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On December 7, 2023, we explored how the Philippines is reforming its health financing to purchase integrated health services from networks of providers.

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Integration of care is defined by the World Health Organization as a means “to ensure everybody has access to a continuum of care that is responsive, coordinated and in line with people’s needs throughout their life.” Globally, there is much enthusiasm towards integrating care to further health system goals. If based on strong primary care and public health functions, integrated care can contribute to improved access, greater equity and efficiency in service delivery, and better quality of care and user experience, ultimately leading to health gains and client satisfaction.

One intervention towards integrating health services is the formation of service delivery networks or networks of care. Many countries, including China, Singapore, and the United Kingdom, have reorganized service delivery based on networks. How these networks are financed—or how they are situated within the country’s purchasing arrangements to use health financing terminology—is a critical factor determining their success.

The Philippines is one such country that is reforming its health system to ensure the integration of health services. In 2019, the country passed a landmark UHC Law introducing structural and functional changes in health financing, service delivery, and governance. The Law requires provinces and cities—referred to as local government units (LGUs)—to integrate health facilities into health care provider networks (HCPNs). The networks will constitute province- or city-wide health systems (PCWHS), each with a functional governance mechanism through an expanded health board and a referral process. The Law also mandates that PhilHealth payments and other revenue for facilities in an HCPN flow into a Special Health Fund maintained by the PCWHS to encourage this integrated approach. The country is piloting this approach in select implementation sites, which will be assessed in 2025, leading to recommendations for integrating all local health systems.

In this Counterpoint, we talked with key experts from the Philippines about these reforms. We heard about how the process of integration is unfolding, explored the opportunities and challenges of purchasing services from HCPNs, and received insights into how the implementation of these ambitious and far-reaching reforms can be improved. We also discussed lessons from the Philippines’ experience that other LMICs can leverage as they develop and execute strategies to ensure integrated health services.

Pura Angela Co, ThinkWell’s Philippines Country Director, hosted the webinar featuring the following specialists:

  1. Laurentiu Stan, an international development professional and current Chief of Party of USAID’s ReachHealth project, will share their experience in supporting the implementation of service delivery networks in the Philippines.
  2. Eduardo Banzon, a regional health financing expert from the Asian Development Bank, will share his perspective on how the Philippines is purchasing integrated health services compared to other regional experiences.
  3. Leslie Ann Luces, the Provincial Health Officer of Aklan will share opportunities and challenges for LGUs to ensure the delivery of integrated health services.

Some of the questions posed were as follows:

  1. How is the Philippines trying to achieve integrated health services through the financing reforms mandated in the UHC Law?
  2. What are the opportunities and challenges to purchase services from HCPNS with the UHC Law?
  3. What has been the progress in terms of implementing these reforms?
  4. What are the lessons and recommendations for its improved implementation?
  5. What can other countries learn from the Philippine experience?

Date and time: December 7, 2023, 7-8:30 PM Manila time (6:00 AM-ET)

Counterpoint is ThinkWell’s signature series of webinars, which offers a platform for free and frank debate about questions related to health system strengthening. Through these honest discussions, we strive to challenge dominant paradigms and scrutinize new trends to ascertain their merit.

As a partner of the Indonesia Health Economics Association (InaHEA), ThinkWell is excited to showcase its achievements in the last year at the 8th Biennial InaHEA Scientific Meeting. Our USAID Health Financing Activity (HFA) is one of our most influential projects in Indonesia and will be featured in several topic areas.

HFA is a five-year project that provides technical assistance to strengthen local capacity in financial analyses, stakeholder engagement, learning, and decision-making in Indonesia. Our HFA team collaborates with Indonesian leaders and institutions to strengthen health financing and propel Indonesia towards achieving universal health coverage. Our team is participating in eight presentations at the conference covering a vast range of topics; our presentations are detailed below. If you are unable to attend, on the last day of the event, the titles of the presentations will link to the presentation materials.

Anita Damayanti Putri, a Pubic Health Analyst with ThinkWell working on Strengthening Strategic Purchasing for Primary Health Care, will be presenting “Assessing Readiness for Service Delivery Redesign in Indonesia for Emergency Obstetric and Newborn Care Services.” Her presentation will be linked below following the conference.

InaHEA has released a series of potential topics for the meeting that includes demographic transition and economic challenges, non-health-related determinants of health, post-pandemic health issues, health behaviors and financing, and tobacco economics. Find the full list, sub-topics, and more information on the meeting here.

Online participation is available. Please take a look at registration details here.


Sarah Saragih, Firdaus Hafidz, Aditia Nugroho, Agnes Caroline, Adwoa Twum, Laurel Hatt, Cheryl Cashin, Nana Tristiana, Tiara Pakasi, and Hasbullah Thabrany

This study, initiated in 2020, aimed to simulate a pay-for-performance model in tuberculosis (TB) service delivery, with strictand flexible payment scenarios based on guideline adherence, using TB service delivery data in 2019 at one Puskesmas and one clinic in Medan. Recommendations for the government include considering flexible reimbursement standards and conducting additional research on payments to hospitals for referred patients.

