalent to US$ 4268 per capita . Out- of-pocket (OOP) payments made up 16 .4% of THE; GGHE was 79 .9% of the . GGHE amounted to US$ 3412 per capita and represented 18 .2% of general government expenditure (GGE) of 7 .4% of gdp . Figures 1–5 show historical trends in health expenditure . THE has been increasing steadily since 2008 . In the meantime, the structure of health expenditure has stayed almost uniform during the period, with GGHE occupying more than 80% of the . Figure 4 shows that the Government’s priority has remained relatively stable at 18% of GGE for the past decade .

Health financing system

Health services in Japan are provided by both the public and the private sectors but are financed largely by the country’s various social health insurance (SHI) schemes, with subsidies from the Government . Primary care is supplied by the country’s 90 000 physician-run clinics . Secondary care is provided by hospitals, which may be privately owned or run by the Government . All providers, whether private or public, are paid on a fees-for service (FFS) basis under a price schedule set by the Government . Preventive services are funded by general tax and delivered mainly by local public health authorities . Social health insurance (SHI) is the main source of heath financing in Japan . Public financing of health, which includes both government expenditure on health derived from its general budget and SHI, makes up about 80% of total health expenditure (THE) . Private financing is made up of OOP payments and private insurance . Private health insurance complements SHI in Japan . Private insurance typically provide lump-sum payments for services not fully covered by shi . Enrolment into one of the Japan’s SHI schemes is compulsory for residents of Japan . The health insurance system in Japan is complex, but the numerous SHI schemes can be broadly classified into three categories: employment-based insurance, the national health insurance scheme, and medical insurance for the elderly . Employment-based insurance covers all employed workers and their dependents, and is further subdivided into the Society-Managed Health Insurance (SMHI) scheme which covers employees of large companies (more than 700 workers), and Japan Health Insurance Association-Managed Health Insurance (JHIAHI), which covers employees of small- and medium-sized enterprises . Under the SMHI, each large company is covered by an insurance society . The premium rate of these societies ranges from 3%–10% of monthly wages, and is shared equally by employees and employers . JHIAHI is a single insurance scheme managed by Japan Health Insurance Association (JHIA) . The premium rate of 8 .2% of wages is shared equally between employers and employees .

38 Health financing country profiles in the western pacific region, 1995–2011 JPN–Figure 1. General trends in health expenditure per capita at exchange rate

4500 GGHE 4000 PvtHE

3500

3000

2500

2000

1500

Current US$ per capita (at exchange rate) 1000

500

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

JPN–Figure 2. General trends in health expenditure as % of GDP

10 GGHE as % of GDP 9 PvtHE as % of GDP 8

5 % of GDP 4

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

JPN–Figure 3. Trends in the structure of total health expenditure (THE)

100 GGHE 90 OOP

80 Other private

% of total health expenditure 30

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Japan 39 JPN–Figure 4. GGHE as % of government spending

36 34 32 30 28 26 24 22 20 18 16 % of government spending 14 12 10 8 6 4 2 0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

JPN–Figure 5. External resources for health as % of THE

50 % of THE 40

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

40 Health financing country profiles in the western pacific region, 1995–2011 The National Health Insurance (NHI) covers residents who are not eligible for employment-based health insurance, including farmers, the self-employed, the unemployed and the retirees . Each municipal government runs its own insurance schemes and local governments set the level of premiums for their health insurance schemes . Finally, there is a special medical scheme for the elderly run by municipalities, which is financed through transfers from all insurers and the Government . Despite some differences in the degree of cost sharing, the range of benefits and the level of national subsidy, these programmes are broadly similar in terms of health services covered and reimbursement procedures for services provided . All funds cover a broad range of medical services including hospital and physician care, dental care and pharmaceuticals . At the same time, they all place a cap on the amount of OOP spending health consumers may incur in a year . All SHI schemes compensate medical providers directly for their services . Specific levels of remunerations are defined for all medical procedures under a price list set by Japan’s Ministry of Health, Labour and Welfare . Once every two years, the Health Ministry negotiates a fixed price for every procedure and every drug with the health-care industry .

Way forward

While the Japanese health financing system has been highly rated by the Organisation for Economic Co-operation and Development (OECD) as extremely efficient and effective and for providing good access to services for the entire population,1 the Japanese Government is having to face various challenges, including rapid technological changes in health care, a rapidly ageing population as well as fiscal constraints .

Selected references

• Legislative Council Secretariat (2010) . Fact sheet: health care financing in Japan . (http://www . legco gov. hk/yr09-10/english/sec/library/0910fs18_20100830-e. pdf. , accessed 1 November 2013) . • Organization for Economic Cooperation and Development (2009) . Health-care reform in Japan: controlling costs, improving quality and ensuring equity . Paris, Organization for Economic Cooperation and Development . • Tatara K, Okamoto E (2009) . Japan: health system review . Health Systems in • Transition; 11(5): 1–164 . (http://www euro. who. .int/__data/assets/pdf_file/0011/85466/E92927 pdf. , accessed 21 February 2013) . • World Health Organization (2009) . Western Pacific Country Health Information Profiles 2009 revision . Manila, World Health Organization Regional Office for the Western Pacific .

1 . egislative l Council Secretariat (2010) . Fact sheet: health care financing in Japan . (http://www legco. gov. .hk/yr09-10/english/ sec/library/0910fs18_20100830-e .pdf, accessed 1 November 2013) .

Japan 41 JAPAN 1995 2000 2005 2006 2007 2008 2009 2010 2011

GDP and health expenditures per capita (in current currency unit) ▪ Gross Domestic Product (GDP) – US dollar 42 478 37 275 35 783 34 099 34 095 37 976 39 489 42 859 46 064 – Japanese yen 3 995 436 4 016 991 3 943 921 3 965 649 4 014 833 3 925 143 3 694 944 3 762 178 3 676 231 ▪ Total Health Expenditure (THE) – US dollar 2 891 2 834 2 928 2 796 2 806 3 253 3 736 3 958 4 268 – Japanese yen 271 965 305 429 322 688 325 128 330 400 336 237 349 572 347 474 340 618 ▪ Government Health Expenditure (GGHE) – US dollar 2 379 2 290 2 388 2 221 2 255 2 628 3 008 3 179 3 412 – Japanese yen 223 741 246 824 263 237 258 304 265 573 271 617 281 447 279 042 272 322 ▪ Private Health Expenditure (PvtHE) – US dollar 513 544 539 575 551 625 728 780 856 – Japanese yen 48 225 58 605 59 452 66 824 64 827 64 621 68 125 68 432 68 296 ▪ Out-of-pocket expenditure (OOP) – US dollar 404 436 451 475 452 513 597 639 702 – Japanese yen 38 026 46 945 49 698 55 246 53 276 53 050 55 871 56 122 56 011 Health expenditure ratios THE as % of GDP 6.8 7.6 8.2 8.2 8.2 8.6 9.5 9.2 9.3 GGHE as % of GDP 5.6 6.1 6.7 6.5 6.6 6.9 7.6 7.4 7.4 PvtHE as % of GDP 1.2 1.5 1.5 1.7 1.6 1.6 1.8 1.8 1.9 GGHE as % of GGE 15.5 16.2 18.3 18.1 18.5 18.7 18.2 18.2 18.2 GGHE as % of THE 82.3 80.8 81.6 79.4 80.4 80.8 80.5 80.3 79.9 OOP as % of THE 14.0 15.4 15.4 17.0 16.1 15.8 16.0 16.2 16.4 Other private as % of 3.7 3.8 3.0 3.6 3.5 3.4 3.5 3.5 3.6 THE External resources 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 as % of THE All data for 2011 are provisional data Health Expenditure and GDP figures are expressed in current US dollar based on the average exchange rate for that year.

42 Health financing country profiles in the western pacific region, 1995–2011 Kiribati

Health expenditure trends

Kiribati is a Pacific island country with a population of 101 093 people in 2011 . Gross domestic product (GDP) per capita was US$ 1649 in 2011 . The predominant source of health–care financing is general government health expenditure (GGHE), which is mainly financed through general taxation and is substantially supported by external donors . In 2011, total health expenditure (THE) was 10 7%. of GDP, equivalent to US$ 177 per capita . Out–of–pocket (OOP) payments made up 1 .3% of THE; GGHE was 80 .0% of the . GGHE amounted to US$ 142 per capita and represented 10 0%. of general government expenditure (GGE) and 8 0%. of gdp . External resources made up 3 0%. of the . Figures 1–5 show historical trends in health expenditure . THE increased steadily from 1995 to 2007 . Other private expenditures have accounted for a much larger share of THE since 2006, although the Government remains the main contributor to the . Figure 4 shows that the Government’s priority to health has remained relatively constant since 2005 . Figure 5 shows large fluctuations in the share of external resources for health out of THE over time .

Health financing system

Kiribati has a publicly funded, publicly provided health system that is administered by the Ministry of Health and Medical Services (MHMS) . Citizens receive free medical service from the country’s one national referral hospital, three referral hospitals and 105 primary care facilities (30 health centres and 75 health clinics) 1. In order to access tertiary services, patients must fulfil the clinical criteria outlined by mhms . Overseas referrals are made by the national referral hospital in South Tawara to Fiji; India; New Zealand; and the United States of America . A traditional health system exists in parallel to the formal sector . There is no formal coordination or collaboration between the two systems, and traditional healers are not included in the formal health system or regulations 1. Most people use both traditional and formal health services . The Government is the main source of finance for health services in Kiribati . Public health services are financed mainly through general tax revenues . In addition, donor funding accounts for more than one quarter of total government expenditures on health . Public health services are mainly reliant on donor support 1. Out-of-pocket (OOP) payments constitute a very small share of THE although the share of private health expenditure has substantially increased since 2005 .

Way forward

There are efforts to develop the private sector to reduce pressures on the public health system . MHMS has recently permitted government doctors to establish fee–paying clinics at the national hospital after official hours . The Government is also considering charging a flat fee for outpatient hospital care as a way to make the distribution of public health subsidies more equitable across islands . Under the proposed plans, outer island dispensary visits would remain free, but the

1 . who and Ministry of Health and Medical Services, Kiribati (2012) . Republic of health service delivery profile, 2012 .

Kiribati 43 KIR–Figure 1. General trends in health expenditure per capita at exchange rate

180 GGHE 160 PvtHE

140

120

100

Current US$ per capita (at exchange rate) 40

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

KIR–Figure 2. General trends in health expenditure as % of GDP

14 GGHE as % of GDP

12 PvtHE as % of GDP

8 % of GDP 6

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

KIR–Figure 3. Trends in the structure of total health expenditure (THE)

100 GGHE 90 OOP

80 Other private

% of total health expenditure 30

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

44 Health financing country profiles in the western pacific region, 1995–2011 KIR–Figure 4. GGHE as % of government spending

36 34 32 30 28 26 24 22 20 18 16 % of government spending 14 12 10 8 6 4 2 0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

KIR–Figure 5. External resources for health as % of THE

50 % of THE 40

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Kiribati 45 more expensive hospital services that are disproportionately used by South Tarawa residents would incur a modest fee . The referral system also constitutes a challenge to the sustainability of the health sector .

Selected references

• The World Bank (2007) . Opportunities to improve social services in Kiribati . Human Development in the Pacific Islands Summary Report 38867 . (http://ddp–ext worldbank. org/. EdStats/KIRwp07 pdf. , accessed 21 February 2013) . • World Health Organization and Ministry of Health and Medical Services, Kiribati (2012) . Health service delivery profile: Kiribati . (http://www wpro. who. .int/health_services/service_delivery_ profile_kiribati .pdf, accessed 29 October 2013) .

KIRIBATI 1995 2000 2005 2006 2007 2008 2009 2010 2011

GDP and health expenditures per capita (in current currency unit) ▪ Gross Domestic Product (GDP) – US dollar 746 812 1 146 1 114 1 304 1 361 1 227 1 423 1 649 – Australian dollar 1 006 1 401 1 500 1 480 1 559 1 622 1 573 1 551 1 599 ▪ Total Health Expenditure (THE) – US dollar 70 64 116 122 177 171 159 162 177 – Australian dollar 95 111 152 162 211 204 204 177 172 ▪ Government Health Expenditure (GGHE) – US dollar 67 61 109 105 148 144 134 131 142 – Australian dollar 90 105 143 139 176 172 172 143 137 ▪ Private Health Expenditure (PvtHE) – US dollar 4 3 7 18 29 27 24 31 35 – Australian dollar 5 6 9 23 35 32 31 33 34 ▪ Out–of–pocket expenditure (OOP) – US dollar – – – – – – – 2 2 – Australian dollar – – – – – – – 2 2 Health expenditure ratios THE as % of GDP 9.4 7.9 10.1 11.0 13.6 12.6 12.9 11.4 10.7 GGHE as % of GDP 9.0 7.5 9.5 9.4 11.3 10.6 11.0 9.2 8.6 PvtHE as % of GDP 0.5 0.4 0.6 1.6 2.2 2.0 2.0 2.1 2.1 GGHE as % of GGE 10.3 8.8 8.9 10.2 12.4 11.3 12.0 10.0 10.0 GGHE as % of THE 95.0 94.6 94.1 85.7 83.5 84.3 84.7 81.2 80.0 OOP as % of THE – – – – – – – 1.2 1.3 Other private as % of – – – – – – – 17.6 18.7 THE External resources 28.5 28.4 1.2 16.2 17.1 27.7 36.1 16.9 3.0 as % of THE All data for 2011 are provisional data Health Expenditure and GDP figures are expressed in current US dollar based on the average exchange rate for that year.

46 Health financing country profiles in the western pacific region, 1995–2011 Lao People’s Democratic Republic

Health expenditure trends

The Lao People’s Democratic Republic is a lower-middle income country with a population of 6 .3 million people in 2011 . Gross domestic product (GDP) per capita was US$ 1313 in 2011 . Out- of-pocket (OOP) expenditures are the main source of health-care financing . General government health expenditures (GGHE) are financed through general taxation, but they are largely supported by external donors . In 2011, total health expenditure (THE) was 2 .8% of GDP, equivalent to US$ 37 per capita . OOP payments made up 39 .7% of THE; GGHE) was 49 .3% of the . GGHE amounted US$ 18 per capita and represented 6 1%. of general government expenditure (GGE) and 1 .4% of gdp . Figures 1–5 show historical trends in health expenditure . THE has been on a general upward trend since 1999 . In the meantime, GGHE decreased from 1995 to 2007 but has been increasing since 2008 . Figure 4 shows that GGHE as percentage of GGE has averaged 6% since 1999 .

Health financing system

Health services in the Lao People’s Democratic Republic are provided mainly by the Government, but they financed largely by household OOP payments . The Lao People’s Democratic Republic as of 2010 had seven central-level hospitals of which three are specialized centres, four regional hospitals, 16 provincial hospitals, 130 district hospitals and 894 health centres 1. The private sector for health is small but expanding . It consisted in 2010 of 222 private clinics, 1993 private pharmacies and numerous traditional medicine practitioners . User fees were introduced in 1996 and are now charged at most public and private health facilities, with exemptions in principle at public facilities for certain vulnerable groups . The private sector is also involved in the delivery of health services . The sources of financing are household OOP payments, government expenditure, donor aid and various prepayment schemes . OOP payments predominantly are spent on medicine at both public and private facilities . Donor funding comprises a significant proportion of total government expenditures . The public health system has been highly decentralized, and provincial governments have been granted control over provincial revenues and budgets for health . Consequently, per capita governmental health spending and coverage of key primary health interventions varied considerably across provinces and districts . Social health protection was introduced in 1975, and four social health protection schemes exist in the country – but their contribution to health financing is currently small . The main social health protection schemes include the State Authority for Social Security (SASS) that provides coverage for civil servants, the Social Security Organization (SSO) health insurance scheme,

1 . who and Ministry of Health, Lao People’s Democratic Republic (2012) . Health Service Delivery Profile: Lao People’s Democratic Republic . (http://www wpro. who. .int/health_services/service_delivery_profile_laopdr .pdf, accessed 21 February 2013) .

Lao People’s Democratic Republic 47 LAO–Figure 1. General trends in health expenditure per capita at exchange rate

40 GGHE

35 PvtHE

10 Current US$ per capita (at exchange rate)

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

LAO–Figure 2. General trends in health expenditure as % of GDP

7 GGHE as % of GDP

6 PvtHE as % of GDP

4 % of GDP 3

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

LAO–Figure 3. Trends in the structure of total health expenditure (THE)

100 GGHE 90 OOP

80 Other private

% of total health expenditure 30

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

48 Health financing country profiles in the western pacific region, 1995–2011 LAO–Figure 4. GGHE as % of government spending

36 34 32 30 28 26 24 22 20 18 16 % of government spending 14 12 10 8 6 4 2 0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

LAO–Figure 5. External resources for health as % of THE

50 % of THE 40

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Lao People’s Democratic Republic 49 community-based health insurance (CBHI), health equity funds (HEF), and free maternal, neonatal and child health (MNCH) services . Together they cover only about 20% of the total population in 2011 2. Reimbursements for providers under SASS and SSO schemes are made on a risk- adjusted capitation payment basis, while reimbursement for HEFs is made under a combination of capitation and case-based reimbursement . The SASS scheme is mandatory for all civil servants, and also covers their spouses and children . It is still administered by the Ministry of Labour and Social Welfare . However, according to the Decree on National Health Insurance issued in October 2012, SASS will move its health component to the Ministry of Health (MOH) . The employer (the Government) and the employee each contribute a payroll tax of 2% towards the premium 2. The benefit package covers all outpatient, inpatient and prescription drug fees at hospitals . Road traffic accidents and cosmetic surgery are excluded . Civil servants must register a district hospital as their primary provider and are covered only for services obtained in higher-level hospitals if they receive referrals . Providers are reimbursed by SASS on a capitation basis . The SSO-administered scheme is mandatory for salaried employees in the private sector, their spouses and children . It is still administered by the Ministry of Labour and Social Welfare . However, according to the Decree on National Health Insurance, SSO will move its health component to moh . Employers and employees contribute a payroll tax of 4% each as the premium . Benefits are similar to those provided by SAss . Those enrolled are permitted to select their primary provider . Health-care benefits include ambulatory and inpatient care . These are, in principle, without copayment or limits on the number of services provided, although in practice members still have to make OOP payments . Because the formal sector is limited in size and geographical scope, the SSO scheme is currently implemented in only four provinces . Although the scheme is officially mandatory, there is no mechanism in place to enforce employers to comply . Consequently, only about 10% to 15% of employers are enrolled . Some private employers opt to provide private health insurance or reimbursement for their employees, sometimes even in addition to participation in the SSO scheme . CBHI was a voluntary health insurance scheme launched by MOH in 2001 as a pilot project 3. It operated in 33 districts across 11 provinces as of December 2012 . Premiums vary between urban and rural areas and according to family size . Members are eligible for a benefit package similar to SASS and sso . Unlike the SSO and SASS schemes, CBHI does not cover referrals to central hospitals except in Vientiane Capital . Only about 6% of the target population was enrolled in CBHI in 2011 2. HEFs have been introduced in various parts of the country by international agencies since 2003 . HEFs target sections of the population that are unable to pay for services at public health facilities or health insurance premiums . HEFs typically offer benefit packages that fully cover curative care at all public health facilities, transportation costs, social services for hospitalized patients and one relative, and funeral costs . HEFs are largely funded by international donors and the Government, through revenues generated from the Nam Theun 2 hydropower project .

