Health financing

Developing a national health financing strategy:
a reference guide

WHO/M. Jowett

WHO’s Reference Guide for countries in the process of developing or revising a range of policies related to health financing, in an effort to improve health system performance and progress towards universal health coverage (UHC), comprises four chapters as follows:

    • Chapter 1 asks what is a health financing strategy, and discusses the structure of the guide

    • Chapter 2 discusses preparations for a health financing strategy, focusing on conducting a situation analysis, guidance for which is provided in the Health Financing Country Diagnostic

    • Chapter 3 provides an outline of the issues which any comprehensive health financing strategy should address, and

    • Chapter 4 builds on the issues raised in this outline, and provides more information in terms of the underlying concepts, rationale, and context, illustrated by country examples

The Guide is written for those responsible for, or those who advise on, the development and improvement of health financing policies. The intention is to not to prescribe a process or particular health financing arrangement, but to guide countries in developing their own HFS in a comprehensive manner that addresses main challenges of a particular country and reflects country systems. The Guide is rooted in WHO’s approach to health financing policy, which can be read in more depth in documents on our website; in this document a set of guiding principles based on our approach are outlined, as follows:

1) Revenue raising

  • Move towards a predominant reliance on public/compulsory funding sources (i.e. some form of taxation)
  • Increase predictability in the level of public (and external) funding over a period of years
  • Improve stability (i.e. regular budget execution) in the flow of public (and external) funds

2) Pooling revenues

  • Enhance the redistributive capacity of available prepaid funds
  • Enable explicit complementarity of different funding sources
  • Reduce fragmentation, duplication and overlap
  • Simplify financial flows

3) Purchasing services

  • Increase the extent to which the allocation of resources to providers is linked to population health needs, information on provider performance, or a combination of both
  • Move away from the extremes of either rigid, input-based line item budgets or completely unmanaged fee-for-service reimbursement
  • Manage expenditure growth, for example by avoiding open-ended commitments in provider payment arrangements
  • Move towards a unified data platform on patient activity, even if there are multiple health financing / health coverage schemes

4) Benefit design and rationing mechanism

  • Clarify the population’s legal entitlements and obligations (who is entitled to what services, and what, if anything, they are they meant to pay at the point of use)
  • Improve the population’s awareness of both their legal entitlements and their obligations as beneficiaries
  • Align promised benefits, or entitlements, with provider payment mechanisms

Developing a national health financing strategy: a reference guide