Case Study

NATIONAL HEALTH ACCOUNTS AND THEIR USE IN INFORMING HEALTH SECTOR REFORM

DiMcIntyre

CharlotteMuheki

TheHealthEconomicUnit, UniversityofCapeTown, CapeTown, SouthAfrica

This case studymaybe copiedandusedinanyformal academic programme. However, it must be reproducedwithappropriate acknowledgementofthe author(s).

1. INTRODUCTION

YouaretheDirectorforPolicyandPlanning intheMinistryofHealthinamiddle incomecountry.Yourcountryisabouttoembarkonsignificant healthsector restructuring,andyouhavebeenrequestedtocompileNationalHealthAccounts datatoinformthisrestructuringprocess.Youdiscussedadatacollectionstrategy withstaffin yourDirectorate,andtheyhavecompiledthefollowinginformationforthe

1994/95financialyear(i.e.April1994 toMarch1995).Usetheinformationpresented belowtocompletetheNHAmatrixprovided.Pleasenotethatthematrixrepresents

flowsfromfinancingintermediaries toproviders(i.e.youshouldidentifywhois actuallypayingtheprovider,ratherthantheoriginalsourceofthefunds).

2. OBJECTIVESOFCASESTUDY

•To“demystify”theprocessof NationalHealthAccounts(NHA)datacollectionand matrixcompilation;

•ToprovideinsightsintodatasourcesforNHAandtohighlightpotentialproblems withsomedatasources;

•Todevelopskillsinextrapolatingcertainexpenditureestimatesandincompiling

NHAmatrices;

•Tohighlightpotentialareasofdouble-countingwhencompilingNHAmatrices;

•TodevelopskillsinanalysingNHAdatatoassesshealthsystemperformanceto informhealthsectorreforminitiatives;

•To illustratehownon-financialdatacanassistin obtainingamorecomprehensive healthsystemanalysis.

3. PUBLICSECTORFUNDING

MinistryofHealth

Thedatacollectionteamwasabletodetermine thatatotalof$10,535millionof generaltaxrevenuewasallocated totheMinistry ofHealth.$10,197 millionwas actuallyspentonhealthservices provided bytheMinistry,while$338millionwas transferredtolocalgovernmenthealthdepartments tosubsidisethebasichealth servicestheyprovide.Thedistribution ofDepartment ofHealthexpenditure between servicecategorieswasasfollows:

Administration/management$843million Academicandtertiaryhospitals $4,636million Otherpublicsectorhospitals $3,897million Publicsectorbasichealthservices(PHC) $821million TransfertolocalgovernmentforPHC $338million

MinistriesfortheSecurityForces

Theteamapproached theMinistryofDefence,MinistryofPoliceandtheMinistryof Correctional Services(Prisons)forinformationonspendingonhealthservices.In total,thesethreeMinistriesforSecurityForcesspent$583milliononhealthservices, fundedoutofallocations fromgeneraltaxrevenue.Theservicedistribution ofthis expenditurewasasfollows:

Publicsectorhospitals(generalist)$466million

Publicsectorbasichealthservices(PHC)$117million

MinistryofEducation

Itwasdetermined thattheMinistryofEducation spent$330milliononhealth-related educationandtrainingactivities.Thiswasalsofundedfromgeneraltaxrevenue.

Localgovernment

Thereare520localgovernments inthecountry,and311ofthemprovidehealth services.Asamplesurveyofthoselocalgovernments thatprovidehealthservices wasconducted.Itwasfound thateachofthesurveyedlocal governmentsspendsan averageof$1.81milliononhealthservices.Approximately40%ofthis expenditureis financedfromlocalgovernments’ownrevenue(i.e.localratesandtaxes),while about60% isfinancedthroughtransfersfrom theMinistryofHealth.Allofthismoney wasspentonbasichealthservices(i.e.PHC).

