Yon Konsèy sou Finans Sante nan Ayiti: Pi Bon Depans, Pi Bon Swen

Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Better Spending, Better Care A Look at Haiti’s Health Financing COVER PHOTO CREDIT: LOGAN ABASSI UN/MINUSTAH Health Nutrition and Population Global Practice Latin America and Caribbean Region World Bank March 2017 Standard Disclaimer: This volume is a product of the staff of the International Bank for Reconstruction and Development/ The World Bank. The findings, interpretations, and conclusions expressed in this paper do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. 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Table of contents ACKNOWLEDGMENTS 5 ABBREVIATIONS 6 EXECUTIVE SUMMARY 8 INTRODUCTION 16 BACKGROUND 20 HEALTH OUTCOMES AND THE HEALTH SYSTEM 26 HEALTH FINANCING 34 ACCESS TO HEALTH SERVICES 50 EFFICIENCY ANALYSIS 60 MAIN FINDINGS AND RECOMMENDATIONS 78 APPENDIX 84 BIBLIOGRAPHY 97 All dollar amounts are U.S. dollars unless otherwise indicated. 3 BETTER SPENDING, BETTER CARE: A LOOK AT HAITI’S HEALTH FINANCING ACKNOWLEDGMENTS This report was prepared by Eleonora Cavagnero, Marion Cros, Ashleigh Dunworth and Mirja Sjöblom. Significant contributions were also made by Nicolas Collin Dit De Montesson, Alexo Esperato, Louise Estavien, Nelta Joseph, Francois Staco, and Isabelle Simeon. We are grateful for comments on an earli er version of this report by Pierre Bonneau, Daniel Dulitzky, Michelle Keane, Sunil Rajkumar, Raju Singh, and Kanae Watanabe. Kassia Antoine and Ibrahim El Ghandour provided valuable support on interpre tation and understanding of the BOOST data set and other national data sources. We also appreciate comments on an earlier draft of this report by three peer reviewers: Sarah Alkenbrack, Jean Kagubare, and Ajay Tandon. This study was conceived in partnership with the Ministry of Public Health and Population (Ministère de la Santé Publique et de la Population, MSPP) in Haiti. Special thanks go to the Minister of Public Health and Population, Dr. Marie Greta Roy Clément and her team, as well as the Director of the Evaluation and Programming Unit (UEP), Dr. Jean-Patrick Alfred, and those of the Unit of Contractualization (UC) and the Project Management Unit (PMU) of PASMISSI, Dr. Johnny Calonges and Dr. Wedner Pierre for their invaluable support. We are also very grateful to the Technical Committee on Health Financing and the many professionals and managers involved in the process who provided technical and logistical support throughout this study. We acknowledge with thanks the financial and technical support received from the World Bank’s Global Solutions Group on Health Financing. 5 ABBREVIATIONS AIDS Acquired immune deficiency syndrome ALOS Average length of stay ANC Antenatal care ANOVA Analysis of variance ASC Agent de santé communautaire (Community health worker) BOR Bed occupancy rate BSC Balanced Score Card CAL Centre de santé avec lit (Health center with bed) CDAI Centre Departemental d’Approvisionement en Intrants CEmOC Comprehensive Emergency Obstetric Care CHE Catastrophic health expenditure CNMP Commission Nationale des Marchés Publics (National Procurement Commission) CONAM Coordination National de l’Assurance Maladie (National Coordination of Health Insurance) CSL Centre de santé sans lit (health center without bed) DALY Disability-adjusted life years DASH Développment des Activités de Santé en Haïti (Development Activities and Services for Health) DDS Directions departementales sanitaires (departmental health directorates) DEA Data envelopment analysis DH Departmental hospital DHS Demographic and Health Survey DTP Diphtheria, tetanus, and pertussis ECVMAS Enquête sur les Conditions de Vie des Ménages après le Séisme (Survey on the Living Conditions of Households after the Earthquake) EPHS Essential package of health services GAVI Global Alliance for Vaccines and Immunizations HIS Health information system HIV Human immunodeficiency virus HR Human resources IMR Infant mortality rate LAC Latin America and the Caribbean LIC Low-income country MIF Multilateral Investment Fund MMR Maternal mortality ratio MPCE Ministère du Plan et de la Coopération Extérieure (Ministry of Planning and External Cooperation) MSH Management Sciences for Health MSPP Ministère de la Santé Publique et de la Population (Ministry of Public Health and Population) NCD Noncommunicable disease 6 BETTER SPENDING, BETTER CARE: A LOOK AT HAITI’S HEALTH FINANCING NGO Nongovernmental organization NHA National Health Account ODA Official development assistance OFATMA Office d’Assurance Accidents du Travail, Maladie et Maternité (Office of Insurance for Work Accidents, Illness and Maternity) OOP Out-of-pocket ORS Oral rehydration solution ORT Oral rehydration therapy PAHO Pan American Health Organization PDS Plan Directeur de Santé (Health Master Plan) PER Public expenditure review PES Package of essential services PFM Public financial management PHC Primary health care PIP Programme d’Investissement Public (Public Investment Program) PNS Politique Nationale de Santé (National Health Policy) RBF Results-based financing SARA Service Availability and Readiness Assessment SCD Systemic Country Diagnostic SDG Sustainable Development Goal SDI Schéma Directeur Informatique (IT Master Plan) SDI Service delivery indicator SDSH Santé pour le Développement et la Stabilité d’Haïti (Health for the Development and Stability of Haiti) SH Small hospital SPA Service Provision Assessment TE Technical efficiency THE Total health expenditure U5MR Under-5 mortality rate UAS Unité d’arrondissement de santé (district health unit) UH University hospital UHC Universal health coverage UN United Nations UPE Unité de Planification et d’Evaluation (Planning and Evaluation Unit) USAID U.S. Agency for International Development WASH Water, sanitation, and hygiene WDI World Development Indicators (database) WHO World Health Organization 7 EXECUTIVE SUMMARY ASC This report