2 . who Western Pacific Region: countries and areas . Policy Brief on Health Financing for Lao pdr . (http://www wpro. who. .int/countries/lao/policy_brief_health_financing_lao_pdr .pdf, accessed 21 February 2013) . 3 . he t World Bank (2010) . Community-based health insurance in the Lao People’s Democratic Republic: understanding enrollment and impacts . (http://documents worldbank. org/curated/en/2010/11/13264720/community-based-health-. insurance-lao-peoples-democratic-republic-understanding-enrollment-impacts, accessed 21 February 2013) .

50 Health financing country profiles in the western pacific region, 1995–2011 Way forward

The Government is in the process of merging the various social health protection schemes into a single National Health Insurance Agency as established in the 2012 Decree on National Health Insurance . A critical issue is how to modify the existing social health protection mechanisms in light of the existing projects and programmes . The small share of government resources dedicated to health, as well as the large share of OOP and the fragmented approach to social health protection, will continue to challenge the Government’s goals of establishing universal health coverage by 2025 . The promise of free maternal, neonatal and child health services may protect some of the population against catastrophic expenditures and improve access for this target group, but more general constraints – such as the limited technical capacity to administer an increase in health services, the low quality of services at public facilities, and utilization patterns that are not well-aligned with benefit packages such as preferences for private health care and widespread self-treatment – will need to be addressed .

Selected references

• Ministry of Health, Lao People’s Democratic Republic . Health financing strategy 2011–2015 (Draft) . • WHO and Ministry of Health, Lao People’s Democratic Republic (2012) . Health Service Delivery Profile: Lao People’s Democratic Republic . (http://www wpro. who. .int/health_services/service_ delivery_profile_laopdr .pdf, accessed 21 February 2013) . • WHO Western Pacific Region: countries and areas . Policy Brief on Health Financing for Lao pdr . (http://www wpro. who. .int/countries/lao/policy_brief_health_financing_lao_pdr .pdf, accessed 21 February 2013) . • The World Bank (2010) . Community-based health insurance in the Lao People’s Democratic Republic: understanding enrollment and impacts . (http://documents worldbank. .org/curated/ en/2010/11/13264720/community-based-health-insurance-lao-peoples-democratic-republic- understanding-enrollment-impacts, accessed 21 February 2013) . • The World Bank (2010) . Enrollment of firms in social security in the Lao People’s Democratic Republic: perspectives from the private sector . (http://documents worldbank. .org/curated/ en/2010/11/13264661/enrollment-firms-social-security-lao-pdr-perspectives-private-sector, accessed 21 February 2013) . • The World Bank (2010) . Health financing note . East Asia and Pacific region . Volume II: Health System Profiles . (http://siteresources worldbank. org/. HEALTHNUTRITIONANDPOPULATION/Resources/ HFNEAPVol2090210 .pdf, accessed 21 February 2013) .

Lao People’s Democratic Republic 51 Lao People’s Democratic 1995 2000 2005 2006 2007 2008 2009 2010 2011 Republic GDP and health expenditures per capita (in current currency unit) ▪ Gross Domestic Product (GDP) – US dollar 368 325 475 591 712 904 954 1 158 1 313 – Lao kip 295 947 2 565 023 5 066 245 6 005 417 6 837 151 7 904 815 8 127 002 9 564 729 10 500 000 ▪ Total Health Expenditure (THE) – US dollar 15 11 20 25 29 37 34 30 37 – Lao kip 12 272 85 362 217 395 255 524 283 174 322 443 293 458 250 290 295 023 ▪ Government Health Expenditure (GGHE) – US dollar 9 4 3 7 7 9 17 14 18 – Lao kip 7 328 29 940 37 091 70 892 70 589 77 616 144 651 116 509 145 416 ▪ Private Health Expenditure (PvtHE) – US dollar 6 7 17 18 22 28 17 16 19 – Lao kip 4 944 55 422 180 305 184 632 212 585 244 827 148 808 133 781 149 607 ▪ Out-of-pocket expenditure (OOP) – US dollar 5 6 13 14 17 21 10 13 15 – Lao kip 4 398 50 883 135 518 138 771 159 781 184 014 88 453 104 679 117 062 Health expenditure ratios THE as % of GDP 4.1 3.3 4.3 4.3 4.1 4.1 3.6 2.6 2.8 GGHE as % of GDP 2.5 1.2 0.7 1.2 1.0 1.0 1.8 1.2 1.4 PvtHE as % of GDP 1.7 2.2 3.6 3.1 3.1 3.1 1.8 1.4 1.4 GGHE as % of GGE 8.4 5.8 4.1 6.8 5.7 5.5 9.1 5.4 6.1 GGHE as % of THE 59.7 35.1 17.1 27.7 24.9 24.1 49.3 46.5 49.3 OOP as % of THE 35.8 59.6 62.3 54.3 56.4 57.1 30.1 41.8 39.7 Other private as % of 4.4 5.3 20.6 17.9 18.6 18.9 20.6 11.6 11.0 THE External resources 1.2 29.2 16.7 22.0 15.4 17.3 20.1 28.7 23.5 as % of THE All data for 2011 are provisional data Health Expenditure and GDP figures are expressed in current US dollar based on the average exchange rate for that year.

52 Health financing country profiles in the western pacific region, 1995–2011 Malaysia

Health expenditure trends

Malaysia is an upper middle-income country with a population of 28 9. million people in 2011 . Gross domestic product (GDP) per capita was US$ 9977 in 2011 . The predominant source of health-care financing is general government health expenditure GGHE( ), which is mainly financed through general taxation . In 2011, total health expenditure (THE) was 3 .8% of GDP, equivalent to US$ 383 per capita . Out-of- pocket (OOP) payments made up 35 .4% of THE; GGHE was 55 .2% of the . GGHE amounted US$211 per capita and represented 6 2%. of general government expenditure (GGE) and 2 1%. of gdp . Figures 1–5 show historical trends in health expenditure . THE has been increasing in recent years . OOP payments as a percentage of THE increased in 2011 . Figure 4 shows that the Government’s priority to health has experienced a slight fall between 2007 and 2008 . As a whole . GGHE as percentage of GGE is around 5%–6% .

Health financing system

Malaysia has a mixed health financing and delivery system . Most of its public health system is financed by general taxation . The Government provides a wide range of comprehensive services from primary to tertiary health services and uses its annual budget from the Treasury to fund its public health facilities and to carry out other public health activities . Primary care services at public health clinics are delivered free, while inpatient services are provided at highly subsidized rates . Specialist services are available at designated public hospitals through a national system of referral . They are also highly subsidized by the Government . Public sector services are highly subsidized with goods and services free to the user or with small copayments . The private sector also offers a wide range of health services, including traditional and alternative care . The private sector provides more than half of the country’s outpatient services and 17% of inpatient services . OOP payments account for a majority of the financing source for the private sector . According to the Malaysia Health System Review, “Malaysia offers public sector health services to the whole population, although under-staffing and long waits mean that many people instead use private services, especially for visits to a doctor, pay out-of-pocket for consultations and for medicines and pay for coverage through private health insurance schemes ”. 1 Nongovernmental organizations also are involved in providing health services and are often funded by the Ministry of Health . Malaysia does not have a national social health insurance scheme (social health insurance accounts for less than 0 8%. of total health expenditure) . The Social Security Organization (SOCSO) and the Employee Provident Funds (EPF) also contribute marginally to health financing in Malaysia . Although the primary purpose of the EPF is to create savings for old age for the contributor and his or her family, 30% of the account can be withdrawn for reimbursement of health-care services . There is also voluntary private health insurance that is mostly used for private hospital costs 1.

1 . Asia Pacific Observatory on Health Systems and Policies . Malaysia health system review (2012), Health Systems in Transition . 2(1), Manila . World Health Organization Regional Office for theW estern Pacific .

Malaysia 53 MYS–Figure 1. General trends in health expenditure per capita at exchange rate

400 GGHE

350 PvtHE

300

250

200

150

100 Current US$ per capita (at exchange rate)

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

MYS–Figure 2. General trends in health expenditure as % of GDP

4 GGHE as % of GDP

3.5 PvtHE as % of GDP

2.5

2 % of GDP

1.5

0.5

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

MYS–Figure 3. Trends in the structure of total health expenditure (THE)

100 GGHE 90 OOP

80 Other private

% of total health expenditure 30

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

54 Health financing country profiles in the western pacific region, 1995–2011 MYS–Figure 4. GGHE as % of government spending

36 34 32 30 28 26 24 22 20 18 16 % of government spending 14 12 10 8 6 4 2 0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

MYS–Figure 5. External resources for health as % of THE

50 % of THE 40

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Malaysia 55 Way forward

The increasing dominance of the private sector also presents human resource challenges (“brain drain” from the public to the private sector) and exacerbates equity concerns . A rapidly ageing population and an increase in chronic diseases also present challenges to the Government, which the current health financing structure will need to address .

Selected references

• Asia Pacific Observatory on Health Systems and Policies . Malaysia health system review (2012), Health Systems in Transition . 2(1), Manila . World Health Organization Regional Office for the Western Pacific . • The World Bank (2010) . Health financing note . East Asia and Pacific region . Volume II: Health System Profiles . (http://siteresources worldbank. org/. HEALTHNUTRITIONANDPOPULATION/Resources/ HFNEAPVol2090210 .pdf, accessed 21 February 2013) .

MALAYSIA 1995 2000 2005 2006 2007 2008 2009 2010 2011

GDP and health expenditures per capita (in current currency unit) ▪ Gross Domestic Product (GDP) – US dollar 4 287 4 006 5 499 6 119 7 155 8 393 7 237 8 691 9 977 – Malaysian ringgit 10 737 15 221 20 827 22 447 24 596 27 996 25 505 27 993 30 530 ▪ Total Health Expenditure (THE) – US dollar 126 120 177 220 253 286 284 344 383 – Malaysian ringgit 315 456 672 805 871 954 1 000 1 107 1 171 ▪ Government Health Expenditure (GGHE) – US dollar 71 67 91 121 137 159 167 197 211 – Malaysian ringgit 178 254 344 442 472 531 590 635 646 ▪ Private Health Expenditure (PvtHE) – US dollar 55 53 87 99 116 127 116 146 172 – Malaysian ringgit 137 202 328 363 398 423 410 471 525 ▪ Out-of-pocket expenditure (OOP) – US dollar 42 41 69 80 92 101 90 114 136 – Malaysian ringgit 105 156 261 292 317 337 317 368 415 Health expenditure ratios THE as % of GDP 2.9 3.0 3.2 3.6 3.5 3.4 3.9 4.0 3.8 GGHE as % of GDP 1.7 1.7 1.7 2.0 1.9 1.9 2.3 2.3 2.1 PvtHE as % of GDP 1.3 1.3 1.6 1.6 1.6 1.5 1.6 1.7 1.7 GGHE as % of GGE 4.9 5.2 5.2 5.8 5.5 5.0 5.8 6.7 6.2 GGHE as % of THE 56.6 55.8 51.1 54.9 54.2 55.7 59.0 57.4 55.2 OOP as % of THE 33.2 34.3 38.8 36.2 36.4 35.3 31.7 33.2 35.4 Other private as % of 10.2 9.9 10.1 8.9 9.4 9.0 9.3 9.4 9.4 THE External resources 0.7 0.7 – – – – – – – as % of THE All data for 2011 are provisional data Health Expenditure and GDP figures are expressed in current US dollar based on the average exchange rate for that year.

56 Health financing country profiles in the western pacific region, 1995–2011 Marshall Islands

Health expenditure trends

The Marshall Islands are a Pacific island country with a population of 54 816 in 2011 . Gross domestic product (GDP) per capita was US$ 3169 in 2011, although this figure reflects, in part, large financial flows from the United States of America . The predominant source of health-care financing in the Marshall Islands is general government health expenditure with substantial support from external donors . In 2011, total health expenditure (THE) was 16 5%. of GDP, equivalent to US$ 524 per capita . Out-of-pocket (OOP) payments made up 12 .6% of THE; General government health expenditure (GGHE) was 83 3%. of the . GGHE amounted to US$ 437 per capita and represented 18 3%. of general government expenditure (GGE) and 13 8%. of gdp . External resources for health was 32 0%. of the . Figures 1–5 show historical trends in health expenditure . THE, which was on an upward trend, has remained relatively constant in recent years . The structure of health expenditure has been uniform with very low OOP payments as a proportion of the . Figure 4 shows that the Government’s priority to health has hovered around 18 0%. since 2001 .

Health financing system

The Government is the main provider of health services in the Marshall Islands . All citizens are eligible to receive free health care from public health facilities . Public health-care services in the Marshall Islands are provided through two hospitals – in the urban areas of Majuro and Ebeye – and 60 health centres on the outer islands 1. In addition, there is one private health clinic in Majuro . Patients requiring tertiary health services are referred to hospitals in the Philippines and Hawaii . Health services are largely funded by external aid or grant programmes . They include the United States Federal Health Grants and the various grants under the Compact of Free Association between the Marshall Islands and the United States of America . Private expenditure on health is very small .

Way forward

The financial and referral dependence of the Marshall Islands towards the United States of America, the Philippines and the state of Hawaii is the main challenge that the Government needs to address .

1 . who Western Pacific Region (2011) . Marshall Islands country profile 2011 (http://www wpro. who. .int/countries/mhl/16MSIpro2011_finaldraft .pdf, accessed 29 October 2013) .

Marshall Islands 57 MHL–Figure 1. General trends in health expenditure per capita at exchange rate

600 GGHE

PvtHE 500

400

300

200 Current US$ per capita (at exchange rate) 100

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

MHL–Figure 2. General trends in health expenditure as % of GDP

25 GGHE as % of GDP

PvtHE as % of GDP 20

15 % of GDP 10

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

MHL–Figure 3. Trends in the structure of total health expenditure (THE)

100 GGHE 90 OOP

80 Other private

% of total health expenditure 30

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

58 Health financing country profiles in the western pacific region, 1995–2011 MHL–Figure 4. GGHE as % of government spending

36 34 32 30 28 26 24 22 20 18 16 % of government spending 14 12 10 8 6 4 2 0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

MHL–Figure 5. External resources for health as % of THE

50 % of THE 40

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Marshall Islands 59 Selected references

• US Department of Health and Human Services (2011) . Republic of the Marshall Islands Title V maternal and child health 2010 needs assessment . (https://mchdata .hrsa .gov/tvisreports/ Documents/NeedsAssessments/2011/MH-NeedsAssessment .pdf, accessed 21 February 2013) . • WHO Western Pacific Region (2011) . Marshall Islands country profile 2011 . (http://www wpro. who. . int/countries/mhl/16MSIpro2011_finaldraft .pdf, accessed 29 October 2013) .

marshall islands 1995 2000 2005 2006 2007 2008 2009 2010 2011

GDP and health expenditures per capita (in current currency unit) ▪ Gross Domestic Product (GDP) – US dollar 2 357 2 127 2 643 2 746 2 853 2 885 2 838 3 015 3 169 ▪ Total Health Expenditure (THE) – US dollar 374 466 422 460 490 543 537 517 524 ▪ Government Health Expenditure (GGHE) – US dollar 309 410 350 384 409 458 454 433 437 ▪ Private Health Expenditure (PvtHE) – US dollar 64 56 73 76 81 85 83 83 88 ▪ Out-of-pocket expenditure (OOP) – US dollar 48 42 55 57 61 64 63 63 66 Health expenditure ratios THE as % of GDP 15.9 21.9 16.0 16.7 17.2 18.8 18.9 17.1 16.5 GGHE as % of GDP 13.1 19.3 13.2 14.0 14.3 15.9 16.0 14.4 13.8 PvtHE as % of GDP 2.7 2.6 2.8 2.8 2.8 3.0 2.9 2.8 2.8 GGHE as % of GGE 9.3 21.1 15.5 16.6 15.4 18.4 19.5 17.0 18.3 GGHE as % of THE 82.8 87.9 82.8 83.5 83.5 84.3 84.5 83.8 83.3 OOP as % of THE 12.9 9.1 13.0 12.4 12.4 11.8 11.7 12.1 12.6 Other private as % of 4.3 3.0 4.3 4.1 4.1 3.9 3.8 4.0 4.1 THE External resources 28.6 33.1 41.7 58.4 27.3 26.5 29.1 33.9 32.0 as % of THE All data for 2011 are provisional data Health Expenditure and GDP figures are expressed in current US dollar based on the average exchange rate for that year.

