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SimFin
a simulation model
of financial needs
and government
budget options for
the functioning of
the health system
by
Guy Carrin and Jean Perrot
Division of Intensified Cooperation with
Countries and Peoples in Greatest Need
World Health Organization, Geneva
in collaboration with
Marlene Abrial and Fabrice Sergent
SimFin Software
version 1.1 (01/98)
t
by
Marlene Abrial
in collaboration with
Doumit Abi-Saleh
4
*
I
ADDRESS FOR CORRESPONDENCE REGARDING THIS DOCUMENT
or
Dr Guy Carrin
Dr Jean Perrot
World Health Organization
ICO
20 avenue Appia
1211 Geneva 27
Switzerland
Tel.+41 22 791 22 06
Fax.+ 41 22 791 41 53
e-mail: perrotj@who.ch
Tel.+ 41 22 791 27 80
Fax.+ 41 22 791 41 53
e-mail: carring@who.ch
This document is not issued to the general public, and all rights are reserved by the World Health Organization
(WHO). The document may not be reviewed, abstracted, quoted, reproduced or translated, in part or in whole, without the prior
written permission of WHO. No part of this document may be stored in a retrieval system or transmitted in any form or by any
means - electronic, mechanical or other - without the prior written permission of WHO.
The views expressed in documents by named authors are solely the responsibility of authors.
Printed in 1998 by WHO
Printed in Switzerland
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J
/
TABLE OF CONTENTS
GENERAL PRESENTATION
PARTI
f
1
THE FINANCIAL NEEDS FOR THE FUNCTIONING OF THE HEALTH
SYSTEM
1
GENERAL OUTLINE
1.1
1.2
Introduction............................................................................................................................ 3
Health services ...................................................................................................................... 4
Health administration............................................................................................................ 4
General overivew of the structure of MicroFin .................................................................... 4
1.4.1 First stage: Expenditure by category of health facility and administration.............. 4
1.4.1.1 Step 1 : Calculations relating to a standard health facility& administration 5
1.4.1.2 Step 2 : Determination of the number of health facilties & admin, offices . 5
1.4.2
Second stage : National expenditure on health facilities and administration.......... 5
1.4.3
Third stage: MoH expenditure on health facilities and administration.................... 5
1.3
1.4
3
2.
HEALTH CENTRES
2.1
2.2
Introduction............................................................................................................................ 8
General overview of the structure of the “health centres” module ...................................... 9
2.2.1 First stage: Analysis by category of health centres.................................................. 9
2.2.1.1 Step 1 : Calculations relative to an average health centre ......................... 9
2.2.1.2 Step 2 : Determination of the number of healthcentres.............................. 9
2.2.1.3 Step 3 : Results by category of health centre ........................................... 9
Second stage: Results at the national level ............................................................ 10
2.2.2
2.2.3
Third stage: MoH expenditure on health centres .................................................. 10
Analysis by category of health centre (First stage): detailed structure.............................. 10
Step 1 : Calculations relating to a standard health centre.................................... 10
2.3.1
2.3.1.1 Categories of staff needed for the operation of a standard health centre .. 10
2.3.1.2 Estimation of health personnel needs........................................................ 10
2.3.1.3 Estimation of needs for non-health care personnel .................................. 14
2.3.1.4 Expenditure on drugs ................................................................................ 14
2.3.1.5 Other operating expenditure of a standard health centre.......................... 14
Step 2 : Determination of the number of health centres ........................................ 14
2.3.2
2.3.3
Step 3 : Results by category of health centre.......................................................... 15
Results at the national level (Second stage) : detailed structure ........................................ 16
MoH expenditure on health centres (Third stage): detailed structure................................ 16
2.5.1 MoH expenditure on health centre personnel ........................................................ 17
2.5.2 MoH expenditure on drugs .................................................................................... 17
2.5.3 MoH expenditure on the other operating expenditure of health centres................ 17
2.5.4 Total MoH operating expenditure.......................................................................... 18
Determinants of future Ministry of Health expenditure...................................................... 18
2.6.1 Variables treated as exogenous by the simulation model .......................................... 18
2.6.2 Policy variables.......................................................................................................... 18
2.3
2.4
2.5
2.6
8
ii
2.7
Data input........................
2.7.1
2.7.2
2.7.3
List of data to be collected for the base year
2.7.1.1 General data....................................
2.7.1.2 Data for standard health centres ...
Data input for exogenous variables............
Data input for policy variables ..................
20
20
20
20
21
21
3.
REFERRAL HOSPITALS
22
3.1
3.2
Introduction.........................................................................................................................
Calculations concerning each of the eight types of services (First stage)........................
3.2.1 Inpatient departments ...........................................................................................
3.2.1.1 Number of beds.........................................................................................
3.2.1.2 Staff requirement ....................................................................................
3.2.1.3 Drug expenditure ....................................................................................
3.2.1.4 Operating expenditure ............................................................................
3.2.2 Out-patient clinic..................................................................................................
3.2.2.1 Number of out-patient consultations ......................................................
3.2.2.2 Staff requirement ....................................................................................
3.2.2.3 Drug expenditure ....................................................................................
3.2.2.4 Other operating expenditure....................................................................
3.2.3 Operating theatre...................................................................................................
3.2.3.1 Number of surgical interventions............................................................
3.2.3.2 Staff requirement ....................................................................................
3.2.3.3 Drug expenditure ....................................................................................
3.2.3.4 Operating expenditure ............................................................................
3.2.4 Radiology department..........................................................................................
3.2.4.1 Number of X-rays....................................................................................
3.2.4.2 Staff requirement ....................................................................................
3.2.4.3 Expenditure for medical supplies............................................................
3.2.4.4 Other operating expenditure....................................................................
3.2.5 Laboratory department...........................................................................................
3.2.6 Administration .....................................................................................................
3.2.6.1 Staff requirement ....................................................................................
3.2.6.2 Other operating expenditure....................................................................
3.2.7 Ambulance service................................................................................................
3.2.7.1 Staff requirement ....................................................................................
3.2.7.2 Other operating expenditure....................................................................
3.2.8 Catering service....................................................................................................
3.2.8.1 Staffing requirement................................................................................
3.2.8.2 Food expenditure ....................................................................................
3.2.8.3 Other operating expenditure....................................................................
Determination of the number of hospitals ........................................................................
Results at the national level and MoH expenditure on hospitals (Second and third stage)
Determinants of future MoH expenditure ........................................................................
3.5.1 Variables treated as exogenous..........................................................................
3.5.2 Policy variables..................................................................................................
22
23
23
23
24
24
24
25
25
25
25
26
26
26
26
27
27
27
27
27
28
28
28
29
29
29
30
30
30
30
30
30
30
31
31
31
31
31
3.3
3.4
3.5
*
*
♦
iii
3.6
Data input................................................................
3.6.1 List of data to be collected for the base year
3.6.1.1 General data ..................................
3.6.1.2 Data for standard hospitals............
3.6.2 Data input for exogenous variables............
3.6.3 Data input for policy variables ..................
32
32
32
32
34
35
4.
NATIONAL REFERRAL HOSPITALS
36
5.
ADMINISTRATION
37
5.1
Administration at the district and regional levels................................................
5.1.1 First stage: Analysis by management category......................................
5.1.1.1 Step 1 : Calculations relating to an average administrative office
5.1.1.2 Step 2 : Number of districts and regions....................................
5.1.2 Third stage : MoH expenditure on administration ................................
5.1.3 Determinants of future MoH expenditure..............................................
5.1.4 Data input................................................................................................
5.1.4.1 Administration of the district....................................................
5.1.4.2 Administration of the region......................................................
Central administration ........................................................................................
5.2.1 MoH expenditure on central administration ..........................................
5.2.2 Data input................................................................................................
37
37
37
38
38
38
39
39
39
40
40
40
5.2
PART II
GOVERNMENT BUDGET OPTIONS FOR THE FUNCTIONING OF
THE HEALTH SYSTEM
6.
GENERAL OUTLINE
41
6.1
6.2
Introduction........................................................................................
General overview of the structure of MacroFin ..............................
6.2.1 Equations ............................................................................
6.2.2 Results................................................................................
6.2.3 Role of the user ..................................................................
6.2.4 Diagram of MacroFin ........................................................
Detailed structure of MacroFin........................................................
6.3.1 The base year......................................................................
6.3.2 The population....................................................................
6.3.3 Value added by sector........................................................
6.3.4 Utilization of resources ......................................................
6.3.5 International transactions....................................................
6.3.6 Prices..................................................................................
6.3.7 Exchange rates....................................................................
6.3.8 Government revenue ..........................................................
6.3.9 Government expenditure....................................................
6.3.9.1 Expenditure at constant prices ..............................
6.3.9.2 Expenditure at current prices ................................
6.3.9.3 Total government expenditure ..............................
6.3.9.4 External financing of total government expenditure
6.3.9.5 The government budget deficit..............................
41
42
42
42
44
46
47
47
47
47
50
51
53
53
54
6.3
57
57
58
60
60
60
iv
6.4
6.5
6.6
6.3.9.6 The set of equations related to government expenditure . .
6.3.10 Ministry of Health expenditure......................................................
6.3.10.1 Expenditure at constant prices..........................................
6.3.10.2 Expenditure at current prices
......................................
