Cash-flow analysis for the Catastrophic Expenses Fund María-Cristina Gutiérrez-Delgado Economic Analysis Unit, Mexican Ministry of Health Second International Colloquium Dresden, April 2004.
Contents. • Background. • Reform to the Mexican General Health Law. • The Catastrophic Expenses Fund. • Results, conclusions and recommendations. • Next steps.
Background. The Mexican health system. Population groups Salaried workers in Non-salaried workers formal sector in informal sector Poor Middle Functions Private Public class Urban/Rural Stewardship Financing Provision IMSS ISSSTE Private Federal and sector state Social Security departments System of health
Financial characteristics. • 1. Level: insufficient investment (5.8% of GDP) • 2. Source: predominance of out-of-pocket payments (55%) • 3. Distribution – Among populations: 1.7 times between insured and uninsured – Among states: 7 to 1 between the state with the highest expenditure on the insured and the one with the lowest on the uninsured • 4. State contributions: 109 to 1 • 5. Allocation items: payroll expenditure vs. investment Source: Mexican Ministry of Health, 2003.
Distribution of healthcare expenditure. Federal Social Gv´t Uninsured Security 31.8% 31.8% 61.6% 61.6% 6.6% 3% State Gv´t 42% 55% Public Out-of-pocket Pre-paid services Source: Mexican Ministry of Health,2003.
Reform to the General Health Law. System of Social Protection in Health. Aims • Offer financial protection to uninsured through a public healthcare insurance scheme. • Promote a culture of pre-payment among uninsured. • Strengthen a culture of preventive healthcare . • Decrease the number of uninsured families facing poverty because of healthcare costs at point of delivery. Source: Mexican Ministry of Health,2003.
System of Social Protection in Health. Healthcare goods and funds. Goods Funds • Stewardship function Budget of the Federal Public • Information, research & Ministry of Health health human resources goods development Community Health • Community health Services Fund services Personal Health • Essential health Personal health Services Fund interventions services ( Popular Health Catastrophic Expenses • Catastrophic Insurance ) Fund interventions Source: Mexican Ministry of Health,2003.
Structure of Financial Contributions. Universal Health Insurance. Public Insurance Contributors Scheme Federal IMSS (private-sector Private Employee Government salaried employees) employer (social contribution) Federal ISSSTE (public-sector Public Employee government salaried employees) ** employer (social contribution) Popular Health State Federal Federal Insurance, SSPH Family Gov´t Gov ´ t government (informal sector, self- solidarity (social contribution) employed and unemployed) contribution Source: Mexican Ministry of Health,2003. **Proposal for future reform to ISSSTE Law.
Structure of Financial Contributions. SSPH. Social Federal Solidarity State Solidarity Family Contribution Contribution Contribution Contribution According to socioeconomic Contributions to SSPH: USD$675.52 conditions per family during 2004 Operative 89 % USD$601.21 Personal Health Services reserve for drugs USD$ 54.04 Catastrophic Expenses 8 % and medical USD$675.52 material USD$ 20.27 Annual budget reserve 3 % necessary for essential interventions Source: Mexican Ministry of Health,2003.
The Catastrophic Expenses Fund. Aim Purchasing of covered catastrophic expenses. Catastrophic expenses Those derived from the treatment of diseases which pose a financial burden to the SSPH . Coverage of catastrophic expenses will be gradual following criteria defined in the General Health Law. Source: Mexican Ministry of Health,2003.
Diseases or treatments that generate catastrophic expenses. No. Category Category No. 12,8 Cancer Rehabilitation 6 2 Cardio-vascular Neonatal intensive care 8 3 Neuro-vascular Transplants 6 1 HIV/AIDS Dialysis 2 5 Injuries Total 53 The General Health Council is responsible for the identification of diseases, definition of treatments and drugs that generate catastrophic expenses for the SSPH. Source: General Health Council,2003.
Financial cash-flow. Cash in-flow Cash out-flow (income) (expenses) Balance of annual budget reserve at end of tax year Payment to CEF authorized 8% of Federal & providers Covered States (Operative Services contributions expenses) Interest Administrative expenses Source: Mexican Ministry of Health,2003.
Financial sufficiency. How many diseases or treatments can be covered with available resources? • Short and mid-term financial sustainability. • Selection of diseases, based on budgetary resources, cost-effectiveness, infrastructure and national healthcare priorities, is responsibility of the National Commission of Social Protection in Health. Source: Mexican Ministry of Health,2003.
Available information. Set Disease or treatment 1 HIV/AIDS, acute lymphoblastic leukemia, cervix-uterine cancer. 2 Set 1 plus acute myocardial infarctation. 3 Set 2 plus breast cancer. 4 Set 3 plus kidney transplant. 5 Set 4 plus bone marrow transplant. 6 Set 1: 2004; Set 2: 2005; Set 3: 2006; Set 4: 2009; Set 5: 2010.
