Why Are Risk-Pooling and Risk-Sharing Arrangements Necessary for Financing Healthcare and Improving Health Outcomes in Low and Lower Middle-Income Countries

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Health is important to economic development, and economic development has an important impact on health outcomes. Health Expenditure makes up a substantial part of the global economy. In the world, the costs of healthcare are increasing; patients are compelled to pay more for treatment, and that makes a lot of people faced to Catastrophic Health Expenditures (CHE) and in long run fall below the poverty line. One of the most urgent and vexing challenges faced by many low- and middle-income countries is how to provide health care for the more than two billion poor people who live in these areas (developing countries). As much as more than 65% (in 2014) of total private health care expenditure in low-income countries comes from out-of-pocket payment by patients. In addition, according to World Bank report (2007), in low and lower middle-income countries was speared nearly 13% of global health spending with 87% the global disease burden. The WHO considers health financing models with high risk pooled, such as health insurance and prepaid schemes, a promising means for achieving universal health-care coverage and promotion health care. A crucial concept in health financing is that of pooling. The WHO defines risk-pooling as the “accumulation and management of revenues in such a way as to ensure that the risk of having to pay for health care is borne by all members of the pool and not by each contributor individually”. The larger degree of pooling, the less people will have to bear the health financial risks. Furthermore, adopting and operating financing policies based on greeter risk pooling/sharing (prepayments) are recommended to all countries (especially in low and lower-middle income countries). It means risk sharing/pooling plays a key role in all financing systems for achieving effectiveness and efficiency health systems.