6.3.10.3 External financing of Ministry of Health expenditure . ..
6.3.10.4 Set of equations related to Ministry of Health expenditure
6.3.11 Health expenditure of other ministries ..........................................
6.3.11.1 Health expenditure at constant prices ..............................
6.3.11.2 Health expenditure at current prices ................................
6.3.11.3 Set of equations of expenditures by other ministries........
6.3.12 Health expenditure in the private sector ........................................
6.3.12.1 Expenditure at constant prices..........................................
6.3.12.2 Expenditure at current prices............................................
6.3.12.3 Set of equations related to private health expenditure . . . .
Data input....................................................................................................
6.4.1 List of data to be collected for the base year..................................
6.4.2 Data input for exogenous and policy variables..............................
6.4.3 Remarks about rates of growth and coefficients............................
Results
Sample questions on health system financing policy..........
6.6.1 Questions about the volume of resources for health
6.6.2 Questions on allocation of resources for health . .
PART III
60
62
62
62
64
64
66
66
66
67
69
69
69
70
72
72
74
76
76
77
77
78
USING SIMFIN
7.
AN EXAMPLE
82
7.1
Base year data for MicroFin ......................................................................................
7.1.1 General data....................................................................................................
7.1.2 Health centres ................................................................................................
7.1.2.1 Number of health centres, population covered and activities............
7.1.2.2 Breakdown of staff activities..............................................................
7.1.2.3 Breakdown of staff by qualification and source of financing............
7.1.2.4 Pharmaceutical supplies ....................................................................
7.1.2.5 Other operating expenditure ..............................................................
7.1.3 Referral hospitals (levels II and III) and National Referal Hospitals............
7.1.3.1 Data per department..........................................................................
7.1.3.2 Breakdown of expenditure according to source of financing............
7.1.3.3 Breakdown of staff according to source of financing........................
7.1.3.4 Imported drugs as a percentage of total drugs purchased..................
7.1.4 Administration................................................................................................
7.1.4.1 Data related to all of the districts........................................................
7.1.4.2 Data related to all of the regions........................................................
7.1.4.3 Data related to an average district, an average region and the central
administration....................................................................................
Base year data for MacroFin........................................................................................
7.2.1 Coherence of data between MacroFin and MicroFin ....................................
7.2.2 Population ......................................................................................................
7.2.3 Value added by sector....................................................................................
7.2.4 Utilization of gross domestic product (GDP) ................................................
82
82
82
82
83
84
85
85
85
86
92
92
93
93
93
93
7.2.
94
94
94
94
95
95
*
V
Balance of payments ............................................................................................ 95
Exchange rate .................................................................................................... 95
Taxes and taxation rates........................................................................................ 96
Other government revenue .................................................................................. 96
Government expenditure...................................................................................... 96
7.2.10 Ministry of Health expenditure............................................................................ 97
7.2.11 Health expenditure by other ministries and private health expenditure .............. 97
A simulation example........................................................................................................ 98
7.3.1 Base case simulation ............................................................................................ 98
7.3.2 Health policy simulations using MicroFin .......................................................... 98
7.3.2.1 A general salary increase.......................................................................... 98
7.3.2.2 Policy regarding health centres................................................................ 99
7.3.2.3 Policy regarding hospitals.................................. ...................................... 101
7.3.2.4 Policy regarding administration................................................................ 103
7.3.2.5 Policy regarding the structure of health expenditure................................ 103
7.3.3 Health policy simulations linking MicroFin with MacroFin................................ 105
7.3.3.1 Taking account of the macroeonomic environment; impact of a currency
devaluation............................................................................................................ 105
7.3.3.2 Needs versus budgetary constraints........................................................ 106
7.3.5 Rapid estimates with MacroFin............................................................................ 107
7.2.5
7.2.6
7.2.7
7.2.8
7.2.9
7.3
f
ANNEX I:
ADDITIONAL INDICATORS
109
ANNEX II:
USER’S GUIDE TO SimFin
115
1.
2.
3.
3.1
3.2
3.3
3.4
3.5
3.6
4.
5.
5.1
5.2
5.3
5.4
5.5
5.6
5.7
a
6.
6.1.
6.2
6.3
HOW TO INSTALL SimFin ..................................................................
HOW TO START MicroFin....................................................................
HOW TO USE MicroFin ........................................................................
General principles of MicroFin ..............................................................
Data input................................................................................................
Results......................................................................................................
Save and exit commands in the main menu............................................
Switching between menus ......................................................................
Specific elements to take into account while working with the MicroFin
components..............................................................................................
HOW TO START MacroFin ..................................................................
HOW TO USE MacroFin........................................................................
The main menu........................................................................................
General principles on how to use the model............................................
Data input................................................................................................
Display and consultation of results..........................................................
How to print ............................................................................................
How to save results and exit the main menu ..........................................
Specific elements to take into account while working with the MacroFin
components..............................................................................................
OTHER QUESTIONS ............................................................................
How to get a print-out..............................................................................
How can Lotus 123 recognize your computer equipment ......................
How to use the special keys ....................................................................
115
116
118
118
118
120
121
121
121
124
126
126
126
128
128
128
128
129
131
131
131
132
vi
TABLE 1:
TABLE 2:
TABLES:
TABLE 4:
TABLE 5:
TABLE 6:
TABLE 7:
TABLE 8:
TABLE 9:
TABLE 10 :
TABLE 11:
Diagram of the sub-model..........................................................
Value added by sector, gross domestic product and its utilisation
International transactions............................................................
Government revenue..................................................................
Government expenditure............................................................
Ministry of Health expenditure..................................................
Health expenditure other ministries............................................
Private sector health expenditure................................................
Government expenditure at constant prices................................
Health expenditure at current prices ..........................................
Structure of MoH expenditure....................................................
46
49
52
56
61
65
68
71
79
80
81
Cl
1
GENERAL PRESENTATION
Budgeting as part of health planning: macro and micro aspects
Health systems, particularly in the developing countries, are facing a difficult dilemma:
on the one hand, populations may have important needs for better health and on the other hand
the financial resources they can mobilize are limited. Choices have to be made all the time:
households allocate part of their budget to health, donors have to decide what proportion of their
financial contribution to assign to health, and governments have to establish their health budget
under budgetary constraints.
With SimFin, we will focus on government's behaviour with regard to their budgets for
publicly provided health services. Budgeting will be seen as a part of the planning process. In
a planning process, we start from the present situation and indicate the objectives one wishes to
achieve within a given period as well as ways in which that is to be achieved. Yearly budgets
can then be considered as different points in the planning process.
This approach presupposes that the decision-makers have a relatively clear idea about
health policy and the way in which they intend to implement it. They must therefore make some
technical choices about the health services pyramid, the role of prevention and curative care, the
importance of primary health care, the need for supervision, staff qualifications, etc. However,
all these choices have financial repercussions. The question is : to what extent are these choices
financially feasible ?
For the health policy-maker, planning means therefore that they are able to propose, for
the coming years, how the government's health policy and expenditure on health should develop.
These proposals, which will subsequently need to be ratified by the government bodies, in
particular through a national plan, will be the outcome of a comparison between the budgetary
possibilities on the one hand and the financial needs of the health sector on the other hand:
- The budgetary possibilities express the constraints on resources. These constraints are
determined in part by national economic activity as well as by the international environment.
They also depend on the choices made by the government (with regard to the role of health in
the government budget. This analysis of budgetary possibilities can be called a "macro"
approach, and is facilitated by SimFin's macro submodel called MacroFin.
- The financial needs for the functioning of the health system call for a "micro
"micro"1
approach. This consists of determining the financial needs related to the health services at
different levels of the health system (health centres, hospitals at the district, regional and national
level), and to the administration. The financial needs depend, of course, on the objectives that
are set for these health services and the administration. This particular analysis is facilitated by
SimFin's micro submodel called MicroFin.
2
Confronting needs with possibilities
The comparison between financial needs and financial possibilities may be illustrated by the
following graph:
GOVERNMENT HEALTH BUDGET
Comparison of possibilities and needs
PoBSibiliti**
In this graph it can be seen that at the start of the simulation period the financial needs
for operating the health system, as established in accordance with the hypotheses selected by the
decision-maker, exceed the budgetary possibilities determined by the macroeconomic approach.
At the end of the period, on the other hand, the financial needs are less than the budgetary
possibilities.
(i)
How would the policy-makers react ? At the start of the period the policy-makers would
have to revise their needs downwards by changing some of the hypotheses selected for the
calculations, or else seek extra budgetary financial resources (increase in community financing,
external aid), or persuade the government to increase the funding it allocates to the health sector.
(ii)
At the end of the period, on the other hand, they would be able to increase health
expenditure without requesting government to alter its global budget policy.
SimFin and its two submodels
The micro and macro aspects of government budgeting for health can be studied by the
submodels MicroFin and MacroFin, respectively. These submodels can be used separately.
However, SimFin becomes truly meaningful whn the user establishes a link between the two
submodels. Note that as a simulation model. SimFin does not presuppose any prior knowledge
of statistics or econometrics, and is therefore easily accessible.
3
PART I:
THE FINANCIAL NEEDS FOR THE FUNCTIONING OF THE
HEALTH SYSTEM
1.
GENERAL OUTLINE
1.1
Introduction
The purpose of this part of the model, namely MicroFin, is to analyse the financial
resources that the government needs to allocate to the functioning of publicly provided health
services. At the starting point of the model - that is the base year - this requires a breakdown of
the expenditure the government has allocated to health. This breakdown is in accordance with
two major functions: (i) the production of services by government health structures; and (ii) the
overall management and supervision of the system by the health administration.
