This document discusses various models of healthcare financing. It describes major models including the National Health Service model, Social Health Insurance model, Community-Based Health Insurance, Voluntary Health Insurance, and Out-of-Pocket Payments. For each model, it provides information on the source of revenue, groups covered, how risks are pooled, and who provides care. It also discusses how systems have evolved from relying more on private insurance and out-of-pocket payments in low-income countries to utilizing government budgets and social health insurance in middle-income and high-income countries.

1. Model Pembiayaan Pelayanan
Kesehatan

2. PPoollaa BBeellaannjjaa KKeesseehhaattaann

3. BBeellaannaajjaa KKeesseehhaattaann 22000044
((ppooppuullaattiioonn--wweeiigghhtteedd))

4. FFaakkttaa KKuunnccii
• Belanja Negara terhitung kurang dari 25% dari total belanja kesehatan di
Low Income Countries (LICs), kira-kira 50% in MICs dan lebih dari 60% in
HICs:
→ Policy-makers need to focus on private spending as well as public.
• Belanja Negara (Public spending) utk Kesehatan : kira-kira $10 per capita in
LICs, lebih dari $100 in MICs, dan $2000 in HICs:
→ Policy-makers in LICs will be challenged to provide an essential package of basic
services.
• Pembayaran langsung oleh masyarakat (Out-of-pocket payments) terhitung
70 percent di LICs, 40 percent di MICs dan 15 percent di HICs:
→ Policy-makers need to focus on improving formal risk pooling mechanisms in order to
provide financial protection and protect the poor.
• Asuransi Social terhitung 2% dari total belanja kesehatan di LICs, 20% di
MICs, dan 30% in HICs:
→ Policy-makers in LICs need to carefully evaluate whether they have the enabling
conditions in place for SHI to succeed.

5. FFuunnggssii ddaann MMooddeell
PPeemmbbiiaayyaaaann KKeesseehhaattaann

6. FFuunnggssii ddaann SSaassaarraann
Fungsi Sasaran
Revenue
Collection
Pooling
Purchasing
raise sufficient and sustainable
revenues in an efficient and
equitable manner to provide
individuals with both a basic
package of essential services and
financial protection against
unpredictable catastrophic financial
losses caused by illness and injury
manage these revenues to equitably
and efficiently pool health risks
assure the purchase of health
services in an allocatively and
technically efficient manner

7. Kebutuhan Pembiayaan Terkait ddeennggaann PPeennddaappaattaann..
RReessiikkoo ddaann MMaannaajjeemmeenn ddaann PPeemmbbiiaayyaaaann
Revenue Pooling Resource Allocation
Collection or Purchasing (RAP)
Private Public
Taxes
Public Charges/
Resource Sales
Mandates
Grants
Loans
Private
Insurance
Communities
Out-of-Pocket
Service
Provision
Public
Providers
Private
Providers
Government
Agency
Social Insurance or
Sickness Funds
Private Insurance or
Community-based
Organizations
Employers
Individuals
And Households

8. Basic Packages: AAnn EEffffoorrtt aatt SSeettttiinngg PPrriioorriittiieess
Modern and traditional medicine offer a very large and growing number of
health interventions. But with the limited availability of public resources, not
all can be publicly afforded.
Include? Include? Include? Include? Include?
Maximum
possible
health status
Set of interventions
Select a limited set of
health interventions,
that you can finance
with available
resources, and that
maximizes health
status.
Source: Bitran

9. WWhhyy CCoonnssiiddeerr BBaassiicc PPaacckkaaggeess??
• Growing sense that main health problems
12
remain only partly tackled.
• Current resources spent “otherwise” would
result in greater health gains.
• In social or private health insurance, benefits
package must be made explicit: people pay a
known premium in exchange for a known
coverage, or set of benefits. Enrollees want to
know their rights explicitly.
• Under social insurance, resource allocation is
accomplished through basic benefit design
Source: Bitran