Ruli Endepe Al Faizin, Miftakhun Nafisah Yannis Putri, Iko Safika, and Hasbullah Thabrany

The purposes of this study are as follows:

  • To document the prevalence of e-cigarette consumption in Indonesia.
  • To identify the effect of smoking on various groups and poverty levels among households in Indonesia.
  • To compare and contrast the spending on e-cigarette and food consumption  among households in Indonesia.
  • To show the trend of e-cigarette consumption among vulnerable populations (e.g., late teens and young adults).

The research team recommends additional data collection on e-cigarettes and their effects, a higher tobacco tariff on e-cigarettes and a ban on aromatic and flavored e-cigarettes, and a government-led campaign on the health and economic risks of smoking both cigarettes and e-cigarettes.

Rizki Tsalatshita Khair Mahardya, Yudistira Permana, Ririn Ariani Dewi, Putri Listiani, Muhammad Akmal Farouqi, Naufal Mohamad Firdausyan, Astara Lubis, Yosinda Arsy, Inraini Syah, Maria Hotnida, Iko Safika, and Hasbullah Thabrany

This analysis aimed to demonstrate improvements in access and the quality of maternal and newborn health (MNH) services with the new tariff stated in the Minister of Health Decree (Permenkes) No. 3/2023). The decree was on new standard tariffs for health services under the National Health Insurance (JKN) scheme and the implementation of non-payment interventions. The team concluded that continued monitoring of the governance process around MNH services provision would ensure better communication between health providers, local health offices, and BPJSK branch offices and improve MNH outcomes.

Mutia Astrini Pratiwi, Iko Safika, Anita Damayanti, Halimah Mardani, Febriansyah Budi Pratama, Made Anggarawati, Rahmad Asri Ritonga, and Rahma Anindita

Though Ministry of Health Decree No. 64/2016, mandated that JKN tariffs, both at the hospital and primary levels, should be adjusted every two years, the tariff has not been adjusted since its introduction eight years ago. Operating costs continue to increase, so, to promote fairness at primary health care centers (PHC), this team used age and gender as risk factors to calculate a new, risk-adjusted tariff. Ultimately, they recommend that the tariff be regularly evaluated and adjusted, an M&E dashboard should be used to analyze use trends, and another payment mechanism should be determined for PHCs in remote areas.

Mentari Widiastuti, Abigael Wohing Ati, Lambang Wahyu Nugroho, Shita Dewi, Yuli Farianti, Mazda Novi Mukhlisa, Elvina Diah, Iko Safika, Ruli Endepe Al Faizin, and Hasbullah Thabrany

The research question for this study was “how much did the patient pay out of pocket at a facility for the current visit for the following items: registration, laboratory/radiology examination, medical procedures and consultation, medicines, preventive services, and a bed.” Based on responses to this question, the team recommends enhancing the coverage of JKN and reassessing membership types, expanding JKN’s connections with PHCs, and conducting further qualitative studies and data triangulation.

Iko Safika, Yuli Farianti, Ackhmad Afflazir, Hasbullah Thabrany, Sushanty, Sarah Straubinger, and Ritu Kumar

The goal of this study was to examine the challenges and opportunities of improving the capacities of Government of Indonesia, which is HFA’s main counterpart, specifically the Center of Health Financing and Decentralization Policy (Pusjak PDK). The researchers concluded with two recommendations:

  • With the introduction of new laws, organizational changes, and subunits within the establishment, a concentrated effort is needed to foster enhanced analytical skills and understanding of health financing concepts. Additionally, it is essential to develop capacity for creating evidence-based policy briefs that effectively communicate ongoing progress in health financing and information reform initiatives.
  • Continued capacity building can be achieved through on-the-job training, coaching, and mentoring. These strategies will effectively address the high turnover and demanding schedules of staff members, allowing them to participate in training sessions.

Diah Eva Sari Husnul Khotimah, Ruli Endepe Alfaizin, Dini Kurniawati, Mutia Astrini Pratiwi, Iko SafikaNurhalina Afriana, Romauli, Indah Budiarty, Maria Hotnida, Amalia Zulfah Dani Hari WijayaWindi Haryani, Nana Tristiana Indriasari, and Hasbullah Thabrany

This team aimed to calculate the cost of viral load (VL) testing per patient per year, including the cost for specimen transport, at health facilities. They applied unit costs to inform a budget impact analysis and estimate the costs of covering comprehensive HIV services, including VL testing, under JKN. The researchers recommend that further expansive of VL test coverage at the PHC level should be targeted, regional variations of VL testing machines should be considered when determining reimbursement rates for such services, and necessary specimen transport costs should be included in these rates.

Dini Kurniawati, Iko Safika, Hasbullah Thabrany, Ackhmad Afflazir, Tri Indah Budiarty, and Lanny Luhukay

This study was conducted to understand the demographic status of respondents, understand access and adherence to antiretroviral treatment (ARV) among JKN members, and explore factors associated with access and adherence to ARV treatment among members. The researchers recommend health care providers consider implementing multi-month dispensing of ARV to ensure that PLHIV have an adequate supply and offer counseling services aimed at reducing internal stigma and encouraging ARV adherence.

