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Chapter Six
An Introduction to
Health Systems
Learning Objectives
• Describe the main functions of a health system
• Review how health systems are organized
• Discuss selected examples of health systems
• Outline key health system issues and how they
might be addressed
• Note the main features of universal health
coverage (UHC) and measures countries can
take to achieve UHC over time
What is a Health System?
“The sum of organizations, institutions, and
resources whose primary purpose is to improve
—World Health Organization
What is a Health System?
• The agencies that plan, fund, and regulate health
• The money that finances health care
• Those who provide preventive health services
• Those who provide clinical services
• Those who provide rehabilitative services
• Those who provide specialized inputs, such as the
education of the healthcare profession
The Functions of a Health System
The World Health Report 2000 suggests that
there are three goals for every health system:
1. Good health
2. Responsiveness to the expectations of the
3. Fairness of financial contribution
The Functions of a Health System
The World Health Report 2000 suggests that
health systems have four functions:
1. Provide health services
2. Generate resources: raise money that can be
spent on health
3. Financing: pay for health services
4. Stewardship: govern and regulate the health
The Functions of a Health System
Used with permission from World Health Organization (WHO). (2007). Everybody’s business: Strengthening health systems to improve health outcomes: WHO’s
framework for action. Geneva, Switzerland: Author.
How are Health Services Organized?
Categorizing Health Services
Data from Birn, A.-E., Pillay, Y., & Holtz, T. H. (2009). Textbook of international health. New York, NY: Oxford University Press.
How are Health Services Organized?
Categorizing Health Services
• Most low-income countries have fragmented
health systems that include both public and
private providers
• Many middle-income countries have a system
organized around a national insurance scheme
• Almost all high-income countries have a
national health insurance system, usually
based on “social insurance
How are Health Services Organized?
Levels of Care
Generally three levels of care:
1. Primary
2. Secondary
3. Tertiary
How are Health Services Organized
Levels of Care
• High-income and some middle-income countries:
– Primary care: “gate-keeper”
– Secondary care: physicians and general hospitals
– Tertiary care: specialized hospitals
Usually part of a system of UHC, with varying degrees of
• Most low-income countries:
– Public primary, secondary, and tertiary level facilities
determined by geographic areas and population size,
coupled with a range of private providers, often fragmented
Primary Health Care,
from Alma-Ata to the Present
• First articulated in Declaration of Alma-Ata
• Established health as a human right
• Primary health care is care that is essential and
socially acceptable, based on evidence and
made universally available
• Set the goal of “health for all” by 2000
• Important to identify as different than “primary
care” – meaning first level care
Primary Health Care,
from Alma-Ata to the Present
Characteristics of primary health care:
• Essential and socially acceptable
• Based on evidence and universally available
• Addresses the needs of the community and is
• Provides preventive, promotive, curative, and
rehabilitative services
• Linked to health system through referral system
The Roles of the Public, Private, and
NGO Sectors
Public sector responsible for:
• Stewardship of the system
• Raising the funds for the health system
• Making decisions about allocating those funds
• Establishing approaches to health insurance
The Roles of the Public, Private and
NGO Sectors
Private, For-Profit Sector:
• Involved in the provision of services including
nonlicensed “medical practitioners”
• Involved in the operation of health clinics,
hospitals, services, and laboratories
• Can partner with the public sector or work
under contract to the public sector
• Is involved in essentially all countries
The Roles of the Public, Private, and
NGO Sectors
NGO, Private, Not-For-Profit Sector:
• Often involved in community-based efforts to
promote better health through education,
improved water and sanitation
• Often carry out health services
• Can partner with the public sector or work
under contract to the public sector
Health Sector Expenditure
• Total health expenditure as a share of GDP varies
substantially across countries
• Some countries spend around 3% to 4%, such as
Indonesia, Pakistan, and Nigeria
• Most of the higher-income countries spend
between 8% and 12%
• The U.S. spends 17% of its GDP on health
• Some countries, such as Afghanistan, Costa Rica,
Cuba, and Haiti, are outliers, spending more than
their country income group might suggest
Health Sector Expenditure
• There is a wide range in the share of total
expenditure on health that is private sector
• The less developed the insurance system is, the
more there will be out of pocket and private
• Private health expenditure, as a share of total
expenditure: Denmark and France, 15–25%;
Ireland and Israel, 35–40%; Bangladesh, India,
Kenya, and Pakistan, 60–70%
Key Health Sector Issues
• In general, health systems in high-income
countries perform better than those in low- and
middle-income countries
• All systems struggle with a variety of challenges
and constraints, including: governance, financing,
human resources, access/coverage, and quality of
Universal Health Coverage
• WHO suggests the aim of UHC reflects three
fundamental concerns
– People should have access to services, regardless
of their ability to pay for them
– Services must be of appropriate quality
– Financial arrangements for services must protect
people from suffering financial hardship
Universal Health Coverage
• As countries seek to develop UHC, they face a
number of questions, including
– Who should be covered?