seeks to formulate a long-term vision for Haiti’s health sector to accelerate progress toward universal health coverage (UHC), a key objective of the government’s National Health Policy (Politique Nationale de Santé, PNS)–MSPP (2012). Progress toward this goal has been hindered by political instability and frequent natural catastrophes. Most recently, in October 2016, Hurricane Matthew wreaked havoc on Haiti’s health system. It has been estimated that at least 1,000 peo- ple died and 1.4 million Haitians were directly affected by the hurricane. Such disasters have influenced Haiti’s government and development partners by demand- ing a short-term focus on acute need priorities. This study aims to take a step back, assess Haiti’s health financing system, and identify critical constraints and opportunities to accelerate progress toward UHC and the health-related United Nations’ Sustainable Development Goals (SDGs) in the long term. The re- port compiles existing studies and information, and it PHOTO CREDIT: VICTORIA HAZOU UN/MINUSTAH provides new analysis of larger data sets, as well as hospital financing data. To our knowledge, it is the first attempt to assess systematically the health financing system in Haiti. 8 BETTER SPENDING, BETTER CARE: A LOOK AT HAITI’S HEALTH FINANCING EXECUTIVE SUMMARY 9 Findings Although Haiti has made significant progress on key health outcomes since the 1990s, it still fares worse than many low-income countries in terms of service coverage of key interventions and in pro viding equitable access to health. Between 1990 and 2015, maternal and child mortality fell by about half. And yet the maternal mortality ratio and the un der-5 mortality rate have to decline further–by 80 per cent and 64 percent, respectively, by 2030–to attain the SDGs. Compared with other low-income countries (LICs), Haiti has low coverage rates of basic services. For example, according to the 2012 Demographic and Health Survey (DHS) in Haiti, the coverage of institu tional deliveries was 37 percent–the Low and Middle Income Countries (LMICs) average is 70.5 (Joseph et al. 2016)–and the percentage of children under 24 months who received all three diphtheria, tetanus, and pertussis (DTP) vaccine doses. Meanwhile, service cov erage was dramatically lower for the poorest wealth quintiles–for example, deliveries in health care facilities were eight times more frequent (76 percent) for the highest wealth quintile than for the lowest quintile (9 percent). The disparity in utilization mirrors the inequal ity in health outcomes in Haiti. For example, growth was stunted in 31 percent of children in the lowest wealth quintile but only 6 percent of children in the highest wealth quintile (DHS 2012). The overall health expenditure in Haiti is high rel ative to those of the LICs, but health outcomes are not significantly better, which points to low overall efficiency in the health sector. Haiti’s total health expenditure (THE) as a proportion of its gross domestic product (GDP) is 7.6 percent, which is higher than the average for the LICs (5.7 percent) and com parable to the average for the Latin America and the Caribbean (LAC) region (7.2 percent). Haiti’s THE per capita is $131 in international dollars, which is much higher than the LIC average ($93) but much lower than the LAC region average ($1,113).1 Nevertheless, value-for-money is low because the level of spending in Haiti is much higher than in other countries with similar or lower maternal and infant mortality ratios, such as Rwanda ($125) and Eritrea ($51).2 This finding also highlights issues of low efficiency in Haiti’s health sector. The efficiency of health providers could be greatly improved. Service readiness is an issue across all fa cilities, and present levels of health worker productiv ity is very low. An analysis of how efficiently health in puts are turned into health services reveals that Haiti has very low technical efficiency scores compared with those of other LICs (Zere et al. 2006; Akzaili et al. 2008; Sebastian and Lemma 2010; Marshall and Flessa 2011; Hernandez and Sebastian 2013; Kirigia and Asbu 2013; Jehu-Appiah et al. 2014; Osmani 2015). Dispensaries are the most inefficient type of health facility, and the inefficiency of the remaining facility types–health centers without bed (centres de santé sans lit, CSLs), health centers with bed (cen tres de santé avec lit, CALs), and hospitals–follows accordingly. Thus primary care level units are partic ularly inefficient. Other measures of efficiency at the hospital level, such as bed occupancy rate, confirm the low productivity of hospitals. One reason facili ties are inefficient is low staff productivity levels. For example, medical staff see only six patients a day (less than one patient per hour). Productivity is also neg atively influenced by absenteeism, which contributes to the waste of approximately $3 million per year (MSPP forthcoming3), moonlighting, and limited ser vice readiness. A recent study of health facilities in three departments revealed that the medical staff in primary health care (PHC) facilities work only four hours a day but are actually paid a full-time4 salary (World Bank, USAID, and MSPP 2013). Furthermore, only 32 percent of health facilities provide essential medicines,5 and only 31 percent possess basic medi cal equipment. Other key factors contributing to low productivity at the hospital level are poor functioning of the referral system and poor utilization rates. The fact that the Ministry of Public Health and Population (Ministère de la Santé Publique et de la Population, MSPP) allocates 90 percent of its operating budget to personnel costs means that operational budgets are 1 These figures are in international dollars (at constant 2011 prices, purchasing power parity–adjusted). 2 World Development Indicators (database) 2016, World Bank, http://data.worldbank.org/products/wdi. 3 This publication, developed in partnership with the U.S. Agency for International Development (USAID), has not been released, but it was drafted in September 2014. 