Health Financing

(Uganda)

With
John B Alege
 Learning Outcomes
Be able to understand, develop competences and apply
knowledge to;

 Key definitions
 Sources of healthcare funding
 Expenditure on the health sector; Uganda
 Health financing mechanism
 Challenges of health financing in Uganda & the solutions
 Key Definitions
Health care financing

 mobilization of funds for health care

 allocation of funds to the regions and population

groups and for specific types of health care

 mechanisms for paying health care

(Hsaio, W and Liu, Y, 2001)

According to WHO…..Health financing refers to the

“function of a health system concerned with the

mobilization, accumulation and allocation of money to cover
the health needs of the people, individually and collectively,
in the health system the purpose of health financing is to
make funding available, as well as to set the right financial
incentives to providers, to ensure that all individuals have
access to effective public health and personal health care”

(WHO 2000).
Per capita – Is the average per person income for a country
and is used as a means of evaluating living conditions and
quality of life in different countries

Total health expenditure – Is the sum of public and private

health expenditures as a ration of total population, it covers
the provision of both preventive and curative health services
 Key definitions con’…
Health Expenditure per capita = Total health expenditure/
Total population
Uganda’s per capita health expenditure at an average of
US$56 is low compared with neighbours like Kenya (US$77)
and Sudan (US$129) it is also far below the five-year Health
Sector Development Plan-recommended minimum of
US$73 per capita in 2015/16.
 Sources of Health service financing (I)
 Health services financed broadly through private
expenditure or public expenditure or external aid

 Public expenditure includes all expenditure on health

services by

 central and local government funds spent by state owned and

parastatal enterprises as well as government and social
insurance contributions

 where services are paid for by taxes, or compulsory health

insurance contributions either by employers or insured persons or
both this counts as public expenditure.
 Sources of Health service financing (II)

 Voluntary payments by individuals or employers are

private expenditure.

 External sources refer to the external aid which comes

through bilateral aid programme or international non
governmental organizations

 The ownership of the facilities used whether

government, social insurance agencies, non profit
organizations private companies or individuals is not
relevant
Expenditure on Health Sector: Uganda (I)
 Government expenditure on health in the year
2015/16 was 6.4 percent down from 8.5 percent spent
in the previous year 2014/15

Generally, government expenditure on health sector

has been declining since financial year 2013/14 (7.8
percent)

The trend changed upwards in financial 2013/14 (8.7

percent) but in the Financial 2014/15 went down to 8.5
percent.
 EXPENDITURE ON HEALTH (II)
 The average expenditure on health sector in the last five
years stood at 7.9 percent, 1.9 points short of the Health
Sector Development Plan 2015/16-2019/20 target of 9.8
percent and much lower than the Abuja Declaration of 15
Percent (UBOS, 2017) .

 Government resource allocation for health as a

percentage of the total government budget has averaged
at about 8% from 2010/11 to 2015/16, which is 1.8% short
of the Health Sector Development Plan target of 9.8%.
GoU health expenditure as percentage of
total government expenditure

Source: UBOS, 2017

 Per capita Public health expenditure
 Generally the per capita public health expenditure has
been on the increase in Uganda.

 per capital health expenditure in 2015/16 was Uganda

Shillings 36,830 compared to Uganda Shillings 37,130
registered in the previous year 2014/15.

 Before 2015 the per capita health expenditure increased

to Uganda Shillings 32,214 up from Uganda Shillings
23,756 observed in 2012/13 down from 25,142 Uganda
Shillings seen in 2011/12.
 The health sector was allocated UGX 1,824 billion for
2017/18, which is 0.2% less than the 2016/17 allocation.
Analysis of long-term financing projections also shows
that health sector budget allocation is on a downward
trend from the current year into 2021/22
Declining projected allocations to the
health sector
 Health Financing Mechanisms
 Tax-based financing,
 User fees,
 Social health insurance,
 Community health insurance,
 Private health insurance,
 Medical savings accounts,
 Newer innovative health financing methods
 Tax Base
 This financing mechanism uses funds raised from the
government’s taxation of the population.
 This can be from direct taxes on income or wealth or
indirect taxes (for example, sales tax).
 Monies raised from taxation go into the general
government revenue to be used for spending in the
health sector, among other uses.
 Services are then offered free or at a relatively low price
at the point of use.
 User Fees
 Amid political pressure and the exclusion of access to
care of more than 50% of the population, User Fees
(UF)were abolished in 2001 from all publicly owned
general wings of hospitals and health centres

 UF continued to be levied in private wings. The private

sector has always charged user fees and continues to do
so
 Social Health Insurance

 The contributions from workers, the self-employed,

enterprises and government are pooled into one or more
funds on a compulsory basis.
 These funds typically contract with both public and
private providers for the provision of a specified benefit
package and engage into a dynamic of purchasing of
health care.
 Private Health Insurance

 Premiums are paid directly from employers,

associations, individuals and families to insurance
companies, which pool risks across their membership
base.
 Private insurance includes policies sold by commercial,
for-profit firms. Members pay premiums for access to
care; it is not equitable because there is risk rating..
 Generally, private insurance is voluntary, whereas social
insurance programmes tend to be compulsory.
 Community Health Insurance

 CHI is a not-for-profit form of private health insurance

that is based on solidarity.
 It is not risk-related and there is generally a high level of
community involvement in the running of such schemes
 Membership is usually voluntary, and collection of the
premiums can often pose a challenge.
 A flat rate charged, irrespective of the income of the
individual, thus, implying risk sharing. This is called
community rating.
 Medical Savings Accounts

Medical Savings Accounts (MSAs) are individual savings

accounts that are restricted to spending on health or medical
care. They have been introduced to:
(1) encourage savings for the expected high costs of medical
care;
(2) involve health care consumers in the control of costs;
(3) mobilise additional funds for health systems.
-Only a few countries in the world have experience with MSAs;
examples are Singapore, China, South Africa and the USA.
 Newer innovative financing methods

 In addition to the traditional methods, countries are

experimenting with other financing mechanisms.
 Some of these methods are nationally based, such as
hypothetical taxes like 'sin taxes' for tobacco and alcohol,
national and state lotteries dedicated to health, and
public-private partnerships between governments and
the private sector to co-fund health care.
Challenges of health financing in Uganda

Brainstorm
Mitigation measures for the challenges
identified above

Brainstorm
THE END