Financing and provision of healthcare for two billion people in low-income nations: Is the cooperative healthcare model a solution?

The international consensus in support of universal health coverage (UHC), though commendable, thus far lacks a clear mechanism to finance and deliver accessible and effective basic healthcare to the two billion rural residents and informal workers of low- and lower-middle-income countries (LLMICs). Importantly, the two preferred financing modes for UHC, general tax revenue and social health insurance, are often infeasible for LLMICs. We identify from historical examples a community-based model that we argue shows promise as a solution to this problem. This model, which we call Cooperative Healthcare (CH), is characterized by community-based risk-pooling and governance and prioritizes primary care. CH leverages communities' existing social capital, such that even those for whom the private benefit of enrolling in a CH scheme is outweighed by the cost may choose to enroll (given sufficient social capital). For CH to be scalable, it needs to demonstrate that it can organize delivery of accessible and reasonable-quality primary healthcare that people value, with management accountable to the communities themselves through structures that people trust, combined with government legitimacy. Once LLMICs with CH programs have industrialized sufficiently to make universal social health insurance feasible, CH schemes can be rolled into such universal programs. We defend cooperative healthcare's suitability for this bridging role and urge LLMIC governments to launch experiments testing it out, with careful adaptation to local conditions.

Early appraisal of China's huge and complex health-care reforms.

China's 3 year, CN¥850 billion (US$125 billion) reform plan, launched in 2009, marked the first phase towards achieving comprehensive universal health coverage by 2020. The government's undertaking of systemic reform and its affirmation of its role in financing health care together with priorities for prevention, primary care, and redistribution of finance and human resources to poor regions are positive developments. Accomplishing nearly universal insurance coverage in such a short time is commendable. However, transformation of money and insurance coverage into cost-effective services is difficult when delivery of health care is hindered by waste, inefficiencies, poor quality of services, and scarcity and maldistribution of the qualified workforce. China must reform its incentive structures for providers, improve governance of public hospitals, and institute a stronger regulatory system, but these changes have been slowed by opposition from stakeholders and lack of implementation capacity. The pace of reform should be moderated to allow service providers to develop absorptive capacity. Independent, outcome-based monitoring and evaluation by a third-party are essential for mid-course correction of the plans and to make officials and providers accountable.

The Case Against Labor-Tax-Financed Social Health Insurance For Low- And Low-Middle-Income Countries.

An increasing interest in initiating and expanding social health insurance through labor taxes in low- and low-middle-income countries goes against available empirical evidence. This article builds on existing recommendations by leading health financing experts and summarizes recent research that makes the case against labor-tax financing of health care in low- and low-middle-income countries. We found very little evidence to justify the pursuit of labor-tax financing for health care in these countries and persistent evidence that such policies could lead to increased inequality and fragmentation of the health system. We recommend that countries considering such policies heed the evidence on labor-tax financing and seek alternative approaches to health financing: primarily using general taxes or, depending on the context, general taxes combined with adequately regulated insurance premiums.

Non-evidence-based policy: how effective is China's new cooperative medical scheme in reducing medical impoverishment?

In recent years, many lower to middle income countries have looked to insurance as a means to protect their populations from medical impoverishment. In 2003, the Chinese government initiated the New Cooperative Medical System (NCMS), a government-run voluntary insurance program for its rural population. The prevailing model of NCMS combines medical savings accounts with high-deductible catastrophic hospital insurance (MSA/Catastrophic). To assess the effectiveness of this approach in reducing medical impoverishment, we used household survey data from 2006 linked to claims records of health expenditures to simulate the effect of MSA/Catastrophic on reducing the share of individuals falling below the poverty line (headcount), and the amount by which household resources fall short of the poverty line (poverty gap) due to medical expenses. We compared the effects of MSA/Catastrophic to Rural Mutual Health Care (RMHC), an experimental model that provides first dollar coverage for primary care, hospital services and drugs with a similar premium but a lower ceiling. Our results show that RMHC is more effective at reducing medical impoverishment than NCMS. Under the internationally accepted poverty line of US$1.08 per person per day, the MSA/Catastrophic models would reduce the poverty headcount by 3.5-3.9% and the average poverty gap by 11.8-16.4%, compared with reductions of 6.1-6.8% and 15-18.5% under the RMHC model. The primary reason for this is that NCMS does not address a major cause of medical impoverishment: expensive outpatient services for chronic conditions. As such, health policymakers need first to examine the disease profile and health expenditure pattern of a population before they can direct resources to where they will be most effective. As chronic diseases impose a growing share of the burden on the population in developing countries, it is not necessarily true that insurance coverage focusing on expensive hospital care alone is the most effective at providing financial risk protection.

