PHOTO CREDIT: LOGAN ABASSI UN/MINUSTAH SUMMARY REPORT Better Spending, Better Care A Look at Haiti’s Health Financing A mid recurrent natural disasters and severe financial hardship Haitians face formida- ble challenges to their health. Maternal and infant mortality rates are 5 and 3 times higher than the regional average. Access to health care is low compared to low-income countries and particularly among the poorest house- holds. Delivery of preventive health services like immu- nizations is below minimum standards. Patients often bypass the public health system for lack of trust, and rely on consultations from traditional healers or simply purchase medication directly from unregulated provid- ers for their medical needs. Haiti faces the challenge of meeting the United Nations’ Sustainable Development Goals on health and improving outcomes for the poor despite declines in external financing for health and relatively low government contributions com- pared to other low-income countries to finance the health sector. In light of this, Haiti’s healthcare system must operate more efficiently, and access to services PHOTO CREDIT : LOGAN ABASSI UN/MINUSTAH must become more equitable and reach vulnerable populations. BETTER SPENDING, BETTER CARE: 2 A LOOK AT HAITI’S HEALTH FINANCING summary report 3 HEALTH OUTCOMES HAVE receive physical examinations that meet minimum stan- IMPROVED IN HAITI BUT BASIC dards, and 3 out of 10 health providers fail to ask pa- SERVICES ARE LACKING tients about pregnancy risk factors. Only 20 percent of medical consultations with pregnant women incorpo- rate preventive care, or dispensing essential nutrition- Since the 1990s, health outcomes for Haitians have al interventions, such as folic acid supplementation. improved considerably. However, measures of equi- Health facilities also score poorly on internal manage- ty and coverage of health and water and sanitation ment processes, possibly explaining the low prepared- services are below many other low-income countries. ness of health staff to deliver care according to clinical While Haitians can now expect to live longer, access guidelines. Many health facilities operate without any to basic health services is still lacking. For example, the data collection system, which makes monitoring, and proportion of mothers who deliver in health facilities evaluation as well as quality supervision problematic. assisted by a skilled birth attendant is almost twice as great (70 percent) in low-income countries compared Average life expectancy at birth has increased to Haiti (37 percent). As well, mothers are far less like- in Haiti but compared to low-income countries, ly to deliver in a health facility if they are in the lowest Haiti spends more on health care relative to what household income quintile (9 percent) than if they are the system produces. This points to inefficiencies in in the highest (76 percent). Only 68 percent of children health expenditure. Haitians can now expect to live under 24 months received all three diphtheria, tetanus, until the age of 63, eight years longer than in 1990. and pertussis vaccine doses, compared to 80 percent This is similar to many low-income countries such as in similar countries. Despite these difficulties, maternal Rwanda, Comoros, and Tanzania, except Haiti outlays and child mortality fell by about half between 1990 almost twice as much to achieve this outcome. In oth- and 2015. However, these two measures of mortali- er words, even though Haiti has scarce resources, it ty remain respectively five and four times higher than could do more. Latin America and Caribbean countries. Based on cur- rent trends, Haiti will not meet the United Nations’ Sustainable Development Goals to reduce the mater- RAISING EFFICIENCY OF HEALTH nal mortality ratio to less than 70 maternal deaths per PROVIDERS TO IMPROVE HEALTH OF 100,000 live births, and the under 5 mortality rate to THE POOR 24 or lower deaths per 1,000 live births by 2030. Lack of service coverage may be partially explained Efficiency has not been the priority given frequent by the fact that, compared with other countries, emergencies. A succession of disasters and political Haiti has low physical access to the primary care instability have had the effect of focusing national pol- level. The country has only 0.3 dispensaries per 10,000 icy and international partners primarily on acute health inhabitants, and there are large variations across the needs and short-term priorities, diverting attention and different departments. This ratio is well below the tar- financing towards ‘firefighting’ and away from long- get set by Haiti’s Ministry of Health and Population term issues like sustainability. Hurricane Matthew of (MSPP), and it is also low relative to other countries. October 2016 is one of the recent illustrations of this Physical access to the second level of primary health situation, in which the state and development partners care, the health center, is better: Haiti has 1.2 health have focused their efforts on urgent needs. The hur- centers per 30,000 inhabitants, which is comparable ricane reportedly killed at least 1,000 people, affect- to other low-income countries. By contrast, the densi- ed 1.4 million Haitians directly, and displaced 175,000 ty of community referral hospitals is very high in Haiti. people inside the country. Post-catastrophe response However, these hospitals are often not adequately has often taken the form of construction or rehabili- equipped for the level of care they are supposed to tation of hospitals without planning for how running provide. costs will be borne after the initial emergency has passed. More than half of all health expenditure is al- Another constraint is the poor quality of care, located towards curative, rather than preventive care, which is considerably worse in preventive clinical even though the top causes of morbidity and disability care services. Only 62 percent of pregnant women could be resolved at the primary care level. BETTER SPENDING, BETTER CARE: 4 A LOOK AT HAITI’S HEALTH FINANCING PHOTO  