60 Health financing country profiles in the western pacific region, 1995–2011 Mongolia

Health expenditure trends

Mongolia is a lower middle-income country with a population of 2 8. million people in 2011 . Gross domestic product (GDP) per capita was US$ 3129 in 2011 . General government health expenditure (GGHE) is the predominant source of health care financing and is equally financed through general taxation and social health insurance (SHI) . In 2011, total health expenditure (THE) was 5 1%. of GDP, equivalent to US$ 161 per capita . Out- of-pocket (OOP) payments made up 39 7%. of THE; GGHE was 57 .3% of the . GGHE amounted to US$ 92 per capita and represented 6 8%. of general government expenditure (GGE) and 2 9%. of gdp . External resources for health is 4 .8% of the . Figures 1–5 show historical trends in health expenditure . While THE has generally been on an upward trend, it fell slightly in 2008 . OOP payments as percentage of THE have increased since 2003 while that of GGHE decreased, even though GGHE represents the major part of the . Changes in the methodology of the survey used to obtain OOP expenditure information may attribute to the drastic changes since 2003 . Figure 4 shows that GGHE as percentage of GGE decreased in 2005 and again in 2011 .

Health financing system

Health services in Mongolia are largely provided by the Government and funded through the Government and the country’s social health insurance (SHI) scheme . There is, however, a growing private sector that is financed mainly by households OOP payments and funds from the shi . Primary care health services are provided by private family group practices in urban areas and by soum health centres and bagh feldshers in rural areas . Specialized care is delivered by provincial or urban district general hospitals at the secondary level . State clinical hospitals and specialized national centres provide tertiary care and are located mainly in Ulaanbaatar . By 2010, 16 specialized hospitals, four regional diagnostic and treatment centres, 17 aimag general hospitals, 12 district general hospitals, 6 rural general hospitals, 37 inter-soum hospitals, 274 soum hospitals, 218 family group practices, and 1113 private hospitals and clinics were delivering health care and services to the population . Officially, most public health facilities charge user fees for diagnostic tests specified by the Ministry of Health and copayments for inpatient services funded by SHI in accordance with the amendments made in the Health Law in 2006 . These official user charges contribute only 5% of the . This is not, however, the total OOP payments made by the Mongolian population for their health services, since Mongolians can also purchase services privately, mostly from private doctors and pharmacies . Primary health care and treatment of certain specified chronic and infectious diseases, such as diabetes, cancer, tuberculosis, brucellosis, HIV/AIDS and mental diseases, are provided for free or at highly subsidized rates to all of the population regardless of their insurance status . Primary health care in urban settings is contracted out to medical practitioners in family group practices with full government support .

Mongolia 61 MNG–Figure 1. General trends in health expenditure per capita at exchange rate

160 GGHE

140 PvtHE

120

100

40 Current US$ per capita (at exchange rate)

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

MNG–Figure 2. General trends in health expenditure as % of GDP

7 GGHE as % of GDP

6 PvtHE as % of GDP

4 % of GDP 3

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

MNG–Figure 3. Trends in the structure of total health expenditure (THE)

100 GGHE 90 OOP

80 Other private

% of total health expenditure 30

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

62 Health financing country profiles in the western pacific region, 1995–2011 MNG–Figure 4. GGHE as % of government spending

36 34 32 30 28 26 24 22 20 18 16 % of government spending 14 12 10 8 6 4 2 0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

MNG–Figure 5. External resources for health as % of THE

50 % of THE 40

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Mongolia 63 The main sources of financing in Mongolia are the government budget, SHI funds and OOP payments . Each year, the Ministry of Health allocates funding for public health interventions and to all tertiary public health facilities and local government units . National public health programmes, research, professional training, health services during natural or unforeseen disasters, and infectious diseases natural foci services are paid on the basis of a global budget from the central government budget . Local governments then allocate funding to hospitals and primary health-care facilities . Hospitals use Diagnosis Related Groups (DRG) to determine funding, with 115 DRG classes used by both the Government and the SHI scheme . However, funding for a public hospital in reality is commonly decided on a historical basis: the previous year’s spending is adjusted for a certain percentage increase which is then classified or divided among 115 DRG classes to define the respective contributions of the state budget and health insurance funds . Primary health-care providers have been funded through a risk-adjusted capitation model since 1998 . OOP payments are mostly spent as copayments . Mongolia’s SHI programme was initiated in 1994 with the aim of protecting the vulnerable and low-income sector of the population while encouraging personal responsibility for health . It is administered by the Social Insurance General Office SIGO( ), which operates under the Ministry of Population Development and Social Protection . The SIGO has affiliates in local government units where collection of premiums is handled by social insurance inspectors . All employees, self-employed, children under 16 years old, students, pensioners and other recognized social welfare beneficiaries are eligible to enroll in shi . Enrolment is compulsory for all population groups since 2003 . Coverage in 2009 was 77 .5% of the population, a decline from 84 .9% in 2000, mainly due to decreased subsidies for contribution payments for specific population categories, such as herdsmen and students . It reached 82 6%. of the population in 2010, an increase of 5 0%. compared the previous year . The SHI contribution is set at 4% of the salary in the formal sector, which is shared equally between employees and employers . Flat contribution rates apply for herdsmen, students and the self-employed . These rates are defined on the basis of minimum wage and contribution levels . The insurance contribution for the remaining population, including children under 16 years old, pensioners and the disabled, is set at Mongolian tugrik 640 (US$ 0 .40) monthly and is paid by the Government, according to the Citizen’s Health Insurance Law . In 2008, the government-subsidized portion comprised 13% of total revenue of the health insurance fund (HIF) . However, 60% of total expenditure from the HIF was spent for health care of the insured whose premiums were subsidized by the Government . Therefore, there is a need to increase the share of HIF in the general government health expenditure and to increase health insurance premiums paid by the Government for some population groups . HIF income and expenditures have been increasing annually since 2000 . In comparison with the previous year, HIF’s income in 2010 increased by 24 .4% and expenses by 35 .4% . The benefit package of the SHI covers nearly all types of inpatient care and a limited range of outpatient services and diagnostic tests . Officially, patients are supposed to make a 15% copayment to tertiary-level providers and 10% for services at the secondary level of inpatient care . SIGO in principle reimburses public hospitals on a DRG basis . Payments for inpatient services of private health providers are calculated based on the rate defined by the accreditation percentage of the respective provider, multiplied by the average case-mix rate applied for similar level public hospitals . In addition, SIGO reimburses designated pharmacies at a discounted rate of 50%–70% when and only when the drugs are prescribed by family group practices and soum health centres .

Way forward

Some of the main concerns with Mongolia’s SHI scheme are the poor definition of the benefit package and provider payment methods . The benefit package and payment methods also have not been changed adequately over time . In 2010, a Strategy on Health Financing was approved . Activities to be implemented include: 1) to renew the benefit packages funded by state budget

64 Health financing country profiles in the western pacific region, 1995–2011 and SHI; 2) to use capitation payment for financing of family group practices, soum and inter- soum hospitals to ensure equal access to the essential health-care package of services by a full subsidy from the Government and updated capitation payments every year; 3) to advocate for a mandatory health insurance system with universal coverage; and 4) to decrease OOP payments to 25% of total health expenditure . Currently, Mongolia is revising its Citizen’s Health Insurance Law to address the evolving needs in providing financial protection to its citizens .

Selected references • Bayarsaikhan D, Nakamura K (2009) . Health promotion financing with Mongolia’s social health insurance . Asia Pacific Journal of Public Health 21(4):399–409 . • Ministry of Health, Ministry of Finance, and Ministry of Social Welfare and Labour of Mongolia (2010) . Health care financing strategy . Ulaanbaater, Mongolia . • The World Bank (2010) . Health financing note . East Asia and Pacific region . Volume II: health system profiles . (http://siteresources worldbank. org/. HEALTHNUTRITIONANDPOPULATION/Resources/ HFNEAPVol2090210 .pdf, accessed 21 February 2013) . • WHO: Western Pacific Region (2011) . Mongolia: Country Health Information Profile . (http://www . wpro who. int/countries/mng/18. MOGpro2011_finaldraft .pdf, accessed 21 February 2013) .

mongolia 1995 2000 2005 2006 2007 2008 2009 2010 2011

GDP and health expenditures per capita (in current currency unit) ▪ Gross Domestic Product (GDP) – US dollar 630 471 991 1 321 1 614 2 108 1 690 2 250 3 129 – Mongolian togrog 282 489 507 621 1 193 954 1 558 568 1 888 601 2 457 593 2 430 483 3 053 157 3 959 739 ▪ Total Health Expenditure (THE) – US dollar 20 22 52 63 85 123 98 124 161 – Mongolian togrog 8 899 23 654 62 904 74 544 99 560 143 052 140 816 168 229 203 431 ▪ Government Health Expenditure (GGHE) – US dollar 16 18 26 33 48 71 55 71 92 – Mongolian togrog 7 342 19 433 31 500 39 399 55 798 82 772 78 790 95 890 116 564 ▪ Private Health Expenditure (PvtHE) – US dollar 3 4 26 30 37 52 43 53 69 – Mongolian togrog 1 558 4 221 31 404 35 145 43 762 60 279 62 026 72 338 86 867 ▪ Out-of-pocket expenditure (OOP) – US dollar 2 3 24 28 35 48 40 50 64 – Mongolian togrog 1 033 2 824 29 393 32 895 40 960 56 112 57 738 67 337 80 861 Health expenditure ratios THE as % of GDP 3.2 4.7 5.3 4.8 5.3 5.8 5.8 5.5 5.1 GGHE as % of GDP 2.6 3.8 2.6 2.5 3.0 3.4 3.2 3.1 2.9 PvtHE as % of GDP 0.6 0.8 2.6 2.3 2.3 2.5 2.6 2.4 2.2 GGHE as % of GGE 11.3 10.9 10.5 8.2 8.4 9.0 9.1 8.6 6.8 GGHE as % of THE 82.5 82.2 50.1 52.9 56.0 57.9 56.0 57.0 57.3 OOP as % of THE 11.6 11.9 46.7 44.1 41.1 39.2 41.0 40.0 39.7 Other private as % of THE 5.9 5.9 3.2 3.0 2.8 2.9 3.0 3.0 3.0 External resources 8.5 28.0 6.3 3.4 2.2 4.7 3.9 3.8 4.8 as % of THE All data for 2011 are provisional data Health Expenditure and GDP figures are expressed in current US dollar based on the average exchange rate for that year.

Mongolia 65 Nauru

Health expenditure trends

Nauru is a Pacific island country with a population of 10 308 people in 2011 . Gross domestic product (GDP) per capita was US$ 8392 in 2011 . The predominant source of health-care financing in Nauru is general government health expenditure, with support from external donors . In 2011, total health expenditure (THE) was 8 1%. of GDP, equivalent to US$ 683 per capita . Out-of-pocket (OOP) payments made up 7 8%. of THE; General government health expenditure (GGHE) was 86 .7% of the . GGHE amounted US$ 592 per capita and represented 9 .9% of general government expenditure (GGE) and 7 1%. of gdp . External resources for health are 39 .0% of the . Figures 1–5 show historical trends in health expenditure . THE had been on a downward trend from 1995 to 2001, but since 2002 it has generally increased . Government’s contribution to THE had been fluctuating around 80% between 1995 and 2007, while it has showed a tendency to decrease since 2008 . Figure 4 shows that the Government’s priority to health has continued to decrease since 2005 .

Health financing system

Health services in Naura are provided mainly by the country’s only hospital . To improve the effectiveness and efficiency of service delivery in health, the Government in 1999 amalgamated the Nauru General Hospital and the National Phosphate Corporation Hospital to become the Republic of Nauru Hospital . The Republic of Nauru Hospital offers a number of medical and surgical specialties, but specialized clinical services are only offered by visiting specialized clinical teams and overseas medical facilities . Overseas referrals for specialized clinical care are made to Australia, Fiji and India and are coordinated by the Overseas Medical Referral Committee . Health-care services are provided to all citizens for free . Funding for health services in Nauru comes mainly from financial assistance by Australia and other international donors . OOP payments contribute very marginally to the .

Way forward

According to the National Sustainability Report 2009, the Government aims to investigate and implement options for sustainable health financing by 2013, including cost recovery and an insurance medical scheme . The 2013 Nauru National Assessment Report concluded that the “increasing cost of health service provision (including prescriptions and overseas referrals) places pressure on the health sector” . Furthermore, the country faces the dual challenge of donor dependence and the inability to provide higher-level care .

66 Health financing country profiles in the western pacific region, 1995–2011 NRU–Figure 1. General trends in health expenditure per capita at exchange rate

700 GGHE

600 PvtHE

500

400

300

200 Current US$ per capita (at exchange rate)

100

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

NRU–Figure 2. General trends in health expenditure as % of GDP

20 GGHE as % of GDP 18 PvtHE as % of GDP 16

10 % of GDP 8

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

NRU–Figure 3. Trends in the structure of total health expenditure (THE)

100 GGHE 90 OOP

80 Other private

% of total health expenditure 30

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Nauru 67 NRU–Figure 4. GGHE as % of government spending

36 34 32 30 28 26 24 22 20 18 16 % of government spending 14 12 10 8 6 4 2 0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

NRU–Figure 5. External resources for health as % of THE

50 % of THE 40

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

68 Health financing country profiles in the western pacific region, 1995–2011 Selected references

• Government of the Republic of Nauru (2013) . Nauru national assessment report for the Third International Conference on Small Island Developing States (SIDS) . (http://www .sids2014 .org/ content/documents/203NAURU%20National%20Assessment%20Report%20for%20Third%20 SIDS%20Conference%202013 .pdf, accessed 21 February 2013) . • Republic of Nauru national sustainable development strategy 2005–2025 (2009) . (http://www . naurugov nr/. Documents/NSDS/ReviewInfrastructureSector .pdf, accessed 21 February 2013) .

nauru 1995 2000 2005 2006 2007 2008 2009 2010 2011

GDP and health expenditures per capita (in current currency unit) ▪ Gross Domestic Product (GDP) – US dollar 3 496 2 099 2 599 2 507 2 277 4 080 5 350 6 138 8 392 – Australian dollar 4 716 3 620 3 403 3 329 2 721 4 864 6 860 6 692 8 136 ▪ Total Health Expenditure (THE) – US dollar 461 287 337 348 441 689 532 596 683 – Australian dollar 622 495 441 463 528 822 682 650 662 ▪ Government Health Expenditure (GGHE) – US dollar 431 271 302 315 412 637 464 515 592 – Australian dollar 582 468 395 419 492 759 594 562 574 ▪ Private Health Expenditure (PvtHE) – US dollar 30 16 35 33 29 53 68 81 91 – Australian dollar 40 27 46 44 35 63 87 88 88 ▪ Out-of-pocket expenditure (OOP) – US dollar 17 9 20 19 17 31 40 47 53 – Australian dollar 23 16 27 26 20 37 51 51 51 Health expenditure ratios THE as % of GDP 13.2 13.7 13.0 13.9 19.4 16.9 9.9 9.7 8.1 GGHE as % of GDP 12.3 12.9 11.6 12.6 18.1 15.6 8.7 8.4 7.1 PvtHE as % of GDP 0.8 0.7 1.4 1.3 1.3 1.3 1.3 1.3 1.1 GGHE as % of GGE 5.9 11.2 18.5 18.5 18.5 13.8 10.5 10.3 9.9 GGHE as % of THE 93.6 94.6 89.6 90.5 93.3 92.4 87.2 86.4 86.7 OOP as % of THE 3.8 3.2 6.1 5.6 3.9 4.4 7.5 7.9 7.8 Other private as % of THE 2.7 2.3 4.3 4.0 2.8 3.2 5.3 5.6 5.5 External resources as % 9.4 12.7 2.5 10.5 42.3 56.5 43.9 40.9 39.0 of THE All data for 2011 are provisional data Health Expenditure and GDP figures are expressed in current US dollar based on the average exchange rate for that year.

Nauru 69 New Zealand

Health expenditure trends

New Zealand is a high-income country with a population of 4 .4 million people in 2011 . Gross domestic product (GDP) per capita was US$ 36 635 in 2011 . The predominant source of health-care financing is general government health expenditure (GGHE), which is mainly financed through general taxation . In 2011, total health expenditure (THE) was 10 1%. of GDP, equivalent to US$ 3691 per capita . Out-of- pocket (OOP) payments made up 10 .5% of THE; GGHE was 83 .2% of the . GGHE amounted to US$ 3072 per capita and represented 19 .8% of general government expenditure (GGE) and 8 .4% of gdp . Figures 1–5 show historical trends in health expenditure . THE has been increasing steadily over the last decade . In the meantime, the structure of health expenditure has stayed relatively constant, with GGHE as percentage of THE increasing gradually . Figure 4 shows that GGHE as percentage of GGE has been on a steady upward trend for nearly two decades .

