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Wednesday, November 13, 2024

What You Need to Know about Health Financing

We can never downplay the fact that health financing is a vital enabler of Universal Health Coverage (UHC). And this is partly because it ensures people access the universal coverage for health services, they need without making do with financial hardships.

Luckily enough, there are many different ways to flow funds through the health care system as depicted by 1FSS. Despite this, all systems have four basic elements. This simple guide will examine some of the most popular ones. Read on below to find out more!

Financing and Revenue Sources

Financing and revenue sources occur when funds are gathered from people to pay for healthcare needs. This can happen at scale through government contributions, taxes, social insurance contributions, and private insurance, to mention a few. It also entails out-of-pocket payment by individuals paying directly when they need treatment.

Risk Pooling

You’d may be surprised to learn that funds gathered at scale can be pooled together in a manner allowing them to be leveraged more efficiently and effectively. What this simply means is that the risks of needing healthcare are shared among a larger group of help. That’s what you need to keep your healthcare costs low.

Keep in mind risk pooling is possible through a single fund for a whole health system, regional funds for sub-national systems, or even multiple funds for specific population groups. No wonder you should consider trying it.

Provider Payment Models

Providers have to be paid for the health care services they offer. This is made possible through different models, including capitation, block funding, line-item funding, case-based payments, fee-for-service, or even a mix of some or all. It can entail incentives to bolster performance or conditional on reaching pre-agreed outcomes.

Strategic Purchasing

We can’t sign off without mentioning pooled funds are used to purchase healthcare services for a group. This can be done directly by the government or through private insurance companies. It includes making contracts with healthcare service providers, and making sure that quality standards are met with minimal effort.

The Bottom Line

By now you already know that there are many different ways to attain Universal Health Cover. However, all require a mix of financing mechanism. The most popular way to finance health care is through a mix of public and private sources. Be sure to find the ideal financing option for your healthcare needs.

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