National Health Accounts: A Tool to Track Financial Flows of the Health System

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1 National Health Accounts: A Tool to Track Financial Flows of the Health System Charu C. Garg, Economist (Health) EIP/GPE Increasing Investments in Health outcomes for the Poor Second Consultation on Macroeconomics and Health October 2003

2 Principle behind NHA Financial resources provide a means to an end, i.e., the health sector s goal of maintaining and improving a population s health status. NHA describes the FLOW of funds through a health system Who finances health care? How much do they spend? i.e allocation of resources by sources Where do their health funds go, i.e., distribution among providers and ultimately among services provided? Who benefits from this health expenditure pattern?

e allocation of resources by sources Where do their health funds go, i.e., distribution among providers and ultimately among services provided?

3 Uses of NHA Health information is the glue that holds a health system together Helps in informed policy decisions Takes into account all stakeholders that contribute to financing to develop financing strategy Useful when used in conjunction with non-financial data like health status or utilisation Benefits in the study of resource availability for various countries and comparative analysis

financing strategy Useful when used in conjunction with non-financial data like health status or

4 Life Expectancy at Birth Share of THE in GDP Relationship between Total Health Expenditures and Life Expectancy

5 Inequality in Population, GDP, Total Health Expenditures and Global Burden of Disease (DALYs) by Region: AFR AMR* EMR EUR* SEAR WPR* OECD POP GDP THE DALY**

(DALYs) by Region: 2001 80 70 60 50 40 30 20

6 NHA: In context of CMH-I recommendations Help countries develop method of financing that suits their population. CMH recommends for a nation to achieve its health goals, it has to match methods of financing to its population groups, using general budgetary revenue to fill in gaps or compensate for the limits of different methods. How is the Money from Different Sources of Financing are Distributed among the Beneficiaries (by Employment): 1997 Estimated Employment No. of Status Beneficiaries (millions) + Regular 200 Salaried Government 18.5 Defence, police 20 etc. Railways 10 Agriculture 7.7 Manufacturing 26.4 organised Manufacturing Informal Services 79.7 Self 383 Employment Agriculture 253 Non Agriculture 130 Casual Wage Employment Agriculture Non Agriculture 42.9 n.e.c % of total health Expenditures Tax- Financed Source: Garg C. Health Finance Paradigm in India, Background paper for CMH1, 2000 Social Insurance Private Insurance Firms Out of Pocket

different methods. How is the Money from Different Sources of Financing are Distributed among the Beneficiaries (by Employment): 1997 Estimated Employment No.

7 NHA: In context of CMH-I recommendations (contd.) Provides information on availability from domestic resources CMH recommends that financing strategy should envisage an increase of domestic budgetary resources for health of 1 percent of GNP by 2007 and 2 % by Benefits donors in their funding allocation decisions. CMH assumes that international assistance for health will be more readily forthcoming if donors know that countries are doing their best to raise domestic resources to finance health care and that these resources are being raised and spent efficiently. 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Share of Health Expenditures by Sources according to Income Categories, 2001 Low income Lower middle income Upper middle income High income: OECD High income: non OECD Tax SSHE EXT PPE OOP OTH

2007 and 2 % by 2015. Benefits donors in their funding allocation decisions.

8 NHA in WHO Key NHA indicators- presented in annexes of WHR Presents best estimates for 192 countries, 5 years of data. Updated annually. Producers guide in 6 UN languages and 3 other -Mongolian, Vietnamese and Indonesian Available gratis at: Training and country support Training in EMRO, Pacific Islands, Francophone Africa, Latin America, India and CIS countries Country support- Uganda, Namibia, Nigeria, Myannmar» l Global Programme on Evidence for Health Policy

Producers guide in 6 UN languages and 3 other -Mongolian, Vietnamese and Indonesian Available gratis at: http://whqlibdoc.who.

9 NHA in WHO (contd..) Provide information to other clusters e.g. Immunisation program in Laos, SimFin model for Vietnam Plans Monitoring resources by beneficiary groups, disease categories e.g HIV Working with EUROSTAT/OECD and other UN agencies Through NHA, the issue of additionality can be more accurately answered and WHO would like to work with other agencies who are advanced in this area.

WHO Global Health Expenditure Atlas

WHO Global Health Expenditure Atlas September 214 WHO Library Cataloguing-in-Publication Data WHO global health expenditure atlas. 1.Health expenditures statistics and numerical data. 2.Health systems