4 Here, “full-time” refers to a workday of eight hours. 5 Facilities were considered to have basic access to essential drugs if at the time of the survey they dispensed at least half of the 14 medicines in the Service Availability and Readiness Assessment (SARA) list of the World Health Organization (WHO 2010b). 10 BETTER SPENDING, BETTER CARE: A LOOK AT HAITI’S HEALTH FINANCING too tight to ensure an adequate supply of essential drugs and equipment. Even though it would be more cost-effective to in vest in primary care, large allocations of resources to hospital care persist, which is one reason why value-for-money is low. Currently, Haiti only spends 19 percent of its total health expenditure on preven tive care, whereas 54 percent is spent on curative care. Furthermore, the number of dispensaries per capita (the dispensary is the key facility for the provision of primary care) is much lower than the average of other LICs, while the number of community referral hospitals (hôspitaux communautaires de référence, HCRs)6 per capita is much higher (MoHSW 2008; Awate 2014; Ujoh and Kwaghsende 2014). However, the three leading causes of disability-adjusted life years (DALYs) in Haiti are the human immunodeficiency virus (HIV), acute respiratory infections, and diarrhea, all which could be addressed by preventive and primary health care interventions. This evidence on Haiti’s disease bur den indicates that it would be much more cost-effec tive to increase coverage of promotional and preven tive health services at the primary care level than to maintain the current density of hospitals per capita. Inefficiencies in both domestic and external fund ing are exacerbated by the fragmentation and lack of coordination of external aid. After the 2010 earth quake,7 it appears that a large share of external emer gency funding focused on strengthening infrastruc ture, particularly the construction and rehabilitation of hospitals. Because Haiti did not have a strong coordi nation mechanism in place at that time and 90 percent of external funding is off-budget, it has been difficult to track, monitor, and plan how these resources are applied to the health sector. As a consequence, this funding has not been maximized to facilitate long-last ing and positive impacts. In the immediate aftermath of the earthquake, several capital investments in in frastructure were funded by development partners in the form of donations to the MSPP. Since then, the MSPP has found the operational costs necessitated by these capital investments to be unaffordable–a situa tion that has posed further challenges to funding the health sector. In other words, the post-catastrophe re sponse has often taken the form of construction or re habilitation of hospitals without planning for how the running costs will be met after the initial emergency has passed. Consequently, hospitals are currently lack ing the basic resources to ensure service delivery, and the MSPP is unable to meet these increasing opera tional costs, which is affecting its capacity to ensure staff recruitment, training, and the provision of medi cal equipment and commodities. Meanwhile, for the poorest Haitians health care is unaffordable. After the 2010 earthquake, out-of pocket expenditures as a fraction of total health expen diture fell to 26 percent (2011), which is about 10 per cent lower than in 2009.8 However, this study shows that out-of-pocket expenditures increased steadily in the years that followed and reached 35 percent in 2014.9 The incidence of catastrophic health expendi tures (CHEs)10 has also increased, and vulnerable pop ulations, such as those hospitalized, the unemployed, and households with more than three children under 5, are the most affected.11 Almost all health facilities (93 percent) charge user fees; this financial burden falls heaviest on the poorest segments of the population. In fact, nearly two-thirds (63 percent) of households in the lowest wealth quintile do not consult a health pro vider because they cannot afford to do so. Haiti’s health financing system has undergone pro found change over the last two decades, partic ularly since the 2010 earthquake. Government fi nancing of health care has also declined sharply in 6 The density of dispensaries and community referral hospitals (hôspitaux communautaires de référence, HCRs), was estimated using the 2013 SPA data set–Service Provision Assessment (Évaluation de la Prestation des Services de Soins de Santé, EPSSS), Haitian Institute of Childhood and ICF International, http:// dhsprogram.com/what-we-do/survey/survey-display-442.cfm. The density of community hospitals included small hospitals. Although a small hospital is not classified as a community referral hospital, these hospitals have a similar bed capacity and staff, and thus could be regrouped. According to SPA, there were 40 HCRs and 65 small hospitals in 2013. 7 A catastrophic 7.0 magnitude earthquake struck Haiti in 2010. Over 100,000 Haitians died, and millions were displaced. The infrastructure damage was extensive; the earthquake destroyed approximately 105,000 homes and damaged more than 208,000. It also left more than 1,300 educational establishments and 50 health centers and hospitals completely unusable (World Bank 2010a). 8 Global Health Expenditure Database (GHED), World Health Organization, http://apps.who.int/nha/database/Select/Indicators/en. 9 Global Health Expenditure Database (GHED), World Health Organization, http://apps.who.int/nha/database/Select/Indicators/en. 10 A household that allocates at least 25 percent of its nonfood consumption to health is considered to be encountering catastrophic health expenditures or financial hardship related to health (WHO and World Bank 2015). 