Health financing system

New Zealand has a mixed public–private system for the delivery and financing of health services . The health service delivery system is organized around physicians, who are independent and self-employed providers, primary health organizations (PHOs) and district health boards (DHBs) . All New Zealand residents have access to a broad range of health services with substantive government funding, supplemented by a copayment scheme . Health care is provided free to pregnant women and children under the age of six . For the rest of the population, the size of government subsidies depends on the age and the level of income . General Medical Services (GMS) are subsidies paid to general practitioners under the Section 88 notice to help reduce patient fees for children and subsidy cardholders . The general practitioners can claim a subsidy if the patient is: 1) 15 years or younger; 2) 17 years or younger and not financially independent; 3) a Community Services cardholder; or 4) a High-Use Health cardholder . If the general practitioner’s fee is more than the subsidy, then the patient may need to pay the difference 1. Low-income residents are further eligible for a Community Services Card . Patients suffering from long-term illnesses are also eligible for High Use Health Card . Treatment for accident-related injuries is covered fully by the Accident Compensation Corporation . Public funding for health accounts for a large portion of the country’s health expenditure and is derived from general taxation . The Government sets an annual budget for publicly funded health services and distributes funds to the DHBs . There are currently 20 DHBs in New Zealand . More than three quarters of public funds are districted to DHBs . DHBs use this funding to plan, purchase and provide health services within their areas and also regionally, including public hospitals and the majority of public health services . DHBs plan, manage, provide and purchase health services for the population of their districts to ensure services are arranged effectively and efficiently for all of New Zealand . This includes funding for primary care, hospital services, public health services, aged care services, and services provided by other non-government

1 . ministry of Health . New Zealand (2013) . Primary health care services and projects . (http://www .health govt. .nz/our-work/ primary-health-care/primary-health-care-services-and-projects, accessed 21 February 2013) .

70 Health financing country profiles in the western pacific region, 1995–2011 NZL–Figure 1. General trends in health expenditure per capita at exchange rate

4000 GGHE

3500 PvtHE

3000

2500

2000

1500

1000 Current US$ per capita (at exchange rate)

500

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

NZL–Figure 2. General trends in health expenditure as % of GDP

10 GGHE as % of GDP 9 PvtHE as % of GDP 8

5 % of GDP 4

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

NZL–Figure 3. Trends in the structure of total health expenditure (THE)

100 GGHE 90 OOP

80 Other private

% of total health expenditure 30

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

New Zealand 71 NZL–Figure 4. GGHE as % of government spending

36 34 32 30 28 26 24 22 20 18 16 % of government spending 14 12 10 8 6 4 2 0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

NZL–Figure 5. External resources for health as % of THE

50 % of THE 40

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

72 Health financing country profiles in the western pacific region, 1995–2011 health providers, including Maori and Pacific providers 2. The other sources of financing are household OOP payments and private insurance . About one third of the country’s population purchase private insurance, which provides supplementary coverage .

Way forward

Some of the main challenges for New Zealand are controlling the raising costs of health services with the advances in medical technologies and improving access to health services given the changing demography .

Selected references

• Ministry of Health . New Zealand (2013) . Primary health care services and projects . (http://www . health govt. nz/our-work/primary-health-care/primary-health-care-services-and-projects. . accessed 21 February 2013) . • Ministry of Health . New Zealand (2013) . District health boards . (http://www .health .govt .nz/ new-zealand-health-system/key-health-sector-organisations-and-people/district-health- boards?mega=NZ%20health%20system&title=District%20health%20boards(accessed on 20 February 2013), accessed 21 February 2013) .

new zealand 1995 2000 2005 2006 2007 2008 2009 2010 2011

GDP and health expenditures per capita (in current currency unit) ▪ Gross Domestic Product (GDP) – US dollar 16 809 13 802 27 256 26 054 31 584 30 466 27 092 32 422 36 635 – New Zealand dollar 25 615 30 380 38 711 40 177 42 976 43 345 43 352 44 984 46 375 ▪ Total Health Expenditure (THE) – US dollar 1 189 1 051 2 288 2 295 2 694 2 820 2 702 3 267 3 691 – New Zealand dollar 1 812 2 314 3 250 3 539 3 666 4 012 4 324 4 532 4 673 ▪ Government Health Expenditure (GGHE) – US dollar 917 820 1 823 1 838 2 220 2 336 2 243 2 719 3 072 – New Zealand dollar 1 398 1 806 2 589 2 834 3 021 3 324 3 590 3 772 3 889 ▪ Private Health Expenditure (PvtHE) – US dollar 271 231 465 457 474 484 459 548 619 – New Zealand dollar 414 509 660 705 645 688 734 761 784 ▪ Out-of-pocket expenditure (OOP) – US dollar 192 161 322 318 309 317 287 343 388 – New Zealand dollar 293 355 457 490 420 451 459 476 491 Health expenditure ratios THE as % of GDP 7.1 7.6 8.4 8.8 8.5 9.3 10.0 10.1 10.1 GGHE as % of GDP 5.5 5.9 6.7 7.1 7.0 7.7 8.3 8.4 8.4 PvtHE as % of GDP 1.6 1.7 1.7 1.8 1.5 1.6 1.7 1.7 1.7 GGHE as % of GGE 13.2 15.7 17.7 18.1 18.1 18.4 19.6 19.8 19.8 GGHE as % of THE 77.2 78.0 79.7 80.1 82.4 82.8 83.0 83.2 83.2 OOP as % of THE 16.2 15.4 14.1 13.8 11.5 11.2 10.6 10.5 10.5 Other private as % of THE 6.7 6.6 6.3 6.1 6.2 5.9 6.4 6.3 6.3 External resources 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 as % of THE All data for 2011 are provisional data Health Expenditure and GDP figures are expressed in current US dollar based on the average exchange rate for that year.

2 . inistry m of Health . New Zealand (2013) . District health boards . (http://www .health govt. .nz/new-zealand-health-system/ key-health-sector-organisations-and-people/district-health-boards?mega=NZ%20health%20system&title=District%20 health%20boards(accessed on 20 February 2013), accessed 21 February 2013) . New Zealand 73 Niue

Health expenditure trends

Niue is a self-governing territory in free association with New Zealand . It had a population of 1426 in 2011 . Gross domestic product (GDP) per capita was US$ 15 045 in 2011 . The predominant source of health-care financing is general government health expenditure with support from external donors . In 2011, total health expenditure (THE) was 14 6%. of GDP, equivalent to US$ 2190 per capita . Out-of-pocket (OOP) payments made up 0 8%. of THE; General government health expenditure (GGHE) was 99 2%. of the . GGHE amounted to US$ 2171 per capita and represented 17 6%. of general government expenditure (GGE) and 14 .4% of gdp . Figures 1–5 show historical trends in health expenditure . THE has been on an upward trend, with that of 2001 relatively high . The Government’s contribution to THE has been dominant over time, representing more than 95% of the . Figure 4 shows that GGHE as percentage of GGE has been increasing since 2002, with only a slight decrease in 2004 and 2005 .

Health financing system

The Government of Niue provides and finances all health services in Niue . Health services are available to the citizens for free, mainly through Niue Foou Hospital, the territory’s only hospital . In addition . “Community outreach is maintained through village visits by public health nurses and regular village inspections by public health officers . While medical services are free for local residents, payment is required for some prescribed medicines, such as contraceptives” 1. As such, private health expenditure constitutes a very small portion of the . Niue receives substantial support from New Zealand and other international donors to finance its public health expenditure .

Way forward

Niue, which has a small population, faces a persistent dual challenge of donor dependency and the inability to provide referral services on the island .

1 . WHO Western Pacific Regional Office (2011) . Nauru: Country Health Information Profiles . (http://www wpro. who. .int/ countries/niu/22NIUpro2011_finaldraft .pdf . accessed 21 February 2013) .

74 Health financing country profiles in the western pacific region, 1995–2011 NIU–Figure 1. General trends in health expenditure per capita at exchange rate

2500 GGHE

PvtHE 2000

1500

1000

Current US$ per capita (at exchange rate) 500

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

NIU–Figure 2. General trends in health expenditure as % of GDP

40 GGHE as % of GDP

35 PvtHE as % of GDP

20 % of GDP

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

NIU–Figure 3. Trends in the structure of total health expenditure (THE)

100 GGHE 90 OOP

80 Other private

% of total health expenditure 30

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Niue 75 NIU–Figure 4. GGHE as % of government spending

36 34 32 30 28 26 24 22 20 18 16 % of government spending 14 12 10 8 6 4 2 0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

NIU–Figure 5. External resources for health as % of THE

50 % of THE 40

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

76 Health financing country profiles in the western pacific region, 1995–2011 Selected reference

• WHO Western Pacific Regional Office (2011) . Nauru: Country Health Information Profiles . (ht tp:// www wpro. who. int/countries/niu/22. NIUpro2011_finaldraft .pdf, accessed 21 February 2013) .

niue 1995 2000 2005 2006 2007 2008 2009 2010 2011

GDP and health expenditures per capita (in current currency unit) ▪ Gross Domestic Product (GDP) – US dollar 4 389 4 015 8 123 8 156 9 827 10 484 10 456 12 793 15 045 – New Zealand dollar 6 688 8 837 11 536 12 576 13 372 14 916 16 731 17 749 19 045 ▪ Total Health Expenditure (THE) – US dollar 351 318 1 046 1 273 1 586 1 674 1 833 2 076 2 190 – New Zealand dollar 534 700 1 485 1 963 2 158 2 382 2 933 2 880 2 772 ▪ Government Health Expenditure (GGHE) – US dollar 345 313 1 036 1 263 1 574 1 661 1 820 2 060 2 171 – New Zealand dollar 526 689 1 471 1 948 2 141 2 363 2 913 2 858 2 748 ▪ Private Health Expenditure (PvtHE) – US dollar 6 5 10 10 12 13 13 16 18 – New Zealand dollar 9 11 14 15 16 18 20 22 23 ▪ Out-of-pocket expenditure (OOP) – US dollar 6 5 10 10 12 13 13 16 18 – New Zealand dollar 9 11 14 15 16 18 20 22 23 Health expenditure ratios THE as % of GDP 8.0 7.9 12.9 15.6 16.1 16.0 17.5 16.2 14.6 GGHE as % of GDP 7.9 7.8 12.8 15.5 16.0 15.8 17.4 16.1 14.4 PvtHE as % of GDP 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 GGHE as % of GGE 7.9 6.5 11.3 14.9 14.6 18.9 20.8 20.3 17.6 GGHE as % of THE 98.4 98.5 99.0 99.2 99.2 99.2 99.3 99.2 99.2 OOP as % of THE 1.6 1.5 1.0 0.8 0.8 0.8 0.7 0.8 0.8 Other private as % of THE 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 External resources 8.5 4.5 40.3 52.7 59.8 69.5 60.4 35.9 53.3 as % of THE All data for 2011 are provisional data Health Expenditure and GDP figures are expressed in current US dollar based on the average exchange rate for that year.

Niue 77 Palau

Health expenditure trends

Palau is a Pacific island country with a population of about 20 609 in 2011 . Gross domestic product (GDP) per capita was US$ 10 331 in 2011, although this figure reflects in part large financial flows from the United States of America . The predominant source of health-care financing in Palau is general government health expenditure, with support from external donors . In 2011, total health expenditure (THE) was 9 0%. of GDP, equivalent to US$ 930 per capita . Out-of-pocket (OOP) payments made up 11 .6% of the . General government health expenditure (GGHE) was 74 7%. of the . GGHE amounted to US$ 695 per capita and represented 6 0%. of general government expenditure (GGE) and 6 7%. of gdp . Figures 1–5 show historical trends in health expenditure . THE has been on a general upward trend since 2004 . The Government’s contribution to THE has increased since 2000 . Figure 4 shows that the Government spends on average about 14% of its total expenditures on health . Figure 5 shows that external resources for health are about 30%–40% of THE in the past few years .

Health financing system

Health services in Palau are mainly provided by the public sector and financed by the Government, although a private sector exists . The country’s health facilities include the Belau National Hospital (BNH), four community health centres, four satellite dispensaries that serve outlying localities, and private clinics and dispensaries 1. The Ministry of Health provides preventive care services to all citizens for free and charges a flat rate fee for drugs . User fees at Belau National Hospital were charged based on income and family size and are paid out of pocket (OOP) if patients do not have private health insurance . The private sector is allowed to charge its own fees . Prior to 2010 . THE was financed by the Government, overseas donors, household OOP expenditures and private insurance . OOP payments are made for drug purchases, and user fees are collected at Belau National Hospital and private clinics . The National Health Saving Plan, a social health insurance (SHI) scheme, was introduced in 2010 . It covers all workers and their families on a mandatory basis . Employers and employees each contribute 2 .5% of their wages, while the Government subsidizes contributions for elderly and disabled based on average insured wages of all contributors . The National Health Saving Plan has two heath financing instruments – the Medical Savings Account and National Health Insurance (NHI) – that make up the Health Care Fund Programme . Individuals accumulate funds in their Medical Savings Account to cover the costs of outpatient medical treatment and medication for themselves and their families . Medical Savings Account (MSA) funds may also be used to pay for private health insurance premiums . Individuals are allowed to make voluntary tax-free contributions to their MSA at any time The NHI programme was designed to complement the MSAs as these do not cover costs associated with catastrophic illnesses or injuries . The NHI covers inpatient and off-island treatment . For inpatient care, the patient pays 20%, up to a ceiling of US$ 200–US$ 400 and NHI covers the remaining cost . For off- island care costs approved by the Referral Committee, the patient pays 20% up to a ceiling of US$ 1000–US$ 4000 depending on household income, and the NHI covers the remaining costs .

78 Health financing country profiles in the western pacific region, 1995–2011 PLW–Figure 1. General trends in health expenditure per capita at exchange rate

1000 GGHE 900 PvtHE 800

700

600

500

400

300

Current US$ per capita (at exchange rate) 200

100

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

PLW–Figure 2. General trends in health expenditure as % of GDP

14 GGHE as % of GDP

12 PvtHE as % of GDP

8 % of GDP 6

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

PLW–Figure 3. Trends in the structure of total health expenditure (THE)

100 GGHE 90 OOP

80 Other private

% of total health expenditure 30

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Palau 79 PLW–Figure 4. GGHE as % of government spending

36 34 32 30 28 26 24 22 20 18 16 % of government spending 14 12 10 8 6 4 2 0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

PLW–Figure 5. External resources for health as % of THE

50 % of THE 40

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

80 Health financing country profiles in the western pacific region, 1995–2011 Way forward

High dependence on funding from the United States of America and the government budget for financing THE has been a key policy concern . The small population size, as well as an increase in chronic diseases and the continuous need to refer patients off the island, also represent persistent challenges to the financial sustainability of the island’s health sector .

Selected references

• Asian Development Bank (2008) . Palau: development of a sustainable health financina scheme . Technical Assistant Report . Project Number 42020 . (http://www .adb .org/Documents/TARs/ PAL/42020-PAL-TAr .pdf, accessed 29 October 2013) . • Republic of Palau Health Care Fund (2010) . Medical savings account and national health insurance . Palau’s first national, healthcare financing system . (http://www ropssa. org/hcf-about. .html,accessed 29 October 2013) .

PALAU 1995 2000 2005 2006 2007 2008 2009 2010 2011

GDP and health expenditures per capita (in current currency unit) ▪ Gross Domestic Product (GDP) – US dollar 5 520 8 263 10 365 10 500 10 529 10 517 9 708 9 601 10 331 ▪ Total Health Expenditure (THE) – US dollar 725 661 798 857 901 914 875 966 930 ▪ Government Health Expenditure (GGHE) – US dollar 527 532 610 662 691 689 644 735 695 ▪ Private Health Expenditure (PvtHE) – US dollar 197 129 188 194 209 225 231 230 235 ▪ Out-of-pocket expenditure (OOP) – US dollar 160 95 99 100 96 103 106 106 108 Health expenditure ratios THE as % of GDP 13.1 8.0 7.7 8.2 8.6 8.7 9.0 10.1 9.0 GGHE as % of GDP 9.6 6.4 5.9 6.3 6.6 6.5 6.6 7.7 6.7 PvtHE as % of GDP 3.6 1.6 1.8 1.9 2.0 2.1 2.4 2.4 2.3 GGHE as % of GGE 13.9 12.0 15.9 14.5 14.3 15.1 13.8 16.0 16.0 GGHE as % of THE 72.8 80.4 76.5 77.3 76.8 75.4 73.6 76.1 74.7 OOP as % of THE 22.1 14.4 12.5 11.7 10.7 11.3 12.1 10.9 11.6 Other private as % of THE 5.1 5.2 11.1 11.0 12.6 13.3 14.3 12.9 13.7 External resources 40.3 35.1 45.7 41.3 39.0 37.9 31.6 37.5 36.8 as % of THE All data for 2011 are provisional data Health Expenditure and GDP figures are expressed in current US dollar based on the average exchange rate for that year.

Palau 81 Papua New Guinea

Health expenditure trends

Papua New Guinea is a lower middle-income country with a population of 7 million people in 2011 . Gross domestic product (GDP) per capita was US$ 1767 in 2011 . The predominant source of health-care financing is general government health expenditure GGHE( ), which is mainly financed through general taxation and substantially supported by external donors . In 2011, total health expenditure (THE) was 4 .5% of GDP, equivalent to US$ 79 per capita . Out- of-pocket (OOP) payments made up 11 7%. of THE; GGHE was 79 0%. of the . GGHE amounted to US$ 62 per capita and represented 2 8%. of general government expenditure (GGE) and 3 5%. of gdp . Figures 1–5 show historical trends in health expenditure . THE has been fluctuating and has shown a tendency to increase since 2002 . Since 1995, the Government’s contribution to THE has been fluctuating, while the contribution of OOP payments has slightly increased . Figure 4 shows that the Government’s priority to health has averaged about 10 0%. since 1995 .