– What services should be covered?
– What share of the costs should the insurance
scheme pay?
• When establishing UHC programs, countries
must also assess ways to pay healthcare
Universal Health Coverage
Reproduced from Maeda, A., Araujo, E., Cashin, C., Harris, J., Ikegami, N., & Reich, M. R. (2014). Universal health coverage for inclusive
and sustainable development: A synthesis of 11 countrycase studies. Washington, DC: World Bank Group. Retrieved from
Selected Examples of Health Systems
High-Income Countries
• First country to have universal health insurance
• Insurance carriers for mandatory insurance are
“sickness funds” financed by employers and
employees and cover 90% of the population
• Statutory health insurance package; about 10% of
population opts for private insurance
Selected Examples of Health Systems
High-Income Countries
The United Kingdom
• Universal health coverage
• National Health Service (NHS) is responsible for
health services and related insurance
• 75% of NHS funding comes from general taxes
and the rest mostly from a payroll tax
• About 11% of population opts to buy private
Selected Examples of Health Services
High-Income Countries
The United States
• Complex and fragmented
• Over half of the population has private insurance,
about 37% are covered by government insurance,
and about 9% are uninsured
• No standard package of insurance benefits
Selected Examples of Health Systems
Upper Middle-Income Countries
• Commitment to universal coverage
• Costa Rican Social Security Administration (CCSS) is
both financier and provider of health services
• Formal sector employees are obliged to participate in
the CCSS, informal sector workers may join for fees on
a sliding scale, and costs of the poorest covered
• 90% of financing of CCSS comes from employer and
Selected Examples of Health Systems
Lower-Middle-Income Countries
• Federal system of tiered network of health
services in the public sector
• The private sector treats almost 80% of
outpatients and 60% of inpatients
• Only 30% of population covered by insurance
• RSBY is a new insurance scheme for those below
poverty line and India is moving to wider
insurance cover
Selected Examples of Health Systems
Lower-Middle-Income Countries
• Committed to universal coverage
• In 2003, established National Health Insurance
System (NHIS), funded by value added tax
• Marginalized populations must increase enrollment
• There are substantial problems of quality and a
shortage of competent health workers at all levels
• More public funding needed
Key Health Sector Issues
• Demographic and Epidemiologic Change
• Stewardship
• Human Resource Issues
• Quality of Care
• Financing of Health Systems
• Financial Protection and Provision of Universal
• Access and Equity
Addressing Key Health Sector Issues
Demographic and Epidemiologic Change
• People are living longer so societies will face a
greater burden of noncommunicable diseases
• Cost of treating noncommunicable conditions is
• Poor countries simultaneously face a triple burden
of disease: communicable disease,
noncommunicable disease, and injuries
Addressing Key Health Sector Issues
• High-income countries: clear rules and can enforce
those regulations
• Low- and middle-income countries: problems of
• Weak governance penalizes poor people in particular
because they have less choice and power
• Weak management of human resources
• Poor facilities, absenteeism, and corruption can also be
Addressing Key Health Sector Issues
Human Resource Issues
• High-income countries: imbalance in types of
• Poorest countries: not enough healthcare
personnel, who are poorly distributed and often
poorly trained and motivated
• Human resource problems compounded by the
“Brain Drain”
Addressing Key Health Sector Issues
Quality of Care
• Health services should be safe, effective, patientcentered, timely, efficient, and equitable
• Quality varies between and within systems
• Causes can include poor management, lack of
financial resources, poorly trained staff,
unempowered patients, and no system for
monitoring the performance of the health system
Addressing Key Health Sector Issues
The Financing of Health Systems
• High-income countries: issues of rising costs due
to aging populations and use of new technologies
• Low- and middle-income countries: absolute lack
of public sector financial resources for health
• All countries – the need to spend in as costefficient a manner as possible
Addressing Key Health Sector Issues
The Financing of Health Systems
• Many low-income countries do not provide
enough public funds to ensure delivery of an
appropriate basic package of services, between
$12 and $50 per person
• Many countries fail to maximize the value of their
health investments
Addressing Key Health Sector Issues