11 Survey on the Living Conditions of Households after the Earthquake 2013 (Enquête sur les Conditions de Vie des Ménages après le Séisme, ECVMAS), Haitian Institute of Statistics and Data Processing, http://catalog.ihsn.org/index.php/catalog/5360. EXECUTIVE SUMMARY 11 Haiti over the last two decades, while external financ ing has increased. Between 1995 and 2014, public health expenditure as a fraction of total health expen diture decreased by half, lowering from 41 to 21 per cent.12 External health financing reached record lev els of about 70 percent of THE in 2011 as a result of the large inflow of emergency aid in response to the earthquake. Nevertheless, because external financing has decreased sharply in recent years and domestic fi nancing is not increasing in proportion to this decline, households are bearing a growing burden of health costs, with grim implications for the poorest segments of the population. Recommendations: Seven Strategic Shifts Based on these findings, we identified seven stra tegic shifts that would accelerate the progress to ward universal health coverage in Haiti: 1. Prioritize primary health care. Realign resourc es from hospital to primary health care and cost and prioritize the existing Health Master Plan (Plan Directeur de Santé, PDS) to guide future financ ing. As Haiti undergoes epidemiological transition, it also takes on the double burden of disease that accompanies this change –the main causes of mor bidity and mortality are now attributable to both communicable and non-communicable diseases. Since primary care models and preventive health services target the root causes of both communi cable and non-communicable diseases, they would yield the highest rate of return on investment. The MSPP and development partners should spearhead the development of a joint investment case (or stra tegic plan) to guide investments in the sector and to shift resources to the primary care level. Such a document would use the existing Plan Directeur and the essential package of health services (EPHS) as starting points and would prioritize and cost a few focus areas or interventions on which MSPP and development partners could focus their financ ing. Innovative and cost-effective models for de livering health care, particularly at the level of the community, should be considered. And, indicators to measure progress toward UHC should be incor porated into the investment case. 2. Increase equitable access to quality care. Update and implement a facility mapping tool by re-classi fying health facilities to enhance service readiness and facilitate a practical referral network. Facilities should be properly (re)classified and a popula tion-based carte sanitaire (facility mapping) devel oped to ensure systematically that all facilities in cluded in the referral network meet the minimum criteria in terms of service readiness, which will vary by type of facility. The MSPP should therefore de velop a facility mapping tool to (1) identify the ex isting public and private facilities; (2) establish their service readiness (mostly in terms of staff and in puts); and (3) determine the population coverage of each facility. The first step would build on the ex isting carte sanitaire that emerged from the Service Provision Assessment (SPA) survey, which was a census of all health facilities in Haiti and a mapping of the services actually being delivered in each fa cility. The findings of such a mapping tool would identify service gaps or redundancies and trigger a re-categorization of certain facilities. However, it would not necessarily mean building new dispen saries. Taking into consideration the investment priorities defined in the Plan Directeur (see Shift 1), certain inefficient community referral hospitals could be transformed into health centers that offer health promotion services and primary care. In oth er cases, certain facilities could be converted into primary health care units, or upgraded to hospitals, or given special attention to ensure service readi ness. Merged facilities would be better equipped with drugs and medical equipment. For this exer cise, it would be crucial to have a well-defined es sential package of health services to be financed at the primary care level. 3. Spend more wisely on hospitals. In the short run, consider placing a moratorium on new hospital construction until the existing infrastructure can be mapped and a hospital licensing program has been developed. The MSPP should also encourage de velopment partners to finance technical assistance for hospitals. The ongoing externally financed wave of hospitals construction was not accompanied by 12 Global Health Expenditure Database (GHED), World Health Organization, http://apps.who.int/nha/database/Select/Indicators/en. 12 BETTER SPENDING, BETTER CARE: A LOOK AT HAITI’S HEALTH FINANCING plans to sustain hospitals’ operational costs and maintain service delivery. Consequently, hospitals are currently lacking the basic resources to en sure service delivery, and the MSPP does not have enough financing to meet the increasing opera tional costs, thereby affecting its capacity to ensure staff recruitment, training, and the provision of medical equipment and commodities. In the short term, no new hospital should be built unless it re sponds to the urgent functional or geographical needs that will remain beyond the emergency pe riod. Technical assistance should focus on business plans that can financially sustain hospital infrastruc ture that is being or has been handed over to the government. Revenue generation strategies that might entail, for example, luxury wards for patients who have a high willingness to pay, or cost-cutting strategies for hospital care, or alternative sources of revenue, such as from very wealthy individu als, diaspora, or religious organizations, should be considered. 