Health financing system

Health service delivery in Papua New Guinea is mainly provided at Government and church health facilities, funded by a mix of government tax revenues . OOP payments and donor funds . The central Government is responsible for the national referral hospital, as well as one specialist hospital and four regional and 16 provincial public hospitals . The provinces and districts have been given the responsibility to run rural health services, although the financial resources to do so may be inadequate . The majority of health service delivery is carried out by provincial and local governments as part of rural health service delivery through rural hospitals, health centres, health subcentres and aid posts . All of these services offer a mix of public health, primary and community care . In addition, churches also contribute significantly to health service delivery in rural areas and are responsible for training many of the country’s health workers . However, the Government remains the main source of finance for church-run health activities and meets more than 80% of the costs of church health services . Private sector organizations include for-profit, enterprise-based services or employment-related health-care programmes; small for-profit private sector, women’s and youth organizations; nongovernmental organizations and an undocumented number of unregulated traditional healers . General taxation is one of the major sources of finance for government expenditure on health . Overseas donors also finance a significant share of the Government’s expenditure on health . The central Government provides provinces with a Provincial Health Function Grant, which provincial governments can decide how to use within its portfolio of health activities . In principle, all public health and primary health-care services are free at the point of use . However, since health function grants do not always reach the facility level on time, staff at those facilities tend to charge user

82 Health financing country profiles in the western pacific region, 1995–2011 fees . Fees in church facilities are usually displayed in public view and are generally higher than fees in public facilities . The Public Hospitals (Charges) Act (1972) covers the user fees in public hospitals, but not health centres nor aid posts . The role of private insurance is also small, with only a minority of the population covered with such insurance . Consequently, private expenditure on health, including OOP payments and private insurance, accounts for less than 10% of the . Nonetheless, the demand for private insurance is increasing .

Way forward

The 2001–2010 National Health Plan envisaged a substantial real increase in the Government’s funding for the health sector . The plan, however, did not materialize because of a sharp economic slowdown in 2002 and a continuing decline in overseas aid . The National Health Plan 2011–2020’s vision is of strengthened primary health care for all and improved service delivery for the rural majority and the urban disadvantaged, which should lead to equity issues being addressed . This new plan also emphasizes the importance of increased efficiency and the central role of human resources for health, as well as the need of infrastructure rehabilitation and better governance structures . The main challenges have been identified and a plan developed to address them .

Selected references

• Government of Papua New Guinea (2010) . National health plan 2011–2020 . Volume 1– policies and strategies . Papua New Guinea . • Australian Agency for International Development (2009) . Evaluation of Australian aid to health service delivery in Papua New Guinea . Solomon Islands, and Vanuatu . Evaluation report . (http://www ode. .ausaid .gov .au/publications/pdf/health_service_delivery_png_sols_van .pdf, accessed 21 February 2013) . • WHO and the National Department of Health . Papua New Guinea(2012):Papua New Guinea health service delivery profile .2012 . (http://www wpro. who. int/health_services/service_delivery_profile_. papua_new_guinea .pdf, accessed 21 February 2013) .

Papua New Guinea 83 PNG–Figure 1. General trends in health expenditure per capita at exchange rate

80 GGHE

70 PvtHE

20 Current US$ per capita (at exchange rate)

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

PNG–Figure 2. General trends in health expenditure as % of GDP

4.5 GGHE as % of GDP

4 PvtHE as % of GDP

3.5

2.5

% of GDP 2

1.5

0.5

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

PNG–Figure 3. Trends in the structure of total health expenditure (THE)

100 GGHE 90 OOP

80 Other private

% of total health expenditure 30

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

84 Health financing country profiles in the western pacific region, 1995–2011 PNG–Figure 4. GGHE as % of government spending

36 34 32 30 28 26 24 22 20 18 16 % of government spending 14 12 10 8 6 4 2 0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

PNG–Figure 5. External resources for health as % of THE

50 % of THE 40

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Papua New Guinea 85 papua new guinea 1995 2000 2005 2006 2007 2008 2009 2010 2011

GDP and health expenditures per capita (in current currency unit) ▪ Gross Domestic Product (GDP) – US dollar 1 026 651 798 885 991 1 223 1 183 1 382 1 767 – Papua New Guinean kina 1 314 1 810 2 476 2 706 2 939 3 302 3 259 3 758 4 190 ▪ Total Health Expenditure (THE) – US dollar 36 26 32 31 41 56 50 57 79 – Papua New Guinean kina 46 72 100 96 123 151 138 154 187 ▪ Government Health Expenditure (GGHE) – US dollar 31 21 25 24 32 44 36 43 62 – Papua New Guinean kina 40 59 76 72 96 118 100 116 148 ▪ Private Health Expenditure (PvtHE) – US dollar 5 5 8 8 9 12 14 14 17 – Papua New Guinean kina 6 13 23 23 27 32 38 38 39 ▪ Out-of-pocket expenditure (OOP) – US dollar 2 3 4 4 5 7 8 8 9 – Papua New Guinean kina 3 7 13 13 15 18 21 21 22 Health expenditure ratios THE as % of GDP 3.5 4.0 4.0 3.5 4.2 4.6 4.2 4.1 4.5 GGHE as % of GDP 3.0 3.3 3.1 2.7 3.3 3.6 3.1 3.1 3.5 PvtHE as % of GDP 0.5 0.7 0.9 0.9 0.9 1.0 1.2 1.0 0.9 GGHE as % of GGE 10.7 9.9 8.0 7.3 9.4 10.3 10.0 9.8 12.8 GGHE as % of THE 86.2 81.7 76.5 75.7 78.2 78.5 72.5 75.2 79.0 OOP as % of THE 6.4 10.2 13.1 13.6 12.2 12.0 15.4 13.8 11.7 Other private as % of 7.4 8.0 10.4 10.7 9.6 9.5 12.1 10.9 9.3 THE External resources 6.6 23.8 39.3 26.1 22.2 15.4 18.7 20.9 19.3 as % of THE All data for 2011 are provisional data Health Expenditure and GDP figures are expressed in current US dollar based on the average exchange rate for that year.

86 Health financing country profiles in the western pacific region, 1995–2011 Philippines

Health expenditure trends

The Philippines is a lower middle-income country with a population of 94 .9 million in 2011 . Gross domestic product (GDP) per capita was US$ 2370 in 2011 . Out-of-pocket (OOP) expenditures are the main source of health financing . General government health expenditures (GGHE) are largely financed through general taxation . In 2011, total health expenditure (THE) was 4 .4% of GDP, equivalent to US$ 105 per capita . OOP payments made up 52 .7% of THE; GGHE was 36 .9% of the . GGHE amounted to US $39 per capita and represented 10 2%. of general government expenditure (GGE) and 1 6%. of gdp . Figures 1–5 show historical trends in health expenditure . THE has been increasing steadily since 2002 . The Government’s contribution to THE has increased to over 35 .0% for the past few years, while the contribution of OOP payments has decreased since 2009 . Government’s priority to health has increased since 2009 to over 10 0%. .

Health financing system

In the health delivery system, the public sector supplies health services through a nationwide network of public hospitals, health centres and village health stations . The private sector supplies health services through private hospitals, physicians’ clinics and diagnostic clinics, mostly located in urban areas . Both public and private health facilities operate on a fee-for-service (FFS) basis, although public facilities receive further funding from national or local government governments for salaries and other costs . Most public health facilities are managed by local governments, except for Department of Health-retained hospitals . In the health financing system, household OOP payments are the largest contributor to THE in the Philippines . Patients are expected to make OOP payments for health services in public and private facilities, beyond whatever cost is covered by the country’s social health insurance (SHI) scheme and their private insurance . However, public health facilities are mandated to provide health services free or at lower cost to those who are identified as poor by social workers . Wealthier patients typically seek health services in the private sector, which are permitted to set their own pricing policies . Public financing of health is the second largest contributor to THE and consists of the government budget financed by taxation and funds from shi .

The National Health Insurance Program (NHIP) is managed by the Philippines Health Insurance Corporation (PhilHealth) . It is financed by contributions from employees, employers, individuals (including overseas foreign workers or OFWs), and national and local governments .

Philippines 87 PHL–Figure 1. General trends in health expenditure per capita at exchange rate

100 GGHE 90 PvtHE 80

Current US$ per capita (at exchange rate) 20

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

PHL–Figure 2. General trends in health expenditure as % of GDP

4.5 GGHE as % of GDP

4 PvtHE as % of GDP

3.5

2.5

% of GDP 2

1.5

0.5

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

PHL–Figure 3. Trends in the structure of total health expenditure (THE)

100 GGHE 90 OOP

80 Other private

% of total health expenditure 30

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

88 Health financing country profiles in the western pacific region, 1995–2011 PHL–Figure 4. GGHE as % of government spending

36 34 32 30 28 26 24 22 20 18 16 % of government spending 14 12 10 8 6 4 2 0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

PHL–Figure 5. External resources for health as % of THE

50 % of THE 40

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Philippines 89 Revenue raising PhilHealth is financed by contributions from employees, employers, individuals (including OFWs), and national government and local governments . Employers and employees in the formal sector each contribute a 2 5%. payroll tax as a premium (up to a salary cap of about 30 000 pesos per month, about US$ 700, although plans to adjust this cap are under way) . Under the Individual Paying Program, the self-employed and OFWs contribute an annual premium of around 1200 pesos (US$ 28) . Retirees and pensioners are granted lifetime membership so long as they have paid at least 120 months of premiums into the programme . Those belonging to the poorest 20% of the population are classified as indigent and are entitled to subsidized membership . The premium for the sponsored programme is subsidized by the central Government (mean contribution 80%, range 50%–90%) and local government (mean contribution 20%, range 10%–50%) . Yearly enrolment has depended on local government political will and fiscal capacity . Starting in 2011, sponsored members are identified using the Department of Social Welfare and Development’s national household targeting system for poverty reduction, and will be fully subsidized by the national Government . This is in line with the health agenda of President Benigno Aquino III, which seeks to achieve universal health coverage, with a special focus on reaching the poorest . In 2005, PhilHealth launched the KaSAPI (Kalusugang Sigurado at Abot-Kaya sa PhilHealth Insurance) initiative . It seeks to boost and sustain enrolment among workers in the informal economy . Under KaSAPI, PhilHealth enters into strategic partnerships with microfinance agencies, many of which specifically serve informal economy workers . Members of microfinance agencies could enrol in the NHIP through their agencies and obtain health insurance on more flexible payment terms and in a streamlined process . Pooling of risks and resources Coverage estimates have varied markedly . For instance, PhilHealth previously estimated that about 74% of the nation’s population was enrolled in the programme in 2010 . Yet the 2008 National Demographic Health Survey showed that only 38% of respondents were aware of at least one household member being enrolled in PhilHealth . A recent joint evaluation by PhilHealth and the Department of Health estimated population coverage to be 53%, a figure that is being used as the basis for current reform initiatives . Strategic purchasing PhilHealth pools funds from a variety of sources . Members are entitled to obtain their benefits from any PhilHealth-accredited provider, which can be either public or private . PhilHealth uses the provider payment mechanism as one way to control the behaviour of health providers . Fee-for-service was used to reimburse health providers until, when PhilHealth introduced a case rate system as the new mechanism of reimbursement . Fees-for-service made the cost of a specific disease condition or procedure highly unpredictable and variable in the country . In the new mechanism, the reimbursable amount of specific diseases and procedures is fixed . The new mechanism does not only improve the turnaround time for claims processing, but it also promotes transparency on the actual cost of care . Since PhilHealth members would now know the amount of subsidy, it is hoped that they can plan and make rational choices ahead of time . Members are reimbursed up to a ceiling for different categories of care, after which they have to make OOP payments . PhilHealth reimburses accredited providers on a fee-for-service regime, again with ceilings, though hospitals are allowed to charge over and above the PhilHealth fees (balanced billing) . In addition to the standard package, PhilHealth has also expanded outpatient benefits for indigent members . It has also introduced packages targeted to specific groups, such as mothers and children and tuberculosis patients .

90 Health financing country profiles in the western pacific region, 1995–2011 • Private insurance exists and often is provided by private employers, either voluntarily or as a result of collective bargaining agreements . A number of for-profit health nanagement organizations HMO( s) have been established in the Philippines since the 1990s . HMO benefit packages typically offer preventive health care, inpatient and outpatient services, and emergency care . In addition, the Labor Code also prescribes a minimum set of medical, dental and occupational safety obligations for employers .

Way forward

Despite social and private health insurance schemes, the current high level of OOP payments suggests that the population is still subjected to high financial risks . Indeed, a recent WHO study found that the extent of severe financial hardship caused by using health services (“catastrophic” expenditures) has been increasing in recent years . It also found that inpatient admission rates were markedly lower among the poorer segments of the population . In light of these continuing challenges, the current government recently has launched the Aquino Health Agenda . It aims to achieve universal health care or kalusugang pangkalahatan, with a strong focus on substantially improving the coverage of the poor . Recently, there have been millions of poor families newly enrolled in PhilHealth and several improvements in inpatient and outpatient benefits . As also stipulated in the Philippines’ Health Financing Strategy 2010–2020, the Government seeks to increase health spending, expand PhilHealth to cover the majority of the population and make the NHIP the main source of health financing, reducing OOP payments .

Selected references

• Asia Pacific Observatory on Health Systems and Policies . Health Systems in Transition(2011):1(1) . The Philippines health system review . Manila . World Health Organization Regional Office of the Western Pacific . • Lavado l . et al . (forthcoming) . Financial health burden in the Philippines . • Quimbo s . et al . (2008) . Underutilization of social insurance among the poor: evidence from the Philippines . PLoS One 3(10):3379 . • Obermann k . et al . (2008) . Lessons for health care reform from the less developed world: the case of the Philippines . Eur J Health Econ 9(4):343–349 .

Philippines 91 philippines 1995 2000 2005 2006 2007 2008 2009 2010 2011

GDP and health expenditures per capita (in current currency unit) ▪ Gross Domestic Product (GDP) – US dollar 1 070 1 048 1 205 1 403 1 685 1 932 1 836 2 140 2 370 – Philippine peso 27 521 46 316 66 370 71 986 77 750 85 623 87 523 96 541 102 631 ▪ Total Health Expenditure (THE) – US dollar 37 33 47 55 65 74 78 90 105 – Philippine peso 949 1 442 2 595 2 846 2 977 3 264 3 697 4 048 4 525 ▪ Government Health Expenditure (GGHE) – US dollar 15 16 18 20 23 23 28 34 39 – Philippine peso 375 707 964 1 034 1 060 1 023 1 318 1 535 1 698 ▪ Private Health Expenditure (PvtHE) – US dollar 22 17 29 35 42 51 50 56 66 – Philippine peso 574 736 1 634 1 812 1 917 2 241 2 380 2 514 2 830 ▪ Out-of-pocket expenditure (OOP) – US dollar 19 13 24 30 36 43 42 47 55 – Philippine peso 501 559 1 303 1 558 1 668 1 898 1 989 2 099 2 381 Health expenditure ratios THE as % of GDP 3.4 3.2 3.9 4.0 3.9 3.8 4.3 4.2 4.4 GGHE as % of GDP 1.4 1.5 1.5 1.5 1.4 1.2 1.5 1.6 1.6 PvtHE as % of GDP 2.1 1.7 2.4 2.5 2.5 2.6 2.7 2.7 2.8 GGHE as % of GGE 7.4 8.4 8.9 8.7 8.2 7.4 8.7 9.3 10.2 GGHE as % of THE 39.5 47.6 38.4 36.7 35.1 31.7 36.3 37.2 36.9 OOP as % of THE 50.0 40.5 51.9 54.0 55.1 57.9 53.3 52.5 52.7 Other private as % of 10.5 11.9 9.7 9.3 9.7 10.5 10.4 10.3 10.4 THE External resources 1.8 3.5 4.2 3.8 2.0 1.6 2.4 1.8 1.0 as % of THE All data for 2011 are provisional data Health Expenditure and GDP figures are expressed in current US dollar based on the average exchange rate for that year.

92 Health financing country profiles in the western pacific region, 1995–2011 Republic of Korea

Health expenditure trends

The Republic of Korea is a high-income country with a population of 49 .8 million in 2011 . Gross domestic product (GDP) per capita was US$ 22 424 in 2011 . The predominant source of health- care financing is general government health expenditure GGHE( ), which is mainly financed through social health insurance (SHI) . In 2011, total health expenditure (THE) was 7 .2% of GDP, equivalent to US$ 1616 per capita . Out- of-pocket (OOP) payments made up 32 9%. of THE; GGHE was 57 3%%. of the . GGHE amounted to US$ 927 per capita and represented 13 7%. of general government expenditure (GGE) and 4 1%. of gdp . Figures 1–5 show historical trends in health expenditure . THE has been increasing overall, with the exception of 2008 and 2009) . The contribution of OOP payments to THE has been on a downward trend, while GGHE’s contribution has been on an upward trend since 2003 . Figure 4 shows that the Government’s priority to health has been increasing steadily since 2003 .

Health financing system

Health services in the Republic of Korea are mainly provided by the private sector, but they are financed by the country’s SHI system that runs a copayment scheme . Prior to 2000, the SHI system in the Republic of Korea was characterized by a multiple-payer structure . The 300 insurance societies were merged in stages at the beginning of 1998 to form one national single payer – the National Health Insurance Service (NHIS) – to overcome problems with fragmentation . At present, all employed citizens and their families are mandatory members of the National Health Insurance (NHI) scheme . NHI is financed by contributions collected from the insured and employers and by government subsidies from the national treasury, national health promotion fund, tobacco tax and other sources . It covers more than 97% of the population and consists of two categories of members – employees and the self-employed 1. For employees, contributions are 5 33%. of their gross salaries, with employer and employee each paying half of the premium . The premium levels for those insured in the self-employed category depend on their income and income type . Since the introduction of the self-employed insurance scheme in 1998, the Government has been subsidizing the premiums of beneficiaries . Under NHI, the extent and the level of benefit coverage are determined by the Government, and the benefit package is the same for the whole population 1. All hospitals, clinics and pharmacies, whether public or private, are legally obliged to subscribe as providers under nhi . They are reimbursed by the NHIS on a fee-for-service basis . As such, the NHIS acts as a monopsony by purchasing health services from all providers and setting the cost of every medical procedure that the law covers .

1 . The World Bank (2010) . Health Care Financing Note . East Asia and Pacific Region . Volume II: Health System Profiles . PROFILE SIX: REPUBLIC OF KOREA .

