Governance Issues in Health Financing

Abstract

This article provides an overview of the different definitions of governance in health, with a special focus on financing and related issues, and ranging from the concepts of good governance in health to global health governance. Governance in the financing of health systems requires an oversight function similar to the concept defined as stewardship by the World Health Organization. It strives for a level playing field for all involved in the health sector, covering concerns over corruption and abuse from a lack of accountability and transparency to universal health issues of equity, effectiveness and equity. Good governance of health systems seeks an optimum path to maintain a judicious balance between delivery and financing of health services with sound and proper regulation. Conceptually, it can be a force to achieve social justice and fairness in health systems, although the contexts may vary according to social norms and public expectations. The article also discusses the WHO's work on health systems financing for universal health coverage, to justify better leadership and governance toward protecting the public interest beyond just improving health status. Financing is presented as a basic function of a health system that requires a clear identification of the roles of regulations and regulators, including ways and means to enforce the rules for proper behavior and the penalties for noncompliance. Health financing has been commonly defined as consisting of the three essential subfunctions of (1) collecting revenues, (2) pooling resources, and (3) purchasing services, each with their specific requirements for governance. Peculiarities in health such as risk and uncertainty present certain consequences for governance, such as the need for insurance and associated hazards, together with the complexities of payment to influence the behaviors of doctors, patients, financing intermediaries, and government. Among very specific challenges to governance in health financing are (1) measurement, (2) health outcomes, (3) international issues, and (4) universal health coverage. These are made even more complicated due to the differing systems of health financing and approaches, definitions of processes and outputs, and consensus of goals and values. A framework of public–private health financing is discussed along with the governance issues that usually appear for the provision and payment methods in financing systems, relating to the trade-offs between equity and efficiency in balancing costs, access, and quality. Thus the issues of governance may involve even greater regulation over financial reporting and monitoring of financial information, as an essential part of the health management information system. As medical technology advances, there would be greater need for providers to provide financial data to be linked to claims of better outcomes and quality of services. Improvements in information technology will allow access to comparisons of cost-effectiveness in prevention and treatment, thus holding promise for cost containment and also contributing to better governance in health-care financing. The main conclusion acknowledges that governance is indeed critical for health financing but needs sound financial information to affect policy at all levels. Ultimately, the priorities for good governance are to determine proper roles and functions of financing within health systems that are well integrated in a balanced share of public, private, and voluntary sectors, to develop universal health coverage for all within an affordable and sustainable financing framework, and to strengthen health financing methods with improved financial management systems. These financing and related payment mechanisms must be regulated more effectively through checks and balances, but without incurring high administrative and transaction costs, so as to achieve the policy goals of effective, efficient, and equitable utilization of scarce societal resources toward Health for All.