10. Decision TTrreeee ffoorr PPuubblliicc RReessoouurrccee
AAllllooccaattiioonn
Cost-Effective?
No Yes
Do Not
Subsidize
Contributory
Insurance
Appropriate?
No Yes
Public? Private?
Finance
Publicly
Yes
Public
Good? No
Significant
Externalities
No
Yes
Adequate
Private Demand?
No
Yes
Catastrophic
Yes Cost
No
Beneficiaries
Poor?
Yes No
(Regulated)
Private Market
Source: P. Musgrove

11. IInnssuurraannccee CCaann BBee CCoommpplleexx
• Adverse selection occurs
when sicker than average
individuals enroll in
competing public or private
health insurance plans
• This can destabilize
insurance markets through
premium spirals if healthier
individuals disenroll
• Insurers react by trying to
screen out such high risk
individuals by:
– rreeqquuiirriinngg mmeeddiiccaall eexxaammss
– eexxaammiinniinngg ccllaaiimmss hhiissttoorryy
– hhaavviinngg wwaaiittiinngg ppeerriiooddss
– eexxcclluuddiinngg pprree--eexxiissttiinngg
ccoonnddiittiioonnss ffrroomm ccoovveerraaggee
– rreeffuussiinngg iinnssuurraannccee ccoovveerraaggee
• These instabilities can be
offset by:
– regulation of insurers
– marketing insurance to
groups formed for other
purposes (e.g. employment)
– having a mandatory public
insurance program

12. IInnssuurraannccee EEnnccoouurraaggeess OOvveerruussee ooff
SSeerrvviicceess
• TThhiiss pphheennoommeennoonn kknnoowwnn aass mmoorraall hhaazzaarrdd rreessuullttss
bbeeccaauussee ooff tthhee tteennddeennccyy ffoorr iinnssuurraannccee ttoo iinnccrreeaassee
tthhee pprroobbaabbiilliittyy ooff tthhee ooccccuurrrreennccee ooff tthhee eevveenntt tthhaatt iiss
bbeeiinngg iinnssuurreedd aaggaaiinnsstt
• IItt iiss pprreesseenntt iinn bbootthh ppuubblliicc aanndd pprriivvaattee iinnssuurraannccee
• IInnssuurraannccee ddeessiiggnn ffeeaattuurreess ttoo mmiittiiggaattee mmoorraall hhaazzaarrdd
iinncclluuddee::
– ccoosstt sshhaarriinngg
– lliimmiittss oonn bbeenneeffiittss
– ffrreeqquueenntt rreenneewwaabbiilliittyy
– uuttiilliizzaattiioonn mmaannaaggeemmeenntt

13. DDoo IInnssuurraannccee MMaarrkkeett IInnssttaabbiilliittiieess
NNeecceessssiittaattee PPuubblliicc FFiinnaanncciinngg??
PPuubblliicc ffiinnaanncciinngg ccaann::
– ppooooll rriisskkss oovveerr tthhee
eennttiirree ppooppuullaattiioonn
– eelliimmiinnaattee aaddvveerrssee
sseelleeccttiioonn aanndd
mmeeddiiccaall uunnddeerrwwrriittiinngg
pprroobblleemmss
– ssttiillll ffaaccee ccoosstt
pprroobblleemmss dduuee ttoo
mmoorraall hhaazzaarrdd
PPrriivvaattee iinnssuurraannccee ccaann::
– sseeggmmeenntt hheeaalltthh rriisskkss
bbyy uunnddeerrwwrriittiinngg ggrroouuppss
– pprreecclluuddee eeccoonnoommiicc
lloosssseess ffrroomm ccooeerrcciivvee
ttaaxxeess
– aallllooww ffoorr ggrreeaatteerr
ccoonnssuummeerr cchhooiiccee

