Research for stronger health systems during and after crisis

Desk Review of institutional arrangements for health financing in Zimbabwe

ZEPARU (2014) Desk Review of institutional arrangements for health financing in Zimbabwe,
ZEPARU, TARSC, MoHCC, EQUINET in the ReBUILD project: Harare

As part of the ReBUILD project ‘Rebuilding the foundations for universal health coverage with equity in Zimbabwe’, led by the Training and Research Support Centre (TARSC), this desk study seeks to identify and describe the organizational, institutional and governance arrangements and procedures for pooling funds, for cross subsidies and for provider payments at different levels in the public health system in Zimbabwe.

You can download the full report from the TARSC website here.


Executive summary:

This research is a literature review done under the ReBuild Programme of health systems
research and stakeholder dialogue and capacity building that seeks to move from the immediate
recovery measures to longer term measures for Universal Health Coverage (UHC), which
encompasses equity in access and coverage. The work is supported by Liverpool School of
Tropical Medicine through Training and Research Support Centre (TARSC) and the Ministry of
Health and Child Care (MoHCC). Specifically, the literature seeks to identify and describe the
organizational, institutional and governance arrangements and procedures for pooling funds, for
cross subsidies and for provider payments at different levels in the public health system. The
literature review was done based on a framework designed by KIT, based on literature review
from African countries to enable identification of gaps and policy options that can be adapted for
health financing in Zimbabwe. The literature review was based on reports from the Ministry of
Finance and Economic Development (MoFED), MoHCC, national technical institutions, and
development partners.
The primary sources of health financing in Zimbabwe are the Government, the households,
employers and external funders. The main source of health financing as at 2010 was
households (39%), followed by employers (21%), external funders (19%), and Government
(18%). There is high donor dependency for health financing, which in principle is not
encouraged, as it is usually unreliable, unpredictable, unsustainable and highly dependent on
political environment. This raises concerns on the sustainability of health financing institutions
and the vulnerability of Governments budget should external funding be withdrawn. Although
total health expenditure (public and private) as a percent of GDP was high in 2010 at about 15%
(MoHCC, 2013), this did not necessarily mean that the health sector was adequately financed,
but was rather a consequence of a low formal GDP due to the economic crisis experienced from
2000 to 2008. Lower levels of per capita health expenditure indicated that health expenditure in
the country is insufficient to guarantee adequate access and quality of health care. Government
expenditure on health as percent of total Government budget was less than 15% over the period
2009-2013. OOP payments were high at 50.97%, reflecting the limited cover by prepayment
mechanisms and inadequate public financing and thus exposing the population to catastrophic
health care expenditures, creating barriers to access to health care.
Although Government expenditure on health is insufficient, the MoHCC budget kept pace with
inflation and population growth, indicating that the resources allocated to health at least did not
go down in real terms for the period 2010 to 2013. However, the budget was found to be
unreliable and unpredictable as a source of funding as the actual disbursement was always less
than planned expenditure by margins of greater than 33%. The budgeting process is bottom-up,
starting at facility level (with the district playing the major role) and culminating into a
consolidated budget at the MoHCC, reflects local facility participation in identifying needs,
although there is need to establish the extent to which input from the local levels influence
central decision making at the MoHCC. The budget is historical and demand based and there is
need to integrate population measures of health needs and capacity gaps into the allocation of
resources (with work on this underway in separate work in the Rebuild programme. The budget
can be characterized as a programme budget, where allocation is based on programmes and
service delivery areas, making it possible to track and evaluate if funding is being used
efficiently to achieve intended outputs. Results based financing (RBF) is better at linking funding
to health outcomes, but is being applied to limited maternal and child health interventions.

In Zimbabwe there is no social health insurance scheme, neither are there community based
health insurance schemes. Private voluntary insurance is dominated by Medical Aid Societies
(MAS). There are over 26 registered MAS, but only 3 key players dominate the market, and
together they account for 90% of the market, implying limited pooling of risk among the rest of
the other registered players who account for 10% of the market. MAS cover only about 10% of
the population, which is mainly formal employees, wealthy women and men, and their
dependents in urban areas. There is limited in risk pooling and cross in these schemes and they
cover largely formal employees, wealthy individuals and urban inhabitants at the exclusion of
the poor women and men, informally employed and rural inhabitants. Although their presence in
most cities and towns widens geographic cover, there are inequalities in the different benefit
packages, in the segmentation within and across schemes, limiting cross-subsidies between
different schemes and different income groups covered. Inequalities also exist in the form of tax
credits that are based on one’s expenditure on health care services. About 6.9% of MAS
members find it difficult to get special therapy on their medical plans, and a considerable
number of members find it difficult to access medicine on their plans. Few beneficiary plans give full reimbursement for services provided outside their managed care plans. This weakens financial protection of the plans for members. Collectively, the MAS spend 56% of the
subscriptions on administration and 44% on health care services, implying that they mainly use subscriptions on sustaining their organisations while their clients have to make OOP payments.
The semi-autonomous institutions and/or arrangements that have been used to pool funding in Zimbabwe include the Health Transition Fund (HTF), National AIDS Trust Fund (NATF) and Health Services Fund (HSF). The HTF is an arrangement between the Government of
Zimbabwe and the donor community to mobilize pool and manage funds for health financing,
where earmarking is done externally but there is no earmarking internally. Although the fund
avoids duplication and ‘cherry picking’ of activities by external funders and utilizes existing
systems and structures, it is affected in terms of its reliability and sustainability as some external funders cannot commit funds for the duration of the HTF and as it is threatened by the political and economic environment. The HSF was established in 1996 to supplement the health budget for the maintenance of health services using income from hospital fees, interest earned on bank credit balance and from financial investments, government grants and donations from
development partners, and other fund raising activities. Although the HSF has decentralized
features that enable local participation and flexible decision-making on funds use and is governed by both law and a constitution, and is integrated within the existing systems and structures, it suffers from delays in reporting and lack of harmonization between constitution and law. The NATF is an autonomous national fund managed by NAC, formed in 1999 and financed through an AIDS levy to raise resources to meet increasing demand for HIV prevention, treatment care and support in compensation of declining donor financing. The NATF has been a best practice internationally. Its role in addressing other diseases and services is now being explored, and its functioning could be improved through linking funding with results and strengthening communication of information on its performance to the public.

You can download the full report from the TARSC website here.