Health sector reform: Background and variations sector reform

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Health sector reform Background and variations
sector reform

• TK Sundari Ravindran
• 20 June 2006

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The Historical Backdrop-1 Oil Price increases in
the 1980s

• A sharp increase in oil prices initiated by OPEC
  led to a balance-of-payment crisis in non-oil
  producing developing countries.
• Many industrialised countries also deflated their
  economies to cope with higher oil prices, and
  curtailed their imports.

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Historical Backdrop- 2 World Slump

• This led to a low demand and prices for third
  world goods
• In turn, this meant lower foreign earnings for
  third world countries.
• At the same time, third world countries needed
  more foreign exchange to be able to import oil.

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Historical Backdrop 3Balance of payments crisis

• Countries started borrowing from commercial banks
  internationally. These were at high interest
  rates. The cost of debt servicing was high.
• Spiralling from crisis to crisis, most countries
  devalued their currency to increase demand for
  their exports.

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Historical Backdrop 4Cuts in public expenditure

• Devaluation further increased debt-servicing
  costs and led to cuts in public expenditure,
  often in response to IMFs intervention.
• Low world growth also meant decreased foreign
  aid.
• The cumulative result of all these forces was
  cuts in health expenditure by governments

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Other global forces

• International donors and their priorities
• These have tended to prioritise and promote
  different strategies for health and development
  at different points in time, and influenced
  resource allocation both in the development and
  in health sectors

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Other global forces -2

• Growth in prominence of the ideology that
  increasing privatisation and private sector
  partnership with the public sector for health
  development
• Belief that government inefficiency is inbuilt
  and inevitable.

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The World Bank plays a proactive role

• World Bank emerged as a major donor in the health
  sector in the early 1990s and played a prominent
  role in the shape of health sector reform.

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Health Sector reforms

• Two complementary strategies to bridge the
  resource gap
• a) Containing costs and increasing efficiency
  rationalising drug use, using donor funds more
  effectively, reprioritising areas for investing
  public health resources, increasing hospital
  efficiency, and enforcing more effective
  mechanisms for cost-control and accountability.

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Health Sector reforms

•    b) Increasing revenues through cost-sharing
  using mechanisms such as promoting the private
  sector, user fees, pre-payment schemes, community
  cost-sharing systems and health insurance.

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Variations in nature of health sector reforms

• Different countries may institute reforms in
  different aspects of the health sector
• Changes in financing mechanisms (balance between
  tax revenue, social or private insurance, user
  fees, external aid sector-wide approaches etc)
• Changes in priority setting mechanisms (e.g role
  of the state in regulation and service provision
  basis for decisions about which services ought
  to be publicly funded, which regions or
  populations get priority)
• Changes in organizational mechanisms (management,
  integration of services, logistics and supply
  systems)
• Organisational Changes (e.g. decentralisation)

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Variations in scope of health sector reforms

• National vs. state or provincial levels
• in financing, organization and priority setting
  vs in one or two of these
• sector-wide versus programme-specific (MCH,
  communicable diseases)
• Big R reforms Changes in financing,
  priority-setting and organisational mechanisms
  affecting a substantial part of the health
  system e.g Zambia
• Small r reforms e.g. Introduction of user
  fees, public-private partnerships, hospital
  autonomy

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South Africa Political context

• Period of democratic transition occurred
  culminating in first democratic election in 1994
• A new constitution and a bill of rights were
  passed
• Constitution of South Africa
• The state may not unfairly discriminate . on one
  or more grounds, including race, gender, sex,
  pregnancy, martial status, ethnic or social
  origin, colour, sexual orientation, age,
  disability, religion, conscience, belief,
  culture, language and birth .
• Health enshrined as a constitutional right