14. MMaajjoorr HHeeaalltthh FFiinnaanncciinngg
MMooddeellss

15. Major HHeeaalltthh FFiinnaanncciinngg
MMooddeellss • National Health Service (NHS) -- systems financed through general
revenues, covering whole population, care provided through public
providers (General revenues dominate financing in some 106 of
191 countries)
• Social Health Insurance -- systems with publicly mandated coverage
for designated groups, financed through payroll contributions, semi-autonomous
administration, care provided through own, public, or
private facilities (Over 60 countries have established SHI systems)
• Community-Based Health Insurance -- not-for-profit prepayment
plans for health care, financed through private voluntary
contributions, with community control and voluntary membership,
care generally provided through NGO or private facilities
• Voluntary Health insurance -- financed through private voluntary
contributions to for- and non-profit insurance organizations, care
provided in private and public facilities
• User Fees – charges to individuals for publicly provided services

16. Evolution of HHeeaalltthh FFiinnaanncciinngg
SSyysstteemmss
PPrriivv.. iinnssuurr
PPaattiieenntt
PPaattiieenntt OOuutt--
OOuutt--ooff--
ooff--PPoocckkeett
PPoocckkeett
SSoocciiaall IInnssuurr
SSoocciiaall IInnssuurr
GGoovv’’tt BBuuddggeett GGoovv’’tt BBuuddggeett
LLooww IInnccoommee
CCoouunnttrriieess
MMiiddddllee
IInnccoommee
CCoouunnttrriieess
HHiigghh IInnccoommee
CCoouunnttrriieess
NNaattiioonnaall HHeeaalltthh
SSeerrvviiccee MMooddeell
SSoocciiaall
HHeeaalltthh IInnssuurraannccee
MMooddeell
PPrriivvaattee
IInnssuurraannccee
MMooddeell
Source: Modified from A. Maeda
CCoommmmuunniittyy
FFiinnaanncciinngg
PPaattiieenntt OOuutt--
ooff--PPoocckkeett

17. Major Health FFiinnaanncciinngg MMooddeellss
Model
Revenue
Source
Groups
Covered
Pooling
Organization
Care
Provision
National Health
Service
General
revenues
Entire
population
Central
government
Public providers
Social Health
Insurance
Payroll taxes Specific
groups
Semi-autonomous
organizations
Own, public, or
private facilities
Community-based
Health
Insurance
Private
voluntary
contributions
Contributing
members
Non-profit plans NGOs or private
facilities
Voluntary Health
Insurance
Private
voluntary
contributions
Contributing
members
For- and non-profit
insurance
organizations
Private and
public facilities
Out-of-Pocket
Payments
(including public
user fees)
Individual
payments to
providers
None Public and
private facilities
(public facilities)

18. Major HHeeaalltthh FFiinnaanncciinngg
MMooddeellss
Model
Revenue
Source
Groups
Covered
Pooling
Organization
Care
Provision
National Health
Service
General
revenues
Entire
population
Central
government
Public
providers
Social Health
Insurance
Payroll taxes Specific groups Semi-autonomous
organizations
Own, public, or
private facilities
Community-based
Health
Insurance
Private voluntary
contributions
Contributing
members
Non-profit plans NGOs or private
facilities
Voluntary Health
Insurance
Private voluntary
contributions
Contributing
members
For- and non-profit
insurance
organizations
Private and
public facilities
Out-of-Pocket
Payments
(including public
user fees)
Individual
payments to
providers
None Public and
private facilities
(public facilities)

19. WWhhaatt iiss aa NNHHSS??
Systems financed through general revenues, covering
whole population, care provided through public providers
Three main features:
1. Funding comes primarily from general revenues.
• Taxes, other public revenues from sales of natural resources,
sales of government assets, public tolls, borrowing and grant
assistance, earmarked taxes or funds from local authorities.
1. Provide medical coverage to the whole population.
• Health care coverage is considered an attribute of citizenship.
1. Usually deliver health care through a network of public
providers.
• MoH heads a large network of public providers organized as a
national health service.
• Facilities are owned by the government, and health personnel are
public employees.
• However, some countries reimburse or contract with private
providers.

