Research for stronger health systems during and after crisis

Review of financing of semi-autonomous health institutions in Zimbabwe

Chigumira G, Matsika W, Nyamadzawo J, Chiwunze G (2014) Review of financing of semi-autonomous health institutions in Zimbabwe, ZEPARU for TARSc and MoHCC in the Rebuild programme, Harare

As part of the ReBUILD project ‘Rebuilding the foundations for universal health coverage with equity in Zimbabwe’, this desk study presents evidence on the funds pooled in and paid by semi-autonomous institutions funding health, specifically the Health Transition Fund (HTF), the National AIDS Trust Fund (NATF), Health services Fund (HSF), the Global Fund to fight AIDS, Tuberculosis and Malaria (GFATM), and the Workers Compensation Investment Fund (WCIF). The review presents the revenue sources and trends, how funds are pooled, how the budgets and expenditure relate, the criteria governing allocations and the targets and shares of expenditure.

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

 

Executive Summary

This desk review was conducted as part of the ‘Rebuild’ programme supported by Liverpool School of Tropical Medicine to Training and Research Support Centre (TARSC) and Ministry of Health and Child Care (MoHCC) Zimbabwe. The ReBUILD Programme in Zimbabwe seeks to take forward a programme within the context of the work in Zimbabwe on health financing policy and on Universal Health Coverage (UHC). It aims to implement health systems research, stakeholder dialogue and capacity building of the Zimbabwe health system, that seeks to move from the immediate recovery measures implemented in 2009-2012, towards building the foundation for long term rebuilding of the Universal Health system, as set out in the National Health Strategy (NHS) 2009-2013, taking into account equity in access and coverage.

This report presents evidence on the funds pooled in and paid by semi-autonomous institutions funding health, specifically the Health Transition Fund (HTF), the National AIDS Trust Fund (NATF), Health services Fund (HSF), the Global Fund to fight AIDS, Tuberculosis and Malaria (GFATM), and the Workers Compensation Investment Fund (WCIF). The review presents the revenue sources and trends, how funds are pooled. how the budgets and expenditure relate, the criteria governing allocations and the targets and shares of expenditure.

The HTF is a pooled health fund for external funders, reducing overhead costs and streamlining reporting, operations and administration. This means that funding can be directed towards programme impact, and reduces duplication of efforts by external funders. By the end of 2012, pooled funds were US$ 84.99 million, or 19.52% of the targeted amount of US$ 435.33 million by 2015. Expenditure allocations for HTF are guided by needs and priorities of the MoHCC as articulated in the NHS 2009 – 2013, Programme Documents and Annual Work Plans approved by the HTF steering committee. The expenditure allocations of the HTF fall under four categories namely: medical products, vaccines and technology; planning and financing; maternal, new-born and child health and nutrition; and human resources for health. The category with the highest funding is the medical products, vaccines and technology.

The NATF pools funds collected from the AIDS Levy, a 3% tax on income tax paid by formal employers and employees. The income has grown over the period 2009 to 2012 from US$ 5.1 million in the 1st quarter of 2009 to US$ 32.5 million in the 4th quarter of 2012. The levy is contributed to by 11% of the 5.4 million employed people in Zimbabwe, namely those in formal employment. The remaining 89% of employed people in the informal sector or in non-classifiable employment do not pay the AIDS Levy as there is no mechanism for collecting from them, suggesting an untapped source funding. The mining sector is also exempt from paying the levy. The funds are pooled and cross subsidies applied as the fund is applied nationally to all people in need of intervention around HIV, irrespective of employment status. The interventions are purchased by the National AIDS Council (NAC) and may be implemented by NAC and by other providers, particularly Ministry of Health and Child care, but also non state actors. The expenditure allocations by NAC are guided by predetermined percentages set by the NAC Board, within areas of: planning; prevention; treatment and advocacy.

The HSF income comes predominantly from hospital fees, 100% of which are retained by the health facilities. The full retention of fees at each facility means that there is no cross subsidy across facilities. Other sources of income for the HSF contribute less than 2% of total funds. The dominant expenditure overheads in the HSF includes medical supplies and services, salaries, institutional provisions, maintenance of vehicles and mobile equipment and fuel, oil and lubricants. In 2012 these line items they accounted for almost 66% of total expenditure, whilst salaries accounted for 8.43% of total expenditure. Income and expenditures for the HSF have been increasing over the period 2009 to 2012. A share of the income is not in hard cash, for that share of health service provision funded by medical aid, where the provider has a delay in reimbursement for the service offered that affects the cash flow of the fund. .

The Workers Compensation Investment Fund (WCIF) is a Social Security Scheme, whose main objective is to prevent accidents at the work places and compensate workers who get injured in work related accidents or contract work related diseases.The scheme is fully funded by employers who are obliged to cover all employees regardless of the period of employment, even if employment is for hours. Employees do not contribute anything. Government and employers of domestic workers do not contribute to the scheme, and do not benefit from it. The minimum insurance premium the employer is required to pay is calculated using a risk factor depending on the type of industry the employer is involved in. The scheme is also funded by interest earned from investment projects financed by savings from the WCIF and occupational health and safety. Over the period 2010 and 2011, total funds pooled into the WCIF fell from US$49.15 million in 2010 to US$45.36 million in 2011, mainly due to company closures and the subsequent job losses. The WCIF pooled resources are disbursed to meet medical claims in relation to accidents at the work place or work related illnesses, as well as costs related to transport and provision of artificial appliances. The WCIF uses the Association of Healthcare funders of Zimbabwe rates. The WCIF funds safety training and inspection activities, operating expenses and investments. The fund is underutilized with claims accounting for only 35% and 43% in 2010 and 2011 respectively, possibly due to a lack of knowledge amongst beneficiaries to make claims when is injured at work. This may partly explain the surpluses the fund has had in 2010 and 2011. Operating expenses are also high and more than double the amount spent on claims in 2011. Payments under the WCIF are made direct to beneficiaries/ claims using the warrant system through ZIMPOST, with short term benefits (e.g., periodical payments, lump sum, funeral grant, medical costs) being decentralized to the six Regional Offices. In a separate scheme, the payment of long term benefits is centralized at Head Office, in Harare.

The Global Fund to fight AIDS, Tuberculosis and Malaria (GFATM) is a global not a national fund, but funds activities in Zimbabwe. It is included as a significant source of health care funding, even though it is not the same as other semi-autonomous funds. It is managed by the Global Fund Secretariat in Geneva, which is responsible for managing the global grant portfolio, screening proposals submitted, issuing instructions to disburse money to grant recipients and implementing performance-based funding of grants. Zimbabwe has been a recipient of 17 grants from the Global Fund between 2003 and 2013. These grants had a total signed amount of US$857.65 million, but the total disbursed funds amounted to US$594.87 million. The gap between signed and disbursed funds may be attributed to underutilisation and to lags in the implementation of programs. The funds are channelled through various recipients namely the NAC, Zimbabwe Association of Church related Hospitals (ZACH), the UNDP and the MoHCC, particularly for HIV/AIDS programmes, and less so for malaria and tuberculosis programmes.

It is very difficult to get financial information of these semi-autonomous funds. The paper recommends measures for greater financial transparency for the funds, and areas for follow up information gathering to better understand their operations.