Beyond the base year, MicroFin enables the user to estimate the trend in government
expenditure on health according to various hypotheses. Some of these are external to the health
sector - population growth, for example - while others are based on health policy choices and
thus are fully dependent on the policy-maker; others again concern the demand for health
services by the population.
It should be clear that SimFin, together with its submodels, is not a forecasting model that
seeks to predict what the expenditure of the Ministry of Health will be. On the contrary, the
model aims to help the decision-maker to measure the repercussions of the decisions he wishes
to take. It therefore seeks to reply to the question: "if I as a decision-maker take such-and-such
a decision, what will be the repercussions of my decision in the years to come on government
health expenditure ?" For example, if I decide that in order to attain good quality of services at
health centres, expenditure on drugs per case should eventually be five dollars, what is the
consequence of this decision for the government budget? Next, by comparing this result with
those provided by MacroFin, the decision-maker can see whether his decision is feasible.
The model works over a 10-year period. This reflects that things cannot change overnight:
it takes time before decisions and objectives can be achieved. By working over a 10-year period
the model indicates the trend, the direction health expenditure will take in the future. The user
will have to specify quite a number of objectives to be reached by the end of the 10-year period,
or the target-year. To revert to the above example, drug expenditure per case today could be 2
USS, whereas the objective in the target year would be 5 USS.
Technically speaking, the changes that will be made between the base year and the target
year will be gradual. To return once more to the above example, it will be assumed that the
change in expenditure on drugs from two dollars in the base year to five dollars in the target year
will be made step by step: 2.3 dollars in t + 1,2.6 dollars in t + 2, and so on. The model therefore
implements gradual and regular changes.
4
1.2.
Health services
The model presupposes that the health pyramid has three levels:
- Health centres : This is the first level of the health pyramid, which provides basic care for the
population. The model permits four categories of health centres to be distinguished. Note that
in reality, health centres” may have a variety of names: health posts, health huts, health and
welfare centres, etc. The classification may thus differ from one country to another (see below),
but these health centres are assumed to operate in comparable ways.
- Referral hospitals: The model can distinguish between two types of referral hospital: firstreferral hospitals, (district hospitals), and second-referral hospitals (regional, provincial, or,
county hospitals). In MicroFin, we refer to them as hospitals of level II and III, respectively.
- National referral hospitals: These are the highest referral hospital in the health pyramid, such
as specialised hospitals, teaching hospitals, etc. We refer to these as hospitals of level IV.
1.3.
Health administration
The model assumes that the health system is supervised by the health administration
which is divided into three levels:
- Basic administration: This is the administration that supervises the health centres and firstreferral infrastructure: we shall call it the district administration though being aware that
different terms are used in different countries.
- Intermediate administration: This is the administration intermediate between the basic and
central administration: we shall call it the regional administration, but here again the terms vary
from one country to another.
- Central administration: This is the national administration, i.e. in practice the Ministry of
Health. It comprises the traditional departments found at the central level, but may also include
institutions or specific services.
It should be noted that this model does not include training establishments.
1.4.
General overview of the structure of MicroFin
The model operates in three major stages.
1.4.1
First stage: Expenditure by category ofhealth facility and administration
During this stage, two steps must be distinguished.
5
1.4.1.1 Step 1: Calculations relating to a standard health facility and administration
For each of the 10 years of the projection period, the calculations are designed to
determine:
the number of staff with qualification k who are needed to operate a "standard”
or average health facility and administration;
expenditure on drugs for each standard health facility;
operating expenditure of a standard health facility and administration.
1.4.1.2 Step 2: Determination of the number of health facility and administrative offices
For each of the 10 years of the projection period, the calculations are designed to
determine the number of health facility and administrative offices that will be needed. This step
does not of course apply to the central hospital and the central administration.
Combining the information from steps 1 and 2, we obtain :
the number of staff with qualification k who are needed in the health facilities and
(i)
administrative offices;
the expenditure on drugs by the different categories of health facilities;
(ii)
the operating expenditure of health facilities and the administration.
(iii)
1.4.2 Second stage: National expenditure on health facilities and administration
Adding the results obtained for each category of health facilities and administration, we
obtain results at the national level:
(i)
total number of staff with qualification k who are needed to operate all the health
facilities and administrative offices managed by the government’s Ministry of Health (MoH).
total drug expenditure at all the health facilities;
(ii)
total operating expenditure of all the health facilities and administrative offices in the
(iii)
country.
Note that the national expenditure arrived at here includes expenditure by government,
communities and donors. Government includes central as well as local/provincial/regional
government. Sources of fimding are not taken into account during this stage.
1.4.3 Third stage : MoH expenditure on health facilities and administration
By making hypotheses concerning the financial contribution paid for by the MoH, we
arrive at:
(i)
the number of staff with qualification k who are paid by the MoH. Multiplying this
number by the salary (or remuneration) for each qualification k produces the MoH expenditure
on health and administrative personnel in all structures;
the MoH expenditure on drugs for all health facilities;
(ii)
the MoH operating expenditure for all health facilities and administrative offices.
(iii)
6
The types of main results of MicroFin are presented on page 7.
7
SUMMARY TABLE OF THE MAIN RESULTS OF MicroFin
Personnel
Number
Expenditure
Drug
expenditure
Other
operating
costs
Expenditure
on supervision
Food
expenditure
Total
expenditure
- Health centres
-Hospitals II
-Hospitals III
-National hospital
-District administration
-Regional administration
-Central administration
-Total
N.B.: Shading of fields means “not applicable”: for example, there is no expenditure on patient’s food in the central administration
8
2.
THE “HEALTH CENTRES”
2.1
Introduction
The principle of this module is based on the concept of a “standard health centre”. The
information that will be introduced into the model does not therefore concern each individual
health centre in the country: such an approach would have been possible in theory, but for highly
populated countries would have led to far too large a database to be processed. Accordingly, the
user of the model will often have to do quite a large amount of work in advance to obtain a
standard or mean value for each of the data used in the model. It is indeed only this mean value
that will be introduced into the model.
It must be borne in mind that this module only permits a maximum of four categories of
health centres to be taken into account. It is therefore advisable to subdivide the country’s health
centres in accordance with an appropriate classification. Obviously, this will vary from country
to country: a distinction will be made, for example, between rural health centres, urban health
centres with beds, health centres without beds, and small, medium-sized and large health centres.
It must be stressed that the objective of this module is to arrive at the government
expenditure on health centres. Consequently, all health centres that receive a financial
contribution from the government in one form or another must be taken into account in the
model: we are concerned not just with purely public structures but also with private structures
(religious, non-profit or otherwise) that receive a contribution from the government.
Health centre expenditure has been divided into three categories:
(i)
(ii)
(iii)
personnel expenditure. But it is also desirable to know the number of people working in
the centre, with a breakdown by category of staff;
expenditure on drugs, reagents, vaccines, etc.
other operating expenditure: this is the expenditure, other than on drugs, required for the
day-to-day operation of a health centre.
Clearly the evolution in this health centre expenditure depends on a number of factors that
need to be taken into account simultaneously:
(i)
(ii)
(iii)
(iv)
future demand: expenditure is dependent on the number of people attending the health
centre. In turn the latter depends on the size and growth of the population where the
health centre is located and on the population’s preference for the health centre services;
general economic considerations: for example, the evolution in real income;
the type of activities carried out at the health centre: for example, it matters to the
population whether health centres perform deliveries or not, or practise outreach strategy
or not, etc.;
the production technology of these activities, i.e., the way in which the various factors
of production (e.g., different categories of personnel, drugs, etc...) are combined for the
production of services.
9
The activities carried out by the staff of a health centre have been divided into five
categories:
(i)
(ii)
(iii)
(iv)
(v)
2.2.
curative consultations : these are activities that the staff perform during direct contact
with an individual: consultations, minor treatment, minor surgery, follow-up visits, etc.;
maternal and child health services : these again entail direct contact with an individual:
prenatal and postnatal consultations, child consultations, vaccination, family planning;
deliveries;
Information, Education and Communication (IEC) and outreach activities: administration
committees, awareness meetings, collective campaigns, group activities, family planning,
etc.;
administrative tasks : statistics, mail, staff supervision, meetings, district-level
contacts;
General overview of the structure of the “health centres” module
The model operates in three major stages:
2.2.1 First stage: Analysis by category ofhealth centre
It should be home in mind that this module can take into account four categories of health
centre. During this first stage, again two steps need to be distinguished:
2.2.1.1 Step I: Calculations relative to an average health centre
For each of the 10 years and for each category of health centre, the calculations performed
during this phase are designed to determine:
•
the number of staff with qualification k who are needed to operate a standard health
centre;
•
expenditure on drugs for a standard health centre;
•
other operating expenditure of a standard health centre.
2.2.1.2 Step 2: Determination of the number of health centres
For each of the 10 years and for each category of health centre, the calculations are
designed to determine the number of health centres that will be needed.
2.2.1.3.Step 3 : Results by category of health centre
For each of the 10 years and for each category of health centre, multiplying the results
obtained in Step 1 by the number of health centres, produces the following results:
•
number of persons with qualification k who are needed to operate the health centres in
the category;
•
expenditure on drugs by health centres in the category;
•
other operating expenditure of the health centres in the category.
