• No health financing strategy works in all cases and all systems; they must respond to the specific context and structure of a country’s health system. However, a series of cross-cutting principles can provide a solid foundation and enable a strong PHC financing system. They can guide policymakers and health systems leaders to prioritize funding for PHC, align financial incentives to enable better quality PHC, and improve financial access to PHC.2

    • Allocate enough money to PHC. The magnitude of funding should be consistent with the expected benefit of PHC to society.  There is no global standard for the “right” amount of spending on PHC. Various 6  organizations 7 have estimated 8 the minimum cost of a “basic” or “essential” package of services 9, although these often do not include the value of investing in public health interventions such as health literacy, sanitation, and nutrition. 
    • Incentivize the provision of PHC. Primary health care is a cost-effective way of improving population health, and promoting financial access can enable better equity within the system.  Care provided at the primary level delivers greater value-for-money in terms of population health outcomes than care provided at higher levels10 High-impact PHC services should be appropriately incentivized through budget allocations and health worker payment mechanisms.      
    • Promote efficiency by incentivizing patients and providers to promote provision of PHC in the lowest cost-appropriate setting. In general, care provided at the primary level is less costly than hospital-based care. Funding should be targeted to make quality PHC widely available close to the community.  Demand-side incentives such as tiered provider networks, reference pricing, or voucher schemes [Link to financial access improvement strategy] can incentivize the patient to use specific high-impact providers or products for specific types of services.  Likewise creating a payment mechanism that strengthens primary care providers’ ability to promote care continuity [Link to continuity improvement strategy], care comprehensiveness [Link to comprehensiveness improvement strategy], and care coordination [Link to coordination improvement strategy] through stronger referral norms—or “primary care gatekeeping”—can also promote efficiency.  Even in highly developed health systems, patients may seek basic primary care in expensive hospital settings, such as the emergency room.  Front-line health workers have tremendous influence on how a patient navigates the healthcare system. Some health worker payment mechanisms could incentivize underproviding PHC or unnecessarily referring patients to higher-cost settings, while others encourage low-cost care provision at the primary level.  Financing mechanisms should empower health workers to guide patients to receive the right care in the right setting at the right time. 
    • Align financial incentives for better quality of care.  In conjunction with other service delivery interventions, financial incentives should be aligned to contribute to better PHC quality, and governments can take steps to ensure that there are minimal perverse incentives that might lead to lower service quality.  For example, this would include making payments to health workers and facilities conditional on service readiness or accreditation standards, using data to evaluate different providers on health specific indicators, or trying to move away from paying providers based on service provision (through fee for service) and instead paying providers based on specific health outcomes (such as performance-based payments). 
    • Minimize out-of-pocket payments as a source of financing for PHC. Out-of-pocket payments reduce the use of needed services, especially among the poor.  User fees can negatively impact demand for care 11, contribute to household poverty, and promote general inequities in health access.12
    • Use data to continuously monitor financing and service use. Information recorded during a financial transaction (such as an insurance claim) can give system managers insight into service utilization trends at the community level.  It can be used to monitor how payment methods affect patient outcomes and quality of care, and allow for adjustments to be made if there are detrimental effects. 
    • Ensure that PHC financing is considered as part of a holistic financing strategy. Just as PHC policies, plans, and service delivery should be addressed in the context of the wider health system, PHC financing policy should not be addressed in isolation. Funding and incentives at the PHC level will influence service provision and outcomes at other levels. 
    • Use contracts with private sector providers to improve PHC access and quality assurance. Health financing policy should provide holistic stewardship of both public and private providers.  Contracts with private providers that define the quality standards and payment mechanisms can promote access to PHC and extend the reach of government service provision.

References:

  1. World Health Organization. Monitoring the Building Blocks of Health Systems: a handbook of indicators and their measurement strategies.  Geneva, Switzerland: WHO. 2010.
  2. Joint Learning Network for Universal Health Coverage (JLN). Financing and Payment Models for Primary Health Care: six lessons from JLN country implementation experience. Washington, DC: Results for Development; 2017
  3. Langenbrunner J, Cashin C, O’Dougherty S, editors.  Designing and implementing health care provider payment systems: how-to manuals.  Washington, DC: World Bank. 2009
  4. Friedberg M, Hussey P, Schneider E.  Primary Care: A critical review of the evidence on quality and costs of health care.  Health Affairs. May 2010; 29(5)
  5. Kinner K, Pellegrini C. Expenditures for Public Health: Assessing Historical and Prospective trends.  Am J Public Health. 2009 October; 99(10): 1780–1791 
  6. Özaltın A, Cashin C editor. Costing of Health Services for Provider Payment: A Practical Manual Based on Country Costing Challenges, Trade-offs, and Solutions. Washington, DC: Joint Learning Network for Universal Health Coverage. 2014
  7. Wright J and Holtz J.  Essential Packages of Health Services in 24 Countries: Findings from a Cross-Country Analysis.  Bethesda, MD: Health Finance and Governance Project, Abt Associates. June 2017.
  8. World Health Organization.  Estimation of unit costs for general health services: updated WHO-CHOICE estimates.  Geneva, Switzerland: WHO. July 2011.
  9. McIntyre D, Meheus F. Fiscal space for health spending. London: Chatham House Centre on Global Health Security Working Group Papers, Working Group on Financing, Paper 4; 2013.
  10. Watson SI, Sohota H, Taylor C, et al.  The Cost-Effectiveness of Primary Care Services in Developing Countries: A review of the literature.  Glob Health Res Policy. 2018; 3:17
  11. Newhouse J and the Insurance Experiment Group.  Free for all? Lessons from the RAND Health Insurance Experiment.  Cambridge, MA: Harvard University Press. 1993
  12. World Health Organization.  Out-of-pocket payments, user fees, and catastrophic expenditures. [cited—3 July 2019].  Available at: https://www.who.int/health_financing/topics/financial-protection/out-of-pocket-payments/en/