Academic journal article Bulletin of the World Health Organization

Tax-Funded Social Health Insurance: An Analysis of Revenue Sources, Hungary/Assurance Maladie Sociale Financee Par L'impot: Analyse Des Sources De Recettes-Hongrie/Seguridad Social Financiada Con Impuestos: Un Analisis De Las Fuentes De Ingresos, Hungria

Academic journal article Bulletin of the World Health Organization

Tax-Funded Social Health Insurance: An Analysis of Revenue Sources, Hungary/Assurance Maladie Sociale Financee Par L'impot: Analyse Des Sources De Recettes-Hongrie/Seguridad Social Financiada Con Impuestos: Un Analisis De Las Fuentes De Ingresos, Hungria

Article excerpt

Introduction

Health financing is a key health system function. Such financing can be divided into several subfunctions according to the way the money flows in the health system: from households, which are the ultimate source of health revenues, through financial intermediaries, which manage budgets, to health care organizations, which provide services to patients (Fig. 1). Accordingly, revenue generation can be separate from pooling of funds, and pooling from purchasing. Using the case of Hungary, we argue that these distinctions are important for policy-making as they allow a wider range of policy options to be considered to improve health system performance. As a starting point for analysis, financial resources should be tracked using a standard method that makes the documentation of the flow of funds in the health system detailed enough to distinguish the financing subfunctions from each other and allows comparison between countries and over time.

The System of Health Accounts is a joint effort of the World Health Organization (WHO), the statistical office of the European Union, and the Organisation for Economic Co-operation and Development (OECD) to establish a standard framework for tracking resources to describe and analyse health-financing arrangements in member countries. (2) The system classifies health expenditures into well-defined categories of the various health system dimensions, such as financing schemes, providers and services. The first version of the System of Health Accounts, introduced in 2000 by OECD, (3) was followed by a revised version in 2011. (2) One of the most important improvements of the new version is its ability to distinguish the sources of revenue from pooled funds man aged by financing agents. The 2000 version classified data on the structure and composition of revenue sources according to financing agent, which meant, for instance, that all the revenues of a social health insurance fund were considered health insurance contributions, even if some came from the central government budget to cover non-contributing groups. (3) The 2011 version introduced two new classifications (Box 1), health-financing schemes and revenues of health-financing schemes, which enable analysis of revenue sources separately from that of pooling and purchasing arrangements for a particular scheme.

The European debt crisis that started in 2009 brought the sustainability of health financing to the forefront of policy debates. In Hungary, the government spoke about the need to balance the budget of the health insurance fund, (4) and internationally it was thought that sustainability could be enhanced by increasing reliance on general taxation. (5,6) WHO suggested alternative financing sources beside social health insurance contributions and other types of wage-based revenue sources, which increase the cost of labour, to mitigate their implied adverse effects on employment and economic growth. (7) Hungary provides a useful illustration of this alternative financing as successive governments have tried to boost employment by reducing the social insurance contribution rate and compensated for this reduction by increasing tax financing of the health insurance fund. (8,9)

Until 2017, OECD and WHO published comparable data based on the 2000 version of the System of Health Accounts. (10-12) These data, however, cannot show changes over time in the composition of financing sources for the health insurance fund because the 2000 version does not disaggregate revenue sources and classifies all expenditures of the health insurance fund as a health insurance source. To reveal the sources of health insurance fund expenditures, we therefore used the approach of the 2011 version. (2)

Box 1. Revenue categories and health-financing schemes based on the
2011 version of the System of Health Accounts (2)

The health financing schemes of the International Classification
for Health Accounts are divided into eight main categories
(ICHA-HF):

* HF. … 
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