10
2.2.2
Second stage: Results at the national level
Summing of the results obtained for each category of health centre produces the following
results:
(i)
(ii)
(iii)
total number of staff with qualification k who are needed to operate all the health centres
to which the government contributes;
total expenditure on drugs at all the health centres;
total other operating expenditure of all the health centres;
Sources of funding are not taken into account during this stage.
2.2.3
Third stage: MoH expenditure on health centres
By formulating hypotheses concerning the fraction of expenditure paid for by the MoH,
we arrive at:
(ii)
(iii)
the number of staff with qualification k paid by the government. Multiplying this number
by the salary for each qualification k produces the MoH’s expenditure on staff in all
health centres;
MoH financing of total expenditure on drugs at all health centres;
MoH financing of total other operating expenditure at all health centres.
2.3
Analysis by category of health centre (first stage): detailed structure
2.3.1
Step 1: Calculations relating to a standard health centre
(i)
2.3.1.1 Categories of staff needed for the operation of a standard health centre.
The staff working in a health centre has been divided into five categories:
physicians;
nurses: this covers all the various categories of nurses: registered nurses, enrolled nurses,
etc.;
midwives;
health workers these are all the other health personnel involved in health services and
not listed above, for example nursing aides;
non-health personnel: these are the staff with no health activities: caretakers, maintenance
staff, administrative and secretarial staff, etc.;
2.3.1.2 Estimation of health personnel needs
Health care
The reasoning below is valid for three categories of health centre activities :
curative consultations, MCH services and deliveries. Basically, the needs for staff are
estimated by calculating the time needed to produce the three services mentioned above.
11
This particular time is then related to a staff member's working time in order to make the
conversion into numbers of staff needed.
The time needed for carrying out activities of this type depends on the following
two criteria:
1)
the number ofcases treated in a health centre. For the base year of the model this
information is known. For subsequent years it is estimated on the basis of the size of the
population in the geographical area (POPZONE) where the health centre is located as
well as by and the demand by this population, expressed by the number of cases per
inhabitant (CASEC);
CASEi,c = POPZONE
* CASEC
c
i,c
(1)
where i = curative care, MCH activities, deliveries
c = category of health centre
the time that staff with qualification k devote to “producing” a service i: for
2)
example, the time that a nurse spends on producing a curative procedure. This time itself
is a function of two factors :
2a) the average time taken to produce a procedure i (AVTIME / For example, it could
be estimated that the production of a curative consultation should take 20 minutes. It is
important to note that the average time for a service is not the actual duration of the
’’medical” service but the total time needed to produce the service (e.g. including any
administrative time needed);
2b) the time contribution by a staff with qualification k (CTR% j c k) in the production
of service i. We therefore have:
TIMEi,c,k, = AVTIMEI.c * CTR% I,c,k.
(2)
For example, it may be thought that the involvement of the midwife in a delivery
should represent 80% of the average total time needed, the other 20% being provided by
a nurse. Surely, these two categories of staff should not always be present
simultaneously during all deliveries; it is simply estimated that on average a delivery
will involve a midwife for 80% of the time and a nurse for 20%.
The time needed for staff with qualification k for all activities i is arrived at as follows:
TIMEc,k.
(CASETIME.
(3)
12
IEC1 and outreach
The time needed for staff with qualification k to contribute to those activities is
arrived at by multiplying the total time spent on IEC and outreach in the health centre by
the time contribution of people with qualification k to those activities:
,
TIMEIECc,k = TIMEIEC *CTRIEC%
c
c,k
(4)
Administration
The time needed for staff with qualification k to carry out activities is arrived at
by multiplying the total time spent on administration by the contribution of staff with
qualification k to administration:
TIMEADMc,k. = TIMEADM * CTRADM%
c c,k,
(5)
Staff of qualification k needed
Making use of equations (3) to (5), we arrive at the total time needed for each of
the staff of qualification k:
TTIME
= TIMEr .+ TIMEIECr .+ TIMEADM .
CyK
C y K>
C y K-
C y IC
(6)
By dividing the total time needed for staff qualification k by the working time of
a person with qualification k (WORKTIME), we arrive at the number of staff with
qualification k needed to operate the standard health centre:
PER c,k,
i
TTIME .
____________ c,k
WORKTIMEr,
IEC : information, education and communication
(7)
13
BOX 1 : PRODUCTION FUNCTION OF ACTIVITIES
One of the specific features of this model concerns what may be called the production function of activities, i.e. the
way in which each of the persons with qualification k contributes to implementing one of the five scheduled activities i. This
would amount to having information presented in the following form:
Curative
care
MCH
Deliveries
1EC
Administration:
100%
100%
100%
100%
100%
Physicians
Nurses
Midwives
Other health
care personnel
Total
Each field indicates the contribution made by personnel with qualification k to the production of an activity i.
For the base year, such information would no doubt be difficult to collect. Consequently, the two essential components
in the model, the production function and the average time for an activity, have been estimated as follows:
1. Estimation of the components of the production function
- The users of the model should obtain information on the time budget of each of the personnel categories, i.e. on the
way in which the personnel spend their time. For example, nurses devote on average 70% of their time to curative care, 15%
to IEC and outreach 15% to administration and nothing to other activities. This information is then recorded as t % t c k. It must
be noted that this information corresponds to the above table, the only important difference being that the total of 100% appears
in the rows and not in the columns.
- Also known is the average number of persons with qualification k working in a health centre and the normal weekly
working time.
With this information, the simulation model first of all calculates the time spent by personnel of category k on
producing an activity i:
Ti,c,k.= ^..k * WORKTIMEc,k. * PER c,k,
Addition of the times calculated above for each of the personnel categories k produces the time that is devoted by all
the staff of the health centre to this activity i namely:
TI.c
=E T
1 i,c,k
k
Next, the ratioT i c k AT ijC produces an estimate of the components of the production function described above, i.e the
contribution by staff with qualification k to producing an activity i. This leads us to the coefficients:
CTR^c,k ,’ CTRIEC^ c,k. Or CTRADMK c,k.
2, Estimation of the average time for an activity: (A VTIME^
This time is arrived at by dividing the time spent on activity i by the entire staff of the health centre by the number
of cases (which is a datum collected). This gives the average time spent on a delivery, on a curative procedure and on an
individual MCH procedure. In other words:
AVTIME
Ti,c
CASE
•,c
14
2.3.1.3 Estimation of needs for non-health care personnel
For the base year and for each of the categories of health centre c, the number of non
health care personnel at a health centre is given. For the following years the user needs to assign
a value to this variable. The average number of non-health care personnel per category of health
centre is denoted by: PERNHC.
2.3.1.4 Expenditure on drugs
For the base year of the model, and for each of the categories of health centre c, the
expenditure on drugs at a standard health centre is given. It is stressed that this is the total
expenditure on drugs, whatever the source of funding: the user is requested to take care to assign
a value to any donations of drugs as far as possible.
For the projection years, this expenditure at a standard health centre is estimated on the
basis of two criteria:
•
a number of services i, namely CASEiJC
•
average expenditure on drugs by services , namely : hdri c
Drug expenditure for services i is therefore:
hcdrl,C = l,C
hcdr * CASE
l,C
(8)
2.3.1.5 Other operating expenditure of a standard health centre
For the base year of the model and for each of the categories of health centre c, the other
operating expenditure of an average health centre is given. This consists of all the expenditure
required for the current operation of the health centre, except for expenditure on drugs. It is
stressed that other operating expenditure are taken into account whatever the source of funding:
again the user must therefore assign a value to donations as far as possible.
For the projection years, other operating expenditure of a standard health centre is
estimated on the basis of two criteria:
•
the number of services i,
•
the other average operating expenditure for services i: (hoijC). Operating expenditure for
services i is therefore :
ho ltC = ho l,C * CASEl,C
(9)
It is known that, in reality, some operating expenditure is not linked to the volume of
services. Since such expenditure does not represent the majority, however, the decision to regard
operating expenditure as entirely variable was given in by the desire for simplicity.
2.3.2
Step 2 Determination of the number of health centres
In the base year ofthe model, for each of the four categories of health centre, the number
of health centres is known (HCf Similarly, the average population of a reference geographical
zone (POPZONEC) is also a known item of information. By multiplying these two data,
15
therefore, we obtain the total population served by all the health centres of the category under
consideration:
POPHC = HC *c POPZONE
c
c
(10)
Moreover, knowing the country’s overall population (POP), the model calculates the
proportion of the population that is served by each of the four categories of health centre:
POPHCK c c= POPHC /POP
(11)
For example, health centres of category I could serve 50% of the population, health
centres of category II 20%, those of categories III and IV serve 10% each: 10% of the population
is therefore not served by any health centre funded by the Ministry of Health.
For the projection years, knowing the demographic growth rate, the model calculates the
trend in the country’s total population. A demographic growth rate is also applied to the average
population in the geographical zone covered by each of the categories of health centre.
The user then, after observing the current values of POPCH%c, must fix an objective
regarding the proportion of the population that is served by each of the categories of health
centre. After inputting this proportion and knowing the total population, the model calculates the
total population served by each of the four categories of health centre.
POPHC = POP c* POPHCK c
(12)
Dividing POPHCc by the population covered by the standard health centre of the
corresponding category (POPCOVc) forecasts the number of health centres needed in the
category concerned.