CREDIT: VICTORIA HAZOU UN/MINUSTAH Cholera and the Importance of Basic Services Relative to other low-income countries and the Latin American and Caribbean region, Haiti performs poorly on water, sanitation and hygiene indicators, which is concerning given the country’s cholera epidemic. Cholera deaths are disproportionately higher in the poor- est households -- 2.4 percent reported death of at least one household member, while only 0.1 percent of the wealthiest reported the same outcome. Members of the poorest households are 24 times more likely to die from cholera than those in the wealthiest households. Haiti reports a comparably high rate of treatment for children with diarrheal disease (58 percent), which is slightly higher than the aver- age for similar countries (50 percent) and just below the Latin American and Caribbean region’s average (59 percent). This indicator also increased considerably since the 2005-6 survey, up from 44 percent (Figure 1). However, 18 percent of children under 5 still die from diarrheal diseases in Haiti. Coverage Rates of Key Preventive and Curative Health Services: Haiti Demographic and FIGURE 1. Health Survey, 1994–2012 30 33 Immunization 41 45 31 Diarrhea 41 treatment 44 58 Institutional 16 17 delivery 22 36 Skilled birth 21 24 attendance 26 37 0 10 20 30 40 50 60 70 Percent of population coverage for each service or treatment 1994-5 2000 2005-6 2012 Sources: Data is drawn from Demographic Health Surveys conducted in the following years: 1994–95, 2000, 2005–06, and 2012. summary report 5 TABLE 1. Technical Efficiency, Haiti and Other LICs Percentage of sample Country Average score1 Sample that is not efficient (<1) 96%, CALs; 0.30, CALs; 0.09, CSLs; 79 CALs, 265 CSLs, Haiti 99%, CSLs; 99%, dispensaries 0.04, dispensaries 342 dispensaries Burkina Faso – 0.86 25 PHC facilities Ethiopia 75% 0.57 60 health posts Ghana 78% 0.88 Random selection of 86 health facilities 71%, but 53% have a score Guatemala 0.78 34 health posts >0.9 Sources: World Bank staff, 2016; Akzali et al. 2008; Sebastian and Lemma 2010; Marshall and Flessa 2011; Hernandez and Sebastian 2013. Note: – = not available; CALs = centres de santé avec lit (health centers with bed); CSLs = centres de santé sans lit (health centers without bed), LICs = low-income countries; PHC = primary health care. FIGURE 2. Human Resources Salary Payment as Share of Government Operating Budget: Haiti and Selected Countries, Various Years 100 80 60 Percent 91 40 65 58 56 53 20 43 31 0 Haiti Honduras Tanzania Ghana Uganda Burkina Faso Benin Source: Adapted from Better Spending, Better Services: a review of public finances in Haiti (2016). The efficiency of health providers is very low, espe- is far greater than in other countries at a similar level cially at the primary care level. Technical efficiency of economic development. In recent years, Burundi, measures assess how well health facility inputs, such Tanzania, and Afghanistan have spent, respectively, 23 as supplies and equipment, are converted into actual percent, 26 percent, and 29 percent of total health ex- health services delivered. Haiti’s health facilities score penditure on hospitals. Further, the greater proportion very low on this measure in comparison with other of expenditure in Haiti’s hospital sector does not al- low-income countries. Dispensaries, the main provider ways translate to greater volume in service delivery. In of primary health care, are the most inefficient type of fact, only 23 percent of hospitals in Haiti score satis- health facility in Haiti, with an average technical effi- factorily on measures of efficiency. Low efficiency can ciency score of 0.04 (table 1)1. Efficiency is also low in be traced to a number of issues. Although the pro- all other mid-sized health facilities and hospitals. portion of hospital expenditures seems to be higher in absolute terms, the funds available for hospitals are As much as 38 percent of total health expenditure very low. Other countries like the Dominican Republic in Haiti is spent in the hospital sector. This proportion have a higher level of hospital spending than in Haiti. 1 The technical efficiency score ranges from 0 to 1. A score of 1 means that the health facility is on the efficiency frontier and so is efficient. A score below 1 demonstrates poor performance, especially if the score is close to zero. BETTER SPENDING, BETTER CARE: 6 A LOOK AT HAITI’S HEALTH FINANCING Experts, however, find fault with this approach as low poor. The fact that the Ministère de la Santé Publique investments in primary care and prevention lead to ex- et de la Population (MSPP) allocates 90 percent of its cessive use of emergency services and direct consulta- operating budget to personnel costs (Figure 2) means tions with specialists on health problems that can be that operational budgets are too tight to ensure an ad- addressed at the primary level. The country is under- equate supply of all the other inputs required. going reforms to relieve congestion in major hospitals and help reduce costs at the national level. CHANGING THE HEALTH FINANCING Low staff productivity and low service readiness in MODEL TO SAVE LIVES health facilities are two key factors that lead to in- efficiency. For example, the volume of patient con- sultations by health staff is quite low, and individual After the 2010 earthquake, a large share of exter- health personnel only provide an average of six con- nal emergency funding emphasized strengthening sultations a day, or less than one patient per hour. infrastructure through the construction and reha- Productivity is also negatively influenced by moonlight- bilitation of hospitals, yet the operating costs for ing (when publicly employed health staff provide ser- many of these facilities are not sustainable. In the vices to patients in the private sector during off-hours), immediate aftermath of the earthquake, several capital limited service readiness and high staff absenteeism, investments in infrastructure were funded by develop- which on its own contributes to the waste of esti- ment partners