By Nirmala Ravishankar, John Kinuthia, Agnes Gatome Munyua, Boniface Mbuthia, and Anne Musuva

The Facility Improvement Financing (FIF) Bill unveiled by the Government of Kenya in August 2023 is a win for health facilities in the public sector. If passed, the FIF Bill will allow them to directly receive funds and spend them on some operating costs. How big of a win the legislation will be depends on how easy (or complex) it is for facilities to use the funds. The FIF Bill is a step in the right direction, but some of the specifics remain to be fine-tuned.

Devolution and its implications for facility financing arrangements

Kenya shifted to a devolved system of government in 2013. This proved to be a turning point for facility financing arrangements in the country. Prior to 2013, health facilities retained and spent revenue from user fees, health insurance, and other payment schemes. Following devolution, the newly formed county governments asserted control over all revenue in the county.

To substantiate their control, the counties cited the Public Financial Management (PFM) Act of 2012 to require facilities to remit their revenue to a county revenue fund. While the PFM Act does describe this as the default position, it also allows county governments to authorize entities like health facilities to retain their revenue. But many county governments asserted control over all facility revenue, which hampered the latter’s ability to function effectively.

Some counties have tried to rectify the problem using different approaches, resulting in considerable variation in facility financing arrangements across Kenya’s 47 counties. While 10 county governments have passed laws or adopted practices to grant financial autonomy to facilities, 21 counties still claim all facility revenue. In the remaining 16 counties, facilities have access to some of the funds they collect, while the rest goes to the county. Among these 16 counties, 10 have created a central, special purpose “FIF fund” to hold all facility revenue. Through this fund, a county retains a percentage of the funds to cover its administrative costs and transfers the rest back to the facilities; however, county-level structures and processes to administer the fund typically result in a delay in fund flow.

Restoring autonomy to health facilities

The FIF Bill corrects for several things.

  1. First, it states unequivocally that health facilities can retain all revenue they generate in their own accounts, restoring to facilities autonomy that they had before devolution in Kenya. This is especially important for the 21 counties where facilities presently cannot retain any of their revenue. It also rules out the continuation of county-level “FIF funds” to pool facility revenue.
  2. Second, the bill stipulates that facilities can retain any unspent funds at the end of the fiscal year. This prevents county treasuries taking back all unspent funds. Having residual rights over its revenue will hopefully create incentives for a facility to use its funds judiciously.
  3. Third, it does away with the need for each county to pass enabling legislation to grant facilities financial autonomy. Having such laws passed and implemented has proven arduous and time-consuming. Indeed, several counties have enacted laws, but not operationalized them.
  4. Fourth, the bill calls for the integration of facilities into the Government’s financial management information system and routine budget implementation reports. This will give facilities greater legitimacy within Kenya’s PFM architecture and enable greater visibility over facility revenue and expenditure.
  5. Fifth, the bill emphasizes ongoing monitoring of its implementation. In so doing, it sets the stage for greater learning and knowledge-sharing about best practices.

How the bill could be improved

While the bill empowers facilities to retain their revenue, the processes described for them to spend these funds seems unnecessarily bureaucratic. As is standard practice for government entities in Kenya, health facilities must prepare annual budgets for approval by the county government and receive an “authority to incur expenditure” (AIE) from the county government on a quarterly basis to spend their money. But the bill stipulates that, even after receiving AIE, facilities must raise vouchers for approval by the county department of health accountant. Then the subcounty accountant, who is a co-signatory on the facility account along with the facility in charge, must authorize the transaction. The number of steps needed by various government officials for the facility to merely spend funds in its account against its approved budget seems excessive. Moreover, these provisions go beyond what is current practice in many counties, meaning some health facilities will have less flexibility than they presently enjoy.

It is also interesting to note the comparison between the health and education sectors in this area. Schools receive public funds from the national government on account of education not having been devolved. Each school has a management board comprised of officials from the school and community members, which approves its budget. The school in charge is the accounting officer for the school’s accounts and can spend funds as per the school’s approved budget after receiving the quarterly AIE from the county department of education. In contrast, the FIF Bill stipulates that health facility budgets must be approved by the county. The county chief officer for health is the accounting officer for health facilities. And the county health accountant must approve each transaction. In other words, even after the bill, it seems health facilities will have less autonomy than public schools presently enjoy in Kenya.

When it comes to public moneys, authority to spend must be balanced against financial controls. While the FIF Bill reflects this imperative, it seems to err on the side of more rigid control. The process seems especially onerous given that county governments will continue to pay for big expenses (like worker salaries, infrastructure, and most drug costs), while facility funds will pay for relatively small operating costs. The over-prescription of process will erode the very autonomy that the bill aims to establish. Correcting for this—in the implementation regulations if not in the bill itself—will ensure that this important piece of legislation leads to meaningful change.

One month ago, the Government of Kenya released four new health bills to accelerate progress towards the goal of universal health coverage. If passed, the bills will set in motion far-reaching reforms to how health services are financed and delivered in Kenya. Among these bills is the Social Health Insurance Bill, which proposes extending health insurance to all Kenyans based on member contributions, with government-subsidized coverage for the poor. It also mandates the creation of three funds to cover different types of services and a new government agency to manage it all.

To unpack what the Social Health Insurance Bill aims to do, why, and how, ThinkWell hosted a Counterpoint webinar with the bill’s primary architects, county stakeholders, as well as leading health financing experts on October 3, 2023.

