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Health Economics and Financing

HERA's mission is to promote accessible, efficient and equitable health services and systems. Therefore HERA assists its clients in developing policies and strategies in which cost-effectiveness, equity and sustainability are the underlying principles.

HERA has built substantial experience in health financing and costing studies that aimed at finding the most efficient and equitable strategies for countries facing a financial resource gap. HERA's experience in health financing covers studies on behalf of national governments, multilateral development agencies (e.g. the World Bank, the European Commission, the Asian Development Bank, the European Investment Bank, World Health Organisation), bilateral development agencies (e.g. DANIDA, DFID, AFD, DGOS, BTC, DGIS), NGOs (e.g. Cordaid, FARES, Memisa) and private or public institutions (e.g. ITM, universities, hospitals).

The expertise of HERA in health financing and economics was also used in most of the identification, formulation and/or appraisal missions HERA has implemented over the years. The proposals that have been made in these studies are not specifically mentioned here, but can be found in the reference list in the company profile or in the geographical experience.

HERA has also supported clients in developing and negotiating budget support and/or basket funding, monitoring budget support and sector performance, also specifically in the context of sector-wide approach (SWAp).


Health financing strategies and provider payment mechanisms

Within the context of health sector reform, most developing countries also focus on the reform of their health care financing system. Existing health financing systems have been remodelled to better respond to risk pooling or new structures of health care financing have been proposed: tax-based financing, social health insurance, private or community-based health insurance, cost-recovery systems, user fees, capitation payments, health funds/grants,... Most of these proposals have in common that they all seek to ensure adequate and equitable resource mobilisation for health.

Examples of HERA's contribution to specific studies and proposals regarding health financing (reform) are:

  • In Armenia: Review of Health Financing and Provider Payment Systems; BBP Costing Study for hospital sector; Support to the State Health Agency;
  • In Benin: Identification of a new intervention by the Belgian Cooperation in the health region of Comè, including rationalisation of health financing and proposal of health fund for demand financing;
  • In Burundi: Financing proposal for the new Cordaid (Dutch NGO) programme in the provinces of Makamba and Bururi (concept of health fund and demand financing);
  • In Cameroon: Study on the establishment of a Common Health fund at the provincial level;
  • In Egypt: System audit of Family Health Fund, financing family group practices;
  • In Mongolia: Financing mechanisms for the Health Sector Resources Development Project, including capitation payment for family group practices;
  • In RDC: Proposal for a twin Health Fund approach (both demand and provider financing);
  • In Rwanda: Proposal for reform of national health financing system;
  • In Zambia:Proposals for financing the National Health Strategic Plan 2001-2005 in a framework of SWAp;
  • In St Lucia: Health Sector Financing reform: Universal Health Coverage Assessment;
  • In Madagascar Evaluation of the health equity fund at the Marovay Hospital.
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Health Insurance

Many countries are in the process of developing health insurance schemes, at national or local level, obligatory or voluntary. This includes universal health insurance schemes, private health insurance, community health insurance, special schemes for poor people, for certain population groups (such as informal independent workers) etc.

Examples of recent HERA's contribution to health insurance development are:

  • Globally: Co-organiser with the University of Antwerp and WHO of an international conference on "The Economics of Health Insurance in Low and Middle-income countries" (published in Social Science and Medicine, N° 7, Vol. 48, January 1999);
  • In Morocco: Monitoring of ongoing national health insurance reforms in public and private sector, including a specific support programme for the poor (2002-2006);
  • In Egypt: Monitoring of national health insurance planned reforms (2002-2006) and support to the Health Services Fund;
  • In Armenia: Assessment of the State Health Agency and proposals for national financing mechanisms;
  • In St Lucia: Impact assessment of the planned universal coverage plan (2005).
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Costing Studies

Costing studies can be applied to cost the basic benefits package of a country or a health insurance scheme, the (primary, secondary and/or tertiary) health services, health facilities and/or hospitals. Most of these studies intend to obtain results that help to develop proposals for initiating a new or revised financing structure for health services in a country.

HERA has conducted costing studies in:

  • Armenia: Basic Benefit Package Costing Study;
  • Egypt: Costing the Basic Benefits package (BBP) per intervention and per capita;
  • Mongolia: Definition and costing of basic package of services;
  • Morococo: Costing Study in 9 major public hospitals;
  • Rwanda: Costing of 50 health facilities (dispensaries, health centres and district hospitals); costing of the essential package of services;
  • St Lucia: Costing of the central Victoria Hospital and of the St. Jude Hospital;
  • Tanzania: Costing of Health Services and selected interventions of the Basic Benefits Package;
  • Zambia: Costing the transition of the health sector.

HERA has developed tools for costing studies which it has applied in most of the above studies.

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Cost-effectiveness Studies

Cost-effectiveness analysis is a technique for selecting the most effective strategy/option given the (limited) resources available.

HERA has experience in cost-effectiveness studies in:

  • Belgium: Cost-effectiveness analysis of the focused approach to tuberculosis prevention and screening;
  • Belgium: Cost-effectiveness study of Flemish cancer registry;
  • Suriname: Evaluation of the cost-effectiveness of the policy with respect to referring less frequent diseases abroad;
  • EC and WHO: Developing of cost-effectiveness analytic tools for addressing blood transfusion services (and cost effectiveness analysis performed in a number of countries such as Uganda, Zimbabwe, Guinea Conakry).
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National Health Accounts and Health Expenditure Review

National health accounts (NHA) provide policy-makers with information on the volume and sources of financial resources for the health sector. Regular updates of the NHA facilitate reviews of trends in (public and private) health expenditure over time and help to monitor and evaluate the country's health system. The NHA can also be used to make medium term financial projections of a country's health system requirements.

HERA has conducted public health expenditure reviews in Benin, Lesotho, Tanzania and Nigeria. Within the context of the health sector review in the West Bank and Gaza Strip, a public and private health expenditure review has been made. For the assessment of the universal health care insurance proposal in St. Lucia, both public and private health expenditure were reviewed.

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Aid Effectiveness and Donor Financing Modalities

HERA has supported several Development Partners in developing and appraising effectiveness of aid financing modalities (e.g. joint financing mechanisms; budget support modalities).

  • Western Africa: Developing the concept and operational modalities of a Reproductive Health (RH) Regional Financing Mechanism (RFM) in ECOWAS countries;
  • Myanmar: Preparation of a Multi-Donor Health Fund;
  • Cameroon: Analysis of the financing mechanisms of health districts with a view to develop a joint financing mechanism;
  • Globally: Thematic Evaluation of UNFPA experience in increasing aid effectiveness through participation in SWAps;
  • Globally: Evaluation of the Belgian general and sector budget support modality.