HCc
POPHC c
POPCOVc
(13)
Note here that over the projection period, POPCOVc will grow according to population
growth.
2.3.3
Step 3 : Results by category of health centre
For each of the 10 years and for each of the categories of health centre c, multiplication
of the results obtained in Step Iby the number of health centres, determined in Step 2 produces
the following results:
16
the total number of persons with qualification k needed to operate the health centres of
the category concerned:
TPER
= PERS
, * HC c
c,k
c,k
(14)
total expenditure on drugs by each category of health centre
hdr = hdr
* cHC c
c
(15)
total other operating expenditure of the health centres in the category:
ho = cho * cHC c
2.4
(16)
Results at the national level (second stage): detailed structure
Addition of the results obtained or each category of health centre produces results at the
national level:
2.4.1
Total number ofpersons with qualification k needed to operate the health centres:
4
TPER^
2.4.2
E TPERe.k
Total expenditure on drugs at all the country "s health centres:
hcdr hc = E hcdrc
2.4.3
(17)
(18)
Total other operating expenditure ofall the health centres:
ho hC = ^hoc
(19)
C =1
2.5
MoH expenditure on health centres (third stage): detailed structure
This third stage is used to determine which of the national needs arrived at during the
previous stage will be covered by the MoH 2.
2 Note that in MacroFin, we refer to "domestic financing", whenever the MoH is “directly” responsible
for financing via domestic resources.
17
2.5.1. MoH expenditure on health centre personnel:
This expenditure is estimated in two stages. First of all the model determines which
personnel will be covered by the government out of the total number of persons with
qualification k required to operate the health centres considered. For the base year of the model,
the percentage of personnel with qualification k is calculated from observed data; for the
following years this proportion is determined by the user:
TPER*'
= TPERkhc
mi,K
(20)
In the second step, multiplying this number of persons with qualification k paid by the
MoH by the salary rates for qualification k (salJ, produces the total government expenditure on
health centre personnel:
n
hsal hc = y? hsal^ k
(21)
i=l
whereby hsal^fk = TPER^.
* Salk
mi,K
(22)
For the base year, the salary rate for each of the qualifications k is given; for the
subsequent years, the user determines an annual real growth rate.
2.5.2 MoH expenditure on drugs at health centres:
This expenditure is arrived at by multiplying the total expenditure on drugs by all health
centres by the proportion of this expenditure paid by the government:
h'
hedr^f
= hedr hc * HDR°/omi
mi
(23)
From the base year data, the proportion (HDR% hcmi) is calculated from the data; for
subsequent years, the user determines the proportion that should be obtained at the target year.
2.5.3
MoH expenditure on the other operating expenditure of health centres:
This expenditure is arrived at by multiplying the total operating expenditure of all the
health centres by the proportion of this expenditure paid by the government:
Ao= ho hc * HO0/^
(24)
For the base year of the model, this proportion is calculated from the data; for the
subsequent years, the user determines the proportion that should be arrived at by the end of the
projection period.
18
2.5.4
Total MoH operating expenditure
Total MoH operating or recurrent expenditure on the health centres is arrived at by adding
the three types of expenditure above:
.
he
hremi
.
he
.
. he
+ h0mi
= hsal^ + hedr,
mi
(25)
2.6 Determinants of future MoH expenditure
Starting from a situation observed in the base year, the model sets out to estimate the
trend in MoH expenditure for the health centres during the next 10 years. These estimates are
based on a number of hypotheses concerning a number of variables. The hypotheses relate to
what the user expects or wishes the trend to be for these variables during the forecasting years.
Thus, the user has an important role to play in the setting of values of what are called “exogenous
variables”. The values of exogenous variables are fixed outside the model, but they are the ones
to influence the model’s “endogenous variables”. The latter are determined via the model only.
In the simulation model, there are two kinds of exogenous variables: (i) those that in
reality are endogenous or partly endogenous, but that are treated as exogenous by the model,
(ii) variables that are directly determined by policy-makers.
2.6.1 Variables treated as exogenous by the simulation model
(i)
An important example concerns the nation’s population. The latter will determine a.o.
total health expenditure. It is evident that over the years of simulation, population is likely to
grow. It is the user now who must introduce the annual population growth rate. Again, we
recognize that in reality population growth may be partly endogenous, i.e. it is dependent upon
a host of socio-economic variables. However, in the simulation model we treat it as truly
exogenous.
(ii)
Health expenditure is a function of patients’ attendance at health centres. This level of
attendance is itself a function of socio-economic factors such as individual or family income
level, their educational level, the epidemiological pattern in the area concerned, and of supply
characteristics (density of the health facility network, quality of sei vices, etc.) The simulation
model does not determine the level of this demand on the basis of a demand function taking all
the above elements into account. Still, the user should still give an indication of how this demand
will develop during the yeas of simulation. To do so he/she is asked to indicate the “annual
number of cases per inhabitant”, (CASEj,c) in the target year.
2.6.2. Policy variables
Policy variables are those over which the health policy-maker has direct influence. This
influence is exerted in different ways:
(i)
Through budgetary decisions.
The policy variables are:
19
The annual rate of salary adjustment (the rates may differ according to the staff
qualification.
The contribution of the MoH to financing health expenditure. A number of policy
variables can be used to reflect the government’s willingness to finance health care.
These are :
h' and HO0/^
TPRE°/0 mi,k, ,7 HDR°/Omi
(26)
Through the network ofhealth facilities
The health policy-maker may act in two ways. He may decide to transform the
characteristics of the health centres, which is equivalent to altering the relative importance of
each of the four categories of health centre. However, he may also decide to plan for an increase
or decrease of the coverage rate of the health centres. It is the variable POPHC%c that can be
used to reflect such policy actions. The user will need to indicate the value of this variable which
should be attained in the target year.
(ii)
It should be noted that the average size of a health centre, for each of the categories of
centre, was determined for the base year by dividing the total population served by the health
centres in the category by the number of centres in the category. For subsequent years no policy
objective has been established as to the average size of these centres. However, the average size
is assumed to change according to an annual growth rate specified by the user. The latter may
well differ, however, from the overall population growth rate in the country.
(iii)
Through the quality of care. In the model this is expressed by several policy variables:
The standards concerning average expenditure per service on drugs and current
operating expenditure: hdr^ hoc.
This is of course an imperfect indicator of quality, as quality is not just a matter of
expenditure.
The standards in terms of the time that has to be devoted to group activities and
to the administration of a standard health centre TIMEIECc, TIMEADMC.
The standards in terms of time required to produce a health service i.
The standards in terms of modes of production of activities at a standard health centre,
i.e., the way in which the various staff qualifications are combined in performing these
activities: CTR% it Ci h CTRADM%Ci k, CTRIEC% c>k.
20
2.7
Data input
2.7.1
List ofdata to be collectedfor the base year
2.7.1.1 General data
•
•
•
•
•
•
Total population
Population growth rate
Duration of work:
• Number of days worked per year;
• Number of holiday days per year;
• Number of hours of work per day;
Average monthly salary for qualification k. The purpose is to arrive at a total salary cost
paid via the MoH: consequently, all the salary must be taken into account: gross salary,
bonuses, various benefits, etc.
Proportion of imported drugs in the MoH expenditure on drugs ;
Proportion of imported drugs in the expenditure for drugs financed by donors.
2.7.1.2 Data for standard health centres
•
•
•
•
Number of health centres in the category;
Average population covered by each centre;
Growth rate of this population;
Data on the services:
• Number of curative consultations per year;
• Number of MCH services per year;
• Number of deliveries per year;
Percentage distribution of working time for qualification k and for each of the activities,
according to the matrix below:
Curative
care
MCH
Delivery
1EC and
outreach
Administration
Total
Physicians
100%
Nurses
100%
Midwives
100%
Other health
care personnel
100%
Distribution of staff for each of the qualifications k (including non-health care personnel),
by source of funding (MoH, community financing, external aid);
Expenditure on drugs by source of funding (MoH, community financing, external aid);
Other operating expenditure by source of funding (MoH, community financing, external
aid).
21
2.7.2
Data input for exogenous variables
Annual population growth
Annual growth of the population covered by each type of health centre
Number of health services i per capita per type of health centre : CASECi c
2.7.3
Data input for policy variables
Annual rate of growth of salaries per qualification k
MoH financing:
- Percentage of personnel with qualification k paid by the MoH:
TPERV* tn I,ilr™
- Percentage of expenditure on drugs paid for by the MoH:
HDRa/<,tni
h‘
- Percentage of operating expenditure paid for by the MoH:
ml
- Percentage of the country’s population served by each of the categories of health centre:
POPHCVo c
- Average expenditure on drugs per service for each of the categories of health centre c:
hdri,c
- Average other operating expenditure per service for each of the categories of health
centre c:
hOi.c
- Total time that the staff of a health centre have to spend on IEC and outreach, for each
of the categories of health centres c. This is time per week:
TIMEIEC c
22
- Total time that the staff of a health centre have to spend on administrative activities.
This is time per week:
TIMEADMc
- For each of the categories of health centre c, the average time needed to produce a
service i:
- Contribution of one staff member with qualification k to the production of an activity
at the health centre:
CTR^itCtk
CTRADM% c,k.
CTRIECK c,kt
- Percentage distribution of working time for qualification k and for each of the activities
according to the matrix below :
Curative
activities
MCH
Delivery
1EC and
outreach
Administration
100%
100%
100%
100%
100%
Physicians
Nurses
Midwives
Other health
care personnel
Total
- Number of non-health-care personnel for a standard health centre per category of health
centre c.
