The Evolution of HTA in Emerging Markets Health-Care ... - TREE

OHE Consulting Report for PhRMA
5 January 2011
Categorising and Applying Health Care System Frameworks
Our thinking is that the Murray and Frenk (2000) framework (illustrated in Figure 2 on page 26) is
the most helpful one for understanding health care systems. In particular, the subdivision of
financing to address questions of the nature of financing, of risk pooling and of purchasing, enable
key organisational and incentive issues to be identified and differentiated between health care
systems. We regard this framework as complementary to the WHO (2007) framework (illustrated in
Figure 4 on page 29). In effect, the WHO framework makes an important subdivision of resource
generation into: Health Workforce; Medical Products, Vaccines and Technologies; and Information.
Our understanding of the evolution of health care systems is that:
The sophistication of “Financing” evolves slowly over time, with moves from predominantly
out-­‐of-­‐pocket funding to elements of insurance through to more-­‐or-­‐less universal coverage,
but varying from country to country. Typically employer based schemes for urban workers
begin before schemes covering rural workers who are usually self-­‐employed. Rural schemes
therefore often begin as voluntary schemes for people to opt-­‐in to for a relatively modest
lump sum fee. Though intended to be self financing, some public subsidy is usually required.
Communist and former communist countries such as China which collectivised agriculture
are an exception to this – in effect the collective farm became the work place enterprise
providing insurance. Access to health care for the very poor is usually provided initially
through direct subsidy of health care providers – hospitals and clinics. Over time increasing
numbers of this population group may be covered by a separate insurance scheme.
Government and other public sector workers are usually insured through a separate scheme.
The extent to which the various third party payer insurance schemes are combined over
time varies from country to country. Some countries move to a single payer system, others
keep multiple insurers and, in some cases, these insurers compete for enrolees.
The element of Financing that arguably evolves the most slowly is Purchasing. Insurance
cover typically develops around fee-­‐for-­‐service with the role of the third party payer being to
passively pay the bills of the provider rather than actively decide what it is going to cover,
who should provide it, and how they are to be paid. Direct public funding of services
typically begins with block budget allocations to clinics and hospitals. In both cases –
insurance and direct public funding -­‐ more sophisticated mechanisms for incentivising and
rewarding providers tend to develop over time, notably capitation payments in primary care
and DRG-­‐type payments to hospitals. Where providers have limited resources from fee
income or budget allocations, then they may begin providing services that are outside of the
third party cover in order to generate additional revenues with out-­‐of-­‐pocket charges to
patients. This can give rise to a misalignment of incentives, which can give providers
perverse incentives to provide inappropriate or inefficient but profitable services.
We see these two elements of Financing as being key to an understanding of the potential role of
HTA in the health care system.
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