The flip-side of social capital: the distinctive influences of trust and mistrust on health in rural China.

Despite increasing evidence that social capital is positively associated with health, the pathways that link social capital to health are not definitive and invite further investigation. This paper uses household survey data from 22 villages in China in 2002 to test the relationship between social capital and the self-reported health status of the rural population. Focusing on the cognitive dimension of social capital, this paper complements current social capital research by introducing an overlooked distinction between trust and mistrust. Trust and mistrust are measured at the individual and aggregate levels, and the distinct ways in which they affect general and mental health are explored. We adopt an ordered logistic regression using survey procedures in SAS version 9.1 to account for the stratified and clustered data structure. The results suggest that: (1) individual-level trust and mistrust are both associated with self-reported health in rural China--trust is positively associated with both general health and mental health, while mistrust is more powerfully associated with worse mental health; and (2) the effects of individual-level trust and mistrust are dependent on village context--village-level trust substitutes for individual-level trust, while individual-level mistrust interacts positively with village-level mistrust to affect health. However, an unexpected protective health effect of mistrust is found in certain types of villages, and this unique result has yet to be examined. Overall, this study suggests the conceptual difference between trust and mistrust and the differential mechanisms by which trust and mistrust affect health in rural China. It also suggests that effective policies should aim at enhancing trust collectively or reducing mistrust at the personal level to improve health status in rural areas of China.

The impact of rural mutual health care on health status: evaluation of a social experiment in rural China.

Despite widespread efforts to expand health insurance in developing countries, there is scant evidence as to whether doing so actually improves people's health. This paper aims to fill this gap by evaluating the impact of Rural Mutual Health Care (RMHC), a community-based health insurance scheme, on enrollees' health outcomes. RMHC is a social experiment that was conducted in one of China's western provinces from 2003 to 2006. The RMHC experiment adopted a pre-post treatment-control study design. This study used panel data collected in 2002, 1 year prior to the intervention, and followed up in 2005, 2 years after the intervention, both in the intervention and control sites. We measured health status using both a 5-point Categorical Rating Scale and the EQ-5D instruments. The estimation method used here is difference-in-difference combined propensity score matching. The results show that RMHC has a positive effect on the health status of participants. Among the five dimensions of EQ-5D, RMHC significantly reduces pain/discomfort and anxiety/depression for the general population, and has a positive impact on mobility and usual activity for those over 55-years old. Our study provides useful policy information on the development of health insurance in developing countries, and also identifies areas where further research is needed.

China's health system and its reform: a review of recent studies.

This paper provides a survey of the recent empirical research on China's 'old' health system (i.e. prior to the spate of reforms beginning in 2003). It argues that this research has enhanced our understanding of the system prior to 2003, in some cases reinforcing conclusions (e.g. the demand-inducement associated with perverse incentives) while in other cases suggesting a slightly less clear storyline (e.g. the link between insurance and out-of-pocket spending). It also concludes that the research to date points to the importance of careful evaluation of the current reforms, and its potential to modify policies as the rollout proceeds. Finally, it argues that the research on the pre-2003 system suggests that while the recently announced further reforms are a step in the right direction, the hoped-for improvements in China's health system will far more likely occur if the reforms become less timid in certain key areas, namely provider payments and intergovernmental fiscal relations.

What can be achieved with a single-payer NHI system: The case of Taiwan.

The United Nations has incorporated the noble goal of Universal Health Coverage (UHC) in its 2030 Agenda for Sustainable Development. Most nations have already embraced UHC as their goal. However, an intense policy debate has risen about which health system structure can best achieve UHC. Is a single-payer system more efficient, equitable and effective than a multiple-payer system for middle income countries? We argue that empirical evidence and in-depth analysis of single-payer and multiple-payer systems should inform this debate. First, we need a clear definition of single- and multiple-payer health systems that enables us to compare their differences and clarify the issues to be debated. Second, at least four key issues confront any nation that wishes to achieve UHC: (1) how to design an affordable comprehensive health benefit package for UHC and to finance it (2) how the health expenditure inflation rate can be managed to sustain UHC (3) how modern information technology can be used to enhance efficiency and quality of healthcare and (4) how to assure an adequate supply of high-quality services will be distributed equitably throughout a nation. This paper offers a definition of single- and multiple-payer and compares them. We then use Taiwan's National Health Insurance system to address the four key issues, and illuminate how its policies and operations led to Taiwan's successful UHC.