in the form of donations to the MSPP. mated $3 million dollars per year. Service readiness is The necessary operational costs that followed these low overall; only 32 percent of health facilities provide capital investments have proved to be unaffordable, essential medicines and only 31 percent possess ba- posing further funding challenges for the health sector. sic medical equipment. Additionally, a study of health facilities in three departments shows that health staff Haiti is reliant on the substantial flow of human- in primary health care facilities often only work half- itarian aid that climbed sharply following the time (4 hours a day) despite receiving a full-time sal- 2010 earthquake. Over time, external financing has ary.2 Productivity is also lowered by declines in patient also been very volatile. After surging in the wake of flow into health facilities as a result of financial barriers; the devastating 2010 earthquake, it sharply declined, these factors greatly reduce access to services for the with the health sector being among the most affected FIGURE 3. External Financing as Share of Total Health Expenditure: Haiti, LICs, and LAC Region, 2003–14 100 90 80 70 Percent of THE 60 50 40 30 20 10 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Haiti Low-Income Countries Latin American and Caribbean Region Source: GHED 2016. Note: LAC = Latin America and the Caribbean; LICs = low-income countries; THE = total health expenditure. 2 However, it is important to note that the highest paid physicians in public institutions receive a salary of between 30,000 and 40,000 gourdes (approximately between $500 and $650 dollars). Assuming the doctor works full time, or 40 hours per week, this comes to about $3 dollars per hour. summary report 7 FIGURE 4. Finance Source as Share of Total Health Expenditure: Haiti, 1995–2014 70 60 50 40 Percent 30 20 10 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 General government expenditure on health Out-of-Pocket expenditure Nonprofit institutions serving households (e.g. NGOs) Private insurance Source: World Health Organization, Global Health Expenditure Database: http://apps.who.int/nha/database. Government Health Expenditure as Share of General Government Expenditure: Haiti and LAC FIGURE 5. Region, 2000–2014 18 16.0 16.6 16 14.7 13.4 13.1 14 12.8 12.1 12.4 13.1 12.9 12.8 13.2 12.0 11.9 12.2 12.5 12 12.3 11.8 Percent 10 11.7 11.8 12.6 8 9.2 9.5 6.2 6.1 6.1 8.2 5.5 5.5 6 3.4 4 2 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Haiti Latin American and Caribbean Region Source: GHED 2016. Note: LAC = Latin America and the Caribbean. (Figure 3). Government spending has not made up for been in a downward trend. Domestic financing the decrease in development assistance for health, and as a share of total health spending has been steadi- instead, has actually dropped significantly. ly decreasing since the 1990s -- public funding is the smallest source of financing for the health sector af- Even though external aid is a big part of total health ter private insurance. In 2004, it represented 36 per- expenditure, donor coordination is low. Since Haiti cent of total health expenditure and fell to 21 percent does not have a strong coordination mecha­ nism in in 2015 (Figure 4). Between 2000 and 2005, Haiti’s place and 90 percent of external funding is off-budget, health sector received domestic allocations of 14 per- it has been difficult to track, monitor and plan how cent on average. This was similar to the average for these resources are applied to the health sector. This the LAC region (Figure 5). However, in 2014 domestic means funding has not been maximized for long-last- allocations were only 6 percent, which is only half the ing and positive impacts. average proportion that other low-income countries spend on health. Since then, the percentage of total The high proportion of external aid for health has government expenditure going to health has contin- also crowded-out domestic financing, which has ued to fall, reaching 4.4 percent in the latest 2016-17 BETTER SPENDING, BETTER CARE: 8 A LOOK AT HAITI’S HEALTH FINANCING Share of Government Expenditure FIGURE 6. FIGURE 7.Government Expenditure on Health Per Towards Health: Haiti, Low-Income Countries and Capita: Haiti, Low-Income Countries, and Latin Latin American and Caribbean Region, 2014 American and Caribbean Region, 2014 16 400 336 14 13 350 Per capita Expenditure 12 300 (current US$) 10 10 250 Percent 8 200 6 6 150 4 100 2 50 15 13 0 0 Haiti Low-Income Latin American and Haiti Low-Income Latin American and Countries Caribbean Region Countries Caribbean Region Source: World Health Organization, Global Health Expenditure Database: Source: World Health Organization, Global Health Expenditure Database: http://apps.who.int/nha/database. http://apps.who.int/nha/database. budget. Government health expenditure as a percent- clinic or after hospitalization. Out-of-pocket pay- age of GDP has been hovering at 1–2 percent and is ments have been rising; in fact, they have near- currently below that of the average low-income coun- ly reached pre-earthquake levels, which represented try. The budget also shows that government health about 35 percent of total health expenditure. The in- expenditure per capita in Haiti is $13 dollars, which cidence of catastrophic health expenditures has also is lower than the low-income country average of $15 increased, and vulnerable populations, such as the dollars. This indicator is much lower than the average unemployed, the retired, and households with more for neighboring countries like the Dominican Republic than three children under 5 are the most affected. ($180 dollars) or Cuba ($781 dollars) and the Latin Households visiting a private clinic are almost three American and Caribbean region, which has a public times more likely to encounter catastrophic health expenditure of $336 dollars per capita (Figure 7). costs. Those seeking care from a traditional healer are also twice as likely to face catastrophic health expenses as households treated at a public dispensary or