Republic of Korea 93 KOR–Figure 1. General trends in health expenditure per capita at exchange rate

1600 GGHE

1400 PvtHE

1200

1000

800

600

400 Current US$ per capita (at exchange rate)

200

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

KOR–Figure 2. General trends in health expenditure as % of GDP

7 GGHE as % of GDP

PvtHE as % of GDP 6

4 % of GDP 3

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

KOR–Figure 3. Trends in the structure of total health expenditure (THE)

100 GGHE 90 OOP

80 Other private

% of total health expenditure 30

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

94 Health financing country profiles in the western pacific region, 1995–2011 KOR–Figure 4. GGHE as % of government spending

36 34 32 30 28 26 24 22 20 18 16 % of government spending 14 12 10 8 6 4 2 0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

KOR–Figure 5. External resources for health as % of THE

50 % of THE 40

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Republic of Korea 95 When the insured or their dependents receive medical care benefits, they bear a part of the medical costs and the amount may vary: 20% of total medical fees for inpatients and 30%– 60% for outpatients depending on the type of medical care institutions . A copayment ceiling system has also been introduced to protect households against catastrophic or high-cost diseases and covers inpatient, outpatient and pharmaceutical services . Under the system, an insured person is exempted from further copayments when the total amount of medical costs exceeds 2 to 4 million won (about US$ 2000–US$ 4000), depending on annual income . The remainder of the population is covered by the Medical Aid Program, a means-tested programme for low-income households that is fully financed jointly by the central Government and the provincial governments . Since NHI only covers around 55% of THE, many citizens also have private health insurance, which provides coverage for procedures considered as elective by the nhis . It is estimated that about 20% of the population is covered by private insurance . The market for private health insurance is not insignificant in the Republic of Korea with private health insurance’s share of total financing for health care estimated at 3 .4% . With high OOP rates under the current NHI, it is expected that more people will join private health insurance plans, and that the private health insurance market will expand in the years to come 1.

Way forward

While the Republic of Korea has managed to achieve universal health coverage in a relatively short time frame, the continued inequity in access to services as a result of high OOP payments, as well as a rapidly ageing population, rising pharmaceutical costs and the continued use of a fee-for- services payment mechanism constitute challenges for the sustainability, efficiency and equity of the health financing system .

Selected references

• Lee CY and E Kim . Case study: Republic of Korea . (http://www who. int/chp/knowledge/publications/. case_study_korea .pdf, accessed 21 February 2013) . • The World Bank (2010) . Health care financing note . East Asia and Pacific region . Volume II: Health System Profiles, profile six: republic of Korea . Washington DC . The World Bank . • Republic of Korea . Ministry of Health and Welfare (2013) . Policies . (http://english mohw. go. kr/front_. eng/jc/sjc0108mn jsp?. PAR_MENU_ID=100315&MENU_ID=10031501, accessed 21 February 2013) .

96 Health financing country profiles in the western pacific region, 1995–2011 republic of korea 1995 2000 2005 2006 2007 2008 2009 2010 2011

GDP and health expenditures per capita (in current currency unit) ▪ Gross Domestic Product (GDP) – US dollar 11 779 11 347 17 551 19 676 21 590 19 028 16 959 20 540 22 424 – Korean won 9 084 639 12 800 000 18 000 000 18 800 000 20 100 000 21 000 000 21 700 000 23 700 000 24 900 000 ▪ Total Health Expenditure (THE) – US dollar 442 508 994 1 190 1 361 1 229 1 174 1 452 1 616 – Korean won 340 821 575 047 1 018 192 1 136 087 1 264 359 1 354 152 1 498 796 1 678 339 1 791 356 ▪ Government Health Expenditure (GGHE) – US dollar 170 247 526 658 759 687 683 845 927 – Korean won 131 141 279 668 538 755 628 410 705 726 757 600 871 981 977 397 1 026 911 ▪ Private Health Expenditure (PvtHE) – US dollar 272 261 468 532 601 541 491 606 690 – Korean won 209 680 295 379 479 437 507 677 558 634 596 552 626 816 700 942 764 445 ▪ Out-of-pocket expenditure (OOP) – US dollar 230 211 377 425 473 420 381 466 532 – Korean won 177 046 238 837 385 939 405 801 439 097 462 778 486 086 538 647 589 250 Health expenditure ratios THE as % of GDP 3.8 4.5 5.7 6.0 6.3 6.5 6.9 7.1 7.2 GGHE as % of GDP 1.4 2.2 3.0 3.3 3.5 3.6 4.0 4.1 4.1 PvtHE as % of GDP 2.3 2.3 2.7 2.7 2.8 2.8 2.9 3.0 3.1 GGHE as % of GGE 7.1 9.7 11.3 12.1 12.3 11.9 12.2 13.7 13.7 GGHE as % of THE 38.5 48.6 52.9 55.3 55.8 55.9 58.2 58.2 57.3 OOP as % of THE 51.9 41.5 37.9 35.7 34.7 34.2 32.4 32.1 32.9 Other private as % of THE 9.6 9.8 9.2 9.0 9.5 9.9 9.4 9.7 9.8 External resources 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 as % of THE All data for 2011 are provisional data Health Expenditure and GDP figures are expressed in current US dollar based on the average exchange rate for that year.

Republic of Korea 97 Samoa

Health expenditure trends

Samoa is a Pacific island country with a population of 183 874 in 2011 . Gross domestic product (GDP) per capita was US$ 3553 in 2011 . The predominant source of health-care financing in Samoa is general government health expenditure (GGHE), which is mainly financed through general taxation with support from external donors . In 2011, total health expenditure (THE) was 7 .0% of GDP, equivalent to US$ 250 per capita . Out- of-pocket (OOP) payments made up 7 2%. of THE; GGHE was 88 5%. of the . GGHE amounted to US$ 221 per capita and represented 25 1%. of general government expenditure (GGE) and 6 .2% of gdp . External resources for health is 22 6%. of the . Figures 1–5 show historical trends in health expenditure . THE has been on an upward trend since 2002, with the exception of 2009 . Government accounted for the predominant share of THE, and its percentage of THE continued to increase . Figure 4 shows that the Government’s priority to health has an upward tendency as a whole, with a slight decrease in the trend from 2001 to 2005 .

Health financing system

Samoa has a mixed-delivery and mixed-financing health system . The Health Sector Plan 2008– 2018, which is the cornerstone for all health sector development and the reference point for policy, strategy and planning, led to the Ministry of Health Act 2006 and the National Health Service Act 2006, which in turn led to the formation of the National Health Service (NHS) . The Ministry of Health (MOH) now focuses exclusively on monitoring and regulating the health sector as whole, while the NHS focuses exclusively on health services provision . The private sector consists of one private hospital, MedCen Hospital, and numerous private health-care providers, including nongovernmental organizations and traditional healers . Tertiary treatment is available overseas and is financed by the Samoa Medical Treatment Scheme (SMTS) and the New Zealand Medical Treatment Scheme (NZMTS), funded by New Zealand . Health services are financed by the Government through general taxation, household OOP payments and overseas donors . All citizens and residents are eligible to receive highly subsidized health-care services provided by nhs . In addition, the Samoa National Provident Fund, which is also financed by general tax revenues, provides free health services and medical care for all citizens 65 years and above . This scheme covers all primary and secondary treatment performed at public health facilities, as well as prescription drugs . Compared to the public sector, the private sector charges much higher user fees for delivery of health services, as well as for drugs . Private health-care provision is financed by household OOP payments . Finally, donor funding for health is directed either to the Ministry of Finance, which disperses the funding to NHS and MOH, or directly to nongovernmental organizations . Health services provided by nongovernmental organizations are made available to the entire population free at the point of use and are for preventive care and awareness-raising programmes .

98 Health financing country profiles in the western pacific region, 1995–2011 WSM–Figure 1. General trends in health expenditure per capita at exchange rate

250 GGHE

PvtHE 200

150

100

Current US$ per capita (at exchange rate) 50

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

WSM–Figure 2. General trends in health expenditure as % of GDP

7 GGHE as % of GDP

PvtHE as % of GDP 6

4 % of GDP 3

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

WSM–Figure 3. Trends in the structure of total health expenditure (THE)

100 GGHE 90 OOP

80 Other private

% of total health expenditure 30

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Samoa 99 WSM–Figure 4. GGHE as % of government spending

36 34 32 30 28 26 24 22 20 18 16 % of government spending 14 12 10 8 6 4 2 0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

WSM–Figure 5. External resources for health as % of THE

50 % of THE 40

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

100 Health financing country profiles in the western pacific region, 1995–2011 Way forward

Similar to other Pacific islands . Samoa will continue to be challenged by its small population size, leading to a limited ability to raise revenue, and its lack of a referral hospital, leading to increasing health expenditures . The rise and prevalence of noncommunicable diseases, as well as high neonatal mortality rates, will also continue to put pressure on the financial sustainability of the health sector .

Selected references

• Ministry of Health . Samoa . Health sector plan 2007–2015 . (http://www wpro. who. int/countries/. wsm/SamoaHealthSectorPlan0715 .pdf, accessed 21 February 2013) . • NHA Team-Policy Unit . Strategic Development and Planning Division . Ministry of Health . Samoa . National health accounts fiscal year 2006/2007 . (http://www health. gov. ws/. LinkClick .aspx?filetick et=%2FcguyJhEp44%3D&tabid=5385&mid=9136&language=en-US, accessed 21 February 2013) .

samoa 1995 2000 2005 2006 2007 2008 2009 2010 2011

GDP and health expenditures per capita (in current currency unit) ▪ Gross Domestic Product (GDP) – US dollar 1 191 1 312 2 302 2 493 2 804 3 035 2 863 3 192 3 553 – Samoan tala 2 945 4 312 6 238 6 930 7 337 8 025 7 818 7 931 8 234 ▪ Total Health Expenditure (THE) – US dollar 56 79 114 129 165 168 154 205 250 – Samoan tala 138 259 309 359 432 444 421 508 578 ▪ Government Health Expenditure (GGHE) – US dollar 40 61 93 110 142 144 132 179 221 – Samoan tala 98 199 251 305 371 381 360 444 512 ▪ Private Health Expenditure (PvtHE) – US dollar 16 18 21 19 23 24 23 26 29 – Samoan tala 40 60 58 54 61 63 62 64 66 ▪ Out-of-pocket expenditure (OOP) – US dollar 14 15 15 12 15 15 14 16 18 – Samoan tala 34 49 39 34 39 39 38 40 42 Health expenditure ratios THE as % of GDP 4.7 6.0 5.0 5.2 5.9 5.5 5.4 6.4 7.0 GGHE as % of GDP 3.3 4.6 4.0 4.4 5.1 4.8 4.6 5.6 6.2 PvtHE as % of GDP 1.4 1.4 0.9 0.8 0.8 0.8 0.8 0.8 0.8 GGHE as % of GGE 12.4 21.4 15.4 19.3 20.3 18.6 18.3 23.4 25.1 GGHE as % of THE 70.9 76.8 81.3 84.9 85.9 85.9 85.4 87.4 88.5 OOP as % of THE 24.6 19.0 12.8 9.4 9.0 8.8 9.1 7.9 7.2 Other private as % of THE 4.5 4.3 5.9 5.7 5.1 5.3 5.5 4.7 4.3 External resources 14.5 16.2 19.3 25.9 18.8 12.7 11.3 13.4 22.6 as % of THE All data for 2011 are provisional data Health Expenditure and GDP figures are expressed in current US dollar based on the average exchange rate for that year.

Samoa 101 Singapore

Health expenditure trends

Singapore is a high-income country with a population of 5 2. million in 2011 . Gross domestic product (GDP) per capita was US$ 51 200 in 2011 . Out-of-pocket (OOP) expenditures are the main source of health-care financing and account for more than half of the country’s total health expenditure . However, OOP payments also include withdrawals from medical savings accounts . In 2011, total health expenditure (THE) was 4 .5% of GDP, equivalent to US$ 2286 per capita . OOP payments made up 60 4%. of THE; general government health expenditure (GGHE) was 31 0%. of the . GGHE amounted to US$ 709 per capita and represented 8 8%. of general government expenditure (GGE) and 1 .4% of gdp . Figures 1–5 show historical trends in health expenditure . THE has been increasing steadily since 2002 . In the meantime . OOP payments remain the major part of THE, followed by GGHE – with GGHE decreasing before 2004, stabilizing from 2004 to 2007 and slightly increasing since 2007 . Figure 4 shows that the Government’s priority to health has remained relatively constant since 2003, with GGHE as a percentage of GGE averaging 7 0%. .

Health financing system

Singapore has a mixed delivery and financing health system organized around a multi-tier system: • According to the Ministry of Health, “the primary care sector is dominated by private sector providers, which account for about 80% of the market” 1. While outpatient services in private facilities are typically paid OOP, all Singaporeans are entitled to subsidized medical services at government polyclinics and hospitals, which is the first tier of protection . The public sector delivers about 80% of acute care 1. Furthermore, the “Government subsidizes up to 80% of the total bill in acute hospital wards for all Singaporeans . In the step-down care sector (e g. . nursing homes, community hospitals and hospices), service provision is mainly provided by voluntary welfare organizations, most of which are funded by the Government for services rendered to patients ”. 1 • Medisave is the centerpiece of the Singapore health financing system and serves as the second tier of protection 1. Established in 1984, Medisave is a compulsory individual medical savings account (MSA) scheme . All employed Singaporeans and their employers contribute a part of the monthly wages (typically 7–9 5%). into an individual’s saving account that is portable across jobs and after retirement .2 Individuals may use the accumulated contributions in their Medisave to pay for hospital expenses incurred by themselves or their immediate family members . To prevent individuals from exhausting their Medisave account before retirement, the Government sets limits to the use of Medisave .

1 . Ministry of Health, Singapore (2013) . Costs and financing . (http://www .moh gov. .sg/content/moh_web/home/costs_and_ financing .html, accessed 29 October 2013) . 2 . Ministry of Health, Singapore (2013) . Schemes and subsidies . (http://www .moh gov. .sg/content/moh_web/home/costs_ and_financing/schemes_subsidies/medisave .html, accessed 29 October 2013) .

102 Health financing country profiles in the western pacific region, 1995–2011 SGP–Figure 1. General trends in health expenditure per capita at exchange rate

2500 GGHE

PvtHE 2000

1500

1000

Current US$ per capita (at exchange rate) 500

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

SGP–Figure 2. General trends in health expenditure as % of GDP

4.5 GGHE as % of GDP

4 PvtHE as % of GDP

3.5

2.5

% of GDP 2

1.5

0.5

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

SGP–Figure 3. Trends in the structure of total health expenditure (THE)

100 GGHE 90 OOP

80 Other private

% of total health expenditure 30

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Singapore 103 SGP–Figure 4. GGHE as % of government spending

36 34 32 30 28 26 24 22 20 18 16 % of government spending 14 12 10 8 6 4 2 0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

SGP–Figure 5. External resources for health as % of THE

50 % of THE 40

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

104 Health financing country profiles in the western pacific region, 1995–2011 • MediShield provides a third level of protection and is designed to help members meet the medical expenses from major or prolonged illnesses for which their MSA balance would not be sufficient . Annual premiums for MediShield can be paid from the individual’s Medisave account . Deductibles and copayments are applicable when receiving care . • ElderShield is insurance for severe disability that is available for subscription by Singaporeans to protect against the financial risks of suffering a severe disability . Many middle- and higher- income Singaporeans have also supplemented their basic coverage with integrated private insurance policies (integrated shield plans) for treatment in the private sector . Singaporeans must subscribe to the basic MediShield product before they can purchase the add-on private integrated shield plans . This industry structure preserves the national risk pool and guards against “cherry picking” of healthy lives by private insurers . Similarly, ElderShield supplements allow policyholders to enhance the disability benefits coverage offered by the basic ElderShield product 1. • Finally, Medifund is a medical endowment fund to help needy Singaporeans who are unable to pay for their medical expenses . Medifund acts as a safety net for those who cannot afford the subsidized bill charges, over and above the protection provided by Medisave and MediShield . In terms of revenue raising, household OOP payments fund a large portion of the . The next largest source of health-care financing is government expenditure derived from its general budget . Private health insurance provides additional coverage . It is estimated that 2 .32 million people in Singapore are covered by private health insurance .

Way forward

Singapore’s ethos of giving citizens individual responsibility for financing their health-care services, as well as affordable health care, continues to face the challenge of high OOP payments . Addressing the barriers that these represent for some parts of the population may be a policy avenue to explore, as well as trying to harness the pooling potential of these high OOP payments, which would imply departing from the current medical savings accounts approach . Recently, Singapore announced that it plans to introduce “Medishield Life” to ensure lifetime coverage of financial protection .

Selected references

• Ministry of Health, Singapore (2013) . Costs and financing . (http://www .moh .gov .sg/content/ moh_web/home/costs_and_financing .html, accessed 29 October 2013) . • Ministry of Health, Singapore (2013) . Schemes and subsidies . (http://www moh. gov. sg/content/. moh_web/home/costs_and_financing/schemes_subsidies/medisave html. , accessed 29 October 2013) . • Ministry of Health, Singapore (2013) . What is MediShield Life? (http://www .moh gov. .sg/content/ moh_web/home/pressRoom/Current_Issues/2013/national-day-rally-2013/medishield .html, accessed 29 October 2013) .