Click the button below to watch the webinar recording on our YouTube channel.

Watch the recording

Counterpoint is ThinkWell’s signature series of webinars, which offers a platform for free and frank debate about questions related to health system strengthening. In this edition, ThinkWell’s Regional Director for East and Southern Africa, Dr. Anne Musuva, hosted a discussion about Kenya’s new Social Health Insurance Bill featuring four panelists:

  • Dr. Elizabeth Wangia, Director, Healthcare Financing, Kenya Ministry of Health
  • Dr. Daniel Mwai, President’s Advisor on Health and Standards, Office of the President, Kenya
  • Mr. Felix Murira, Country Program Manager, ThinkWell Kenya
  • Dr. Joy Mugambi, County Director of Health Administration and Planning, Nakuru County, Kenya

Some of the questions the panel explored include the following:

  1. What overarching objectives is the Social Health Insurance Bill trying to achieve?
  2. What drove the specific design choices (e.g., three separate funds, means-testing for everyone not employed in the formal sector, and a new health authority)?
  3. How do the reforms envisioned by this bill align with the service delivery reforms set out in the other bills, especially the reorganization of all primary and secondary care facilities into networks?
  4. What is the role of counties in implementing these reforms?
  5. What are the biggest hurdles we can expect on the way to implementing the bill successfully?

Please contact our team with any questions or concerns.

By Kristan Jela Tambio, Helena Lagon Alvior, Pura Angela Co, Maria Eufemia Yap, Mary Camille Samson, and Rosario Dizon

As the Philippines continues its progress towards fully implementing its Universal Health Care (UHC) Law (RA 11223), it is crucial to harness ground-level insights and best practices that can be shared across the different provinces and municipalities in the country. ThinkWell Philippines and the Asian Development Bank (ADB) recently supported the Department of Health (DOH) Western Visayas Regional Office to organize and facilitate the first regional UHC Summit on July 12, 2023. It was followed by the two-day Learning Forum, which fostered further learning exchange on the progress of the technical, managerial, and financial integration across the province-wide and city-wide health systems in the Western Visayas Region.

The Western Visayas Region is currently the first region in the country where all six provinces and two highly urbanized cities have committed to restructuring their health systems according to the mandates in the law. This ensures that there is a region-wide effort on local health systems integration. In his opening statement, Regional Director Dr. Adriano P. Suba-an said, “Your presence here is a testament that we are on the right track towards the achievement of the UHC with inclusivity, creativity, and purposive expansion of medical coverage and reach.”

The summit was designed to celebrate gains and acknowledge and address the challenges the different local government units have faced during the past three years of implementation. The first panel focused on the accomplishments achieved by individuals within the local health offices and government units. In contrast, the second panel, composed of a different set of local chief executives (LCEs), provincial health officers, and municipal health officers, recounted significant milestones and hurdles on several topics, such as the stewardship of province-wide health systems, comprehensiveness of the primary care package and health care provider networks, human resources for health, and health financing (particularly the special health fund and frontload support mechanisms). The provinces also showcased their achievements in the Key Result Areas of the UHC Local Health Systems Maturity Level via a gallery walk during the event. Summit participants had the chance to ask provincial representatives how they progressed in their Key Result Areas and share their insights and experiences.

Several stakeholders shared key insights and ideas to strengthen the implementation of the UHC Law. Mayor Irene Montilla of Isabela, Negros Occidental advocated for allocating a minimum of 15% of the budget of local government units for health care as a tangible commitment of local chief executives towards health and health equity within the community. Furthermore, she underscored the necessity of working as a cohesive local health system, as the rural health unit cannot operate in isolation. Dr. Leslie Anne Luces-Sedillo of Aklan highlighted the significance of a transdisciplinary approach, the pivotal roles played by organizations like the Association of Municipal Health Officers of the Philippines, the LCE’s ownership of the UHC principles, and the importance of fostering collaboration at the grassroots level. Dr. Luces-Sedillo emphasized the finance team’s indispensable involvement in ensuring the local health care system’s financial sustainability. Dr. Sheila Gumabong of Guimaras reiterated how creating legal instruments fostered trust and collaboration by providing clarity of shared responsibility among key stakeholders such as local health offices, LCEs, hospital and facility heads, and private sector stakeholders.

The speakers also called for improvements and efficiency in the system. Current guidelines in the special health fund sandbox require an escrow or buffer fund to secure frontloading of funds from PhilHealth. This may tie up and render a significant portion of the local government units’ funds unusable especially for provinces with very limited fiscal space, prompting Governor Joaquin Carlos Rahman Nava of the Province of Guimaras to call for a more streamlined and cost-effective way of acquiring and utilizing the frontloaded money in the special health fund.  Additionally, Dr. Maria Socorro Quiñon from Iloilo Province encouraged service providers to place prime importance on their financial sustainability and the integrity of their services by clarifying standards of care at each level, especially the primary care level.