health EQUITABLE ACCESS MEANS center. This is concerning, because households from PRIORITIZING PRIMARY HEALTH the lowest wealth quintile consult traditional healers CARE more often than households from the highest wealth quintile. Yet, traditional healers’ performance is neither regulated nor monitored and could pose a health risk Financial and geographical access are the key ob- for the poor. stacles to healthcare in Haiti. Almost all health facil- ities (93 percent) charge user fees, which burdens the In countries where basic services are lacking (such poorest populations the greatest. Nearly two-thirds (63 as Haiti), universal health coverage can only be percent) of households in the lowest wealth quintile achieved by prioritizing primary health care in the decide against consulting a health provider because long-term. This includes extending access for the they cannot afford it. In 2012, transportation was the most vulnerable and poorest populations to essen- second most common factor, after finance, that pre- tial health services. With more than half of the pop- vented women aged 15–49 from accessing health ser- ulation living on less than $1.90 dollars per day and vices (Figure 8). more than 30 percent unemployment, Haitians face severe access barriers and vulnerability to catastroph- Patients in need of treatment face high costs and ic health expenditure. Without access to high quali- often incur significant debt after visiting a private ty health services and universal financial protection, summary report 9 FIGURE 8. Reported Obstacles to Access to Health Care Services, by Wealth Quintile: Haiti, 2005–06 and 2012 a. 2005–06 b. 2012 19 21 24 43 60 Highest 76 11 9 24 31 15 24 79 Fourth 57 16 8 29 17 44 31 83 Middle 77 17 9 37 20 61 44 89 Second 83 21 9 40 26 72 61 92 Lowest 86 22 10 28 32 43 74 78 Total 90 17 11 0 20 40 60 80 100 0 20 40 60 80 100 Percent of respondents Percent of respondents Not willing to go alone Distance to health provider Not having money for treatment Not having permission to go for treatment Sources: DHS 2005–06, 2012. Percentages shown do not add up to 100%, as respondents may have cited multiple obstacles . FIGURE 9. Annual Trends in GDP, 2013–15, and Forecasts: Haiti, 2016–18 5 14 12.3 Percent change in the real GDP 12 4 Percent rate of inflation 10.7 10 7.5 3 8.6 8 6.8 2 6 3.9 4 1 4.2 2.8 1.7 0.9 1.9 1.7 2 0 2013 2014 2015 2016f 2017f 2018f 0 Real GDP Inflation (average) Sources: Ministry of Economy and Finance, Bank of the Republic of Haiti, and World Bank staff calculations. patients are forced to choose between impoverish- to establish national and public health insurance sys- ment due to out-of-pocket expenses and forgoing ac- tems. Currently, no government policy exists to pro- cess to health services altogether. Still, as 93 percent of tect vulnerable populations from health-related finan- workers in Haiti are in the informal sector, it is difficult cial losses. BETTER SPENDING, BETTER CARE: 10 A LOOK AT HAITI’S HEALTH FINANCING THE WAY FORWARD FOR HEALTH IN HAITI Economic projections indicate that economic Resources should be realigned based on the Plan growth in Haiti will likely remain low. This makes it Directeur, which needs to be costed and prioritized. even more important to use existing resources efficient- Currently, funding allocations made at the departmental ly, and the seven strategic shifts described below aim to level in Haiti are based on historically set values, instead facilitate progress towards this goal. Reduction in GDP of being tailored to population need. The MSPP should growth is affecting domestic revenues and shrinking adjust the resource allocation formula so it is driven by the government budget across the board - the health the priorities that would be set in the Plan Directeur, budget is no exception. In addition, there is an urgent and by the health and socioeconomic needs of the poor, need to increase donor coordination with a focus on relevant health system characteristics, updated data on the poorest populations. At the same time, the MSPP disease burden, and the population covered. To guar- should continue to work to increase domestic financing antee service delivery to the population, health facilities for health and affordability for the poor. That requires must posses the necessary resources (staff, inputs, etc.). prioritizing primary health care through better-target- ed spending and staffing. Stronger sector coordination The MSPP should lead this resource re-orientation would enhance service delivery and quality across the exercise with the support of development part- board. Ultimately, the most vulnerable populations in ners. Strengthening the delivery of primary health care Haiti are best served by the strategic planning, alloca- will maximize the potential impact of preventive health tion, and implementation of health financing. This fi- services and reduce the leading causes of morbidity in nancing must be applied towards a well defined set of Haiti. Currently, only 19 percent of health expenditure essential health services to be delivered through health is directed towards preventive care while 54 percent facilities with a high capacity for translating health ser- goes to curative care. This shift of resources from hos- vice inputs into the delivery of quality, accessible and pitals to the primary care level should be data-driven affordable health services. This will make the health and guided by a long-term strategy (see shift 2). system more equitable and more efficient, with higher patient flows into previously underused facilities, and improved public health outcomes, which will save lives. 2. Increase equitable access to quality care. Update and implement a facility mapping The seven strategic shifts that Haiti could prioritize tool by reclassifying health facilities to to accelerate its progress towards universal health enhance service readiness and acilitate coverage are: the development of a functioning referral network. 