Study On Financing Of Public Health Services In Shandong Province

Background and objectivesIn the planned economy, China's responsibility for public health service financing is shared by governments at all levels. The central government unified the allocation of health resources and supplied most of the public health care through public funding. This system ensured the residents of different regions fairly getting health resources and accessing free basic public health services. The specialized public health institution is full-budget management unit, all its expenditures were fully covered by national funding. Non-specialized public health institution is funded mainly from enterprises, township government and village collectives.With the economic reform, the financing policy for public health service gradually changed. Since the early 1980s, China has carried out the financial system called "serving meals to different diners from different pots". The fiscal power together with the duties of the expenditure management was decentralized, all levels of government shouldered an increasing functions for public health development. However, the system of fiscal income arrangements became centralized, funding compensation for public health agency by the government has gradually decreased, especially in poor area. User fee was introduced in public health care provision, revenues generated from user charges was more and more becoming an important source of fund raising. With the transformation of fiscal system and compensation mechanism, the provision of public health service became insufficient, provision of public health care between urban and rural areas and between different regions have become more unequal.After SARS during the year of 2003, the position and role of public health service has been paid higher attention by the government and society, the funding responsibilities of government in the public health service is gradually explicit, the government's input for such service is gradually increasing. In the new project for medical reform in China, the core policy is further definite that public health service is mainly financed by government and provided equally to urban and rural residents. However, the present contradiction between government investment and expenditure on public health service is still obvious, the government's policies for investment in public health service need to make further implementation.The overall objective of this study is to explore the operational approches and measures on financing policy for public health service to provide the scientific basis and decision-making references for improving the government's investment in long-term mechanism. The specific objectives are as follow: analyzing the financing status of public health service in Shandong province; developing a calculation method of government's input and each level's fund-sharing for public health service and making an practical measurement; discussing on the assignment, payment and supervision mechanism of public health service fund; putting forward policy proposals improving financing policy for public health service.Data and methodsThe data sources of this study include document review, the existing data analysis, key informant interviews and questionnaire survey on health professional. Existing data was mainly from annual report databases of health finance and statistics, part of the macro socio-economic data was obtained from the provincial comprehensive statistics. The interview with key personnel selected provincial-managed institutions and 4 prefecture-level city including Zibo, Dongying, Dezhou and Binzhou; and interviewed 49 professionals from the financial sectors, the health departments and public health services-related institutions. Questionnaire survey was taken by a letter and covered 155 related professionals from provincial-managed institutions and 6 prefecture-level city including Yantai, Dongying, Jining, Tai'an, Binzhou, and Heze.This study designed the calculation formula for government's input and each level's fund-sharing for public health service according to consultation and demonstration and made an actual measurement in Shandong province; carried out a descriptive analysis on the financing situation of public health service using the existing data; made a qualitative analysis on the issues about fund assignment, payment, use and regulation of public health service taking advantage of data from key personnel interviews and questionnaire. The calculation and analysis of quantitative data was completed by Excel and SPSS software.Main results(1) Financing situation of public health service. The government's fiscal input to public health service institutions gradually increased. The proportion of fiscal subsidy on specilized public health service to financial health grant, fiscal expenditure and GDP in Shandong province is respectively 28.37%, 0.82%, 0.061% in the year of 2000 and 42.71%, 0.98%, 0.085% in the year of 2007; the share in the financial health grant increased in higher rate, but the share in financial expenditure and GDP is smaller that is not breakthrough 1% and 0.1% in 2007. The compensation of financial subsidies on professional expenses assumes gradual enhancing trend, but the imbalance between the institutions and conflicts to expenditures are still outstanding; the proportion of financial subsidies on CDC, health inspection agencies, maternal and children's health care center and other institutions to professional expenses are respectively 45.36%, 59.03%, 21.14%, 53.48% in the year of 2003 and 53.78%, 86.41%, 17.21%, 64.81% in the year of 2007.(2) Government's input level of public health fund. There is no generally recognized calculation method for such fund, this study make a calculation using the method designed by ourself. The results show: total public health service fund that the government should input is 9.23 billion yuan in the year of 2007 that account for 4.03% of the actual fiscal expenditure and 0.35% of GDP in the same year. This study proves that it's difficult to achieve public health service fund that the government should input and so to promote the equalization of public health service only by local government.(3) Fund-sharing by governments. this study indicates that, each level of government should bear the different fund-sharing and the shortage should be filled up through transfer payment. The measuring results of transfer payment of provincial-level to prefecture-level show that, total public health service fund that the government should input in 17 prefecture-level cities is 5.92 billion yuan in the year of 2007 in which the prefecture-level should bear 4.36 billion yuan accounting for 73.66%, the provincial-level share is 1.56 billion yuan accounting for 26.34%. Among all prefecture-level cities, 7 city including Jinan etc. needn't provincial transfer payment.(4) Payment and allocation of public health fund. Because of the imperfect financial management system and operation level factors under system frame, there are still some issues in the execution of paying and allocating function that include difficulty in linking fund investment and public expenditure on public health services owing to the imperfect connecting mechanism between the financial sector and the health sector; lower allocation efficiency as a result of lacking plan mechanism as a whole for fund input in regional level; insufficiency in the effective integration between fund allocation and payment, lower payment efficiency and single payment pattern. All those issues are not conducive to raise fund operation efficiency.(5) Fund supervision. At present, the supervision situation for public health service fund is not conducive to effective implementation of public health input policy requirements relating to the "new medical reform". The main issues include that targeted and comprehensive and systematic monitoring measures are not still formulated; coexistence of decentralization and deficiency of supervision manpower; lack of coordination in the implementation of supervision; the object of supervision is single that mainly covers fund's user, however the supervision of fund holder is very weak.Conclusions and policy implicationsFramework for financing public health care in China has been formed in the new health sector reform policy, the core policy is that public health service is mainly financed by government and provided equally to urban and rural residents. At present, the government's financial investment to public health service has gradually increased, but the conflicts between investment and demand are obvious, the situation of irrational input structure and layout imbalance is more distinctly. To put the financing policy into effect, there are many key points requiring breakthrough such as quantifying the government's financial responsibility, defining scientifically the fund-sharing of each levels of government, fulfilling realistically the functions of financial allocation and payment, strengthening financing regulations in all aspects. In view of the above conclusions, we recommend that a complete package measures that is targeted, operable, mutual coordinating and support should be formulated in China's policy framework of public health service financing. Specific suggestions are as follow: (1) strengthening the leadership and coordination in public health service financing, setting up the effective mechanism in full convergence between financial sector and health sector; (2) defining the calculation method of public health service fund that the government should input that should have concrete procedure and formula; (3) defining the division method of government's fund-sharing for public health service that should comply with the principle of "responsibility consistent with fiscal ability"; (4) establishing a regional coordinated plan mechanism of public health service fund allocation. In accordance with the principle of equity and efficiency, coordinate the fund allocation of basic, professional public health services and such services from public hospitals in the same region and different regions so as to realize the optimization of fund allocation efficiency in region degree; (5) optimizing the payment pattern of public health service fund to form a effective pressure and dynamic mechanism, mobilizing initiatives of project units and regions, enhancing sense of responsibility, improving the fund use efficiency; (6) improving supervision efficiency and effectiveness of public health service fund. Strengthening the supervision of function execution of government's financial input, distribution and payment so as to ensure the implementation of the policy for public health service financing.