3.
REFERRAL HOSPITALS
3.1
Introduction
The general logic of the simulation model related to these hospitals (Hospitals of level
II and III) is quite similar to that used for the health centres. However, a hospital’s operations are
more complex than a health centre’s. A hospital is structured in district services which each have
their own ways of operating and their own logic. Even if there are clear links between them, each
of these services constitutes an entity.
23
In the present version of MicroFin eight types of services have been distinguished:
- inpatient departments : (four)
- outpatient clinic;
- operating theatre;
- radiology;
- laboratory;
- administration;
- ambulance service;
- catering service.
For each service, total cost will therefore be determined by service-specific number of
staff of qualification k, the operating expenditure, the expenditure on drugs and the expenditure
on food.
3.2
Calculations concerning each of the eight types of services
For each of the 10 years, the following items are determined for each of the levels of
hospital (h =1,11) and for each of the eight types of services:
- the number of staff of professional qualification k needed;
- drug expenditure;
- other operating expenditure;
- expenditure on food (for the catering service only).
3.2.1. Inpatient departments
3.2.1.1 Number of beds
The number of beds in one of the four in-patient departments is the outcome of the
following steps :
(i)
the total number of admissions per year determined by the population of the area (POPJ
and of the admissions per capita (ADMCJ. Note that ADMCh is an indicator of demand, that the
user determines for the target year;
* ADMC.n
ADM. = POP.
n
n
(27)
(ii)
the number of admissions per year to each of the inpatient departments i (ADMih) is the
result of the total number of admissions multiplied by the percentage share of admissions
associated with in-patient department i (ADMo/oi>t)\
ADM . = ADM
. * ADM°/0..
i,n
n
i,n
(28)
Note that ADM0/^ is fixed by the user for the target year.
(iii)
the number of hospitalization days per year in department i is obtained by multiplying
the number of admissions to department i by the length of stay in department i (LOS^ .
HDAYSi,h
.= ADMi,n. * LOSi.h,
(29)
24
(iv)
the number of beds needed for the department i (BEDS
is equal to the number of
hospitalization days in department i divided by 365. Nevertheless, to allow for some irregularity
in the bed requirement according to the time of year or simply for unforeseen factors, the model
introduces an adjustment coefficient (ADJ)3'.
BEDS = {HD
AYS
.. / 365) * ADJ
i,n
' i,n
(30)
The model allows for four different in-patient departments (i=l,...4). The key variable
is the number of beds. It is assumed that the number of beds determines both the number of staff
with professional qualification k, drug expenditure and other operating expenditure.
3.2.1.2 Staff requirement
The total staff requirement per professional qualification k is a function of the number
of beds in the department under consideration and the number of persons with professional
qualification k per bed (PERBEDi htk):
. ,
PERi.n
...,« = BEDSi,n. * PERBED i,h,k
(31)
The number of staff k per bed is a given for the base year and a policy objective to be
fixed by the user for the target year.
3.2.1.3 Drug expenditure
The expenditure on drugs for each of the inpatient departments i is arrived at by
multiplying the number of beds by the drug expenditure per \)e&(hdrb,, .
hdr. , = BEDSih * hdrb .
(32)
3.2.1.4 Other operating expenditure
Other operating expenditure is calculated as above, namely by multiplying the number
of beds by the other operating expenditure per bed (hobi J.
ho i.h. = BEDSi.h. * h0bi,h
(33)
3 For the first year, the number of beds needed is calculated from collected data on the number of
hospitalization days. The number of beds needed is not necessarily equal to the "observed” number of beds.
25
3.2.2. Out-patient clinic
3.2.2.1 Number of outpatient consultations
The key variable is the annual number of outpatient consultations performed in the clinic.
This number of outpatient consultations per annum is itself a function of the population in the
hospital’s catchment-area (POPCOV J and of the number of outpatient consultations per
inhabitant (OPC h):
OP. - nPOPCOV.n * OPC.n
(34)
3.2.2.2 Staff requirement
This number of annual consultations is then distributed among each of the staff with
qualification k that performs outpatient consultations, using the distribution coefficient
OP%h>k:
OPrl,hlrK = OP.fl * OP%..
n,K
(35)
We can now determine the number of outpatient consultations that can be performed in
one year by a person with qualification k. This number is a function of the number of days
worked per year4 and the number of outpatient consultations that one person can perform per day
(OP h k). The latter number is calculated for the base year and fixed by the user for the target
year.
OPShn,K
\ = DAYSW * OP.fl K.
(36)
When the number of outpatient consultations to be performed by people with
qualification k is divided by OPS *h k, or the number of outpatient consultations that "can” be
performed by one person with qualification k per year, we obtain the number of staff with
qualification k needed for the functioning of the outpatient clinic :
PER op,h,k
.. = OP..
n,K ' ops:k
(37)
3.2.2 3 Drug expenditure
The drug expenditure for the outpatient clinic is a function of the number of outpatient
consultations per year and of the drug expenditure per outpatient consultation (hdr Op)h) •
hdrop.n. = OPh * hdrop,h,
4 Number of working days per year after deducting weekends and holidays.
(38)
26
3.2.2.4 Other operating expenditure
Other expenditure is arrived at as above, namely by multiplying the number of outpatient
consultations per year by the other operating expenditure per outpatient consultation (ho op h)
ho op,h, = OP,n * h°oP.H
3.2.3
(39)
Operating theatre
3.2.3.1 Number of surgical interventions
The key variable here is the number of surgical interventions per year. It will be assumed
that the number of operations is a fraction of the number of hospital admissions
(ADMSURG% h):
SURG.n
ADM.n * ADMSURG0/0n.
(40)
3.2.3.2 Staff requirement
We suppose that surgical intervention are done by staff teams, whose composition is to
be fixed by the user. First, the model calculates the number of interventions per year that can
possible be undertaken by a team. It is obtained by multiplying the number of interventions per
day that can be done by one team (SURGTh) by the number of workdays (DAYSW):
SURGE,n = SURGE.n * DAYSW
(41)
The variable SURGTh represents the staff team productivity.
Next, by dividing the number of interventions to be performed at the hospital by the
yearly number of operations per team, one obtains the required number of teams:
SURGTEAM.n = SURG.n / SURGE,n
(42)
Note that SURGTEAM^ could be less than 1, implying that the team spends a fraction of
its time on other tasks in the hospital.
Finally, we obtain the number of staff in the qualification k needed for the operations by
multiplying SURGTEAMh by the number of persons with qualification k needed in a surgical
team:
PER su,h,k = SURGTEAMh * PERsu h k
(43)
27
3.2.3.3 Drug expenditure
The expenditure on drugs for the operating theatre is a function of the number of
operations per year and of the expenditure on drugs for one operation (hdr su h)
hdrsu,h =SURGnh * hdrsu,h.
(44)
3.2.3.4 Operating expenditure
This expenditure is arrived at by multiplying the number of operations per year by the
other operating expenditure per surgical intervention :
ho su,n, = SURG.n * hosu,h,
3.2.4
(45)
Radiology department
3.2.4.1 Number of X-rays
The key variable is the number of X-rays performed by the hospital per year. It will be
assumed that this number is a function of the number of admissions and of the number of X-rays
performed per admission (XRAY h):
XRAY. = ADM.
* XRAY.n
n
n
(46)
3.2.4.2 Staff requirement
First, we define the number of X-rays that can be performed per year by a person with
qualification k:
XRAY. . = DAYSW * XRAYn,K
h,
(47)
Where XRAYh kis the number of X-rays that can be done per day by a person with
qualification k.
Secondly, we calculate the number of staff with qualification k needed for the radiology
department as follows:
PER ra,n,k
. . = XRAY. / XRAY.flflC.
rl
(48)
28
3.2.4.3 Expenditure for medical supplies
The expenditure on medical supplies for the radiology department is a function of the
number of X-rays per year and of the expenditure on medical supplies perscribed per X-ray
(hmsrah).
hms ra,h. = XRAY.n * hms ra,n.
(49)
3.2.4.4 Other operating expenditure
This expenditure is arrived at by multiplying the number of X-rays per year by other
operating expenditure per X-ray (ho raj h) :
ho ra,h.
3.2.5
= XRAY.n * ho ra,n,
(50)
Laboratory department
The key variable is the number of laboratory tests performed by the hospital concerned
per year. The calculations performed by the model are identical to those made for the radiology
department.
3.2.5.1 Number of tests
The key variable is the number of performed by the hospital per year. It will be assumed
that this number is a function of the number of admissions and of the number of tests performed
per admission:
XLAB.n = ADM.n * XLAB.n
(51)
3.2.5.2 Staff requirement
First, we define the number of tests that can be performed per year by a person with
qualification k:
XLAB.n,k. = DAYSW * XLABhk
(52)
Where XLABh k is the number of tests that can be done per day by a person with
qualification k.
Secondly, we calculate the number of staff with qualification k needed for the radiology
department as follows:
PERra,h,k
XLAB.n / XLAB. .
(53)
29
3.2.5.3 Expenditure for medical supplies
The expenditure on medical supplies is a function of the number of tests per year and of
the expenditure on medical supplies perscribed per test (hms ra h).
hms ra,h, = LABnh * hms ra,n,
(54)
3.2.5.4 Other operating expenditure
This expenditure is arrived at by multiplying the number of tests per year by other
operating expenditure per test: (Hora h)
ho ra,h. = LAB,n
ho ra,h.
