Health financing


Voluntary health insurance

WHO/B Mathivet

Voluntary health insurance (VHI) schemes exist in many countries. In higher-income countries VHI tends to provide cover for health services, payment, or facilities not included or fully included in publicly-funded benefits. In lower-income countries where publicly-funded health systems tend to be weaker, VHI is also found in the form of community-based health insurance.

VHI expenditure plays a marginal role in most health systems, contributing less than 5% of total health spending in three quarters of all countries. No country has achieved progress towards UHC by mainly relying on VHI.

Performance-based financing

An Afghan doctor discusses with a woman postnatal care and benefits of exclusive breastfeeding.
N. Ansari

Performance-based financing (PBF) or pay-for-performance (P4P) is a form of incentive where health providers are, at least partially, funded on the basis of their performance to meet targets or undertake specific actions. It is defined as fee-for-service-conditional-on-quality.

In many low- and middle-income countries P4P programmes are implemented with the support of development partners and are referred to as Results-Based Financing (RBF). RBF is an umbrella term for an instrument that links rewards with performance. P4P/PBF/RBF should be viewed as a step in the process of moving systems towards more strategic purchasing.

Revenue raising

WHO/B Mathivet

To make progress towards UHC, Ministries of Health should aim to move towards a predominant reliance on public funding for health, given the evidence that this is a pre-requisite to make progress towards UHC.

Efficient spending is also central. Ensuring a stable and transparent flow of funds to health purchasing agencies and service providers is also an important part of revenue raising policy.