4. Improve technical efficiency at PHC level. Value for-money in service delivery should be increased by reforming human resources, having better avail ability and use of inputs (particularly medicines) and serving more patients, especially at the first level of care. While facilities are being recategorized and basic equipment and medicines are being better distributed (Shifts 1 and 2), it is vital to improve technical efficiency. Increasing value-for-money will require increasing patient flow and reforming human resources (among other things, the decen tralization of certain decisions) in order to reduce absenteeism and improve recruitment and work ing conditions. Primary care facilities in Haiti are less efficient than those in other low-income coun tries. Low productivity characterizes health facilities across all categories–primary care dispensaries and health centers with and without beds are already known to be especially inefficient. Low productivity can be explained in part due to high levels of ab senteeism and moonlighting by health personnel. This situation is likely exacerbated by low levels of demand from prospective patients in poor commu nities. Facilities are not properly classified in terms of the minimum criteria, and referral networks are not in place (see Shift 2), all of which impede 13 Sector Wide Approach in health policy. improvements in efficiency. Linking financing for in dividual staff and facilities to outcomes through re sults-based financing (RBF) mechanisms is one pos sible way to strengthen accountability and thereby lift productivity. Thus RBF could serve as an efficient tool for improving the productivity of human re sources and making health facilities more account able in terms of results, as demonstrated by the first findings from the promising pilot of the national RBF program now being implemented. The avail ability of medicines could also be improved by re vamping supply chain management. Considerable savings could result from enhancing the coordina tion of the distribution network and focusing on last-mile distribution, potentially by outsourcing to local transport companies, which has been suc cessfully piloted in Haiti. 5. Better use of external funding. To increase impact and enforce adherence to a costed and prioritized Plan, Haiti should have an adequately staffed and well-functioning donor coordination unit that pur sue donor tracking and transition planning. The do nor coordination unit would, among other things, maintain the national database of cooperation proj ects and ensure that there is complementarity and that transition plans (especially when donors are withdrawing) match health system needs with the available resources. The MSPP should enforce reg istration of development partners with the donor coordination unit (other countries have enforced that practice by decree). In the short term, develop ment partners should begin to pool external financ ing virtually around the essential package of health services and key interventions identified in the cost ed and prioritized Plan Directeur (or the investment case). Some partners have launched this process for a limited set of services in the context of the RBF program. Meanwhile, all donors should follow a standard reporting format, which would be devel oped by the donor coordination unit (together with the development partners). At the same time, the MSPP and development partners should strength en public financial management (PFM) structures to make it possible to set up a SWAp13 mechanism to pool external financing in the future and strengthen the capacities at the departmental level (including planning, budgeting, monitoring, and reporting). In EXECUTIVE SUMMARY 13 the short term, harmonized procedures and agree ments among partners on levels of per diems and salaries could slash transaction costs. To this end, the health ministry and development partners should draft and sign a memorandum of understanding to identify minimum standards for emergency financ ing–for example, including requirements that major capital investments such as hospitals be supported by long-term plans. 6. Increase resources for health. In light of decreas es in external financing, it is particularly important to increase domestic resources for health and to ensure that domestic financing allocations address key priorities while leveraging donor financing for essential items such as vaccines. Despite pressing health care needs, Haiti has seen a sharp drop in government expenditure in the health sector over the last two decades, with a consequent increase in donor dependency. In the past, Haiti’s health sec tor received allocations of between 9 and 14 per cent of the national budget. In 2014, the share of government expenditure going to health was just 6.1 percent of the total government expenditure, well below the Abuja Declaration’s recommended allocation of 15 percent14 and has since fallen to just 4.5 percent in the 2016-17 budget. In addition, donor financing is decreasing, and thus the gov ernment urgently needs to plan for increasing do mestic financing for health to avoid a spike in out of-pocket expenditures. Increasing public spending on health may imply an increase in domestic re source mobilization as a whole or specifically for the health sector. One way of achieving the lat ter is by introducing earmarked taxes for health. Either way, the MSPP should build a strong case for the Ministry of Economy and Finance (Ministère de l’Economie et des Finances, MEF) to invest in the health sector. For that, it is essential to show enhanced value-for-money, improved budget ex ecution rates, and a vision to accelerate progress toward UHC. On the external revenues side, Haiti should work toward increasing external financing and rally external partners around a more sustain able contribution in line with the Plan Directeur, which implies working on long-term financing strat egies to achieve UHC. Finally, vaccines in Haiti are now entirely financed by donors – unlike in most low-income countries – and this needs to change. Without significant government cofinancing, key donors will be unable to continue financing vac cines in the country for much longer. 