Singapore 105 singapore 1995 2000 2005 2006 2007 2008 2009 2010 2011

GDP and health expenditures per capita (in current currency unit) ▪ Gross Domestic Product (GDP) – US dollar 25 006 24 063 29 402 33 025 38 794 39 937 38 181 45 552 51 200 – Singapore dollar 35 443 41 483 48 937 52 474 58 466 56 506 55 535 62 111 64 398 ▪ Total Health Expenditure (THE) – US dollar 741 663 1 175 1 275 1 449 1 670 1 772 2 005 2 286 – Singapore dollar 1 051 1 143 1 956 2 025 2 184 2 362 2 577 2 734 2 876 ▪ Government Health Expenditure (GGHE) – US dollar 368 298 302 323 367 458 553 629 709 – Singapore dollar 521 513 502 513 553 648 805 858 892 ▪ Private Health Expenditure (PvtHE) – US dollar 374 365 874 952 1 082 1 212 1 219 1 376 1 577 – Singapore dollar 530 629 1 454 1 512 1 631 1 715 1 772 1 876 1 984 ▪ Out-of-pocket expenditure (OOP) – US dollar 362 349 778 847 958 1 073 1 077 1 208 1 382 – Singapore dollar 513 602 1 294 1 346 1 443 1 518 1 566 1 647 1 738 Health expenditure ratios THE as % of GDP 3.0 2.8 4.0 3.9 3.7 4.2 4.6 4.4 4.5 GGHE as % of GDP 1.5 1.2 1.0 1.0 0.9 1.1 1.4 1.4 1.4 PvtHE as % of GDP 1.5 1.5 3.0 2.9 2.8 3.0 3.2 3.0 3.1 GGHE as % of GGE 9.4 6.2 7.0 6.6 6.9 6.9 7.1 9.0 8.8 GGHE as % of THE 49.6 44.9 25.7 25.3 25.3 27.4 31.2 31.4 31.0 OOP as % of THE 48.9 52.7 66.2 66.5 66.1 64.3 60.8 60.2 60.4 Other private as % of THE 1.6 2.3 8.2 8.2 8.6 8.3 8.0 8.4 8.6 External resources as % of THE 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 All data for 2011 are provisional data Health Expenditure and GDP figures are expressed in current US dollar based on the average exchange rate for that year.

106 Health financing country profiles in the western pacific region, 1995–2011 Solomon Islands

Health expenditure trends

Solomon Islands is a Pacific island country with a population of 552 266 in 2011 . Gross domestic product (GDP) per capita was US$ 1517 in 2011 . The predominant source of health-care financing in Solomon Islands is general government health expenditure, with support from external donors . In 2011, total health expenditure (THE) was 8 8%. of GDP, equivalent to US$ 134 per capita . Out-of-pocket (OOP) payments made up 3 0%. of THE; general government health expenditure (GGHE) was 94 8%. of the . GGHE amounted to US$ 127 per capita and represented 25 5%. of general government expenditure (GGE) and 8 .4% of gdp . Figures 1–5 show historical trends in health expenditure . THE has been on an upward trend since 2006 . The structure of health expenditure has remained relatively constant with the Government accounting for the predominant share of the . Figure 4 shows that the Government’s priority to health follows no clear pattern .

Health financing system

Solomon Islands has a publicly financed and publicly delivered health system . Any health reforms will be carried out within the existing overall “public–public” system 1. Health service delivery in Solomon Islands is predominantly a function of the Ministry of Health and Medical Services (MHMS), with implementing agencies in the provinces . The country’s health-care facilities are comprised of the National Referral Hospital (NRH) in Honiara, provincial secondary-care hospitals, church-operated secondary care hospitals and numerous primary health clinics . General outpatient clinic services and inpatient services are provided free of charge to all Solomon Islands nationals . User fees are charged for a limited set of services such as specific dental procedures, radiology and laboratory services, and the issuance of medical records and documents, as well as visits to specialty outpatient clinics . The public sector is responsible for the bulk of health financing in Solomon Islands . The Government funds health services at both the central and provincial levels through its general revenue derived from taxation and income from the export of primary commodities . About one third of public health financing comes from overseas development aid, especially from Australia, Japan and New Zealand . The Government provides some funding for the services of church-operated hospitals and nongovernmental organizations through the MHMS, and accounts for these services in their health sector planning and management 1. Private health insurance makes a negligible contribution to the .

1 . ministry of Health & Medical Services, Solomon Islands (2011) . National health strategic plan (2011–2015) . (http://www . wpro who. .int/health_services/solomon_islands_nationalhealthplan .pdf . accessed 29 October 2013) .

Solomon Islands 107 SLB–Figure 1. General trends in health expenditure per capita at exchange rate

140 GGHE

120 PvtHE

100

40 Current US$ per capita (at exchange rate)

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

SLB–Figure 2. General trends in health expenditure as % of GDP

9 GGHE as % of GDP 8 PvtHE as % of GDP

% of GDP 4

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

SLB–Figure 3. Trends in the structure of total health expenditure (THE)

100 GGHE 90 OOP

80 Other private

% of total health expenditure 30

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

108 Health financing country profiles in the western pacific region, 1995–2011 SLB–Figure 4. GGHE as % of government spending

36 34 32 30 28 26 24 22 20 18 16 % of government spending 14 12 10 8 6 4 2 0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

SLB–Figure 5. External resources for health as % of THE

50 % of THE 40

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Solomon Islands 109 Way forward

Solomon Islands is one of the largest Pacific islands, but it faces challenges of financial sustainability and donor dependence that also affect smaller islands .

Selected references

• Australian Agency for International Development (2009) . Evaluation of Australian aid to health service delivery in Papua New Guinea . Solomon Islands and Vanuatu . Evaluation Report . (http://www ode. .ausaid gov. .au/publications/documents/working-paper-health-service-delivery- sols .pdf, accessed 21 February 2013) . • Ministry of Health, Solomon Islands . Brief introduction . (http://www commerce. .gov .sb/MOH/ MOHintro htm. , accessed 21 February 2013) . • Ministry of Health & Medical Services, Solomon Islands (2011) . National health strategic plan (2011–2015) . (http://www wpro. who. .int/health_services/solomon_islands_nationalhealthplan . pdf, accessed 29 October 2013) . • World Bank (2010) . Soloman Islands health financing options . (http://documents worldbank. . org/curated/en/2010/06/16358926/solomon-islands-health-financing-options, accessed 21 February 2013) .

solomon islands 1995 2000 2005 2006 2007 2008 2009 2010 2011

GDP and health expenditures per capita (in current currency unit) ▪ Gross Domestic Product (GDP) – US dollar 1 457 1 065 881 946 1 180 1 266 1 147 1 261 1 569 – Solomon Islands dollar 4 963 5 417 6 634 7 195 9 033 9 807 9 241 10 170 11 991 ▪ Total Health Expenditure (THE) – US dollar 47 49 69 63 68 71 90 93 134 – Solomon Islands dollar 161 247 520 482 524 550 726 754 1 026 ▪ Government Health Expenditure (GGHE) – US dollar 44 46 65 59 64 66 85 88 127 – Solomon Islands dollar 150 233 489 449 489 510 686 707 971 ▪ Private Health Expenditure (PvtHE) – US dollar 3 3 4 4 5 5 5 6 7 – Solomon Islands dollar 12 14 31 33 35 40 39 47 55 ▪ Out-of-pocket expenditure (OOP) – US dollar 2 2 2 2 3 3 3 3 4 – Solomon Islands dollar 6 8 17 19 20 23 22 27 31 Health expenditure ratios THE as % of GDP 3.2 4.6 7.8 6.7 5.8 5.6 7.9 7.4 8.6 GGHE as % of GDP 3.0 4.3 7.4 6.2 5.4 5.2 7.4 6.9 8.1 PvtHE as % of GDP 0.2 0.3 0.5 0.5 0.4 0.4 0.4 0.5 0.5 GGHE as % of GGE 14.8 20.7 28.5 25.2 20.1 15.5 21.1 20.3 25.5 GGHE as % of THE 92.8 94.3 94.1 93.2 93.2 92.8 94.6 93.8 94.6 OOP as % of THE 4.0 3.2 3.4 3.9 3.8 4.1 3.1 3.5 3.0 Other private as % of THE 3.2 2.5 2.6 3.0 2.9 3.1 2.3 2.7 2.3 External resources 14.5 13.1 35.4 50.6 44.4 31.8 33.3 36.1 44.8 as % of THE All data for 2011 are provisional data Health Expenditure and GDP figures are expressed in current US dollar based on the average exchange rate for that year.

110 Health financing country profiles in the western pacific region, 1995–2011 Tonga

Health expenditure trends

Tonga is a Pacific island country with a population of 104 510 in 2011 . Gross domestic product (GDP) per capita was US$ 4347 in 2011 . The predominant source of health-care financing in Tonga is general government health expenditure (GGHE), which is mainly financed through general taxation and is substantially supported by external donors . In 2011, total health expenditure (THE) was 5 .0% of GDP, equivalent to US$ 219 per capita . Out- of-pocket (OOP) payments made up 11 1%. of THE; GGHE was 83 6%. of the . GGHE amounted to US$ 183 per capita and represented 15 8%. of general government expenditure (GGE) and 4 2%. of gdp . Figures 1–5 show historical trends in health expenditure . THE has been on an upward trend since 1995, although it decreased in 2009 . GGHE accounts for about 80% of THE, and has been on an upward trend overall, despite a decrease in 2009 .

Health financing system

Health services in Tonga are largely provided and financed by the Government . The Ministry of Health is responsible for delivering health services through the country’s public health facilities, which include four hospitals and 48 primary care health centres . Tonga nationals who use public health facilities are able to receive free medical treatment and drugs . A small private health sector exists and consists mainly of traditional healers and nongovernmental organizations . Patients requiring specialist care that is not available in Tonga can be referred to New Zealand under two overseas treatment schemes funded by the governments of Tonga and New Zealand 1. The decision whether to refer is made by the Medical Transfer Board . The bulk of government expenditure is directed to public health facilities . Public expenditure on health is financed by general taxation with the support of external donors . OOP spending was mostly on traditional healers, private pharmacies and private physicians . According to WHO’s Tonga Country Health Profile, “About 12% of the population have some kind of health insurance . The private sector is still small and consists mainly of traditional healers and government- employed doctors practising ‘after hours’ . About 14% of total expenditure on health is for traditional healers, although they are mostly paid in kind . Expenditure on drugs accounts for approximately 7 .8% of total expenditure on health ”. 1 Private health insurance, which accounts for less than 1% of total health spending, is used almost exclusively to help cover the costs of overseas medical treatment . Achieving a more diversified and sustainable financing base for the health sector is a key policy goal for the Government . Under this rationale, the Cabinet approved the introduction of user fees in public facilities in 2005 . Initially, the user fees primarily targeted non-Tongan nationals and applied only to inpatient services provided at Vaiola Hospital . However, the new policy eventually will involve an increase for the inpatient food and admission fees for Tongan nationals . These charges will be capped at 21 days .

1 . WHO Western Pacific Region (2011) . Tonga country information profile . (http://www wpro. who. .int/countries/ton/33TONpro2011_finaldraft .pdf . accessed 21 February 2013) .

Tonga 111 TON–Figure 1. General trends in health expenditure per capita at exchange rate

250 GGHE

PvtHE 200

150

100

Current US$ per capita (at exchange rate) 50

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

TON–Figure 2. General trends in health expenditure as % of GDP

7 GGHE as % of GDP

6 PvtHE as % of GDP

4 % of GDP 3

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

TON–Figure 3. Trends in the structure of total health expenditure (THE)

100 GGHE 90 OOP

80 Other private

% of total health expenditure 30

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

112 Health financing country profiles in the western pacific region, 1995–2011 TON–Figure 4. GGHE as % of government spending

36 34 32 30 28 26 24 22 20 18 16 % of government spending 14 12 10 8 6 4 2 0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

TON–Figure 5. External resources for health as % of THE

50 % of THE 40

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Tonga 113 User fee exemptions apply to patients under 14 years old and over 70, those in the Infections Disease Ward (or isolated in the ward for infection control) and those admitted for psychiatric illnesses . There are also plans to introduce social health insurance (SHI) .

Way forward

The revenue collection method currently uses general taxation, is relatively simple, and allows for a greater degree of risk pooling, little fragmentation of pools and greater equity in access as a result . However, the introduction of user fees may jeopardize this equity achievement . The rolling out of SHI could improve the revenue-raising ability of the state . Tonga’s current challenges, therefore, remain the financial sustainability of its health sector, linked to its small population size and high costs associated with overseas referrals, among other factors .

Selected references

• World Bank (2010) . Financing options for the health sector in Tonga . (http://siteresources worldbank. org/. INTHSD/Resources/topics/415176-1255443724448/FiscalSpaceforHealthTongaFinancingOptions fortheHealthSector .pdf, accessed 21 February 2013) . • WHO Western Pacific Region (2011) . Tonga country information profile . (http://www wpro. who. int/. countries/ton/33TONpro2011_finaldraft .pdf, accessed 21 February 2013) .

tonga 1995 2000 2005 2006 2007 2008 2009 2010 2011

GDP and health expenditures per capita (in current currency unit) ▪ Gross Domestic Product (GDP) – US dollar 2 112 1 926 2 617 2 889 2 992 3 298 3 154 3 587 4 347 – Tongan pa’anga 2 684 3 387 5 086 5 854 5 896 6 407 6 417 6 836 7 516 ▪ Total Health Expenditure (THE) – US dollar 87 92 167 159 205 207 145 172 219 – Tongan pa’anga 111 161 325 322 404 402 295 328 379 ▪ Government Health Expenditure (GGHE) – US dollar 56 65 146 138 174 176 115 140 183 – Tongan pa’anga 72 113 283 280 343 341 234 267 317 ▪ Private Health Expenditure (PvtHE) – US dollar 31 27 22 21 31 31 30 32 36 – Tongan pa’anga 39 48 42 42 61 61 61 61 62 ▪ Out-of-pocket expenditure (OOP) – US dollar 24 21 13 13 21 21 20 22 24 – Tongan pa’anga 30 37 26 26 41 41 42 42 42 Health expenditure ratios THE as % of GDP 4.1 4.8 6.4 5.5 6.9 6.3 4.6 4.8 5.0 GGHE as % of GDP 2.7 3.4 5.6 4.8 5.8 5.3 3.6 3.9 4.2 PvtHE as % of GDP 1.5 1.4 0.8 0.7 1.0 0.9 1.0 0.9 0.8 GGHE as % of GGE 12.4 13.3 16.9 17.8 22.9 23.5 11.7 13.0 15.8 GGHE as % of THE 64.7 70.5 87.1 87.0 84.9 84.9 79.2 81.3 83.6 OOP as % of THE 27.4 22.9 8.0 8.1 10.2 10.2 14.1 12.7 11.1 Other private as % of 8.0 6.7 4.9 4.9 4.8 4.8 6.7 6.0 5.3 THE External resources 1.9 22.2 33.8 33.6 38.5 38.5 11.4 17.4 25.2 as % of THE All data for 2011 are provisional data Health Expenditure and GDP figures are expressed in current US dollar based on the average exchange rate for that year.

114 Health financing country profiles in the western pacific region, 1995–2011 Tuvalu

Health expenditure trends

Tuvalu is a Pacific island country with a population of 9847 in 2011 . Gross domestic product (GDP) per capita was US$ 3636 in 2011 . The predominant source of health-care financing is general government health expenditure (GGHE), which is mainly financed through general taxation . Donor support has decreased in the last 10 years . In 2011, total health expenditure (THE) was 17 .3% of GDP, equivalent to US$ 629 per capita . Out- of-pocket (OOP) payments were minimal; GGHE was 99 .9% of the . GGHE amounted to US$ 629 per capita and represented 18 .0% of general government expenditure (GGE) and 17 .3% of gdp . Figures 1–5 show historical trends in health expenditure . THE, which has been on an upward trend, fell in 2009–2010 . There has been no major change in the structure of health expenditure, with GGHE dominating . Figure 4 shows that the Government’s priority to health has fallen in the last few years .

Health expenditure trends

Health services in Tuvalu are largely provided by the Government and made available to all citizens for free . The Ministry of Health is responsible for the country’s only hospital located on the main island of Funafuti, as well as numerous clinics located on the outer islands and staffed by registered nurses 1. Preventive services are provided by the Tuvalu Family Health Association (TFHA), the country’s leading nongovernmental organization and other nongovernmental organizations . The main source of funding for the country’s health expenditure is the government budget . The remainder of the expenditure is funded by donor grants, which are earmarked mainly for the overseas referral scheme and for capital investment . The contribution of household OOP payments to THE is very negligible . Two medical treatment schemes for overseas referrals operate in Tuvalu . The New Zealand Medical Treatment Scheme (NZMTS) is funded by the New Zealand Official Development Assistance (NZODA) programme for the care of Tuvaluans exclusively within New Zealand and is managed directly by NZODA . The Tuvalu Medical Treatment Scheme (TMTS) is funded by the Government of Tuvalu . Citizens are usually referred to Fiji or New Zealand for specialist treatment and the expenses are borne by the Government .

1 . WHO Western Pacific Region (2011) . Tuvalu country information profile . (http://www wpro. who. .int/countries/ tuv/34TUVpro2011_finaldraft .pdf, accessed 21 February 2013) .

Tuvalu 115 TUV–Figure 1. General trends in health expenditure per capita at exchange rate

700 GGHE

600 PvtHE

500

400

300

200 Current US$ per capita (at exchange rate)

100

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

TUV–Figure 2. General trends in health expenditure as % of GDP

25 GGHE as % of GDP

PvtHE as % of GDP 20

15 % of GDP 10

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

TUV–Figure 3. Trends in the structure of total health expenditure (THE)

100 GGHE 90 OOP

80 Other private

% of total health expenditure 30

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

116 Health financing country profiles in the western pacific region, 1995–2011 TUV–Figure 4. GGHE as % of government spending

36 34 32 30 28 26 24 22 20 18 16 % of government spending 14 12 10 8 6 4 2 0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

TUV–Figure 5. External resources for health as % of THE

60 % of THE

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Tuvalu 117 Way forward

In view of the large portion of the country’s THE spent on the Tuvalu Medical Treatment Scheme and its escalating costs, one of the key health priorities and strategies of the National Strategy for Sustainable Development 2005–2015 is to assess the cost-effectiveness of the overseas medical treatment scheme compared to the reallocation of these resources to domestic capacity-building . In addition, there is a growing interest by the Government in running some form of social health insurance (SHI) to pool health risks and serve as a safety net for its members . However, a major government concern is the population’s inability to pay a premium that is sufficient to make the SHI financially sustainable .