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Economic context

• Unemployment between 23-36 (W.Cape
  18Gauteng 25E.Cape 30KZN 25)
• Enormous inequalities based on race -
  Socio-economic status, health status, social
  service access
• S.A is ranked the third most unequal society in
  the world
• About 45 of South Africans live in poor
  households where the income of each adult is
  about the equivalent of 45 a month
• 59 of black S. Africans are poor compared with
  3 of white S.Africans (coloured 20 Asian
  7)
• Source Cooper et al 2005

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Policy Actors in South Africa

• Political parties and activists
• Civil society organisations
• Research community
• Womens movement
• Consultative processes were part of policy-making
  processes post 1994
• A favourable environment for formulating locally
  appropriate womens reproductive health policies
  rooted in a human rights framework
• Very little role for external donors or IFI. For
  religious groups?

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Nature of Health system

• Roughly 50 public funding, through tax revenue
  medium health resources
• Commitment to transformation of the health system
  based on
• The PHC approach
• Integrating public and private sectors
• Development of a district health system
• Reducing inequalities and expanding access to
  essential health care

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Nature of health system

• At the same time, the countrys economy is
  influenced by international climate supporting
  open economies and a prominent role for the
  market
• The shift from Reconstruction and Development
  programme to GEAR limited the availability of
  funds to the health sector

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Per capita trends above previous peak (R real
05/06 prices) Source Blecher M, 2006
19
Spending on selected sectors affecting public
health (rand million real 05/06 prices) Source
Blecher M, 2006
20
Improving inter-provincial equity (R per cap real
05/06 prices)Source Blecher M, 2006
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Changes in policy related to SRH-1

• 1994 NDOH establishes partnerships to plan,
  process review HIV/AIDS policy focus of
  prevention and rx of AIDS-related opportunistic
  infections
• 1994 Free services introduced for pregnant
  women and children under 6 yrs
• 1995 Govt ratifies the UN convention CEDAW
• 1996 Choice of Termination of Pregnancy Act
  passed providing legal framework for the
  provision of abortion services Amendments, 2004

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Changes in policy related to SRH-2

• 1997 Maternal death made a notifiable condition
  and standing National Committee for Confidential
  Enquiries into Maternal Deaths established.
• 1997 Patients rights Charter launched address
  quality in health care
• 1998 A new Population and Development Policy,
  delinked from population growth.

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Changes in policy related to SRH-3

• 1998 South African National AIDS Council
  formed.
• 1998 The Domestic Violence Act passed.
• 1999-2001 pMTCT of HIV programmes introduced in
  the W.C (1999) Gauteng (2001).
• 2000 National Guidelines for Cervical
  Screening.
• 2002 Comprehensive program to roll-out of
  pMTCT program nationally
• 2002 National Contraception Policy Guidelines
  launched

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Changes in policy related to SRH-4

• 2002 Government approved provision of HIV
  post-exposure prophylaxis to survivors of rape,
  in public sector facilities.
• 2003 Government approved plan to provide
  antiretroviral drugs (ARVs) to people with AIDS
  in public sector
• 2004 Rape legislation under review to amend
  the definition of rape and enforce heavier
  sentences TOP amend.

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Health Sector Reform

• Big R reforms
• Reforms determined more by national than
  international compulsions
• However, influenced by international thinking on
  efficiency and cost-effectiveness, and affected
  by budgetary cuts
• Reforms in financing, relationship with the
  private sector in health, and in organisational
  structures (e.g. development of the district
  health system)
• Difficulties experienced in investing in health
  systems strengthening vs. programme-specific
  investments

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Assessing the implications for SRH services

• Some questions to ask
• Have reforms resulted in-
• Increase in the range of services available? (e.g
  RTIs/STIs, infertility services, cervical cancer
  care)
• Initiation of services for populations not
  hitherto covered? (e.g. adolescents, menopausal
  women)

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Assessing the implications for SRH services-2

• Have reforms resulted in-
• Improvement in the quality of care?
• Increase in access to care for low-income and
  other marginalised groups?
• Elimination of cost barriers in accessing
  essential and emergency services (e.g. family
  planning abortion and delivery care EOC)