7. Increase affordability of health services for the poor. The feasibility of removing user fees for se lected services or target populations (for example, children under 5 and pregnant women, especially in rural areas) should be assessed. User fees nega tively affect not only equity in access but also effi ciency of health facilities and ultimately health out comes. Almost all health facilities charge user fees to bridge the gap in funding. As a result, out-of-pock et spending and thus catastrophic health expendi tures are increasing. In 2013 almost one-quarter of households reported not consulting a provider when sick, and, among those, 49 percent could not afford care. However, because user fees are currently an important part of the operating bud gets of health facilities, their removal needs to be carefully assessed so it will not affect the availability or worsen further the quality of the services pro vided. Mechanisms to increase the affordability of health services for the poorest should be pursued. These include a transportation voucher program or the revival of the equity fund at the facility level to protect the poorest from the direct and indirect costs of health care. The mobile clinics and services provided by community health workers are mostly used by the poor and should be strengthened. As discussed in Shift 1, more resources should be allo cated to expand and strengthen community care in order to move further toward UHC. 14 In 2011 African heads of states approved the Abuja Declaration, which sets a target of allocating15 percent of a government’s total expenditure to health. This target can be regarded as aspirational, as it is currently reached only by some countries. 14 BETTER SPENDING, BETTER CARE: A LOOK AT HAITI’S HEALTH FINANCING CHAPTER 1 INTRODUCTION This report describes how Haiti can accel erate and sustain progress toward univer sal health coverage (UHC). A key objective of Haiti’s National Health Policy (Politique Nationale de Santé, PNS) is to attain uni versal health coverage (MSPP 2012).15 However, be cause of Haiti’s political instability and high frequen cy of natural catastrophes–most recently, Hurricane Matthew in October 2016 in which reportedly at least 1,000 people died, with 1.4 million directly affected and 175,000 internally displaced16–both national and international development partners have tended to fo cus on emergency needs and short-term measures to improve the health sector. This analysis aims to redirect that approach toward a long-term vision for the sector. 15 The 2012 National Health Policy establishes the vision of attaining over the next 25 years the universal delivery of an essential package of health services (MSPP 2012). PHOTO CREDIT : SOPHIA PARIS UN/MINUSTAH 16 This report was written largely before Hurricane Matthew struck Haiti in 2016. However, the systemic challenges to Haiti’s health system have not changed. Moreover, pre-hurricane trends indicated that external funding, which surged after the 2010 earthquake, had dropped sharply, and economic growth was slowing in 2016. Since Hurricane Matthew, the prospects for economic growth in 2017 are even lower, and the domestic revenues and the budget available for all sectors, including health, will decrease. Although there has been a temporary–and modest–spike in emergency financing for the hurricane response, external financing is expected to approach pre-hurricane trends in 2017. Therefore, the analysis and policy recommendations in this report remain valid in the post–Hurricane Matthew period and are therefore relevant to government and partners in shaping the reconstruction efforts. 16 BETTER SPENDING, BETTER CARE: A LOOK AT HAITI’S HEALTH FINANCING Chapter 1 • INTRODUCTION 17 In doing so, it identifies a set of critical constraints to overcome and opportunities to seize to move toward UHC. The recommendations are intended to guide not only Haiti’s government but also its development part ners, who play an important role in advancing Haiti’s health care system. UHC is a moving target, and it includes dimensions such as coverage and quality of services as well as financial protection. For countries like Haiti, with low coverage of basic health services, UHC is achieved gradually. The first step is to prioritize and strength en the primary level of health care to enable a con tinual scale-up of essential services for the vulnerable and poor populations. Increasing the number of indi viduals with access to health services is an important dimension of UHC. Quality of services is another im portant aspect, as well as financial protection for all. Countries must avoid placing those needing health services in the position of having to choose to forgo health care because of financial issues or accept the impoverishment that may result from out-of-pocket (OOP) expenditures. This report describes these important dimensions, including the level of health care coverage,17 equity in access to health services,18 and financial protec tion19 in Haiti. It also discusses the three basic func tions of health care financing: (1) revenue collection– to raise enough revenue to provide individuals with a package of health services that ensures, in an equita ble, efficient, and financially sustainable manner, finan cial protection against catastrophic health expenses arising from illness and injury; (2) pooling–to manage these revenues to pool health risks equitably and ef ficiently; and (3) purchasing–to ensure that the pay ment for or purchase of health services is carried out in an efficient way. Our study places a special emphasis on measuring value-for-money in Haiti’s health sector by examining the ability of the health system to turn resources into health services that result in improved health outcomes for the population. This study compiles existing information and