20. NNHHSS SSyysstteemmss
Systems financed through general revenues, covering whole
population, care provided through public providers
Strengths
– Pools risks for whole
population
– Relies on many different
revenue sources
– Single centralized
governance system has
the potential for
administrative efficiency
and cost control
Weaknesses
– Unstable funding due to
nuances of annual budget
process
– Often disproportionately
benefits the rich
– Potentially inefficient due to
lack of incentives and
effective public sector
management

21. Major HHeeaalltthh FFiinnaanncciinngg
MMooddeellss
Model
Revenue
Source
Groups
Covered
Pooling
Organization
Care
Provision
National Health
Service
General
revenues
Entire population Central
government
Public providers
Social Health
Insurance
Payroll taxes Specific
groups
Semi-autonomous
organizations
Own, public,
or private
facilities
Community-based
Health
Insurance
Private voluntary
contributions
Contributing
members
Non-profit plans NGOs or private
facilities
Voluntary Health
Insurance
Private voluntary
contributions
Contributing
members
For- and non-profit
insurance
organizations
Private and
public facilities
Out-of-Pocket
Payments
(including public
user fees)
Individual
payments to
providers
None Public and
private facilities
(public facilities)

22. What is SSoocciiaall HHeeaalltthh IInnssuurraannccee??
Systems with publicly mandated coverage for designated groups,
financed through payroll contributions, semi-autonomous
administration, care provided through own, public, or private
facilities
Most common features and principles:
1. Membership is publicly mandated for a designated
population.
– Occurs through an incremental process.
– From existing employer-based insurance schemes to
compulsory schemes for specific employment groups to
SHI.
1. Direct link between the payment of contributions to
finance the system and the receipt of medical care
benefits.
– Only contributors have the right to access specific items of
care.
– “There is a public commitment to take and give under
prescribed conditions stipulated by laws and regulations.”
(Ron, Abel-Smith, and Tamburi 1990).

23. What is Social HHeeaalltthh IInnssuurraannccee?? (22)
3. Social solidarity is essential.
– Implies a high level of cross-subsidization across
the system, between rich and poor, low-risk and
high-risk people, and individuals and families
4. Management of social health insurance
involves some degree of autonomy from the
government, often through quasi-independent
organizations in charge of the
system and in principle the organization has
to maintain its own financial solvency.

24. Social HHeeaalltthh IInnssuurraannccee
Systems with publicly mandated coverage for designated groups,
financed through payroll contributions, semi-autonomous
administration, care provided through own, public, or private
Strengths
• Additional health revenue source
• As a ‘benefit’ tax, there may be
more ‘willingness to pay’
• Removes financing from annual
general government appropriations
process
• Generally provides covered
population with access to a broad
package of services
• Often has strong support from
population
• Can effectively redistribute between
high and low risk and high and low
income groups in the covered
population
• Often serves as the basis for the
expansion to universal coverage
Weaknesses
facilities
• Poor are often excluded unless subsidized
by government
• Payroll contributions can reduce
competitiveness and lead to higher
unemployment
• Can be complex and expensive to
manage, which is particularly problematic
for LICs and some MICs
• Governance and accountability can be
problematic
• Can lead to cost escalation unless
effective contracting mechanisms are in
place
• Often provides poor coverage for
preventive services and chronic
conditions
• Often needs to be subsidized from
general revenues

25. MMaajjoorr PPllaannnniinngg IIssssuueess (11)
• Covered population/eligibility
• Enrollment/premium collection
• Benefit package
• Costing/financing
• Macro organization
Public, Semi-public, Private non-profit,
for-profit
Monopoly or competition
• Payment/contracting systems
Source: Hsiao, 2005