The event ended with a ceremony celebrating the commitments of health teams and stakeholders, such as the local government units, civil society organizations, and non-governmental organizations, to work towards UHC, focusing on essential lessons and implementation advancements. In the words of Regional Director Suba-an, “Indeed, we have shown and proved to the rest of the regions in the country that here in Western Visayas, walang maiiwan (no one gets left behind). In our pursuit of UHC, everyone is on board, and no one will ever be left behind. Padayon kita sa paghugpong agud ang UHC nga handum, aton maagom (Let’s continue to unite so that we can achieve the UHC that we want).”

In the two-day Learning Forum that followed, ThinkWell’s partner provinces, Antique and Guimaras, provided significant contributions on technical and financial integration as they discussed the unification of care pathways design within a province-wide health system and health care provider networks, the development of a referral manual within the care system, analysis of referral form data, setting up the special health fund, and the KONSULTA sandbox experience. ThinkWell and ADB will publish learning from the Learning Forum to provide insights to the DOH and other regions as efforts toward full UHC implementation continue.

We want to extend our deepest gratitude to the following individuals who were also present at the UHC Summit:

  • DOH Western Visayas Regional Office: Dr. Mary Pauline Angelique C. Gestosani, Chief of RLED, and Dr. Mary Joy D. Castroverde, Head of HSIMEC
  • Provincial Health Officers: Dr. Leoncio Abiera, Jr. from Antique Province, and Dr. Ramon Alex Nolasco from Capiz Province
  • Municipal Health Officers: Dr. Christian Earvin Bondoc from Igbaras, Iloilo; Dr. Melba Billones from San Jose, Antique; and Dr. Uldarico Babayen-on, Jr. from Sebaste, Antique
  • Development Partners: ReachHealth and the World Health Organization

By Anne Musuva, Country Director, ThinkWell Kenya

Much has been written about the inadequate or delayed flow of funds to frontline providers and its contribution to poor service delivery. The Lancet Global Health Commission on financing primary health care notes that because of insufficient public spending in many places, primary health care is not fully meeting the needs of people.

I gained a new, more grounded appreciation for this problem when I recently visited a series of dispensaries and health centers in a western county of Kenya. At many of these health facilities, casual staff like cleaners and clerks had not been paid for months because the funds received from the county were inadequate and often delayed.

Other facilities I found understaffed—some staffed by a single nurse—and it is not rare to find these facilities closed because the managing nurse is on leave or away for training. When the nurse is available, patients are often sent away to buy drugs from private pharmacies because the dispensary is out of essential medicines. These circumstances are common in many other parts of the country and point to significant under-resourcing of primary health care (PHC) in Kenya as well as poor fund flow to frontline providers.

The importance of PHC

In 1978, the International Conference on Primary Health Care signed the Declaration of Alma-Ata and called for strengthening of PHC, particularly in low- and middle-income countries. PHC is a whole-of-society approach to health that puts people and communities at the center of their health, focuses on patient needs, and shifts focus away from hospitals and specialist care. Equitable and high-quality PHC is the foundation of a strong health system and is essential for achieving universal health coverage (UHC).

What Kenya has gotten right

Kenya has made significant progress in expanding equitable access to PHC. Inspired by the Declaration of Alma-Ata, in the 1990s, the nation introduced user fee exemptions in public primary health care facilities to expand access to PHC. In 2006, Kenya launched a community health strategy that outlined services to be offered at the community level.

In 2013, Kenya adopted a devolved system of government which made the delivery of health services a county responsibility. Since then, county governments have expanded geographical access to health care by constructing health facilities, particularly dispensaries and health centers, referred to as PHC facilities. Access to PHC services was further improved through the free maternity program, Linda Mama, launched in 2013. The national government later introduced the “user fee forgone” grant to compensate PHCs for revenue lost from user fee exemptions. These funds were used for facility operations, including filling supply gaps and paying casual workers.

In 2015, the National Health Insurance Fund (NHIF) shifted from a focus on hospitalization to an expanded benefit package that includes outpatient care. The NHIF introduced capitation, a population-based provider payment mechanism that can improve equity and strengthen primary health care. Additionally, DANIDA, Denmark’s Development Corporation provides funds to PHC facilities for their operations and maintenance.

Currently, the Ministry of Health (MOH) is pursuing a number of reforms to strengthen PHC. The government is rolling out primary care networks which seek to improve PHC through reorganizing service delivery around a network of community units and PHC facilities. The MOH has also announced plans to recruit community health promoters across all counties and the establishment of a PHC fund to further improve PHC.

The glass half empty

Despite Kenya’s recognition of PHC as the backbone of UHC and the country’s immense milestones, we continue to face challenges in advancing the PHC vision. These include inadequate financing for PHC and lack of financial autonomy which lead to compromised quality, inadequate human resources, and drug stock-outs. Secondary and tertiary facilities receive the lion’s share of resources, including direct financing, human resources, and drug supplies. ThinkWell conducted preliminary analyses of several counties which show that PHC facilities on average receive less than 20% of a county’s health allocation yet constitute over 90% of the facilities and provide at least 60% of the services in a given county. Financing of the community health strategy and  paying stipends for community health volunteers has been inconsistent.

Several recent developments have jeopardized nationwide PHC financing. In 2021, the national government discontinued the user fee forgone grant for PHC facilities and converted the conditional grant to an equitable share grant for counties. The counties have full discretion over these funds, many of which have not been channeled to PHC facilities. DANIDA, which remained a main source of direct financing for PHC facilities, announced plans to phase out this funding by 2025.