pulls together new analysis of recent data. The questions included in the Health Financing System Assessment template20 were used as a starting point for the study. It also builds on the analysis carried out for the pov erty assessment and public expenditure review (PER) in Haiti. Additional analysis includes study of the de terminants of catastrophic health expenditures (CHEs), the drivers of inefficiency (including human resources), and health-seeking behaviors. Meanwhile, new data were collected on hospital financing, and an efficien cy analysis was carried out for all facilities. New analy sis was also conducted using the 2013 Survey on the Living Conditions of Households after the Earthquake (Enquête sur les Conditions de Vie des Ménages après le Séisme, ECVMAS) and the BOOST data set.21 The focus of this study is aligned with recent com mitments to UHC at the global and country lev els. Its objective is consistent with the United Nations’ Sustainable Development Goals (SDGs) and the World Bank’s strategy of eliminating extreme poverty and boosting shared prosperity. The achievement of UHC, in which all people are effectively covered by essen tial health services and no one suffers undue financial hardship because of illness, is key to reaching these twin goals. The focus of this study is also consistent with the Systematic Country Diagnostic (SCD) and the Country Partnership Framework for fiscal years 2016– 19 for Haiti, particularly in the strategic area of building human capital, with the objective of increasing access 17 Coverage includes indicators for preventive care such as family planning requirements, at least four antenatal consultations, vaccinations, and improved water sources. In addition, health care coverage includes indicators of curative services such as hypertension treatment, diabetes treatment, TB detection, skilled birth attendance, and antiretroviral therapy. 18 Equity in coverage is measured by assessing prevention and treatment service coverage by wealth quintile. 19 Financial protection is assessed by examining the proportion of households who spend a certain threshold (in this report 25 percent, which is usually used) of their nonfood expenditures on health care or are impoverished because of out-of-pocket payments. 20 This template was recently developed by the World Bank’s Health Financing Global Solutions Group. 21 The following data sets and surveys were used in this study and are cited throughout in shortened form: BOOST–Database of Public Budget Expenditures, World Bank, http://wbi.worldbank.org/boost/boost-initiative; DHS–Demographic and Health Survey, U.S. Agency for International Development, http://www.dhspro gram.com/; ECVMAS–Enquête sur les Conditions de Vie des Ménages après le Séisme (Survey on the Living Conditions of Households after the Earthquake), Haitian Institute of Statistics and Data Processing, http://catalog.ihsn.org/index.php/catalog/5360; GHED–Global Health Expenditure Database, World Health Organization, http://www.who.int/health-accounts/ghed/en/; GBD (Global Burden of Disease) Compare–Institute for Health Metrics and Evaluation, https:// vizhub.healthdata.org/gbd-compare/; MGAE–Module Gestion de l’Aide Externe (External Aid Management Module, Haiti): MPCE–Ministére de la Planification et de la coopération externe (Ministry of Planning and External Cooperation); SNPPGD–Systéme national de planification, de programmation et de gestion du développement (National System of Planning, Programming and Development Management), https://haiti.ampsite.net/portal/; SPA–Service Provision Assessment (Évaluation de la Prestation des Services de Soins de Santé, EPSSS), Haitian Institute of Childhood and ICF International, http://dhsprogram.com/what-we-do/ survey/survey-display-442.cfm; WDI–World Development Indicators, World Bank, http://data.worldbank.org/data-catalog/world-development-indicators. 18 BETTER SPENDING, BETTER CARE: A LOOK AT HAITI’S HEALTH FINANCING to health services. The study was conceptualized with the Ministry of Public Health and Population (Ministère de la Santé Publique et de la Population, MSPP) and key health system stakeholders in Haiti, and comple ments other ongoing analytical activities. This report is organized in seven broad chapters. Chapter 2 provides context for the overall report by describing the macro and fiscal situations in Haiti. Chapter 3 describes health outcomes and the health system, and chapter 4 then turns to health financing and discusses resource mobilization (domestic, exter nal, and private financing), pooling, and purchasing. Chapter 5 examines access to health services, and chapter 6 describes the efficiency of the health system in producing the services needed by the population. Chapter 7 concludes by discussing the main findings of the study, describing the key strategic shifts need ed to move towards UHC in Haiti, and offering policy recommendations. Chapter 1 • INTRODUCTION 19 CHAPTER 2 BACKGROUND Haiti is one of the most unequal countries in the world, and most of the population is poor. Haiti ranks 163rd out of 187 coun tries on the Human Development Index and remains the most unequal country in the Latin America and the Caribbean (LAC) region (Gini, 0.6). Overall, the poverty headcount is about 59 percent, and 24 percent of the population lived in extreme poverty in 2012, indicating that almost 6.3 million Haitians cannot meet their basic needs, and 2.5 million cannot even cover their food needs (World Bank 2016b) Based on the international pov erty lines, 54 percent of the population lives on less than $1.90 a day and 71 percent on less than $3.10 a day.22 In 2014 only 25 percent of the population had access to electricity, which is lower than the average of low-income countries (LICs) overall, and Haiti’s un employment rate remains one of the highest in the LAC region at 30.1 percent (World Bank 2015g). Haiti also has the lowest rate of labor force participation in the region: only 60 percent of working-age individ uals participate in the labor market, compared with, PHOTO CREDIT : VICTORIA HAZOU UN/MINUSTAH for example, 70 percent in the nearby Dominican Republic (World Bank 2015g). Ninety-three percent of the population works in the informal sector (Herrera et al. 2014), making it difficult to set up a national and 22 In constant 2011 prices, purchasing power parity–adjusted. The global poverty lines are now set at $1.90 and $3.10 a day, using 2011 prices. Previously, the values for extreme and moderate poverty were $1.25 and $2.50 a day, respectively. 