UNIVERSAL HEALTH COVERAGE:LESSONS TO GUIDE COUNTRY ACTIONS ON HEALTH FINANCINGWHAT IS UNIVERSAL HEALTH COVERAGE(UHC)?
UHC embodies specific health and social
goals: it is the aspiration that all people canobtain the quality health services they need(equity in service use) without fear of financial
hardship (financial protection). As such, UHC
promotes realisation of the human right tohealth, disassociating access to services fromability to pay. This right is declared in the World
Health Organization (WHO) Constitution andincreasingly in many national constitutions orlaws, thereby reflecting universal social values
such as human security, social cohesion, andsolidarity.

WHY IS UHC IMPORTANT TO PEOPLE EVERYWHERE?
Over a billion people lack adequate access to needed healthservices and 100 million are pushed into poverty each year asa consequence of paying for the services they receive.1 UHC is a
response to this, providing the assurance that the health services
people need are available, affordable and of good quality.
Expanding coverage of financial risk protection and effective
health services improves population health and productivity,
thereby contributing significantly to overall economic and socialdevelopment. At the same time, financial protection prevents
people from being driven into poverty as a result of paying for
health services out of their own pocket.
The aspiration to move toward UHC is relevant to all countries,
as reflected in the 2012 United Nations General Assembly(UNGA) resolution.2 All countries can make progress on UHC,
expanding the population covered, the package of services, andthe extent of financial protection provided. These trade-offs
must be considered as additional resources become available,technologies advance and population needs evolve.

WHAT ARE THE HEALTH FINANCING LESSONS FROM COUNTRY EXPERIENCES FOR PROGRESS TOWARD UHC?
Various countries at different income levels have recently made rapid progress towards UHC. There is no “one size fits all,” approach,and countries as diverse as Chile, China, Ghana, Kyrgyzstan, Mexico, Moldova, Rwanda, Thailand and Vietnam have each chosen
unique pathways. However, the vast diversity in approaches to UHC does not mean anything goes. Country experience reveals common lessons for success and pitfalls to avoid. Here we outline six lessons in health system financing to guide progress toward UHC.

1. MOVE AWAY FROM OUT-OF-POCKET SPENDINGTOWARD PREDOMINANT RELIANCE ON COMPULSORY
AND PREPAID FUNDING SOURCES
No country has made substantial progress toward covering theentire population by relying on payments at the point of use
or voluntary insurance contributions. Out-of-pocket payments
are the most regressive way of financing the health system,
placing financial burden on sick and poor people. Countries
should eliminate or substantially reduce out-of-pocket paymentsand expand progressive mandatory prepayment (i.e. various
forms of taxation, including compulsory social health insurancecontributions) based on ability to pay.3 The aim is to ensure that
there are sufficient resources pooled across the population, andin all cases, public resources have been essential to subsidise
the cost of services for poor populations. For example, in China4,enrolment in the Rural Community Medical Schemes grew fromapproximately 10% of the rural population in 2003 to 98% in 2012
following a substantial increase in government subsidies thatnow contribute an average of 80% of the premium. Low-income
countries may need to supplement efforts to improve revenue
generation with development assistance to reach even the mostbasic level of coverage.

2. BREAK OR WEAKEN THE LINK BETWEEN ENTITLEMENT
AND CONTRIBUTION
Entitlement should not depend solely on specific contributions
made by individuals; otherwise those who are most in need willremain without adequate coverage. Where a high proportion of
the population does not have regular, salaried employment, it
is difficult to collect direct taxes (e.g. income tax or mandatory
health insurance contributions). Greater reliance must be placedon general budget revenues sourced primarily from indirecttaxes (e.g., value added taxes), which can be designed to be
progressive and are an important untapped resource in manycountries. For example, after many years of trying to expand
coverage for the informal sector with a government-run andsubsidized contributory voluntary health insurance program,
Thailand abandoned this approach in 2002, introducing instead
its “Universal Coverage Scheme” (UCS) that is funded entirely
from general tax revenues. The UCS automatically covers all
citizens who are not covered by either of the two formal sector
health insurance schemes.5

References:
1. Xu, K, DB Evans, G Carrin, AM Aguilar-Rivera, P Musgrove, T Evans (2007). “Protecting households from catastrophic health spending.” Health Affairs 26(4):972-983.
2. UNGA resolution Dec 2012: http://www.un.org/ga/search/view_doc.asp?symbol=A/67/L.36&referer=http://www.un.org/en/ga/info/draft/index.shtml&Lang=E
3. WHA resolution: http://apps.who.int/gb/ebwha/pdf_files/WHA64/A64_R9-en.pdf
4. Meng, Q and K Xu (2014). “Progress and challenges of the rural cooperative medical scheme in China.” Bulletin of the World Health Organization 92:447-451.
5. Prakongsai, P, S Limwattananon, V Tangcharoensathien (2009). “The equity impact of the universal coverage policy: lessons from Thailand.” In Chernichovsky, D and K Hanson, Eds. Innovations in Health System Finance inDeveloping and Transitional Economies. Advances in Health Economics and Health Services Research, Volume 21, pp.291-312. Bingley, UK: Emerald Group Publishing.