1. Prioritize primary health care. Realign re- The MSPP should develop a facility mapping tool sources from hospital to primary and com- to i) identify existing public and private facilities; munity health care and cost and prioritize ii) establish their service readiness (mostly in terms the existing Plan Directeur (Health Master of staff and inputs); and iii) map population cov- Plan). erage of each facility. The first step is to build on the “carte sanitaire” already completed under the Service To achieve better health outcomes with the re- Provision Assessment survey, which was a census of all sources available, government and development health facilities in Haiti. This information can be used partners should spend more on primary health to map the services that are actually being delivered care by shifting resources away from hospitals. In in each facility. The findings of such a mapping tool view of Haiti’s double burden of disease -- the coex- will identify service gaps or redundancies and trigger istence of communicable and non-communicable dis- a re-categorization of certain facilities. However, it eases as the main causes of death -- health prevention does not necessarily mean building new dispensaries. and promotion interventions would yield the highest Taking into consideration the investment priorities that rate of return on investments as they address both would be defined in the Plan Directeur (see shift 1), types of diseases. certain inefficient community referral hospitals could summary report 11 that aligns with the Essential Services Package, Service  Readiness in Haiti MSPP should consider putting a temporary mor- Haiti has far less infrastructure and equipment than other atorium on new hospital construction. The still low-income countries, significantly weakening service readi- ongoing externally-financed wave of hospital con- ness and quality. Only 32 percent have essential medicines, struction was not accompanied by plans to sus- and 31 percent have basic medical equipment. The availabili- tain operational costs and maintain service delivery. ty of electricity, water, and bathrooms is far lower in Haiti (31 Consequently, hospitals are currently lacking funds, percent) than in Kenya (86 percent) and Uganda (64 percent). while the MSPP has not provided enough financing Similarly, availability of basic medical equipment in Haiti (49 to meet rising operational costs, affecting the ca- percent) is about half of that observed in Kenya and Uganda. There is almost no budget to pay for drugs and running costs pacity to ensure staff recruitment, training and pro- at the health facility level, given that the MSPP assigns 90 per- vision of medical equipment and commodities. In cent of its operating budget to staffing costs. To address these the short term, no new hospital should be built un- challenges, the MSPP needs to map existing facilities (carte less it responds to urgent functional or geograph- sanitaire) then systematically confirm they meet minimum cri- ical needs that will remain beyond the emergency teria for service readiness. If the criteria are not fulfilled, a li- period. censing agency managed either by the MSPP or outsourced to a third party should downgrade or close the facilities. Addressing the issue of sustainability requires an urgent effort from the MSPP and partners to: be transformed into health centers. As health centers, 1. Suspend further hospital construction; these facilities will have increased operational expendi- tures and will provide primary health care and health 2. Consolidate existing hospital infrastructure promotive services. In other cases, facilities might be (based on the prioritization and costing of converted into primary health care units, upgraded to the Plan Directeur, and the findings of the hospitals, or given special attention to ensure service mapping exercise; see shift 1 and 2 above); readiness. Merged facilities would be better equipped with drugs and medical equipment. 3. Set up a licensing policy (i.e. define param- eters with which hospitals can be built or The re-categorization of facilities should be aligned expanded); with the definition of a coherent and effective re- ferral system. Strategies to cope with the potential 4. Improve hospital performance decrease to access resulting from the re-categorization and sustainability. of institutions should be considered, such as develop- ing systems to provide subsidized transportation op- Donors need to be involved in the process of spend- tions to hospitals for patients. In this process, it is crit- ing more wisely on hospitals. The MSPP should en- ical to agree on a minimum package of services that courage development partners to fund technical as- will be financed and provided at the primary level. sistance for developing business plans and improving hospital management to strengthen the financial sus- tainability of hospital acquisitions or programs by the 3. Spend more wisely on hospitals. Place a government. moratorium on the construction of new hospitals until existing hospitals can be To achieve better use of external funding, the gov- mapped and a new hospital licensing pro- ernment can take a bigger role in guiding donors gram guided by the Essential Service Pack- on what they need to invest in, and ensuring coor- age is established. Development partners dination of financing and interventions. One means should also finance technical assistance of ensuring this function is to assess and strengthen to support the financial sustainability of existing cooperation mechanisms. This could include hospitals. strengthening the Study and Programming Unit (l’Unité d’Etude et de Programmation, UEP), and in particular, Pending the development of a facility map- its external cooperation service in charge of coordinat- ping exercise and a hospital licensing program ing donors. BETTER SPENDING, BETTER CARE: 12 A LOOK AT HAITI’S HEALTH FINANCING 4. Improve technical efficiency at PHC level. The  Role of Technical Assistance in Value-for-money in service delivery should Improving Hospital Efficiency be increased, especially at the first level of care. Compared with other low-income