Health Reform and Drug Financing. Selected Topics - Health Economics and Drugs Series, No. 006
(1998; 49 pages) [French] [Spanish]
Table of Contents
View the documentAcknowledgements
View the documentExecutive summary
Open this folder and view contents1. Introduction
Close this folder2. Financing reforms
View the document2.1 Public financing though general revenues
View the document2.2 Health insurance
View the document2.3 User charges
View the document2.4 Voluntary and other local financing
View the document2.5 Donor financing and drug donations
View the document2.6 Development loans
Open this folder and view contents3. Affordability and efficiency
Open this folder and view contents4. Organizational reforms
View the documentConclusions
View the documentReferences
View the documentBack Cover

2.4 Voluntary and other local financing

Community drug schemes involving revolving funds, pre-paid community health insurance, and private cooperative insurance schemes which have previously been discussed, also can be grouped into this category.

NGOs are frequently involved with these and other voluntary financing schemes, and can play a significant role in the health services of some developing countries. NGOs and not-for-profit foundations donated approximately 19% of the total assistance given in health in 1990 (Ref. [50], p. 165-166). It is estimated that NGOs cover 20-30% of health expenditures in Sub-Saharan African and low-income Asian countries and that, in some cases, they provide as much as half of all curative services [14].

Drugs provided by NGOs can involve both local and external donations. Because these organizations must usually recover costs in order to remain viable, user fees are frequently adopted and essential drugs are often sold at a mark-up to subsidize other costs.

Employer-provided health care - which can be furnished either directly, through contracts with private providers, or through insurance and reimbursements - can also contribute to the overall health provision in a country. The impact of this source of funding may be underestimated. It has been calculated that in Tanzania, a country with minimal formal insurance, as much as 13% of the population may have access to employer-provided health services (Ref.[34], p. 150). Therefore, consideration of this source of funding in developing health financing strategies may be merited.

Other voluntary mechanisms include “sick funds” which pay the costs of health services and drugs for the poorest. These are generally supported through direct contributions or fund-raising events. These funds are intended to meet the immediate needs of a portion of the population, but they cannot provide, in a sustainable manner, drugs to meet the needs of the larger population.

Community schemes and other voluntary financing plans can play an important role in providing health care within a country, and they can succeed in doing this in ways which respect traditional societal structures.

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