26. Source: Hsaio

27. Source: Hsaio

28. Source: Hsaio

29. AAddmmiinniissttrraattiioonn
• Costs of premium collection and
targeting
• Transparency of its operations and
performance
• Accountability to regulators and
enrollees
• Compliance with law when operated
by private insurers
Source: Hsiao,
2005

30. The Governance ooff SSoocciiaall HHeeaalltthh
IInnssuurraannccee AArrrraannggeemmeennttss
–Stewardship or policy/regulatory
–Oversight
– Institutional
Source: World Bank

31. Enabling CCoonnddiittiioonnss ffoorr
SSoocciiaall HHeeaalltthh IInnssuurraannccee
• A growing economy and level of income able to absorb
new contributions
• A large payroll contribution base and, thus a small informal
sector
• Concentrated beneficiary population and increasing
urbanization
• A competitive economy able to absorb increased effective
wages arising from increased contributions
• Administrative capacity to manage rather complex
insurance funds and issues such as management of
reserves, cost containment, contracting and others
• Supervisory capacity to overcome some of the market
failures such as moral hazard and risk selection as well as
other important matters such as governance and
sustainability
• Political consensus and will

32. Major HHeeaalltthh FFiinnaanncciinngg
MMooddeellss
Model
Revenue
Source
Groups
Covered
Pooling
Organization
Care
Provision
National Health
Service
General
revenues
Entire population Central
government
Public providers
Social Health
Insurance
Payroll taxes Specific groups Semi-autonomous
organizations
Own, public, or
private facilities
Community-based
Health
Insurance
Private
voluntary
contributions
Contributing
members
Non-profit
plans
NGOs or
private
facilities
Voluntary Health
Insurance
Private voluntary
contributions
Contributing
members
For- and non-profit
insurance
organizations
Private and
public facilities
Out-of-Pocket
Payments
(including public
user fees)
Individual
payments to
providers
None Public and
private facilities
(public facilities)

33. WWhhaatt iiss CCBBHHII??
Not-for-profit prepayment plans for health care, with
community control and voluntary membership, care
generally provided through NGO or private facilities
Three common features:
1. Affiliation is based on community membership, and
the community is strongly involved in managing the
system.
– Linked by geographic proximity, same profession, religion,
ethnicity, or any “other kind of affiliation that facilitates their
cooperation for financial protection” (Jakab and Krishnan
2004).
1. Beneficiaries are excluded from other kinds of
health coverage.
2. Members share a set of social values.

34. Community-Based HHeeaalltthh IInnssuurraannccee
Not-for-profit prepayment plans for health care, with
community control and voluntary membership, care
generally provided through NGO or private facilities
Strengths
• Community-run and not-for-profit
• Membership is voluntary
• Promotes pre-payment
• Plays a role in mobilizing additional
resources, providing access and
financial protection in LICs
• Risk sharing is usually from the well to
the sick
• If premiums are based on income, there
can also be risk sharing from the better
off to the poor
• CBHI can be a helpful complement but
is not a substitute for NHS or SHI
systems
Weaknesses
• Heterogeneous in terms of populations
covered, regulation, and benefits
provided
• Providing access and financial
protection are limited due to the small
size of most schemes
• The financial sustainability of most
schemes is questionable
• CBHI schemes generally do not reach
the very poor
• Their impacts on care delivery are quite
limited
• Should be encouraged only where
more comprehensive health financing
arrangements cannot be implemented
on a large scale

35. Major HHeeaalltthh FFiinnaanncciinngg
MMooddeellss
Model
Revenue
Source
Groups
Covered
Pooling
Organization
Care
Provision
National Health
Service
General
revenues
Entire population Central
government
Public providers
Social Health
Insurance
Payroll taxes Specific groups Semi-autonomous
organizations
Own, public, or
private facilities
Community-based
Health
Insurance
Private voluntary
contributions
Contributing
members
Non-profit plans NGOs or private
facilities
Voluntary Health
Insurance
Private
voluntary
contributions
Contributing
members
For- and non-profit
insurance
organizations
Private and
public
facilities
Out-of-Pocket
Payments
(including public
user fees)
Individual
payments to
providers
None Public and
private facilities
(public facilities)