Following the loss of two primary funding sources, PHC facilities are left with limited options, including the NHIF and county grants in the few counties that provide them. A facility’s access to NHIF revenue depends largely on whether its county has enacted legislation allowing facilities to retain and use funds generated from the NHIF, including from Linda Mama and from capitation payments. 21 counties have not allowed facilities to do this. Providers in these counties have little incentive to submit claims to the NHIF, leading to loss of NHIF revenue. As a result, mothers coming to deliver at PHC facilities in these counties are often sent away for drugs and supplies, defeating the purpose of Linda Mama, a program premised on free care to vulnerable women at point of use.

So, what should be done?

As Kenya rolls out its ambitious UHC program, we must strengthen PHC to deliver on the UHC promise. The government will need to prioritize the following:

Review resource allocation to prioritize PHC.

This will involve not only increasing allocation to the health sector, particularly PHC, but also reviewing how resources are allocated between PHC, secondary care, and tertiary health care. These allocations should be commensurate with the health care demands at each level. This is at the heart of strategic purchasing, a health financing function which seeks to allocate resources based on information about population needs and provider behavior.

Enact legislation to grant facilities financial autonomy.

The national government or counties should enact legislation that allows all health facilities, including primary health facilities , the autonomy to raise, retain and use funds at facility level. This will mean that facilities can retain NHIF revenue for the services they provide and would be incentivized to make claims to NHIF.

Instate direct facility financing.

As the main sources of direct facility funding dry up, counties should consider directly funding PHC facilities for their operations to improve service delivery. Facility managers are best placed to determine their priorities and manage their funds to meet the needs of the communities they serve. This should be accompanied by support to ensure adherence to the public financial management rules to ensure funds are well used and facility managers are accountable.

Prioritize service delivery.

Investing in additional facilities should be preceded by careful consideration of the need for a facility and the availability of resources to maintain it. Preliminary analysis suggests that counties should shift their priority from building new facilities to resourcing existing facilities and improving quality of care. The focus should be on ensuring existing facilities are well equipped, are stocked with medicines, and have adequate and well-trained health workers.

Conduct further research.

There is a clear need for further evidence on how best to finance and incentivize PHC to deliver high-quality, cost-effective, and equitable care. We need to track financing levels, sources, and expenditure for PHC, and measure what funding levels, strategies, and incentives are associated with better outcomes.

As Kenya continues to deal with the effects of the Covid-19 pandemic and face a triple burden of disease, financing PHC is even more important and should be a key priority for government, at both the national level and county level. The government’s plans to roll out primary care networks and improve PHC financing are a great opportunity for strengthening primary health care. The implementation of these reforms and their outcomes should be tracked closely to inform policy.

How USAID HFA assisted the Government of Indonesia in improving COVID-19 health financing efficiency.

For more than three years, citizens and governments around the world have endured COVID-19. It has posed a unique challenge to national governments to rebalance the three dimensions of everyday life that it most impacts: economy, society, and health. In the face of continuous uncertainty brought on by this unprecedented crisis, Indonesia’s leaders have created strategies to ensure efficiency and economic resilience while also safeguarding the wellbeing of communities. One of these strategies is identifying the most effective health financing system. Efficient and equitable health financing not only saves money, but it also increases coverage for patients otherwise neglected by outdated systems.

To identify and hone this system, the Government of Indonesia (GOI) collaborated with USAID Health Financing Activity (HFA) to build evidence and consensus among stakeholders across the government and health sector. Building on the powerful partnership between USAID and the Ministry of Health (MOH), countless hours of research, discussion, and revisions were conducted to adapt the health financing system to the nuances of a pandemic.

The initial shock of a global pandemic

In March 2020, Indonesia reported its first confirmed case of COVID-19. In the following weeks— characterized by a sense of uncertainty, fear, and rapidly evolving circumstances—almost every aspect of life was impacted. In an instant, the government’s top priority became providing care to COVID-19 patients as quickly as possible. The GOI took measures to protect citizens and finance their medical services. But hospital beds rapidly filled, and access to vital resources dwindled. Normal or routine health procedures quickly became untenable under the burden of COVID-19.

As hospital reimbursement claims piled up, the need for a formulation of a more efficient payment system was clear. Guided by reimbursement and cost data from four large hospitals—Dr. Soetomo Regional Public Hospital Surabaya, Sulianti Saroso Infectious Disease Hospital, Fatmawati Central General Hospital, and Persahabatan Central General Hospital—the GOI decided on a per-diem scheme for reimbursement.

The system reimbursed health care providers or hospitals for all treatment they provide patients—medication, equipment, tools, consumables—in a single day. The reimbursement amount, or “tariff,” was set by MOH. The per-diem tariff scheme served as a quick fix to ensure the GOI was fully reimbursing hospitals as they cared for an overwhelming patient load as the patients arrived. Over the coming months, however, the weight of cases exceeded expectations and the system couldn’t keep up.

