Enhancing Alignment Between Health Financing and Public Financial Management Systems

 
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Source:  Schieber, Cashin and Saleh (2012).
More money for health will not get a country closer to UHC if funds cannot be directed
to priority populations, programs, and services
 
Health Financing policy and PFM systems have the same ultimate goal
Budget
Formulation
Budget
Execution
Generation
of Health
Revenue
Pooling of
Health
Funds
Purchasing
of Health
Services
Service
Delivery
Improved Population
Health
 
PFM System
 
Health Financing System
 
Accountability
Efficiency
Equity
Budget
Monitoring and
Reporting
 
The rules and systems governing the management of public funds can often be at odds
with how health financing systems function.
Revenue
collection
Financing
Function
Sufficient and stable
resources to meet
stated objectives
Implementation
Conditions
Areas for improving alignment between health financing functions and PFM:  REVENUE
COLLECTION
Financing
Function
Pooling
Implementation
Conditions
Mandate and mechanism
to accumulate and
redistribute funds
Areas for improving alignment between health financing functions and PFM:  POOLING
 
Source:  Langenbrunner, Cashin and O’Dougherty (2009).
 
Per capita government health spending across
regions (2007)
 
Distribution of government health spending under fiscal decentralization in Tajikistan
Budget
classification
Budget
formulation
PFM Functions
Areas for improving alignment between health financing functions and PFM:
PURCHASING
 
What is good alignment between the PFM system & health financing policy?
MOH and MOF Joint Process to Improve Communication
The over-arching questions to be answered through the
Process Guide are:
ENSURE SUSTAINABILITY 
-  
Allocate sufficient funds to the health
sector to meet sector objectives and fulfill strategic plans given the
macro-fiscal realities of the country
ENSURE EFFICIENCY
 
-
 
Direct funds to priority populations,
programs, and services at every step of the budget cycle (through
pooling and purchasing arrangements)
ENSURE ACCOUNTABILITY 
- 
Demonstrate that public spending on
health reached priority populations, programs, and services and
met stated objectives in the budget reporting and accountability
systems
A
 
FRAMEWORK
A
 
SET OF
BENCHMARKS 
for
looking at alignment in
different parts of the
PFM system
SAMPLE QUESTIONS
Process Guide
contains Package of
resources
Do budgeting processes and PFM systems make it possible to:
General purpose of this Process Guide
To help guide a systematic dialogue between health and finance actors (MOH and MOF) to do three
things:
 
To 
EXAMINE
 areas of
misalignment and their
consequences and
PRIORITIZE
 among
them for action
 
To create a
COLLABORATIVE
ROADMAP
 for action that
will allow countries to
strengthen alignment
 
For countries to be able
to 
MONITOR PROGRESS
on improving alignment
 
1
2
3
 
2
 
3
 
A closer Look: Descriptive Table - Allocation Within
the Health Sector
 
Assessment: Placing alignment along a continuum
 
Alignment Between Allocation of Budget to the Health Sector and Health Financing
Objectives
 
 
 
 
 
 
 
 
13
What we have learned through initiating the
process in countries
 
We have gotten to 
A HIGHER LEVEL OF UNDERSTANDING 
of what
dialogue between health and finance means
 
There is a demand for 
RESOURCES
 for MOH to become more prepared
for the dialogue with finance
 
There is a need for some sort of a 
FRAMING
 or 
FOCAL POINT 
for the
dialogue itself,  and something systematic you can do with the
information to inform the way forward
 
DIALOGUE
 
How can this align with existing processes in Tanzania?
 
Synergies to existing health financing activities around the Health Financing Strategy and Single
National Health Insurance
To help identify preliminary implementation steps/preconditions that have to do with PFM to
enable moving towards Single national HI (i.e. purchasing)
Building on results and recommendations of existing studies, such as funding flows study
Potential opportunity to integrate Process Guide to PFM working group that is forming, which could
be a good entry point to eventually bringing the MOF and others to the table
In the interim, this can continue to be housed with the HF TWG
Putting MOF/MOH in the position to co-drive the process and build a platform for ongoing
collaboration
Slide Note

World Health Organization

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Examining the alignment between health financing and public financial management systems is crucial for effective resource allocation towards priority populations and programs. This integration ensures that funds are directed efficiently, promoting Universal Health Coverage (UHC) goals. Challenges and areas for improvement in revenue collection, pooling, and other functions are highlighted in the context of health financing policy and PFM systems.


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  1. Integrated Framework and Process Guide A T O O L F O R E X A M I N I N G A L I G N M E N T B E T W E E N H E A LT H F I N A N C I N G A N D P U B L I C F I N A N C I A L M A N A G E M E N T S Y S T E M S Dar es Salaam, Tanzania 2016

  2. More money for health will not get a country closer to UHC if funds cannot be directed to priority populations, programs, and services Health Spending in Ghana 44% 16% 40% Total Health Expenditure: National Health Insurance Scheme Ministry of Health Budget Out-of-Pocket Uninsured Inputs 4% Other services and medicines 38% 54% Services and medicines in the NHIS benefits package 4% Salaries Administration Service Investment Source: Schieber, Cashin and Saleh (2012). 2

  3. Health Financing policy and PFM systems have the same ultimate goal PFM System Health Financing System Generation of Health Revenue Budget Formulation Accountability Efficiency Equity Pooling of Health Funds Budget Execution Service Delivery Purchasing of Health Services Budget Monitoring and Reporting Improved Population Health

  4. The rules and systems governing the management of public funds can often be at odds with how health financing systems function.