36. What iiss VVoolluunnttaarryy HHeeaalltthh IInnssuurraannccee??
Financed through private voluntary contributions to for- and non-profit
insurance organizations, care provided in private and public
facilities
• Voluntary health insurance is defined as any health
insurance that is paid for by voluntary contributions.
• In reality, most private health insurance markets are
voluntary.
– Important to identify whether the voluntary scheme is a primary
or additional source of health care funding.
• Primary functions (OECD 2004):
– the main source of health coverage for a population or
subpopulation (primary)
– coverage of the same services or benefits as the public system
(duplicate) (although the providers and timely access to, quality,
and amenities of the services may vary)
– coverage of cost sharing under the public system
(complementary)
– coverage of services uncovered by the public system
(supplementary)

37. Voluntary HHeeaalltthh IInnssuurraannccee
Financed through private voluntary contributions to for- and
non-profit insurance organizations, care provided in private
Strengths
and public facilities
• As a prepayment and risk pooling
mechanism is generally preferable
to out of pocket expenditure
• May increase financial protection
and access to health services for
those able to pay
• When an “active purchasing”
function is present it may also
encourage better quality and cost-efficiency
of health care providers
Weaknesses
• Associated with high administrative
costs
• Not effective in reducing cost
pressures on public health financing
systems
• May be inequitable without public
intervention either to subsidize
premiums or regulate insurance
content and price
• Has the potential to divert resources
and support from mandated health
financing mechanisms
• Applicability in LICs and MICs
requires well developed financial
markets and strong regulatory
capacity

38. Major HHeeaalltthh FFiinnaanncciinngg
MMooddeellss
Model
Revenue
Source
Groups
Covered
Pooling
Organization
Care
Provision
National Health
Service
General
revenues
Entire population Central
government
Public providers
Social Health
Insurance
Payroll taxes Specific groups Semi-autonomous
organizations
Own, public, or
private facilities
Community-based
Health
Insurance
Private voluntary
contributions
Contributing
members
Non-profit plans NGOs or private
facilities
Voluntary Health
Insurance
Private voluntary
contributions
Contributing
members
For- and non-profit
insurance
organizations
Private and
public facilities
Out-of-Pocket
Payments
(including public
user fees)
Individual
payments to
providers
N/A None Public and
private
facilities
(public
facilities)

39. UUsseerr FFeeeess aarree OOnnllyy aa SSmmaallll SShhaarree ooff
TToottaall CCoonnssuummeerr PPaayymmeennttss
Fees for publicly provided services

40. Evidence oonn UUsseerr FFeeeess iiss MMiixxeedd
Fees for publicly provided services
Strengths
– Generate additional revenue with which
to improve health care quality
– Increase demand for services owing to
the improvement in quality
– May reduce out-of-pocket and other
costs, even for the poor, by substituting
public services sold at relatively modest
fees for higher-priced and less
accessible private services
– Promote more efficient consumption
patterns by reducing spurious demand
and encouraging the use of cost-effective
health services
– Encourage patients to exert their right to
obtain good quality services and make
health workers more accountable to
patients
– When combined with a system of
waivers and exemptions, serve as an
instrument to target public subsidies to
the poor and to reduce the leakage of
subsidies to the non-poor
Weaknesses
– Are rarely used to achieve significant
improvements in quality of care, either
because their revenue generating
potential is marginal or because fee
revenue is not used to finance quality
gains
– Do not curtail spurious demand
because in poor countries there is a
lack, not an excess, of demand
– Fail to promote cost-effective demand
patterns because the government
health system fails to make cost-effective
services available to users
– Hurt access by the poor, and thus harm
equity, because appropriate waivers
and exemption systems are seldom
implemented; where they are, the poor
get discriminated against with lower
quality treatment