Recently, the Health Finance and Governance (HFG) Project organized a multi-country workshop to support policymakers from public health and finance agencies in developing concrete action plans for mobilizing domestic resources for health. This presentation is by the keynote speaker, Ms. Midori de Habich—Peru’s former Minister of Health, who spoke about her experience working across ministries, sharing factors for success and offering advice for both health and finance personnel.

1. September | 2016
Peru’s experiences with DRM for
health

2. Peru has made significant progress in health
50
55
60
65
70
75
80
1985 1990 1995 2000 2005 2010 2015
Life expectancy at birth, total (years)
0
5
10
15
20
25
30
35
40
45
50
55
60
1985 1990 1995 2000 2005 2010 2015 2020
Child mortality rate (per 1000 live births)

3. Increased spending on health
0.0
1.0
2.0
3.0
4.0
5.0
6.0
1995 2004 2005 2006 2007 2008 2010 2011 2012 2013 /e2014 /e
Total expenditure on health, % of GDP
Public expenditure on health, % of GDP
Under US$ 100
US$ 350

4. Increased priority of the health sector in the public budget
0 %
2 %
4 %
6 %
8 %
10 %
12 %
1998 2000 2002 2004 2006 2008 2010 2012 2014
Public expenditure on health, % of public spending

5. Percentage of population with and without health insurance, 2006-
2014
0 %
10 %
20 %
30 %
40 %
50 %
60 %
70 %
80 %
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Percentageofpopulation
% of population with some form of health insurance
% of population without any health insurance

6. SIS (public tax-financed insurer) is well-focused on the poor and
vulnerable
0 %
10 %
20 %
30 %
40 %
50 %
60 %
70 %
80 %
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Poor Vulnerable Non-vulnerable (all)
Non-vulnerable (informal) Non-vulnerable (formal)
Rate of affiliation to SIS,
2004-2014 according to
ENAHO

7. Financial barrier to access has declined substantially
0%
5%
10%
15%
20%
25%
30%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
"No insurance, no money"
% of people that being ill
have no access to health
care

8. Domestic Resource Mobilization
2012-2015
Government Health Budget: 60% increase (nominal terms)
Budget execution: from 80% to 93%

9. Factors of success
• Political will of the President to increase government health
expenditure to implement key reform policies:
– Strengthen SIS (centralized public insurer) and expand coverage
– Implement national health investment policy under MOH
• Enhanced capabilities for economic analysis in the MOH

10. Relationship between the MOF and MOH
• The relationship between MOH and MOF is usually asymmetric.
• MOH has limited capacities to understand (macro)economic analysis,
which undermines its position in the negotiations.
• MOF sees MOH as resource consuming with weak linkages to results and
service improvement
• Short vs. mid term perspectives
• Biggest challenge: Timely and accurate information on performance and
efficiency.

11. The process
• Usually the MOF informs the Ministries of their budget ceilings in June
and there is little room for negotiations
• During my tenure, the President instructed MOF that priority should be
given to Education and Health and that the negotiation process with
these two sectors should precede the other Ministries
• We started in March and centered the negotiations on key reform
policies: expansion on public health insurance coverage; investment
policy (including PPPs); wage reform for health personnel, among the
most important

12. The process
• These negotiations were held at the highest level: MOF and MOH
Ministers and Vice Ministers
– Direct preparation and involvement of the Minister of Health is crucial
• Specific details and information sharing was delegated to technical
working groups of both ministries
• The MOH team developed the proposals and these were discussed in
the meetings with the Ministers
• Adjustments were developed in the technical meetings and brought
back to the meetings with Ministers. (3 meetings, at least)

13. Materials
• The base document is the Multiannual Macroeconomic Framework (MMF)
prepared by MOF, which establishes macroeconomic conditions and fiscal goals
for 3 years
• National Health Accounts (1995-2014) and several studies of Fiscal Space for
Health
• MOH developed materials for the formulation of budget requirements
considering:
– Past expenditures and agreed upon commitments
– New requirements associated to key policies
• Although the negotiations were limited to the annual budget, it was useful to
project budget requirements for 3 years in alignment with the MMF as
reference

14. Advice for MOH
• Present a sound and feasible program to back your budget negotiation:
– Evidence base
– Performance indicators
• Get support from the highest political level
• Start negotiations with enough time
• Attract and “invest” in economists with sound micro and macro
background.

15. Advice for MOF
• Allow appropriate time for negotiations
• Change to a mid-term mind frame
• Ask for evidence of the proposed policies
• Ask for performance indicators for short and medium term that can be
monitored with the MOH.
– Funding of health information systems
• Incorporate health economists with an understanding of the health
sector

16. What would I do differently
• Greater attention to indicators and communicating them to
the public opinion and main stakeholders

17. Thank you