countries, Haiti fares poorly in hospital efficiency, despite 38 percent of its total health ex- As facilities are re-categorized and distribution of ba- penditure being spent at this level. Development of a hospital sic equipment and medicines improves (see shifts 1 licensing policy and further work to improve hospital perfor- and 2), it is vital to improve technical efficiency. As mance are needed. Only 23 percent of hospitals in Haiti are effi- shown before, primary care level facilities in Haiti are less cient in terms of bed occupancy rate, average length of stay and efficient than in other low–income countries. Low pro- unit cost per bed day -- three measures for efficiency of hospital care. Dealing with this issue will require an urgent effort to set ductivity is found in health facilities across all categories. up a licensing policy, impede further hospital construction, con- Dispensaries, and health centers with and without beds solidate existing hospital infrastructure, map out needed hospi- are already known to be especially inefficient. Dispensaries tals, and ensure that hospital services are provided in selected are essential for the provision of primary care in Haiti, institutions where the required quantity of care can be obtained representing 4 in 10 health facilities, yet they score very while improving quality. It is also crucial to explore how hospi- poorly on several key service readiness indicators: mini- tal management can be improved. A line of technical assistance mum personnel, basic infrastructure, basic equipment, will be needed to implement these important reforms. and drugs. Dispensaries are less likely than other facility types to be fully equipped with the necessary medicines (13 percent), equipment (54 percent), and infrastructure human resource management practices are also im- (7 percent), and patient volumes are extremely low. portant ingredients of the results-based financing mod- el. Poor working conditions lead to low satisfaction Increasing value-for-money will require increas- and productivity by medical staff. Increasing non-sala- ing patient flow and human resources reform. Less ry operational budgets would improve service readiness than one percent of dispensaries are efficient in terms and overall performance of health workers. A survey of the number of patient visits for a given number of of medical staff and health managers in three depart- staff. In fact, only one of every 342 dispensaries oper- ments finds that inadequate supply of medicines and ates efficiently, in terms of capacity for providing the equipment, and limited opportunities for job growth number of visits expected considering its available staff are key factors in poor motivation and performance. resources. Absenteeism, moonlighting and slow de- One way to free up resources for medicines, equipment mand by the poor contribute to low productivity, and and medical supplies is to address the large number of in turn further depress patient numbers. Facilities are administrative staff on payroll. For example, 87 percent not properly classified and referral networks are not of the operational budget at the University Hospital in place (see shift 2), which impedes improvements to of the State of Haiti is allocated towards staff payroll, efficiency. It is however crucial to ensure financial and which is high based on international benchmarks. In geographical access to services to encourage service public facilities, administrative staff represent nearly half utilization (and thus higher productivity). of the workforce, which is also high in comparison to other low-income countries. Decentralization of human One way to strengthen accountability and increase resources would make health facilities more account- productivity is to link the funding of health person- able, limit absenteeism and raise productivity. nel and institutions to results. The MSPP just began implementing results-based financing in 10 percent The availability of medicines could also be im- of primary care facilities and will start to pay provid- proved by revamping supply chain management. ers based on the coverage and quality of care. The re- Considerable savings could result from enhancing the sults-based financing model was implemented in March coordination of the distribution network and focusing 2016 in 80 primary level health facilities, of which 50 on last-mile distribution, potentially by outsourcing to are sponsored by the World Bank and 30 by the United local transport companies, which has been success- States Agency for International Development (USAID). fully piloted in Haiti. Lack of proper storage manage- The 80 facilities include dispensaries, health centers, ment and information systems affects the availability and community referral hospitals. Decentralization of of medicines at the facility level. Sometimes, subsidized key human resource decisions and improvements to products are syphoned off at the regional depots and summary report 13 PHOTO CREDIT : SOPHIA PARIS UN/MINUSTAH Health  Financing in Haiti Over Time Total health expenditure has increased over the past 20 years driven mainly by external financing to NGOs while the government has played an increasingly marginal role in financing the sector. The increase in external financing has changed the structural composition of health spending. In 1995, households were the main financiers of the health system through out-of-pocket payments (46 percent), followed by the government (41 percent) and then NGOs (13 percent). Since then, the proportion contributed by the government has decreased substantially down to 21 percent in 2014. In the same year, out-of-pocket payments contributed 35 percent of total health expenditure while NGOs and other private institutions serving households represented 44 percent (Figure 4). In the past, Haiti’s health sector received domestic allocations of between 9 and 14 percent of the national budget. Between 2000 and 2005 government health expenditure as a percentage of the general government budget was 14 percent on average. During