  5. Areas for improving alignment between health financing functions and PFM: REVENUE COLLECTION Implementation Conditions Financing Function PFM Functions PFM Challenges Unpredictable resource envelopes Revenue forecasting Budget formulation Budget classification by inputs rather than objectives, activities, and outputs Sufficient and stable resources to meet stated objectives Revenue collection Budget allocations separate from objectives and planning

  6. Areas for improving alignment between health financing functions and PFM: POOLING Implementation Conditions Financing Function PFM Functions PFM Challenges Fiscal decentralization Fragmented revenue streams, input budgets, donor funds Mandate and mechanism to accumulate and redistribute funds Budget formulation Pooling With no mandate or mechanism to accumulate and redistribute

  7. Distribution of government health spending under fiscal decentralization in Tajikistan 20 18 Per capita health expenditure (somoni) 16 14 Per capita government health spending across regions (2007) 12 10 8 6 4 2 0 Non-PHC PHC Source: Langenbrunner, Cashin and O Dougherty (2009).

  8. Areas for improving alignment between health financing functions and PFM: PURCHASING Health Financing Function Implementation Conditions PFM Functions PFM Challenges Difficult to match health spending to needs and priorities Different purchasing arrangements and accounting for different revenue streams Mandate to purchase services for the population (benefits package, essential services, etc.) rather than infrastructure Budget classification Challenges to engagement with the private sector Purchasing Budget formulation Delays in the release of funds Lack of provider autonomy Poor information systems and monitoring capacity

  9. What is good alignment between the PFM system & health financing policy?

  10. MOH and MOF Joint Process to Improve Communication The over-arching questions to be answered through the Process Guide are: Do budgeting processes and PFM systems make it possible to: Process Guide contains Package of resources ENSURE SUSTAINABILITY - Allocate sufficient funds to the health sector to meet sector objectives and fulfill strategic plans given the macro-fiscal realities of the country ENSURE EFFICIENCY- Direct funds to priority populations, programs, and services at every step of the budget cycle (through pooling and purchasing arrangements) ENSURE ACCOUNTABILITY - Demonstrate that public spending on health reached priority populations, programs, and services and met stated objectives in the budget reporting and accountability systems A FRAMEWORK A SET OF BENCHMARKS for looking at alignment in different parts of the PFM system SAMPLE QUESTIONS

  11. General purpose of this Process Guide To help guide a systematic dialogue between health and finance actors (MOH and MOF) to do three things: 3 2 3 1 2 To EXAMINE areas of misalignment and their consequences and PRIORITIZE among them for action To create a COLLABORATIVE ROADMAP for action that will allow countries to strengthen alignment For countries to be able to MONITOR PROGRESS on improving alignment

  12. A closer Look: Descriptive Table - Allocation Within the Health Sector Characteristic of the Budget Formulation Process Current Situation Key Bottlenecks Basis of budgets within the health sector Integration/fragmentation in the health budget Allocation of health budgets across geographic, administrative and service delivery levels

  13. Assessment: Placing alignment along a continuum ALIGNMENT CONTINUUM 2. Alignment Between Allocation of Budget to the Health Sector and Health Financing Objectives Alignment Between Allocation of Budget to the Health Sector and Health Financing Objectives Sector ceilings not based on strategic planning; final allocations not transparent allocations; some revenue sources excluded; donor funds fragmented Sector ceilings based on strategic planning; final allocations not transparent allocations; some revenue sources excluded; donor funds fragmented Sector ceilings based on strategic planning, reflect policy priorities, and are transparent allocations; some revenue sources excluded; donor funds partially integrated Sector ceilings based on strategic planning, reflect policy priorities, and are transparent allocations of a consolidated budget integrated across revenue sources; donor funds fully integrated 13

  14. What we have learned through initiating the process in countries We have gotten to A HIGHER LEVEL OF UNDERSTANDING of what dialogue between health and finance means There is a demand for RESOURCES for MOH to become more prepared for the dialogue with finance DIALOGUE There is a need for some sort of a FRAMING or FOCAL POINT for the dialogue itself, and something systematic you can do with the information to inform the way forward

  15. How can this align with existing processes in Tanzania? Synergies to existing health financing activities around the Health Financing Strategy and Single National Health Insurance To help identify preliminary implementation steps/preconditions that have to do with PFM to enable moving towards Single national HI (i.e. purchasing) Building on results and recommendations of existing studies, such as funding flows study Potential opportunity to integrate Process Guide to PFM working group that is forming, which could be a good entry point to eventually bringing the MOF and others to the table In the interim, this can continue to be housed with the HF TWG Putting MOF/MOH in the position to co-drive the process and build a platform for ongoing collaboration

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