A method for better spending and faster care

Cases continued to increase, and so did the costs of reimbursements. The costs doubled to IDR 204.9 trillion (nearly US$13.5 billion) between December 2021 and December 2022, leaving public health officials wondering if the high charges from hospitals were a true reflection of the upward trend in cases. MOH requested USAID HFA to perform an evidence-based task analysis to support its decision-making process.

Lia Mahmud, nurse at Koja Hospital, Jakarta, Indonesia, August 2022; Credit: Syane Luntungan for ThinkWell

For two years prior to COVID-19, USAID HFA, implemented by ThinkWell, had been working to build evidence and capacity within the GOI to support MOH in generating and utilizing evidence to inform policy processes, including optimizing the National Health Insurance Scheme (NHIS). When the MOH tapped USAID HFA, the program immediately began assisting the government to generate a robust, timely, and efficient health financing payment scheme for the COVID-19 response in Indonesia.

“Calculating how much the correct real cost was for COVID-19 needs actually required finding the real costs for each unit,” said Dr. Yuli Farianti, MOH Center of Health Financing and Decentralization Policy (Pusjak PDK) Head. Between 2020 and 2021, HFA carried out a study to determine the actual costs of treating COVID-19. “That’s when we began to see the relevance of how the case-based groups (CBGs) might work in this situation,” she said.

The COVID-19 CBGs scheme was modeled after the CBGs payment method that has been applied for other disease areas since 2014. The system charges health care expenses in a package, per instance of care. Each package covers the entire treatment cycle from when a patient tests positive for COVID-19 until their discharge from a health facility. The amount of reimbursed expense per package varies based on severity level, which incentivized hospitals to treat patients quickly and according to each patient’s unique needs

USAID HFA’s technical and analytical assistance made it possible to reconfigure the reimbursement formula so that public funds were utilized effectively, and openness and transparency were promoted among hospitals. The new tariff was enacted in an MOH decree on October 1, 2021.

A policy that changes with the circumstances

Dr. Yuli highlighted that shifting to CBGs improved spending patterns and budgeting. “Before CBGs, [the rates] were calculated unit by unit, from masks to medicine, and beyond,” said Dr. Yuli. “Afterwards, [the expenses were] added to the daily rate of medical service. At the end of the day, expenses surged. CBG is a package service. They take everything into account, from equipment to medical consumables to services and others all under a particular CBG package code.”

COVID-19 continued to rapidly evolve, epidemiologically and clinically, and the development of less severe variants, vaccination, and herd immunity led Pusjak PDK to seek further revisions to the CBG tariff amounts. The Omicron variant required fewer resources, so USAID HFA worked with MOH to adjust the tariffs to reflect the provided health treatment.

According to Dr. Yuli, the process presented two challenges: formulating the new tariffs and implementing them in hospital operations. At the end of the day, however, hospitals across the nation recognized the public good represented by the new tariff structure and have since implemented the new scheme.

Moving forward and a shift to endemic

 

THINKWELL TEAM DISCUSSION WITH SETIABUDI HEALTH CENTER IN JAKARTA, INDONESIA, JULY 2023; CREDIT: ARDI RAHMATULLAH FOR THINKWELL.

The World Health Organization’s Strategic Preparedness and Response Plan: April 2023–April 2025 will end the emergency phase of the COVID-19 pandemic in all countries and shift from emergency response to sustainable comprehensive management of the disease. As she reflected on the current declining trend in COVID-19 deaths and hospitalizations, Dr. Yuli expressed her hope that COVID-19 will be incorporated into the NHIS covered diseases soon. “Notwithstanding future challenges, we have to take into account the sustainability of the NHIS,” she said. Since the time of writing, COVID-19 has been deemed endemic in Indonesia and has automatically been included in NHIS coverage.

Dr. I-ing Ichsan (Director of Regional 5 Hermina Hospital Group), Jakarta, Indonesia, August 2022; Credit: Syane Luntungan for ThinkWell

Dr. Yuli is grateful for USAID HFA’s assistance throughout its three-year collaborative journey with MOH  to find the most effective COVID-19 financing and adjusting the tariffs accordingly. “It is very significant,” she said. “If we don’t work with USAID, it will definitely be more difficult for us. It was such a great help in many aspects, such as the studies and many more…The process was much faster and more efficient with the help of HFA including the process of revising [the tariff]. Moreover, hospitals and other stakeholders have been supportive. Maybe without their help we wouldn’t be able to finish this fast.”

“HFA helped us do the tariff calculation, they taught us what to formulate, how to release the data, how to conduct analysis, and generate tariff calculation,” Professor Abdul Kadir, Head of the Supervisory Board of the Indonesia Social Security Agency on Health.

The successes of this project will act as an example for the MOH’s policy endeavors going forward. The teamwork fostered by USAID HFA between stakeholders and experts to create efficient policy and improved internal capacity will hopefully benefit the health care system of Indonesia as it continues to grow and adapt to whatever circumstances arise.


Header image: Puskesmas Setiabudi, Jakarta, Indonesia, July 2023; Credit: Ardy Rahmatullah for ThinkWell

The IHEA congress is an international convention of health systems experts to discuss the latest data, methodologies, findings, and tools in the pursuit of improving health care around the globe. It will take place in both buildings of the Cape Town International Convention Centre (CTICC).