Available information. Short & mid-term projections. Biometric: Target population; affiliation rates; incidence rates; mortality rates not included. Financial: Minimum daily wage, interest rates; inflation rates. Expenses: Annual number of cases per disease/treatment; annual average cost per case; annual administrative expenses; quarterly payment. Income: Quarterly budget income; interest accrued quarterly; balance of annual budget reserve at end of tax year.
Results under initial assumptions. Paquete 1 Paquete 4 15 15 Acumulado Acumulado Gasto Gasto pesos Miles de millones de pesos 10 10 de millones 5 5 de Miles - - 2004 2005 2006 2007 2008 2009 2010 2004 2005 2006 2007 2008 2009 2010 Año Año Paquete 2 Paquete 5 15 15 Acumulado Acumulado Gasto Gasto pesos Miles de millones de pesos 10 10 de millones 5 5 de Miles - - 2004 2005 2006 2007 2008 2009 2010 2004 2005 2006 2007 2008 2009 2010 Año Año Paquete 3 Paquete 6 15 15 Acumulado Acumulado Gasto Gasto Miles de millones de pesos Miles de millones de pesos 10 10 5 5 - - 2004 2005 2006 2007 2008 2009 2010 2004 2005 2006 2007 2008 2009 2010 Año Año
Results discounting the inflation effect. Paquete 1 Paquete 4 15 15 Acumulado Acumulado Gasto Gasto Miles de millones de pesos Miles de millones de pesos 10 10 5 5 - - 2004 2005 2006 2007 2008 2009 2010 2004 2005 2006 2007 2008 2009 2010 Año Año Paquete 2 Paquete 5 15 15 Acumulado Acumulado Gasto Gasto Miles de millones de pesos Miles de millones de pesos 10 10 5 5 - - 2004 2005 2006 2007 2008 2009 2010 2004 2005 2006 2007 2008 2009 2010 Año Año Paquete 3 Paquete 6 15 15 Acumulado Acumulado Gasto Gasto Miles de millones de pesos Miles de millones de pesos 10 10 5 5 - - 2004 2005 2006 2007 2008 2009 2010 2004 2005 2006 2007 2008 2009 2010 Año Año
Results under decrease of annual average cost per case. Paquete 1 Paquete 4 15 15 Acumulado Acumulado Gasto Gasto Miles de millones de pesos Miles de millones de pesos 10 10 5 5 - - 2004 2005 2006 2007 2008 2009 2010 2004 2005 2006 2007 2008 2009 2010 Año Año Paquete 5 Paquete 2 15 15 Acumulado Acumulado Gasto Gasto Miles de millones de pesos Miles de millones de pesos 10 10 5 5 - - 2004 2005 2006 2007 2008 2009 2010 2004 2005 2006 2007 2008 2009 2010 Año Año Paquete 3 Paquete 6 15 15 Acumulado Acumulado Gasto Gasto Miles de millones de pesos Miles de millones de pesos 10 10 5 5 - - 2004 2005 2006 2007 2008 2009 2010 2004 2005 2006 2007 2008 2009 2010 Año Año
Results under increase of annual average cost per case. Paquete 1 Paquete 4 15 15 Acumulado Acumulado Gasto Gasto s s o o 10 10 s s e e p p e e d d s s e e n n o o l l l l 5 i 5 i m m e e d d s s e e l l i i M M - - 2004 2005 2006 2007 2008 2009 2010 2004 2005 2006 2007 2008 2009 2010 Año Año Paquete 2 Paquete 5 15 15 Acumulado Acumulado Gasto Gasto pesos s o 10 10 s e p de e d millones s e n o l l i 5 m 5 de e d Miles s e l i M - - 2004 2005 2006 2007 2008 2009 2010 2004 2005 2006 2007 2008 2009 2010 Año Año Paquete 3 Paquete 6 15 15 Acumulado Acumulado Gasto Gasto Miles de millones de pesos Miles de millones de pesos 10 10 5 5 - - 2004 2005 2006 2007 2008 2009 2010 2004 2005 2006 2007 2008 2009 2010 Año Año
Conclusions and recommendations. • Key factor for sufficiency is the initial number of diseases or interventions to be covered. • Second most important factor is annual average cost per case. • Ratio between general and medical services inflation rates is very important. • Increases in target population show little impact in cash-flow, but might become important once the “universal coverage” is attained. • Results help recommending to policy-makers starting operations with most conservative set. • Annual evaluation of CEF performance for implementing required adjustments.
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