Selected references

• Tuvalu Ministry of Health national health plan (2009-2018) . Annex . (http://www wpro. who. .int/ health_services/tuvalu_nationalhealthplan .pdf, accessed 21 February 2013) . • WHO Western Pacific Region (2011) . Tuvalu country information profile . (http://www .wpro .who . int/countries/tuv/34TUVpro2011_finaldraft .pdf, accessed 21 February 2013) .

tuvalu 1995 2000 2005 2006 2007 2008 2009 2010 2011

GDP and health expenditures per capita (in current currency unit) ▪ Gross Domestic Product (GDP) – US dollar 1 195 1 459 2 253 2 345 2 784 3 085 2 754 3 238 3 636 – Australian dollar 1 612 2 516 2 950 3 114 3 327 3 677 3 531 3 530 3 525 ▪ Total Health Expenditure (THE) – US dollar 65 161 403 447 475 410 354 461 629 – Australian dollar 87 277 527 594 568 489 454 503 610 ▪ Government Health Expenditure (GGHE) – US dollar 64 161 402 447 475 409 353 460 629 – Australian dollar 87 277 527 594 568 488 453 502 609 ▪ Private Health Expenditure (PvtHE) – US dollar 0 0 0 0 1 1 1 1 1 – Australian dollar 0 0 1 1 1 1 1 1 1 ▪ Out-of-pocket expenditure (OOP) – US dollar 0 0 0 0 1 1 1 1 1 – Australian dollar 0 0 <1 <1 1 1 1 1 1 Health expenditure ratios THE as % of GDP 5.4 11.0 17.9 19.1 17.1 13.3 12.9 14.2 17.3 GGHE as % of GDP 5.4 11.0 17.9 19.1 17.1 13.3 12.8 14.2 17.3 PvtHE as % of GDP 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 GGHE as % of GGE 4.0 5.0 18.4 25.3 23.4 17.0 13.8 18.1 18.0 GGHE as % of THE 99.6 100.0 99.9 99.9 99.9 99.9 99.9 99.9 99.9 OOP as % of THE 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Other private as % of THE <1 <1 <1 <1 0.1 0.1 0.1 0.1 0.1 External resources as % of THE 8.0 44.1 48.8 37.5 32.3 10.0 17.0 15.5 – All data for 2011 are provisional data Health Expenditure and GDP figures are expressed in current US dollar based on the average exchange rate for that year.

118 Health financing country profiles in the western pacific region, 1995–2011 Vanuatu

Health expenditure trends

Vanuatu is a Pacific island country with a population of 245 620 in 2011 . Gross domestic product (GDP) per capita was US$ 3201 in 2011 . The predominant source of health-care financing is general government health expenditure (GGHE), which is mainly financed through general taxation and is supported by external donors . In 2011, total health expenditure (THE) was 4 .2% of GDP, equivalent to US$ 134 per capita . Out- of-pocket (OOP) payments made up 6 9%. of THE; GGHE was 87 9%. of the . GGHE amounted to US$ 117 per capita and represented 15 .0% of general government expenditure (GGE) and 3 .7% of gdp . Figures 1–5 show historical trends in health expenditure . THE has been on an upward trend since 2002 . The Government’s contribution to THE has been increasing, while OOP payments have been falling since 2006 . Figure 4 shows that the Government’s priority to health has been constantly increasing since 2007 . Figure 5 shows that external resources for health as a share of THE have fluctuated greatly, particularly before 2000 .

Health financing system

Health services in Vanuatu are largely provided and financed by the Government . The country’s public health facilities include five public hospitals that offer inpatient and specialist outpatient services and 258 primary care facilities . Two public hospitals located in Port Vila and Luganville refer patients for specialized treatment overseas, mainly to Australia and New Zealand . The private sector is small and consists of one hospital . Both public and private health facilities charge user fees . The major source of funding for the health sector is the government budget, with the support of international donors . Public funds account for almost all of the inpatient expenditure in the public hospitals and much of the outpatient health expenditure . Vanuatu introduced user fees in public facilities in 2005 . These funds are not added to the Ministry of Health budget but are treated as state revenue and go into the Ministry of Finance account . Household OOP payments are made to traditional healers, as well as for user fees at government facilities . Some health facilities also pursue additional fundraising activities, usually with the support of chiefs, churches and other community leaders .

Way forward

The small population and costly overseas referral system will continue to represent the main challenges for the health sector . The Government is considering social health insurance as an option, though the issue is still under discussion .

Vanuatu 119 VUT–Figure 1. General trends in health expenditure per capita at exchange rate

160 GGHE

140 PvtHE

120

100

40 Current US$ per capita (at exchange rate)

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

VUT–Figure 2. General trends in health expenditure as % of GDP

5 GGHE as % of GDP 4.5 PvtHE as % of GDP

3.5

2.5 % of GDP 2

1.5

0.5

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

VUT–Figure 3. Trends in the structure of total health expenditure (THE)

100 GGHE 90 OOP

80 Other private

% of total health expenditure 30

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

120 Health financing country profiles in the western pacific region, 1995–2011 VUT–Figure 4. GGHE as % of government spending

36 34 32 30 28 26 24 22 20 18 16 % of government spending 14 12 10 8 6 4 2 0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

VUT–Figure 5. External resources for health as % of THE

50 % of THE 40

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Vanuatu 121 Selected references

• Australian Agency for International Development (2009) . Evaluation of Australian aid to the health service delivery in Papua New Guinea, Solomon Islands and Vanuatu . Evaluation report . (http://ode ausaid. gov. au/publications/documents/working-paper-health-service-delivery-vanuatu. pdf. , accessed 21 February 2013) . • WHO Western Pacific Regional (2011) . Vanuatu country information profile . (http://www wpro. who. . int/countries/vut/35VANpro2011_finaldraft .pdf, accessed 21 February 2013) .

vanuatu 1995 2000 2005 2006 2007 2008 2009 2010 2011

GDP and health expenditures per capita (in current currency unit) ▪ Gross Domestic Product (GDP) – US dollar 1 690 1 470 1 862 2 019 2 373 2 602 2 525 2 999 3 201 – Vanuatu vatu 189 483 202 303 203 457 223 407 243 109 263 695 269 572 290 607 286 414 ▪ Total Health Expenditure (THE) – US dollar 41 52 61 64 90 111 123 157 134 – Vanuatu vatu 4 623 7 226 6 651 7 090 9 171 11 225 13 085 15 247 11 950 ▪ Government Health Expenditure (GGHE) – US dollar 32 40 44 51 77 98 110 143 117 – Vanuatu vatu 3 554 5 537 4 848 5 621 7 938 9 926 11 757 13 815 10 502 ▪ Private Health Expenditure (PvtHE) – US dollar 10 12 17 13 12 13 12 15 16 – Vanuatu vatu 1 069 1 689 1 803 1 469 1 233 1 299 1 328 1 432 1 448 ▪ Out-of-pocket expenditure (OOP) – US dollar 7 9 12 9 7 7 7 8 9 – Vanuatu vatu 765 1 209 1 291 950 699 737 753 812 821 Health expenditure ratios THE as % of GDP 2.4 3.6 3.3 3.2 3.8 4.3 4.9 5.2 4.2 GGHE as % of GDP 1.9 2.7 2.4 2.5 3.3 3.8 4.4 4.8 3.7 PvtHE as % of GDP 0.6 0.8 0.9 0.7 0.5 0.5 0.5 0.5 0.5 GGHE as % of GGE 7.8 10.5 12.9 12.4 14.8 14.8 16.4 18.2 15.0 GGHE as % of THE 76.9 76.6 72.9 79.3 86.6 88.4 89.8 90.6 87.9 OOP as % of THE 16.6 16.7 19.4 13.4 7.6 6.6 5.8 5.3 6.9 Other private as % of THE 6.6 6.6 7.7 7.3 5.8 5.0 4.4 4.1 5.2 External resources as % of THE 70.7 2.5 5.0 24.4 15.4 11.7 17.2 23.4 23.0 All data for 2011 are provisional data Health Expenditure and GDP figures are expressed in current US dollar based on the average exchange rate for that year.

122 Health financing country profiles in the western pacific region, 1995–2011 Viet Nam

Health expenditure trends

Viet Nam is a lower-middle income country with a population of 8 .9 million people in 2011 . Gross domestic product (GDP) per capita was US$ 1393 in 2011 . Out-of-pocket (OOP) payments are the predominant source of health-care financing . General government health expenditures (GGHE) are financed mainly though general taxation . In 2011, total health expenditure (THE) was 6 .9% of GDP, equivalent to US$ 96 per capita . OOP payments made up 56 1%. of THE; GGHE was 39 .9% of the . GGHE amounted to US$ 38 per capita and represented 9 .4% of general government expenditure (GGE) and 2 7%. of gdp . Figures 1–5 show historical trends in health expenditure . THE has been increasing rapidly since 2002 . Between 2005 and 2007, the Government’s contribution to THE increased, while the contribution of OOP payments fell and remained relatively stable . Figure 4 shows that the Government’s priority to health has been on an upward trend since 2005 . GGHE as percentage of GGE has remained around 8 0–9. 5%. since 2007 .

Health financing system

Viet Nam has a mixed delivery and financing system for health care . In the 1970s and early 1980s, health care was funded and provided by the Government and all citizens received free health care . The private sector has grown rapidly since the country embarked on its doi moi reforms, and today the private sector provides much of outpatient health services . Meanwhile, the public sector continues to provide most inpatient care . In 2008, public health facilities included 774 general hospitals, 136 specialized hospitals and 11 576 primary health centres . Private health facilities include 83 private hospitals and numerous general practitioners’ clinics, traditional medicine clinics, private pharmacies and nursing homes . Both public and private facilities charge user fees . Since 2005, health care is provided free to children six years old and under . Revenue raising Household OOP payments account for the bulk of health financing inV iet Nam . The Government is the second-largest contributor of the . Even though total external assistance to Viet Nam in general has been declining since Viet Nam became a lower middle-income country, official development assistance and international nongovernmental organization assistance to the health sector has been maintained at a relatively high level 1. Financial risk protection The Government uses the funds derived from general revenues to provide direct subsidies to public health facilities, purchase compulsory health insurance for certain target groups and reimburse health providers directly for services provided to children under six . The Social Health Insurance Law passed in 2008 outlined the expansion of health insurance coverage to various target groups . The Five-year Health Sector Plan (2011–2015) has set the goal that population coverage will reach 75% by 2015 and 90% by 2020 . In addition, the road map’s

Viet Nam 123 VNM–Figure 1. General trends in health expenditure per capita at exchange rate

100 GGHE 90 PvtHE 80

Current US$ per capita (at exchange rate) 20

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

VNM–Figure 2. General trends in health expenditure as % of GDP

7 GGHE as % of GDP

6 PvtHE as % of GDP

4 % of GDP 3

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

VNM–Figure 3. Trends in the structure of total health expenditure (THE)

100 GGHE 90 OOP

80 Other private

% of total health expenditure 30

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

124 Health financing country profiles in the western pacific region, 1995–2011 VNM–Figure 4. GGHE as % of government spending

36 34 32 30 28 26 24 22 20 18 16 % of government spending 14 12 10 8 6 4 2 0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

VNM–Figure 5. External resources for health as % of THE

50 % of THE 40

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Viet Nam 125 objectives are to improve the quality of health services and further reform health financing to reduce OOP payments 1. Viet Nam’s journey towards universal coverage started in 1992 when social health insurance (SHI) was first introduced . It is managed by Viet Nam Social Security (VSS) and has evolved over the years . It consists of a compulsory and a voluntary scheme . According to the Ministry of Health, about 68% of the population was enrolled in SHI by 2013 . This represents a rapid increase in recent years . with coverage rates close to 40% in 2008 . • The Compulsory Health Insurance (CHI) scheme covers all civil servants, politicians, war veterans and people of merit . Their family members are not covered . Contributions are shared between the employer and employee . In addition . CHI has begun to cover children under six, the elderly, poor, and ethnic minorities since 2003 . The formal sector contributes 4 5%. of employees’ salaries – 1 5%. from employees and 3 0%. from employers . For the informal sector, 100% subsidies are provided by the Government for specific populations, such as the poor, children under six, and ethnic minority groups . Under the Health Care Fund for the Poor programme, both the central government and the provincial governments are jointly responsible for contributing the premiums for this group of the population . • The Voluntary Health Insurance (VHI) scheme was introduced in 1994 to cover students, family members of those who are compulsorily insured and organizations which are not covered under the compulsory scheme . Premiums range between VND 50 000 (US$ 3) for students in rural areas to VND 320 000 (US$ 21) for adult members in urban areas . The near poor receive 70% government subsidies, while students and middle-income households receive 30% government subsidies . A private insurance market consisting of both foreign and local insurance companies exists in Viet Nam . However, it is unclear how many people have private insurance . Despite rapid improvements in population coverage in recent years – and although most health services are in principle covered by health insurance – a recent analysis of survey data found that the actual financial protection afforded by health insurance remained limited . Indeed, enrollees are required to register with a local government facility and are expected to use the same facility as the first point of care . Reimbursement rates are lower when enrollees choose to receive care in contracted private facilities . The copayment rate ranges from 5–70% . depending on the type of services and level of care . High copayment rates may be one of the barriers that prevent the near poor from accessing health services . Maximum reimbursement is capped at 40 times the minimum monthly wage for high-technology medical services . For these reasons, OOP payments remain substantial despite the existence of health insurance . Benefit package The benefit package for all schemes covers both inpatient and outpatient services that are received at all public facilities and contracted private facilities . VSS only reimburses a part of the provider’s costs, typically on a fee-for-service basis, under a fee schedule set in 1995 . A capitation method is used mainly at district hospitals . The balance of the costs is covered by direct subsidies to contracted health facilities and household OOP payments . To address problems with overuse, there are plans to pilot a diagnosis-related group (DRG) based payment method .

1 . Ministry of Health, Viet Nam (2012) . Master plan roadmap to universal health insurance coverage period 2012–2015 . Hanoi, Viet Nam .

126 Health financing country profiles in the western pacific region, 1995–2011 Way forward Some of the key challenges to Viet Nam’s SHI scheme include low enrolment in the compulsory programme and adverse selection in the voluntary programme . Between 2005 and 2010, expenditure of the SHI also has exceeded revenue . This has been viewed as the result of increased use of health- care services, over-supply of health care by providers, low contribution rates and adverse selection . Since 2002, fee-collecting public hospitals have been given the autonomy to use their savings to increase staff incomes and for reinvestment . While this has the potential to improve hospital management, it also carries the risk of increasing rather than reducing reliance on household OOP payments to finance health care . Viet Nam is undergoing a revision of its Social Health Insurance Law to further advance its progress towards universal health coverage .

Selected references • Ekman B et al . (2008) . Health insurance reform in Viet Nam: a review of recent developments and future challenges . Health Policy and Planning, 23:252–263 . • Ministry of Health, Viet Nam (2012) . Master plan roadmap to universal health insurance coverage period 2012–2015 . Hanoi, Viet Nam . • World Bank (2010) . Health financing note . East Asia and Pacific region . (http://siteresources worldbank. . org/HEALTHNUTRITIONANDPOPULATION/Resources/HFNEAPVol2090210 pdf. , accessed 21 February 2013) . • Ministry of Health, Viet Nam (2011) . Joint annual health review 2011 . Strengthening management capacity and reforming health financing to implement the five-year health sector plan 2011–2015 . Hanoi, Viet Nam .

viet nam 1995 2000 2005 2006 2007 2008 2009 2010 2011

GDP and health expenditures per capita (in current currency unit) ▪ Gross Domestic Product (GDP) – US dollar 280 396 636 725 835 1 060 1 118 1 211 1 393 – Vietnamese dong 3 092 798 5 607 633 10 100 000 11 600 000 13 500 000 17 300 000 19 100 000 2 2500 000 28 600 000 ▪ Total Health Expenditure (THE) – US dollar 15 21 37 47 58 70 79 83 96 – Vietnamese dong 160 439 296 000 590 934 746 330 940 518 1 148 836 1 340 566 1 540 924 1 964 949 ▪ Government Health Expenditure (GGHE) – US dollar 5 6 10 15 23 24 31 31 38 – Vietnamese dong 54 367 91 612 156 021 245 565 375 986 397 417 521 292 572 093 784 592 ▪ Private Health Expenditure (PvtHE) – US dollar 10 14 27 31 35 46 48 52 58 – Vietnamese dong 106 072 204 388 434 913 500 765 564 532 751 419 819 274 968 831 1 180 357 ▪ Out-of-pocket expenditure (OOP) – US dollar 9 14 25 29 33 43 45 48 54 – Vietnamese dong 100 851 195 440 399 700 463 511 523 484 699 736 762 138 901 183 1 103 112 Health expenditure ratios THE as % of GDP 5.2 5.3 5.9 6.4 7.0 6.6 7.0 6.8 6.9 GGHE as % of GDP 1.8 1.6 1.5 2.1 2.8 2.3 2.7 2.5 2.7 PvtHE as % of GDP 3.4 3.6 4.3 4.3 4.2 4.3 4.3 4.3 4.1 GGHE as % of GGE 7.4 6.6 5.2 7.5 9.2 8.0 8.5 7.7 9.4 GGHE as % of THE 33.9 30.9 26.4 32.9 40.0 34.6 38.9 37.1 39.9 OOP as % of THE 62.9 66.0 67.6 62.1 55.7 60.9 56.9 58.5 56.1 Other private as % of 3.3 3.0 6.0 5.0 4.4 4.5 4.3 4.4 3.9 THE External resources 3.5 2.6 3.2 3.0 2.8 2.6 3.1 3.2 3.1 as % of THE All data for 2011 are provisional data Health Expenditure and GDP figures are expressed in current US dollar based on the average exchange rate for that year. Viet Nam 127