(55)
3.2.6 A dministration
Note, first, that in this case we define administration (secretariat, management,
accounting, etc.) to include the maintenance services.
3.2.6.1 Staff requirement
The key variable determining staffing needs is the number of beds in the four inpatient
departments. The total number of staff of qualification k is obtained by multiplying the total
number of beds by the personnel requirement (of qualification k) per bed :
4
aa,n,lc
[£ BEDS.h] * PERad h k
(56)
i=l
where PER^ h k is the number of staff with qualification k per bed.
3.2.6.2 Operating expenditure
First, an average operating expenditure amount per expenditure administrative staff is
fixed Eoad h. Total operating expenditure then follows easily:
ho ad,h
..
[E PER,ad,h,k,]J * ho iad,h
k
(57)
30
3.2.7 Ambulance service
3.2.7.1 Staff requirement
Data for the number of teams (AMBTEAM) and the composition of each team is put in
for the base year. Subsequently, both the number and composition of teams are fixed by the user
for the target year.
3.2.7.2 Other operating expenditure
First, we calculate the number ofjourneys per year, that is equal to the population covered
(POPCOV h) times the number of journeys per capita (AMBJC^ :
AMBJ. = POPCOV.
n
n * AMBJC.n
(58)
Secondly, we obtain other operating expenditure by multiplying the number ofjourneys
by the operating expenditure per journey (Eb am h)
ho am,h. = AMBJ.n * ho am,n.
3.2.8
(59)
Catering service
3.2.8.1 Catering requirement
The number of persons needed to operate this service is calculated by multiplying the
number of hospitalization days by the number of catering service personnel per hospitalization
day (PERca h).
PER ca,h.
Yhdays.h * PER ca,h.
(60)
3.2.8.2 Food expenditure
The expenditure on food for this service is arrived at by multiplying the number of
hospitalization days by the food expenditure per hospitalization day (Kid ca h).
hfdca,h
52 HDAYSi,h * hfdica,h
(61)
3.2.8.3 Other operating expenditure
The operating expenditure for the catering service is arrived at by multiplying the number
of hospitalization days by the other operating cost per hospital day (hbfd h):
fd,h
= Yhdays., * hofd.h
(62)
31
3.3
Determination of the number of hospitals
Beyond the number observed for the base year, the number of hospitals is determined by
the user. Indeed, contrary to the submodel for the health centres, the user himself determines this
number for each of the forecasting years.
3.4
Results at the national level and MoH expenditure on hospitals
The types of calculations to obtain the results at national level and MoH expenditure are
identical to those made in the module for the health centres.
3.5
The determinants of future MoH expenditure
As in the model for health centres, expenditure in hospitals of levels II and III is
determined by exogenous and policy variables :
3.5.1
Variables treated as exogenous
Other things being equal, health expenditure is a function of the population in the zone
where the hospital is situated (POPCOVf). The latter is an exogenous variable.
Secondly, we have the number of days worked.
Thirdly, health expenditure also depends on the population's demand for health services.
Demand is expressed via the number of admissions and outpatient consultations. For the purpose
of the simulation model, the latter variables are taken to be exogenous.
3.5.2
Policy variables
These are variables over which the policy-maker exerts a direct influence. This influence
is exerted in different ways:
(i)
through budgetary adjustments', we refer to the annual growth rate of salaries and to the
contribution by the MoH to financing expenditure;
(ii)
through the density of the hospital network', the policy-maker establishes the number of
hospitals in the country, for each of the two hospital levels;
(iii)
through production technology ofhealth services'.
* utilization of personnel: this concerns the way in which personnel is used when a
service is produced:
- inpatient departments: number of staff with qualification k per bed;
- outpatient clinic: number of outpatient consultations that can be administered per day
by a staff with qualification k, distribution of outpatient consultations among the various
staff with qualification k;
- operating theatre: composition of the operating theatre team, number of operations per
working day in which a staff with qualification k can take part;
32
- radiology: number of X-rays that a person with qualification k can perform per working
day;
-laboratory: number of laboratory tests that a person with qualification k can perform per
working day;
-administration: number of administrative staff with qualification k per bed (total of
inpatient departments);
- ambulance service: composition of the ambulance of team, number of teams;
- catering: number of catering staff with qualification k per hospitalization day;
* regulation of demand: while a good many activities of the hospital services are
governed by the number of admissions, i.e., by demand, the decision-maker can
nevertheless take measures to regulate demand. The length of stay in the inpatient
departments is one example: obviously, the length of stay is conditioned by the type of
health problem the patient has to face, but it is also well known that the length of stay for
the same health problem may vary considerably, depending on the local practices and
habits. The same applies to many other variables: “% of inpatients who undergo an
operation”, “Number of X-rays per admission”, "Number of laboratory tests per
admission”, “Number of ambulance journeys per inhabitant of the area”;
* unit costs for operation and drugs: for each component of a service, the user should
determine the unit cost:
- inpatient departments: expenditure per bed;
- outpatient clinic: expenditure per consultation;
- operating theatre: expenditure per operation;
- radiology: expenditure per X-ray;
- laboratory: expenditure per laboratory test;
- ambulance: cost of one journey;
- administration: operating expenditure per administrative staff member;
- catering: expenditure per hospitalization day;
3.6.
DATA INPUT
3.6.1
List ofdata to be collectedfor the base year
GIVEN
3.6.1.1 General data
- Number of hospitals
- Population served by an average hospital of the category concerned and its growth rate
- Total number of admissions
3.6.1.2 Data for standard hospitals
A. For the average hospital as a whole:
- Distribution of expenditure:
• on drugs by origin of funds: MoH, community financing, external aid;
• on operation, by origin of funds: MoH, community financing, external aid;
- Distribution of staff paid by the MoH, by category
- Imported drugs: by the MoH, by donors
33
B.
By department
*In-patient departments
- Number of beds
- Number of admissions per year
- Average length of stay
- Number of staff:
• General practitioner
• Specialist
• Midwives
• Nurses
• Other health care personnel
- Total expenditure on drugs
- Total other operating expenditure
*Operating theatre
- Number of operations per year
- Total number of staff:
• Surgeons
• Anaesthetists
• Physicians
• Nurses
• Other health care personnel
- Total expenditure on drugs
- Total other operating expenditure
- Composition of a team:
• Surgeons
• Anaesthetists
• Physicians
• Nurses
• Other health care personnel
*Out-patient department
- Number of consultations per year
- Staff:
• Specialists
• General practitioners
• Midwives
- Total expenditure on drugs
- Total other operating expenditure
34
*Radiology
- Number of X-rays (procedures) per year
- Staff:
• Specialist
• Technician
• Other health care personnel
- Expenditure on consumable supplies
- Other operating expenditure
*
*Laboratory
- Number of procedures per year
- Staff:
• Physicians
• Technicians
• Other health care personnel
- Expenditure on consumable laboratory supplies
- Other operating expenditure
*Ambulance
- Number of journeys per year
- Personnel:
•Driver
•Nurse
- Other operating expenditure
*Administration and general services
- Staff:
• Senior managers
• Pharmacists
• Clerical staff including secretaries
• Technicians
• Service personnel
- Other operating expenditure
*Catering
- Service personnel
- Food expenditure
- Other operating expenditure
3.6.2
Data inputfor exogenous variables
GIVEN
- Number of admissions per inhabitant
- Number of outpatient consultations per inhabitant
35
3.6.3
Data input for policy variables
GIVEN
- Paid for by the MoH:
. Percentage of personnel with qualification k paid by the MoH
. Percentage of expenditure on drugs paid by the MoH
. Percentage of operating expenditure paid by the MoH
. Percentage of expenditure on food paid by the MoH
- Number of hospitals for each of the hospital levels
- Inpatient departments:
. Number of persons with qualification k per bed
- Outpatient clinic
. Number of outpatient consultations that a person with qualification k can do in one day
. Distribution of outpatient consultations among the various staff qualifications k
Operating theatre:
. Composition of the operating theatre team
. Number of operations per working day in which a person with qualification k can
participate
- Radiology:
. Number of X-rays that a person with qualification k can perform per day
- Laboratory:
. Number of laboratory tests that a person with qualification k can perform per working day
- Administration:
. Number of administrative staff with qualification k per bed
- Ambulance: Number of teams
- Catering:
Number of catering staff with qualification k per bed day
- Length of stay in each of the inpatient departments
- Percentage of patients who undergo an operation
- Number of X-rays per admission
- Number of laboratory tests per admission
- Number of ambulance journeys per inhabitant
36
- Other operating costs and drug costs (if applicable), medical supplies (if applicable) for:
• Inpatient departments
• Outpatient clinic
• Operating theatre
• Radiology
• Laboratory
• Ambulance
• Administration
• Catering
• Adjustment coefficient
4.
NATIONAL REFERRAL HOSPITAL
This module concerns the national referral hospital. It is assumed that there is only one
such hospital in the country.