4. PRIVATESECTORFUNDING

Privatehealthinsurancegroups

Thereareabout326privatehealthinsurance groups.Luckilyforthedatacollection team,theseinsurancegroupsarerequiredtoreporttothe“CommissionerforPrivate HealthInsuranceSchemes”. TheCommissionercompilesareporteveryyear,which indicateshowInsurance Schemeshavespenttheirmoney.Thedatacollection team contactedtheCommissioner, whoindicatedthatatotalof$12,987millionhadbeen spent.TheCommissionerprovidedthefollowingexpenditureinformation:

Administration/management$1,709million Publicacademicandtertiaryhospitals $320million Otherpublicsectorhospitals $130million Privatehospitals $2,602million Privatedoctorsanddentists $2,906million Privatespecialists $1,890million Privatepharmacies $3,430million

Privatefirms

Private firms contribute to health services in a number of ways. Firstly, they contributetohealthinsuranceschemesonbehalfoftheiremployees (seesection above).Secondly,theycontributetotheWorkmen’sCompensation Fund(which primarilypaysforhealthservicesrequiredforwork-related injuries).Thirdly,some firmsprovidehealthservicesattheworkplace(rangingfromsmalloccupational healthclinicstohospitals-e.g.intheminingindustry).

TheCommissioner oftheWorkmen’sCompensation Fundhasindicatedthat$569 millionwasspentonhealthservicesin1994/95.Thisexpenditure wasdistributedas follows:

Publicacademicandtertiaryhospitals $31million Otherpublicsectorhospitals $101million Privatehospitals $437million

Staffatoneofthenationaluniversities hadrecentlyundertaken asurveyoflarge firms,andhadestimatedthatapproximately $472millionwasspentonworkplace healthservicesin1994/95.Approximately$340millionwasspentonhospitalsand

$132millionwasspentonclinics.

Directhouseholdexpenditure/Out-of-pocketpayments

Everyfiveyears,theCentralStatisticalOffice(CSO)conductsa“HouseholdSurvey ofIncomeandExpenditure”. Thissurveyincludesanumberofquestionsonhealth careexpenditure.ThelastsurveywasconductedinSeptember 1994,andcovered about5%ofthe35millionpopulation.Onthebasisofthissurvey,theNHAdata

collectionteamhasestimatedthattheaveragepercapitaexpenditure ondifferent healthserviceswasasfollows:

HealthInsuranceschemecontributions / $112.03
Academicandtertiaryhospitals / $0.17
Otherpublicsectorhospitals / $5.46
Publicsectorbasichealthservices(PHC) / $2.66
Privatehospitals / $2.28
Privatedoctorsanddentists / $37.20
Privatepharmaciesanddrugsellers / $71.77

5. DONORS

There areonlytwodonorswhohaveanysignificantinvolvementinthehealthsector. Both were approached by the data collection team. Based on the information providedbythedonors,itwasestimated that$131millionwasspentonhealth- relatedactivities bythesedonors. About$68millionwasdevoted topublicsector basichealthservices, whiletheother$63millionwasspentonhealth-related educationandtrainingactivities.

6. DISCUSSIONISSUES

Onceyouhavecompleted theNHAmatrix,discusswithinthegroupwhatthedata suggestaboutthestructureofhealthservicesinthecountry.Inparticular, consider thefollowingissues:

•Thedistributionofexpenditurebetweendifferentfinancingintermediaries;

•Thedistributionofexpenditurebetweendifferentservice/providercategories;

and

•Whetherthereisany additionaldata thatwouldassistininterpretingthe financial data.

Inaddition, discusswhether thereareanygapsintheNHAdataandwhether anyof thedatacompiledbythedatacollectionteammaybeinaccurate.

Pleasediscusstheseissuesbeforereviewing thedataprovidedinthefollowing pages.