Lessons from 20 Years of Capacity Building for Health Systems Thinking.

In 2016, the Flagship Program for improving health systems performance and equity, a partnership for leadership development between the World Bank and the Harvard T.H. Chan School of Public Health and other institutions, celebrates 20 years of achievement. Set up at a time when development assistance for health was growing exponentially, the Flagship Program sought to bring systems thinking to efforts at health sector strengthening and reform. Capacity-building and knowledge transfer mechanisms are relatively easy to begin but hard to sustain, yet the Flagship Program has continued for two decades and remains highly demanded by national governments and development partners. In this article, we describe the process used and the principles employed to create the Flagship Program and highlight some lessons from its two decades of sustained success and effectiveness in leadership development for health systems improvement.

What Drove the Cycles of Chinese Health System Reforms?

Abstract-Since 1978 when China liberalized its economy and moved from a central planning to a socialistic market economy, its health care system has gone through two major cycles of reform-oscillating from relying on the market to fund and deliver health care, to one in which the government plays a central role in financing health care, prioritizes prevention and primary care, and redistributes resources to poorer and rural regions. Consequently, performance of the Chinese health system improved and China was finally able to extend a basic health safety net to more than 95% of its 1.3 billion people over the last decade. Then, in 2013, China launched its new cycle of reform, and vigorously pushed privatization and marketization as a core strategy to reform its public hospitals. What explains China's oscillating health policies and performances? This paper examines the thesis that ideologies of the government and the market are the main drivers for the reforms. The social value that undergirds the government actions, especially how much priority it gives to equity vis-à-vis economic growth has exerted a major influence on whether China chooses a pro-government or pro-market approach.

Disaggregating the Universal Coverage Cube: Putting Equity in the Picture.

Abstract-In recent years, the World Health Organization's "Cube Diagram" has been widely used to illustrate the policy options in moving toward Universal Health Coverage. The Cube has become a globally recognized visual representation of health system reform choices, with its axes defined by: (1) the services covered by pooled funds, (2) the population covered, and (3) the proportion of costs covered. The Cube shows the difference between the current national coverage situation in a country and the policy goal of universal health coverage, identifying where major gaps exist. The essential feature of the Cube diagram is that it shows a country's coverage situation in terms of national averages. As a result, it does not present or call attention to significant disparities in coverage across population groups, which are characteristic of most low- and middle-income countries. This article recommends adding a new diagram that disaggregates the Cube. The new diagram, called the Step Pyramid, allows a policy maker to visualize specific choices in expanding the coverage status of different population groups. This new diagram can help policy makers focus explicitly on equity concerns as they set priorities in moving toward universal health coverage. The paper explains how to construct a Step Pyramid diagram, provides a hypothetical illustration, and then uses data from Mexico to create an example of a Step Pyramid diagram. The paper concludes with a discussion of the strengths, limits, and implications of both the Cube and the Step Pyramid.

Does universal health insurance make health care unaffordable? Lessons from Taiwan.

This paper examines the performance of Taiwan's National Health Insurance (NHI), a universal health insurance program, implemented in 1995, that covers comprehensive services. The authors address two key questions: Did the NHI cause Taiwanese health spending to escalate to an "unaffordable" level? What are the benefits of the NHI? They find that Taiwan's single-payer NHI system enabled Taiwan to manage health spending inflation and that the resulting savings largely offset the incremental cost of covering the previously uninsured. Under the NHI, the Taiwanese have more equal access to health care, greater financial risk protection, and equity in health care financing. The NHI consistently receives a 70 percent public satisfaction rate.

Medical expenditure and rural impoverishment in China.

Thanks to continued economic growth and increasing income, the overall poverty rate has been on the decline in China. However, due to escalating medical costs and lack of insurance coverage, medical spending often causes financial hardship for many rural families. Using data from the 1998 China National Health Services Survey, the impact of medical expenditure on the poverty headcount for different rural regions was estimated. Based on the reported statistics on income alone, 7.22% of the whole rural sample was below the poverty line. Out-of-pocket medical spending raised this by more than 3 percentage points. In other words, medical spending raised the number of rural households living below the poverty line by 44.3%. Medical expenditure has become an important source of transient poverty in rural China.