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Some issues with this method of financing include: Information Lack of an integrated funding approach for health services resulting in poor links between capital and recurrent funding (a problem identified in the Master Plan), difficulties in linking funding to performance, difficulties for providers in managing resources when they are controlled by different entities, and difficulties in creating incentives for performance. Poor links between primary, secondary and tertiary care with different funders with incentives that may not always be aligned (e.g., municipalities with incentives to increase resources for their area at the expenses of others and to cost shift from primary care onto hospitals, including the University clinic, etc). Fragmented and inadequate information on health status and services provided in various institutions, making it difficult to plan, manage and monitor health services. The challenges noted in the draft Health Sector Strategy include improving the information in the health sector. A report on health financing in Kosovo noted that: 6 There is a lack of information on health outcomes, including morbidity and mortality statistics that could be used for international comparison. Kosovo does not collect data on common health indicators, including bacis demographic indicators; lifestyle- and environment-related indicators; mortality, morbidity, and disability; and health care resources comprehensive utilization, and expenditure. The existing data on the population‟s demographic characteristics and health status are highly contradictory, and highlight the need for investment in better monitoring and evaluation capacity at the MoH. This lack of data prevents analysis of trends and comparisons of international health statistics that could help to support the formulation and monitoring of health policyat the national level. Health insurance Another challenge is the preparatory work for health insurance. The report by the World Bank on health financing outlines the considerable work required to establish the foundations for such a development including: 7 Planning the reforms and providing a structure to manage and monitor them; planning needs to cover the areas outlined below and set out the transition path for these changes over time, in a feasible sequence that takes account of critical paths and capacity to undertake the reforms as well as the finances available for making the changes. Risk management strategies should be included in the reform plan. Developing the policy and drafting and putting law in place including law relating to redefined roles for a purchaser provider split; governance and accountability structure for hospitals, other providers, and the insurance or purchasing body; financing; licensing and accreditation; definition of entitlements (health care package); fees and charges; health information requirements relating to roles, use, transfer, storage, etc; prohibitions including on fees and charges; etc. Rationalisation and development of providers and other key institutions as discussed in the Master Plan and in line with requirements for progression to a health purchaser/provider split whether in the form of a health insurance model or single funder/purchaser. Capacity building in all institutions including governance of semi-autonomous institutions such as hospitals and the health insurer or purchaser/funder; developing MOH capability in policy, planning, regulation, information management, reporting, monitoring, and review; developing the purchasing/funding role whether in the insurer or MOH or other institution (discussed further below); improving management including internal financial management, information management, contracting, and many other capabilities for hospitals and other providers; developing capacity in 6 World Bank, “Kosovo Health Financing Reform Study,” page 10. 7 World Bank, “Kosovo Health Financing Reform Study,” table 7.2 page 120. 18
local government in relation to their roles; and improvements in the scope, quality and flows of health information in all institutions and between institutions. If the government proceeds to a full health insurance model, the Health Insurance Fund would require the following capabilities: planning and budgeting in short, medium and long term including revenue and expenditure forecasting; health demand analysis related to the entitlements; costing likely exposure to entitlements including actuarial analysis; financing including investment and debt management; claims management; risk analysis and management including full recognition of contingent and other liabilities; contracting including pricing or rate setting, market development, model contracts for classes of providers, contracting procedures, provider relationship management; monitoring; auditing; review and evaluation of provider performance and impacts of interventions being purchased or funded; client management; stakeholder management; and information management. The World Bank‟s report on health financing notes some barriers to the development of a health insurance model based on contributions from employers/employees from payroll taxes and private premiums, given the small size of the working population (15% working in the formal sector). 8 Corruption was also noted as a possible issue in developing an effective health insurer, given the need to have functioning levels of governance, transparency, responsibility and accountability for results. 9 Risks to the misuse of resources could impede the successful development of a purchaser/provider whether this was taken further to full health insurance model or not. A purchaser/provider split includes a movement from centralised administrative controls to more flexibility for the funding agency and for providers in the use of resources. This requires incentives for performance and effective inhibiters to the misuse of resources. Effective reporting, monitoring and auditing functions may be difficult to establish in 8 Ibid., page iii executive summary. 9 Ibid., page 6. The report notes that research indicates that the health sector has particular vulnerabilities to corruption, page 17. 19
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local government in relation to their roles; and improvements in the scope, quality and flows of<br />
health information in all institutions and between institutions.<br />
If the government proceeds to a full health insurance model, the Health Insurance Fund would require the<br />
following capabilities: planning and budgeting in short, medium and long term including revenue and<br />
expenditure forecasting; health demand analysis related to the entitlements; costing likely exposure to<br />
entitlements including actuarial analysis; financing including investment and debt management; claims<br />
management; risk analysis and management including full recognition of contingent and other liabilities;<br />
contracting including pricing or rate setting, market development, model contracts for classes of providers,<br />
contracting procedures, provider relationship management; monitoring; auditing; review and evaluation of<br />
provider performance and impacts of interventions being purchased or funded; client management;<br />
stakeholder management; and information management.<br />
The World Bank‟s report on health financing notes some barriers to the development of a health insurance<br />
model based on contributions from employers/employees from payroll taxes and private premiums, given<br />
the small size of the working population (15% working in the formal sector). 8 Corruption was also noted as<br />
a possible issue in developing an effective health insurer, given the need to have functioning levels of<br />
governance, transparency, responsibility and accountability for results. 9<br />
Risks to the misuse of resources could impede the successful development of a purchaser/provider<br />
whether this was taken further to full health insurance model or not. A purchaser/provider split includes a<br />
movement from centralised administrative controls to more flexibility for the funding agency and for<br />
providers in the use of resources. This requires incentives for performance and effective inhibiters to the<br />
misuse of resources. Effective reporting, monitoring and auditing functions may be difficult to establish in<br />
8 Ibid., page iii executive summary.<br />
9 Ibid., page 6. The report notes that research indicates that the health sector has particular vulnerabilities to corruption, page 17.<br />
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