Healthcare Financing

Healthcare Financing

• Healthcare financing involves generating, distributing, and managing financial resources to cover healthcare costs, aiming to ensure equitable access to affordable and quality healthcare services while promoting financial sustainability and accountability.

Key Components of Healthcare Financing

• Resource Generation: collecting funds from various sources, including individuals, employers, government agencies, and insurance companies.
• Allocation: distributing financial resources to healthcare providers, facilities, and programs to ensure access to necessary services.
• Utilization: efficient and effective use of financial resources to deliver quality healthcare services, including expenditures on facilities, equipment, medications, and personnel.
• Regulation and Policy: establishing policies, regulations, and frameworks to ensure equitable access to healthcare services and financial sustainability.

Financial Administration

• Financial administration involves budgeting, accounting, auditing, and purchasing to ensure efficient use of funds.

Key Activities in Financial Administration

• Budgeting: allocating financial resources to support programs or projects for a specific period.
• Accounting: recording, assembling, and summarizing financial effects of executive actions.
• Auditing: investigating and reporting on the fidelity and legality of financial transactions.
• Purchasing: acquiring property and materials needed for administration.

Health Financing Policies

• Health financing policies should improve health outcomes, provide financial protection, support quality of care, and align with global health priorities.

Health Financing Functions

• Revenue Generation: raising funds to finance healthcare services to ensure an adequate and sustainable pool of funds.
• Pooling of Funds: redistributing funds to cover healthcare needs, sharing costs equitably among the population.
• Purchasing and Allocation: purchasing healthcare services, guided by healthcare needs, priorities, and cost-effectiveness considerations.

Health Financing Systems

• Public financing methods: external financing, internal financing, social insurance, and public systems of health services.
• Private financing methods: user payments, for-profit insurance, medical savings, voluntary social contributions, employers, and employees.

Health Financing System Models

• National health service (compulsory universal coverage)
• Social insurance
• Private insurance (employer-based or individual purchase of private health insurance and private ownership of health sector inputs)