the years between 2006 and 2010 the same indicator was 9 percent. Due primarily to donor funding displacement in the post-earthquake period, the national budget allocations to health in 2012 were dramatically reduced to 3.4 percent (Figure 5). In Haiti, government expenditure on health represented just 6.1 percent of total government expenditure in 2014, well below the Abuja declaration recommended allo- cation of 15 percent. The drop in external financing raises issues of sustainability of investment programs. From the highest levels in 2012–13 to 2014–15, the off-budget external financing has declined by 25 times and the on-budget external financing by five times, representing a massive loss for the health system. Public treasury funds have also decreased but at a slower pace, while the operating budget has increased slightly but not enough to compensate for the sharp drop in external funding. A large portion of external resources is currently used to finance operating costs such as vaccines, the health workforce, and medical products. With the withdrawal of external funding, the Haitian gov- ernment needs to start paying recurrent expenses to ensure the maintenance of capital investment and the functioning of the health system. Large financing gaps for recurrent costs are emerging, and they are likely to continue. Faced with lack of a system for tracking donor resources and how they are used and with limited public financing, the government may not be able to plan and take over the costs of maintenance and operation. BETTER SPENDING, BETTER CARE: 14 A LOOK AT HAITI’S HEALTH FINANCING sold to private sector pharmacies that then resell the would make transition plans to match health system products. Subsidized products end up in the hands of needs with available resources. Development partners private providers, instead of being distributed at a sub- should be required to register with the unit. This will al- sidized price or free of charge by a public facility. As low the building and management of a national data- a result of stock-outs, public health facilities purchase base of cooperation projects, making planning processes medicines from the private sector that are normally easier for the government. Although the coordination subsidized but are sold at market prices. unit is only part of the solution, it will contribute to tack- ling the current situation where external financing has, Departments with the poorer technical efficiency on one hand, fueled unsustainable hospital construction data should immediately be prioritized for techni- and, on the other hand, is “emergency aid” which is vol- cal and financial support by the MSPP and its part- atile in nature and not necessarily what Haiti needs given ners. Hospitals managed by non-government organi- its burden of diseases and existing health infrastructure. zations (NGOs) are more efficient than public hospitals. Private for-profit hospitals are the lowest-performing Haiti should build on existing examples of donor entities and they also spend more than facilities man- harmonization under specific programs and expand aged by the MSPP and NGOs. Further studies should their scope to harmonize the most important exter- be conducted to better understand why NGO man- nal sources of finance in the health sector. For ex- aged hospitals perform better and what can be learned ample, the MSPP has led the development of a nation- from them. The MSPP needs to engage with these pri- al manual for results-based financing which aligns key vate entities and include them in the proposed facility/ donors such as the World Bank, USAID, and the Global hospital licensing program (see shift 3). Fund (starting in 2016) around an outcomes-driven purchasing mechanism for primary care. Although the project is a good example of donor alignment, a weak- 5. Better use of external funding. Haiti should ness is that it is still 100 percent donor-financed. have an adequately staffed and well-func- tioning donor coordination unit that con- Key donors should agree with the MSPP on a pro- ducts donor tracking and transition planning. gram to strengthen public financial management practices. In the medium term, targeting the depart- The MSSP should establish an adequately staffed mental and local level would greatly increase the efficien- and well-functioning donor coordination unit to en- cy of public spending by improving budget planning and sure adherence to the MSPP’s costed and prioritized reporting, fostering a better allocation of resources and Plan Directeur (shift 1). The role of the unit would be predictability. Also, it would have an impact on reduc- to align all partners under a single plan to reduce in- ing potential intergovernmental leakages. In the short efficiencies related to the fragmentation of external fi- term, harmonized procedures and agreements among nancing and increase complementarity and continuity of partners on levels of per-diems and salaries could cut interventions. Almost half of total health expenditure is transaction costs. To this end, the Ministry of Health and externally financed, typically off-budget, and channeled development partners should draft and sign a memoran- through hundreds of implementers. Still, there is no es- dum of understanding to identify minimum standards tablished and regular mechanism for donors and the for emergency financing - including requirements that MSPP to discuss and coordinate technical and financial capital investments, such as construction of hospitals, contributions, which both undermines the MSPP’s stew- are supported by plans long-term financial sustainability. ardship role and generates inefficiencies. To maximize the full potential of combined financial contributions to health in Haiti, this issue must be addressed. One op- 6. Increase resources for health. Leverage tion is to strengthen the external cooperation service of greater health financing overall by increas- the Study and Programming Unit (l’Unité d’Etude et de ing public health expenditure through bet- Programmation, UEP), which is responsible