NHA and their use in informing Health Sector Reform

PROVIDERS / FINANCING INTERMEDIARIES
Ministry of Health / Ministryof
Education / Ministries for
SecurityForces / Local
Government / Donors / Private
Insurance / Workmen's Compensation Fund / Firms / Households (Out-of- pocket) / TOTAL
Public sector administration
Public academic &
tertiaryhospitals
Other public hospitals
Public basic health services
Education and training
Private administration
Private hospitals
Private GPs and dentists
Private specialists
Private sold medicines
Workplace hospitals
Workplace clinics
TOTAL

7. FURTHERINFORMATIONANDISSUESFORDISCUSSION

Whilereviewingthematrix,aparticularly energetic(andambitious) staffmemberinyour directorate indicates that he took the opportunity, while collecting the data you had requested,tocollectadditionaldatathatmaybeofassistanceinassessingthehealth sector.HepresentsthefollowingdataforconsiderationbytheNHAteam.

HealthSpendingRelativetoAvailableEconomicResources

Knowingthathealthexpenditure isfrequentlyexpressedasaproportionofGrossDomestic Product(GDP),yourenergeticstaffmembercontactedtheCentralBankanddetermined thatGDPin1994/95wasestimatedtobe$353,129million.

Public/PrivateMix

Ithasbeenestimatedthatapproximately 23%ofthepopulationhaveaccessonaroutine basistoprivatesectorproviders.

Figure1:Percentage distribution ofkeycategoriesofhealthpersonnelbetweenthe publicandprivatesectors

Privatesector Publicsector

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

DoctorsDentistsPharmacistsNursesSupplementary health

personnel

LevelofCareDistributionwithinthePublicSector

Table1:Percentagedistributionofpublicsectorhealthcarepersonnelbylevelof care

Table2:Outpatientvisitsandtheircostatgovernmentfacilities

Total visits
(million) / Total cost
($ million) / Cost per visit
($)
Clinics / 31.7 / 951.1 / 30.0
Community hospitals / 9.0 / 498.5 / 55.4
Secondary hospitals / 7.0 / 398.2 / 56.9
Tertiary hospitals / 5.8 / 441.5 / 75.5
Academic hospitals / 11.5 / 1,374.3 / 119.8
Chronic care hospitals / 0.4 / 13.1 / 33.0
TOTAL / 65.4 / 3,676.7

GeographicDistributionwithinthePublicSector

Table 3: Summary of key socio-economic, mortality and public health service resource*distributionindicatorsbetweengeographicareas

*Publicsectorhealthservicesindicatorsexpressedrelativetopopulationdependent on public sector services, i.e. population excluding those covered by private insurance

DiscussionIssues

•Doestheadditionalinformationprovidedabovecontributetointerpretingissuesarising fromtheNHAmatrix?If so,inwhatway?

•BasedontheNHAmatrixandtheadditionalinformationprovidedabove,whatdoyou feelarethekeychallengesfacingthehealthsectorinthiscountry?

8. ACKNOWLEDGEMENT

Dataforthiscasestudywereadaptedfrom:McIntyreD,BloomG,DohertyJ,BrijlalP (1995).Healthexpenditure andfinanceinSouthAfrica.Durban:HealthSystemsTrustand WorldBank.

This work is licensed under a

Creative Commons Attribution-NonCommercial-ShareAlike 2.5 South Africa License

December 2011

You are free:

to Share – to copy, distribute and transmit the work

to Remix – to adapt the work

Under the following conditions:

Attribution. You must at attribute the work in the manner specified by the author or licensor (but not in any way that at suggests that they endorse you or your use of the work)

Non-commercial. You m may not use this work for commercial purposes.

Share Alike. If you alter, transform, or build upon this work, you may distribute the resulting work but only under the same or similar license to this one.

• For any reuse or distribution, you must make clear to others the license terms of o this work. one way to do this is with a link to the license web page:

• Any of the above conditions can be waived if you get permission from the copyright holder.

• Nothing in this license impairs or restricts the authors’ moral rights.

• Nothing in this license impairs or restricts the rights of authors whose work is r referenced in this document.

• Cited works used in this document must be cited following usual academic conventions

• Citation of this work must follow normal academic conventions

Source work available at Vula. Permissions beyond the scope of this license may be available at

contact

We would appreciate your feedback for this Open Educational Resource (OER), by completing this form. Alternatively, you can email us at