Financial Protection and the Provision of
Universal Coverage
• Capacity of people to pay for health services is a
barrier to access; catastrophic costs impoverish
people in many settings
• Not a problem in most high-income countries
with national health insurance or social insurance
schemes that essentially offer health insurance to
all citizens
Addressing Key Health Sector Issues
Access and Equity
• Lack of coverage of basic health services in areas
where poor, rural, and minority people live
• Service coverage with a lower level of inputs in
these areas
• Service coverage that varies with income and
education levels
• Unequal access to many services
Addressing Key Health Sector Concerns
Adapting to Demographic and Epidemiologic
• Reduce cardiovascular disease burden related to
• Take measures to reduce road traffic accidents
• Strengthen health systems
• Adopt models of care that sustain more frequent
contacts with patients
Addressing Key Health Sector Concerns
• Launch national anticorruption programs
• Reform procurement systems
• Increase audits of the health system
• Contract out services as appropriate and costeffective
• Carry out customer satisfaction surveys
• Engage community oversight with “citizen report
Addressing Key Health Sector Concerns
Human Resources
• More shared global responsibility for resources
• More explicit strategies for workforce
development focusing on coverage, motivation,
and competence
• Task-shifting: train lower-level personnel to carry
out functions usually reserved for higher-level
• Financial incentives
Addressing Key Health Sector Concerns
Financing Health Services
• Shift resources from other areas of the economy
because of high return on investment in health
• Shift expenditure within health sector to a
selected group of low-cost, highly effective
• 20–40% of expenditures on health in low-income
countries are wasted by spending that is not effective
or efficient
Addressing Key Health Sector Concerns
Financial Protection and Universal Coverage
• Raise additional revenue
• Improve efficiency of health sector expenditure
• Reduce dependence on out-of-pocket
• Enhance equity
• Move toward and aim to provide basic primary
care package, within universal health coverage
Addressing Key Health Sector Concerns
Modified from Jamison, D. T., Gelband, H., Horton, S., Jha, P., Laxminarayan,
R., Mock, C. N., & Nugent, R. (Eds.). (2018). Diseasecontrol priorities:
Improving health and reducing poverty. In Disease control priorities (3rd ed.,
Vol.9). Washington, DC: The WorldBank. doi:10.1596/978-1-4648-0527-1
Addressing Key Health Sector Concerns
Access and Equity
• Question of political will and health systems
• Use data from national surveys to identify gaps in
health status
• Specifically target health resources to the places
most in need and the poor
Addressing Key Health Sector Concerns
• Carry out assessments of quality gaps
• Better professional oversight, supervision, and
continuing training
• Use of clear guidelines, protocols, and algorithms
• When contracting out services, link payment to
• Focus on staff being proficient at selected tasks
Addressing Key Health Sector Concerns
Delivering Primary Health Care
Overall orientation of health system in low- and
middle-income countries should:
• Focus services on the main burdens of disease
• Strengthen the health system to deliver services
effectively and efficiently
• Offer core of activities through primary health
care and district hospital
Addressing Key Health Sector Concerns
Delivering Primary Health Care
Primary care package of essential interventions:
• Maternity-related interventions
• Childhood disease-related interventions
• Malaria prevention and treatment
• TB treatment
• HIV prevention and care
• Tobacco and alcohol control programs
Addressing Key Health Sector Concerns
Results Based Financing
• Initiated in Mexico and Brazil
• Now a central feature of many health systems
• Can be supply or demand side
• Meant to incentivize better health behaviors and
better system performance
Main Messages
• Goal of every health system, in principle,
should be universal health coverage
• This is central to maximizing the health of a
population, in fairly distributed ways, at least
• LMICs face a range of issues in meeting the
WHO health system building blocks, which
must be addressed to provide quality care, in
fair ways, that meet UHC
Main Messages
• Important to keep financing and provision
separate and consider the roles different actors
can play in them
• To enhance health system coverage, engage
communities of poor and marginalized
populations in the planning, design, and
evaluation of health system interventions
• There are important lessons from the study of
different country approaches to health

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