for coordi- ter tax collection and more sustainable ex- nating donors. ternal financing. As many donors are reducing financing or withdraw- Haiti should leverage greater overall health fi- ing, a properly functioning donor coordination unit nancing, especially through domestic sources. summary report 15 Despite pressing health care needs, Haiti has seen a less and less frequent. It is therefore urgent that the sharp drop in government expenditure on the sector government begin to allocate some of its own funds over the last two decades with a consequent increase to the vaccines to avoid any drop or interruption in in donor-dependency. However, donor financing is vaccine supply. Similar arguments apply to other in- itself decreasing and thus, the government urgent- puts and health services considered essential by the ly needs to plan for increasing domestic funding for government. health to avoid a spike in out-of-pocket expenditures. Increasing public spending on health may require a broad increase in domestic resource mobilization or 7. Increase the affordability of health ser- specifically for the health sector. One way of achiev- vices for the poorest people. The feasibility ing the latter is by introducing earmarked taxes for of removing user fees for selected services health. Together with expanded domestic resourc- or target populations – children under 5 es for heath, Haiti should also work towards more and pregnant women, especially in rural sustainable external financing in line with the Plan areas – should be assessed. Directeur. The feasibility of removing user fees for select- Haiti raises little tax revenue given its economic ed services including maternal and child health status and there is scope to raise more. Sin taxes should be assessed, especially in rural areas. User on alcohol and tobacco present an interesting option fees negatively affects not only equity in access but for sourcing funds for the health sector while discour- also efficiency of health facilities and ultimately health aging consumption. Haiti has no tax on tobacco and outcomes. Almost all health facilities charge user the tax rate is 4 percent for locally produced spirits fees to bridge the gap in funding and consequent- and 16 percent for imported alcohol. On average, tax- ly, catastrophic health and out-of-pocket expendi- es account for 31 percent of the retail price of ciga- tures are both increasing. In 2013, almost one quar- rettes in low-income countries and 47 percent in the ter of households reported not consulting a provider Latin American and the Caribbean region so there is when sick, and among those, 49 percent could not scope for imposing taxes on these products in Haiti. afford care. Because of the high poverty rate in Haiti, An estimated minimum of $8.2 million dollars per any amount of user fees, even very low ones can de- year could be generated by applying a 25 percent al- ter the poor from seeking care. A larger proportion cohol tax and earmarking the additional tax revenue of publicly managed facilities charge user fees com- to health. The proceeds from such a tax would repre- pared to those run by NGOs. Although dispensaries sent an increase of almost 11 percent in government are thought to be pro-poor because they are in ru- health spending, or $0.76 dollars per capita. Since the ral areas – where the majority of the population is health sector incurs a disproportionate cost compared poor – they receive a higher proportion of wealthy to other sector, for the consumption of these goods, beneficiaries (22 percent belong to the highest quin- earmarking of tax revenues to the health sector can be tile) than poorer ones (18 percent belongs to the low- justified. Developing dedicated taxes for health raises est quintile). Following the removal of user fees for technical and political issues that warrant a thorough maternal and child health services in several facilities assessment. in Grand’Anse, patient attendance levels were 200 percent greater than with the existing cost-sharing In addition to increasing domestic financing for schemes. However, since currently user fees are an health, Haiti should also ensure optimal alloca- important part of health facilities operating budget, tion and use of resources to target key health pri- their removal needs to be carefully assessed, so that orities and make full use of donor funding for es- it will not affect the availability or worsen further the sential health inputs, such as vaccines. Vaccines quality of services provided. in Haiti have been fully funded by donors for some time. Haiti differs in this respect from most other Mechanisms to increase affordability to health ser- low-income countries, which generally contribute vices for the poorest should be pursued. These in- to financing the purchase of vaccines from their do- clude a transportation voucher program or the revival mestic resources. However, full funding from donors of the equity fund at the facility level to protect the for vaccines without any government co-financing is poorest from direct and indirect costs of health care. BETTER SPENDING, BETTER CARE: 16 A LOOK AT HAITI’S HEALTH FINANCING Mobile clinics and services provided by community diaspora and religious organizations should also be health workers are mostly used by the poor and should examined. Pooling of these resources could allow the be strengthen. As discussed in shift 1, more resources purchase of medical equipment and basic health prod- should be allocated to expand and strengthen com- ucts. In addition, other cost savings could come from munity care. nationally-pooled procurement of medical equipment and commodities. Ultimately, all the resources and cost New revenue streams for hospitals should be ex- savings should help finance more affordable services plored. Alternative sources of revenue for the health for the poorest population to increase the health of all system from high wealth individuals, the Haitian Haitians. summary report 17 Notes BETTER SPENDING, BETTER CARE: 18 A LOOK AT HAITI’S HEALTH FINANCING Notes 19