Health Financing and Governance

The main objective of this component is to develop and sustain the capacity of the GOAM to properly manage available resources to meet existing health needs of the population and respond to emerging health challenges. HS-STAR supports ongoing policy dialogue on health financing with a wide range of national stakeholders to help them define long-term vision, goals, and objectives of health financing and develop and implement strategies to achieve them.

With support from international health financing experts and in close coordination with WHO and WB, the health financing team conducts policy dialogue and capacity building activities for key policymakers on the three functions of health financing: revenue collection, pooling of funds, and health purchasing. The project helps the GOAM (including the National Assembly), MOF, MOH, and SHA view the health financing system holistically and prioritize intervention areas for maximum impact and synergy in terms of increasing efficiency, improving equity, and increasing access in both the short- and long-term. HS-STAR collaborates with a wide range of institutions on health financing reform, including the Ministry of Finance and the National Assembly. The project tailors strategies and interventions to the role played by each institution concerning health financing.

Strengthening PHC Provider payment Systems

HS-STAR provides technical assistance and support to GOAM, MOH, and MOF to develop a strategy for PHC provider payment systems consistent with an overarching health financing strategy, and to MOH and SHA to introduce, refine and strengthen PHC provider payment systems starting in January 2011. The base per capita rate will be paid using open enrollment figures, while incentive payments to PHC facilities will be made through a pay-for-performance (P4P) system to reward high performance against agreed upon PHC indicators, including focus indicators on: pre-conception RH care seeking, early prenatal care and preventive childcare visits. The projects’ primary focus is at creating appropriate technical and operational linkages between the core enrollment-based PHC per capita payment system and the additional P4P system.

An important part of improving PHC payment systems is health provider remuneration. HS-STAR will address low salaries in PHC in four ways:

1) Advocate for an increase in the public budget available for health by engaging in policy dialogue under Component 1 and using tools such as National Health Accounts;

2) Increase the level of additional payments for which PHC providers may be eligible to receive through the pay-for-performance system;

3) Increase health system efficiency by restructuring hospitals and shifting the resultant savings to more cost-effective PHC.

4) Support increased private financing for private PHC practices through, for example, the introduction of formal co-payments, perhaps generating increased PHC professional salaries, but also potentially creating barriers to increased choice and access among vulnerable populations.

Additional Health Financing & Risk-pooling mechanisms

HS-STAR provides technical assistance to the MOH and SHA to test additional health financing and risk-pooling mechanisms. Revenue collection function tasks include feasibility studies; data collection to inform design, modeling, and simulation exercises; or actual pilot testing. HS-STAR will consult with key stakeholders and donors on payroll tax and other earmarked taxes, as well as strategies for the development of a private or voluntary health insurance market to cover services and co-payments that fall outside of the BBP. To promote dialogue on health financing policy, HS-STAR also will provide limited support to improve National Health Accounts (NHA). Pooling of funds function tasks include support to SHA to strengthen legal, regulatory, technical, and operational frameworks for the existing national pool of funds for the BBP; and policy dialogue to prevent or mitigate the risks that may be associated with introducing health insurance, such as fragmenting the pool of funds, thereby reducing financial risk protection and universal coverage.

Health purchasing function tasks include working with MOH and SHA to improve: 1) the hospital payment system; 2) the TB financing system; 3) harmonization of health financing and public finance management (PFM) reforms; and 4) drug financing strategies. HS-STAR supports the SHA in design, development, and implementation of a new hospital payment system intended to close the funding gap by increasing health system efficiency and linking payment for inpatient care to entitled BBP services. The project activities focus on improving the health budgeting process, improving Treasury System operations for SHA output-based provider payment systems, and improving financial management and fiduciary measures in the health sector.

Support MOH to redefine BBP

On an annual basis, HS-STAR will work with GOAM (including the National Assembly), MOF, MOH, and SHA to redefine the targeted health care services and populations covered under the BBP. The project helps ensure that the BBP continues to include priority MCH/RH/FP/TB and prevention services. In addition, the project supports counterparts in developing and implementing a strategy to restructure BBP co-payments for inpatient services to ensure that the system is simple and clear for both providers and patients, incorporating results of costing studies being undertaken by the WB, if possible.

Support independent PHC Providers

HS-STAR participates in the national working group recently re-convened by the WB to identify the most effective organizational structure for PHC in urban settings, particularly in Yerevan. Specifically, HS-STAR has adopted a four-pronged approach to support independent PHC providers, which envisages to:

1) Promote private practice to expand the pool of providers and identify potential private service providers;

2) Support creation of an enabling environment, including setting preconditions for establishing PHC practices, ensuring contracting by SHA is possible, identification of investment opportunities, and elimination of registration barriers;

3) Provide management support to help identified parties establish a functioning private practice by building on PHCR’s manuals for independent PHC providers, which cover selecting a form of registration, registering, and setting up their health practice; and

4) HS-STAR will provide direct and in-kind commodity support to newly established independent private PHC practices, pending GOAM/MOH achievement of agreed-upon reform milestones and preconditions.

Supporting the establishment of independent PHC practices in urban areas will improve the provider mix and level the playing field between public and private PHC facilities, creating conditions for more effective competition for patients and therefore continuing to drive efficiency and quality improvements.

Strengthening health workforce planning

A key component to developing and maintaining a strong health sector is developing and retaining skilled human resources. The current workforce in Armenia continues to favor specialization over general practice and its distribution remains unbalanced across marzes and urban and rural areas. Undergraduate medical education requires improvement to meet international standards and the postgraduate CME system should be further institutionalized. HS-STAR supports the MOH’s Department of Workforce Planning to execute three essential steps in workforce planning:

• Determine Requirements: Identify the numbers and types of staff (with a focus on PHC level staff) that will be needed – and where – at the end of the period covered by the plan;
• Analyze Supply: Conduct a stock audit of the existing staff and anticipate flows in and out of the organization during the plan period; and
• Develop Policies and Strategies: Create conditions that match supply with demand.

Initially HS-STAR focuses its efforts on Emergency and Ambulance services, a key MOH priority. Activities in this content area will serve as a model for overall workforce planning in the health sector. Other activities directed to improving pre-service and in-service capacity building will focus on improving targeted MCH/RH/FP/TB/NCD services.

The following concrete activities will strengthen the workforce for Emergency and Ambulance services:

1. Introducing workforce planning tools. HS-STAR works with the MOH to develop a range of options and to build internal capacity for workforce planning related to Emergency and Ambulance services.
2. Supporting capacity building efforts of pre-service and in-service institutions. HS-STAR works with the MOH and training institutions to develop plans and activities to improve pre-service and in-service training in Emergency Care and Ambulance services.  
3. Developing and institutionalizing feedback loops among Ministries. An essential part of implementing strategic and effective workforce planning is ensuring that both supply and demand are balanced. HS-STAR works with the MOH Department of Education, Science, and Personnel Management to feed human resources requirements and needs to the MOE so that the proper amount and types of doctors and nurses are admitted to medical and nursing schools each year.