3. EXPAND FISCAL SPACE TO INCREASE PUBLIC SPENDING
ON HEALTH

6. ALIGN PURCHASING WITH BENEFITS TO TURN
PROMISES INTO RESULTS

As demonstrated in the lessons above, public financing is criticalto subsidise the costs of care for poor and sick populations
and to ensure equity on the path to UHC. In many countries,
this will require increasing public spending on health, either
by prioritizing health financing in national budget allocations,
expanding the overall level of public revenues (throughprogressive mechanisms) and expenditures, or implementing a
combination of the two. Mexico’s commitment to move toward
UHC was reflected in an increase in public spending on health by
an average of 5% annually from 2000 to 2006.6 Turkey’s increases
in public spending between 1995 and 2010 contributed greatly
to significant improvements in service delivery and to improved
access for the underserved and rural populations, with a key
focus on priority services for mothers and children.7

One particularly promising direction has been to create an explicit
link between purchasing mechanisms and declared benefits forthe population. For example in Kyrgyzstan, when an ineffective
fee exemption system was replaced in 2001 by a mechanism topay providers more to treat people in exempt categories, there
was a dramatic decline in out-of-pocket payments by people inexempt groups.10 Chile introduced the same principle with its
Universal Access with Explicit Guarantees (AUGE) program in2005, which guaranteed the entire population a set of 69 definedinterventions.11 Provider payment arrangements were designed
to increase access and quality while reducing wait times and copayments for these services. It is also the same principle reflected
in Burundi’s free maternal and child health services program,which is supported by a mechanism that pays providers for theservices provided to pregnant women and children under 5.12
These experiences highlight the importance of aligning declaredservice entitlements with payment mechanisms that enable suchpromises to be realized.

4. BUILD STRENGTH IN NUMBERS AND ENABLE CROSSSUBSIDIZATION BY CONSOLIDATING RISK POOLS
Fragmentation of risk pools inhibits countries’ ability to distribute
prepaid funds for health in accordance with need. To respondto this challenge, countries should build pools that coverpeople of different economic and health statuses to enable theredistribution of resources. Many countries, e.g. Thailand andMexico, historically developed health insurance schemes for civil
servants and/or formal sector workers before extending explicit
coverage to the rest of the predominantly poor population.
Recent efforts to consolidate the risk pools - incorporating theinformal sector and the poor into the existing schemes - have
proven difficult. As a result, governments have been forced tospend more resources to gradually equalize the benefits acrossthe population.

5. IMPROVE EFFICIENCY AND EQUITY TO ENSURE MOREHEALTH FOR THE MONEY
WHO has estimated that between 20% and 40% of healthexpenditures are wasted in most countries. Effective purchasingof health services can improve efficiency and release funds
that can be reinvested to increase the coverage and quality ofcare. Such strategic purchasing involves shifting from historical,
bureaucratic resource allocation processes towards datadriven approaches that use information about the provider’sperformance and/or the health service needs of the population
they serve. Kyrgyzstan and Moldova, for example, moved awayfrom a system where the number of inpatient beds drove hospitalbudgets, to a mechanism that pays hospitals according to thenumber of treated patients and severity of their conditions.
Hospital managers responded by reducing the fixed costs of their
physical infrastructure, enabling them to shift resources toward
medicines and supplies.8 This efficiency gain benefited thoseliving in poverty most of all by reducing their need to pay for these
items directly at the point of service. Similarly, global evidence
on the effectiveness of interventions delivered by relatively lowcost community health workers have been shown to improvehealth outcomes and access to health services for remote anddisadvantaged populations.9

One Million Community
Health Workers Campaign

CONCLUSION
Experience demonstrates that real progress ispossible in countries at all income levels. Eachcountry’s pathway will differ depending on thelocal context, however the above lessons are
essential for equitable and effective progress.
Country experience provides valuable lessons thatare derived from specific technical details in healthfinancing arrangements rather than the reform
labels. Labels such as “social health insurance,”“community insurance,” or “tax-funded systems”
have little meaning by themselves and hide thecomplex choices and options available to countries
as they raise, pool, and use funds to ensure theavailability and use of quality services.
Health system financing is an essential componentof UHC but progress toward UHC also requires
coordinated actions across the pillars of the healthsystem with particular attention to strengthening
human resources for health.

References continued:
6. Garcia-Diaz R et al. Analysis of the distributional impact of out-of-pocket health payments: evidence froma public health insurance program for the poor in Mexico. Journal of Health Economics. December 2011.
7. http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2013/02/04/000333037_
20130204152023/Rendered/PDF/750120NWP0Box300for0the0Poor0TU
8. Kutzin, J, M Jakab, S Shishkin (2009). “From scheme to system: social health insurance funds and thetransformation of health financing in Kyrgyzstan and Moldova.” In Chernichovsky, D and K Hanson, Eds. Innovations in Health System Finance in Developing and Transitional Economies. Advances in Health. Economics and Health Services Reserach, Volume 21, pp. 291-231. Bingley, UK: Emerald Grouip Publishing.
9. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2412876
10.Jakab, M and J Kutzin (2009). “Improving financial protection in Kyrgyzstan through reducing informal
payments: evidence from 2001-06.” Policy research paper 57, MANAS Health Policy Analysis Project.
Bishkek, Kyrgyzstan. http://www.hpac.kg/images/pdf/PRP57.eng.pdf
11. Bitran, R (2013). Explicit health guarantees for Chileans: The AUGE benefits package. UNICO Studies
Series 21. Washington, DC: The World Bank Group.
12. World Health Organization (2013). Adoption of performance-based finance to fund fee-exempt healthservices: Burundi. UHC Success Story series. Geneva: WHO for the Providing for Health Initiative.