20 BETTER SPENDING, BETTER CARE: A LOOK AT HAITI’S HEALTH FINANCING Chapter 2 • BACKGROUND 21 FIGURE 2.1: Annual Trends in GDP, 2013–15, and Forecasts, 2016–18: Haiti Percent change in the real GDP 5 14 12.3 10.7 7.5 6.8 8.6 3.9 4.2 2.8 1.7 0.9 1.9 1.7 12 Percent rate of inflation 4 10 3 8 6 2 4 1 2 0 0 2013 2014 2015 2016f 2017f 2018f Real GDP Inflation (average) Sources: Ministry of Economy and Finance, Bank of the Republic of Haiti, International Monetary Fund, and World Bank staff calculations. public health insurance system because those mech anisms require levying taxes on a formal workforce. Only 5 percent of the population is enrolled in a com pulsory health insurance program (see chapter 4), and they are primarily formal sector workers. There is no government policy to protect vulnerable populations from health-related financial losses. In 2016 economic growth slowed in Haiti. Although the economy may rebound in 2017, gross domestic product (GDP) growth will remain low. In 2014 Haiti’s gross national income (GNI) per capita was $800, mak ing it a low-income country. Between 1999 and 2014, Haiti’s average GDP annual growth rate was 1.27 percent, but after the 2010 earthquake (in 2011 and 2014), the average growth rate increased to 3.85 per cent. This growth rate exceeded that in the LAC region (2.99 percent), but was below the average growth rate (6.31 percent) of other LICs (WDI 2015). In response to inflation and erosion of the international reserves (fig ure 2.1), GDP growth began slowing in Haiti in 2014 and continued to decelerate to 0.9 percent in 2016. The decline in GDP growth is affecting domestic revenues and shrinking the budget available for all sectors, notably health. The slowing economy is lim iting the scope for increasing public financing for the health sector in the short term. However, projections indicate that GDP may rebound in 2017 (figure 2.1), which would present an opportunity to increase the government’s contributions to equitable and efficient health financing for universal health coverage (UHC) in the medium term. That said, the forecasts for 2017 and 2018 indicate that GDP growth will remain below 22 BETTER SPENDING, BETTER CARE: the 2014 rate, thereby limiting the fiscal space for ex panding funding to the health sector. Improved tax collection is one way to increase do mestic revenues for health. However, although tax mobilization rose after the earthquake, it was likely to fall in 2016. From 2005 to 2015, revenue as a share of GDP increased by nearly 50 percent, from 13.1 to 18.3 percent of GDP (World Bank 2016a). This im provement stemmed primarily from external grants, which increased from 3.5 percent of GDP in 2005 to 12.1 percent in 2010. The fiscal revenue picked up as well, moving from 9.6 percent of GDP in 2005 to 13.6 in 2015, but it was expected to decline to 13.5 percent of GDP in 2016. Since 2015, the fiscal deficit has remained below 3 percent of GDP (World Bank 2016a). Public expenditures jumped from 13.5 per cent of GDP in 2005 to 23.2 percent of GDP in 2015 (World Bank 2016a). Public expenditures and rev enues increased initially after the 2010 earthquake, but both are expected to fall to 18.6 percent in 2018. In addition, the recent decrease in domestic revenue mobilization is forcing a substantial decline in public investment (expected at 6.3 percent of GDP this fiscal year compared with 9.6 percent last fiscal year) –see figure 2.2. Haiti raises little tax revenue given its economic status, but there is scope to raise more. Haiti has the second-lowest tax-to-GDP ratio (13.7 percent) of all countries in the LAC region and one that is only slightly better than the average for LICs. Its tax-to-GDP ratio is 1.07 times higher than that of the LICs, but its GDP per capita is 1.36 times higher than the LIC A LOOK AT HAITI’S HEALTH FINANCING FIGURE 2.2: Fiscal Account as Percentage of GDP: Haiti, 2013–18 35 30 25 Percent 20 15 19.1 24.1 25.5 28.3 27.7 25.8 10 5 0 0 -7.1 -6.3 -4 -2.2 -1.5 -5 -10 2013 2014 2015 2016f 2017f 2018f Fiscal balance Public debt Total revenues Total expenditures Sources: Ministry of Economy and Finance, Bank of the Republic of Haiti, and World Bank staff calculations. average, which indicates that Haiti raises relatively lit tle tax given its economic status and it should have a higher tax-to-GDP ratio. If the country increases its tax to-GDP ratio to 15 percent,23 it could increase its fiscal revenue by $18 per capita or 2 percent of GDP (IMF 2016)–see appendix A for a more detailed discussion of domestic revenues. As indicated in the public expen diture review (PER) for Haiti (World Bank 2016a), its tax system should undergo large-scale reforms. It is cur rently regressive because the country’s fiscal revenues rely heavily on indirect taxes, which affect consumers independently of their income level. Haiti also may not be exploiting its full revenue potential from corporate and personal income taxes (World Bank 2016a). Thus there is scope to raise more taxes, but that may not be feasible in the short term. The health sector is highly dependent on external financing. Because it is now decreasing, the govern ment needs to plan to increase domestic financing for health to avoid a spike in out-of-pocket expenditures. In both fragile states and LICs, net official develop ment assistance (ODA) as a