Below you can find an agenda of all of the organized sessions, oral presentations, and poster presentations ThinkWell will be organizing for the main congress. The main IHEA congress will be held July 10-12, 2023. As more details around schedules become available, this page will be updated.

IHEA Congress Agenda

Congress Registration

ThinkWell’s Pre-Congresses


Organized sessions

Florence Tochukwu Sibeudu, Olusola Oresanya, Christina Banks, Annette Ozaltin

Tuesday, July 11, 10:30 AM-12:00 PM

Stephen Muleshe, Angellah Nakyanzi

Monday, July 10, 10:30 AM-12:00 PM

Mursaleena Islam, Nirmala Ravishankar, Najibullah Syed

Wednesday, July 12, 11:00 AM-12:30 PM


Oral presentations

Find all the details for our oral presentations by accessing the IHEA 2023 agenda and searching “ThinkWell.”

Examining the Challenges of Purchasing Primary Health Care Interventions in Urban Settings: Lessons from Kampala and Nairobi

Richard Ssemujju

The Role of National Health Insurance in Reducing Catastrophic Health Spending on Maternal and Neonatal Health Services in Indonesia Year 2018-2021

Mutia Astrini Pratiwi

Increasing the Sustainability and Fairness of the National Health Insurance in Indonesia

Ruli Endepe Al Faizin

Private Primary Healthcare Provider Readiness in Strengthening HIV Care in Indonesia

Diah Evasari Husnul Khotimah

Better access to Emergency Medicines and Health Supplies; Implications of Improved Autonomy in the Context of Performance Based Financing

Eric Tabusibwa

Does the Gratuité User Fee Exemption Policy Make a Difference on Maternal, Newborn and Child Health Service Utilization in Conflict-Affected Regions of Burkina Faso? Evidence from a Pre-Post Analysis

Marie-Jeanne Offosse Ngbesso

The Effect of Districts’ Health Expenditure Towards Maternal Mortality Rate in Indonesia

Nirwan Maulana

Does fiscal capacity at the district level influence vaccination coverage and the infant mortality rate? Findings from Indonesian National Socio-Economic Survey 2019 – 2021

Edward Sutanto

On June 1, 2023, at 9:00 AM-EST, ThinkWell hosted the third installment of the Counterpoint webinar series titled “Financing health facilities directly: What is all the fuss about?”

During this webinar, we explored the topic of financing health facilities directly.

Watch the recording

There is a growing consensus that granting health facilities in the public sector more funds and greater autonomy is critical for improving primary health care (PHC) delivery. This was one of the themes highlighted by the Lancet Global Health Commission on financing primary health care, which found that public sector PHC facilities could retain and manage funds in fewer than 40% of low- and middle-income countries (LMICs). The report noted that direct financing for public facilities will allow them to improve service readiness and responsiveness. It is also a necessary precondition for them to feel incentivized by signals from public purchasing entities attempting to advance health system goals like improved access, equity, quality, and efficiency. There has been a spate of papers on the topic recently, including by the World Health Organization (WHO) and the World Bank.

And yet, giving health facilities greater financial autonomy is not a new idea as such. Many types of management entities to produce goods and services have been around for centuries. More critically, the merits of granting hospitals autonomy have been debated extensively as part of the new public management discourse since the 1980s. Not everyone is convinced. Some feel that local governments are better positioned operationally to manage service delivery instead of expecting each facility—including small health centers and dispensaries—to manage their own affairs.

In this webinar, we had a candid conversation with two leading voices on the topic about why the push for getting more funds and management of service delivery to the frontlines and why some continue to challenge the idea. We discussed why this is an important issue for LMICs to explore as they develop and execute strategies to make progress towards universal health coverage. ThinkWell Senior Fellow, Nirmala Ravishankar hosted the webinar featuring two experts:

 

 

 

 

 

Nirmala Ravishankar is a Senior Fellow at ThinkWell.

Sheila O’Dougherty is a health financing and management expert who retired from her position as Vice President at Abt Associates in 2020. Sheila led USAID-funded health systems strengthening project implemented by Abt Associates that supported far-reaching government reforms to enable direct financing for public facilities in Central Asia and Tanzania. She is the lead author of joint WHO-World Bank brief on direct financing for health facilities.

Edwine Barasa is the Director of the Nairobi Program of the KEMRI Wellcome Trust Research Program in Kenya. He was instrumental in documenting how health facilities lost financial autonomy when Kenya devolved key decision-making powers from the central government to newly formed county governments and has published extensively on the question of decentralization and facility autonomy.

Some of questions we posed to these experts are as follows:

  1. What does it mean to directly finance facilities? Why the focus on financial autonomy?
  2. Have countries done this before? What does their experience teach us?
  3. Many countries have pursued devolution of decision-making powers to local governments. Is that the same thing? Is that not enough?
  4. Are there any risks to giving more money and control to public facilities? How can they be mitigated?
  5. Where is this agenda headed? What should health financing analysts be exploring? What should health financing policymakers and practitioners be doing?

Counterpoint is ThinkWell’s signature series of webinars that offers a platform for free and frank debate about questions related to health system strengthening. Through these honest discussions, we strive to both challenge dominant paradigms and scrutinize new trends to ascertain their merit.