Health Sector Financing
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Health Sector Financing

Working group objectives:

Develop strategies to reduce inefficiencies and inadequacies in health service provision bearing in mind the country’s limited financial resources.

Discuss public and private sector activities in health sector financing and outline the proposed roles and interaction among these sectors.

Outline approaches for developing the finance component of the health system

Table 3 Health Sector Financing

Issues Recommendations Strategies
How will health services be financed? Decide on policies for an optimal balance between the sources of finance eg. Government contributions , User fees , National Health Insurance , Private insurance , consider co-payments to reduce abuse and continue collaboration between NHI and NIS Assess capital needs and recurrent cost of services

Ascertain the cost of health service. Implement financial reform in the health sector

cost recovery – User charges that reflect the cost of providing public health care

cost containment – tighter controls over budgets and supplies

cost sharing – greater reliance on private and social insurance as well as private institutions .

How should health funds be allocated for the provision of health care services? Identify priority areas for financing

Determine Governments contribution to NHI

Conduct a health needs assessment

Allocate appropriate funds to :

1. Improve primary facilities so as to reduce the burden on Hospitals

2. Management of inefficiencies

NHI- will pay hospital bills and reimburse clients (NHI should not be saddled with excessive debt especially during the early stages of its operation).

How can the Ministry of Health reduce inefficiencies?







Reorganize financing systems


Determine the impact that financing and efficiency measures will have on expectations of improved quality of health service provision.




Increase mechanisms to ensure accountability

Separate service provision from administration

Tie budgets to desired outputs and outcomes

Develop ratios between Health Reform and desired outputs.




Establish review teams which comprise trained professionals to monitor and evaluate the activities of the health institutions


Develop recording systems to monitor expenditure

Allocate finance to cost effective operations


Utilize more sophisticated and accurate Information systems

Institute management structures closer to commercial management


How should health providers and institutions be compensated for services?

Determine appropriate means of compensation for health providers and institution. Capitation – for a stated list of benefits. This method requires a culture of quality and strong regulatory mechanisms.

Fixed or group payments for certain items of health care

Fee for service – This method must be properly controlled

Implement reward systems









What should be the role of the Government of Saint Lucia in the provision of health care services?









The Government of Saint Lucia should clearly define its role in the provision of health care services and that of other major stakeholders financial and otherwise.


Sharing of delivery of health care services and finance between private and public sector

Determine total financial requirements of health care services.


Create policy guidelines which clearly stipulates the roles of all major players in the development and provision of health care services.



How should the finance component of the health system be organized? Encourage collaboration between the public and private sector.




The finance component should address the need for equitable health coverage for the poor and the indigent

Decentralization of health services to health regions in order to provide greater autonomy to manage budgets and operate as statutory institutions

Develop National Health Insurance as the major financial component of the health system for public sector funding

How can we promote wellness as opposed to sickness? Develop a comprehensive health promotion and preventative programme. Increase emphasis on health promotion and preventative health care services-

Include poverty concerns in the financing of preventative services for adults and children eg. user fees at health centers

Inclusion of the wider society in the design, planning and implementation of preventative health care programs eg. Schools and NGO’s.

The relationship between capital and recurrent expenditure The need to examine carefully the relationship between capital expenditure and recurrent cost. Conduct optional appraisals i.e. include capital and recurrent cost implications in all financial estimates and project reports
The escalating cost of health service provision









Government ‘s increasing inability to provide health care services at a standard required by the public.

Develop a financial strategy to fund the health system. This strategy must provide special consideration for vulnerable groups.







Greater private sector involvement


Greater collaboration between public and private sector activities in the provision of health services.

Establish a National Insurance Scheme

Make use of earmarked taxes in the provision of certain services

Institute user fees for the use of government institutions by private health professionals.


Monitor and evaluate expenditure patterns in health institutions

Greater regulation for public and private sector activities eg. fees charged, types of services provided, activities of hospital personnel.

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