This module works exactly in the same way as the module for the level II and III
hospitals, except for the following:
(i)
the number of inpatient departments that is taken into account is 10 instead of 4,
(ii)
a dental department and emergency department are included; these two departments are
assumed to operate like the laboratory department, except that:
- in the data for the base year, the number of laboratory tests is replaced by the number
of dental procedures per year for the dental department and by the number of emergency
cases per year for the emergency department;
- for the target year, the number of dental procedures per inhabitant is introduced for the
dental department, while for the casualty department the number of emergency cases is
determined as a percentage of hospital admissions.
Because of the similarity of the structure of this component with that of hospitals of level
II and III, we have omitted the presentation of equations.
31
5.
ADMINISTRATION
5.1
Administration of the district and regional level
This component operates in two stages, instead of three as for the preceding modules:
stage II does not exist, as it is assumed that the administration costs are wholly covered by the
MoH.
5.1.1
First stage: analysis by management category
This module distinguishes two levels of management: (ad=l,2) the district level and the
regional level.
5.1.1.1 Step 1: Calculations related to an average administrative office
For each of the 10 years and for each of the two categories of management, the following
items are calculated:
(i)
the number of persons with professional qualification k required for the operation of an
average district or a regional administration. For the base year, this information is a
given; for the target year, the user determines the composition of the administrative
teams;
(ii)
the other operating expenditure for an administration at district and regional level (apart
from supervision, which is taken into account later). To arrive at this expenditure, the
notion of costs per management staff member is used: thus the model calculates the
number of management staff including the chief medical officer and multiplies this
number by the operating expenditure per staff member (Ko ad) (calculated for the base
year from the allocation for the operation of an average administrative office and
determined by the user for the target year):
bo ad. = PER ad. * ho ad,
(iii)
(63)
the supervision expenditure5 for an average district and an average region:
hsUPad
^SUP ad. * hsUPad
(64)
where SUP ad and hsupad are the number of supervisions to be carried out per year and the
average supervision expenditure, respectively. The number of supervisions is arrived at
differently for the district and for the region :
5
This does not include the cost of salaries due to supervision.
38
for the district: the number of supervisions per year (SUP D) takes into account
the number of health centres to be supervised, both public and private, and the
number of visits per year that should be made to each type of health centre:
* VISPUB) + (HCPRIV * VISPRIV)
SUPD
c
(65)
where VISPUB and VISPRIV refer to the number of visits per year to a
government health center and a private health center, respectively, and where
HCPRIV refers to the number of private health centres;
for the region: the number of supervisions per year (SUP R) is arrived at
by multiplying the number of districts in the region (DISTR) by the
number of visits that should be made to each district per year (VISDISTR)
SUPR = DISTR * VISDISTR
(66)
5.1.1.2 Step 2 : Number of districts and regions
For the base year these numbers are known. For the target year the user determines the
number of districts and regions in the country.
5.1.2
Third stage : MoH expenditure on administration
In the present case, there is no second stage, because all expenditure is covered by the
MoH. Hence, the calculations in this module move directly to the third stage. Here the MoH
expenditure on staff, on other operating expenditure and on supervision are calculated using the
same reasoning as in the previous modules.
5.1.3
Determinants of changes in future MoH expenditure
As for the previous modules, the user must specifiy the values of a certain number of
variables:
- composition by professional qualification k of the team at district and regional level
- the average other operating cost per staff at the district and regional levels;
- the cost of one supervision at the district and regional levels;
- the number of visits per year to be made to a government health centre and to a private
health centre at the district level;
- the number of visits per year to a district, at the regional level;
- the number of districts and regions in the country.
39
5.1.4 Data input 6
5.1.4.1 Administration of the district
List of information to be collectedfor the base year
- Total number of physicians working in the district administration
- Number of senior staff apart form the district medical officer
- Number of clerical staff
- Number of service personnel
- Operating budget excluding personnel and supervision
- Personnel budget for senior managers excluding district medical officers
- Personnel budget for clerical staff
- Budget for service personnel
- Monthly salary of the district medical officer
- Distribution of the time of the district medical officer:
• on supervision
• on administration
Data on all the districts
- Total number of annual supervision of government health centres
- Total number of annual supervision of private health cenntres
- Total number of private health centres
- Total supervision budget for all the districts
- Number of districts
5.1.4.2 Administration of the region
Data on an average region
- Total number of physicians working in the regional administration
- Number of senior managers apart from the regional medical director
- Number of clerical staff
- Number of service personnel
- Operating budget excluding personnel and supervision
- Personnel budget for senior managers excluding regional medical director
- Personnel budget for clerical staff
- Budget for service personnel
- Monthly salary of the regional medical director
- Distribution of the time of the regional medical director:
• on supervision
• on administration
6
For the variables listed below, both values for the base year as well as for the target year need to
be given by the user. They could therefore be seen as policy variables.
40
Data related to all regions
- Total number of annual supervisions of districts
- Total supervision budget for all regions
- Number of regions
5.2
Central administration
5.2.1
MoH expenditure on central administration
The present module does not include stages I and II like in the preceding modules, since
central administration is by definition unique and is assumed to be wholly financed by the MoH.
The purpose of this module is to calculate the MoH expenditure on remuneration and
operating costs.
(i)
MoH expenditure on the remuneration of staff
For the base year the composition of the staff of the central administration by professional
qualification is known. For the target year the user determines this composition. MoH
expenditure on the remuneration of the management staff is arrived at by multiplying the number
of persons by the corresponding salary level.
(ii)
MoH other operating expenditure
On the basis of the above results the model calculates the number of staff in the central
administration. Then, an operating cost per staff member is determined. For the base year this
cost is arrived at by dividing the other operating expenditure of the central management by the
number of staff. For the target year the user determines the desired value of this other operating
cost. Multiplying the operating cost per staff member by the number of staff results in the MoH
other operating expenditure.
5.2.2
Data input7
- Operating budget (except for personnel)
- Personnel budget
. Senior managers
. Clerical staff
. Service personnel
- Number of personnel
. Senior staff including physicians
. Clerical staff
. Service personnel
7
For the variables listed below, both values for the base year as well as for the target year need to
be given by the user. They could therefore be seen as policy variables.
41
PART II
GOVERNMENT BUDGET OPTIONS FOR THE
FUNCTIONING OF HEALTH SYSTEM
6.
GENERAL OUTLINE
6.1
Introduction
The health sector does not operate in isolation from the rest of the economy.The
economic plight of many developing countries, especially over the last decade, has affected the
public sector and therefore the level of public expenditure on health. This has reminded decision
makers that the health sector is linked to the economy. Countries have realized that the
improvements they wish to see in health are constrained by the current state of the economy and
by its growth.
Government-financed health systems therefore became particularly fragile at a time when
many health policy problems were still to be solved. How are countries to finance the investment
and recurrent costs of the necessary expansion of primary health care? How will countries
finance referral care, the need for which will arise with the development of primary health care?
To what extent will governments be able to rely on international aid and/or households for
additional financing?
In order to plan the health sector properly, we have to understand how it works as an
integral part of the economy. This calls for a macroeconomic approach to help decision-makers
establish appropriate development policies and devise health system reforms and new schemes
to finance them.The advantages of this approach are basically twofold: in the first place,
macroeconomic analysis shows planners the links between the global economy and the health
sector. For example, the policy pursued in the face of a very serious trade deficit may restrict
imports of essential drugs. Another example is the case where general economic growth in a
country can facilitate the financing of health care by the government, thanks to a larger overall
government budget.
Secondly, it offers an overview of the resources available for health. Involvement of all
the partners in planning of national health activities makes for planning that takes account of the
budgetary constraints of each. This approach is useful in that it allows for more realistic
planning.
As in the MicroFin, the user of MacroFin is able to work on a ten-year period. An
important feature of MacroFin is that it enables users, i.e. decision-makers and their advisers, to:
(i)
improve their analysis of government options with respect to health policy alternatives;
(ii)
better assess the possible impact of macroeconomic changes on the global Government
budget and hence on the health budget;
(iii)
gain a better grasp of the potential role of other economic agents such as donors and the
private sector (households, businesses, nongovernmental organizations, health insurance
companies and plans) in the financing of health care.
42
6.2
General overview of the structure of MacroFin
6.2.1
Equations
This sub-model consists of the following sets of equations:
Population
The population for the base year is given. Then, the rate of demographic growth is
determined so that the total population of the country can be calculated.
(i)
Value added by sector
For each sectoral value added, a growth rate is determined. The sum of the value added
of the different sectors results in the gross domestic product (GDP).
(ii)
Use of resources
The use of the main components of GDP is analysed : private and government
consumption, investment and international trade. The resulting values are used to estimate the
various tax bases and the trade balance.
(iii)
International transactions
The rate of growth of various international transactions (net revenue from abroad, net
transfers, long- and short-term capital flows) are defined. This allows one to obtain the current
account and the net foreign currency reserves of the nation.
(iv)
Prices
The rates of growth of various prices (consumer price index, GDP deflator, expenditure
deflator and foreign price index) are determined in order to calculate the level of the price
indexes. Subsequently these price indices are used to convert variables at constant prices into
current prices.
(v)
The exchange rate
An estimate of the exchange rate of the national currency (against the US dollar by
default) is given by the user in order to calculate requirements for imported drugs in national
currency. The exchange rate is used also to estimate external aid requirements in US dollars.
(vi)
Government revenue
Rates of taxation (on consumption, on international trade) and estimated rates of growth
of other Government revenue (other fiscal income, non-fiscal revenue and gifts) are used to
calculate the overall revenue of the Government.
(vii)
Government expenditure
The user sets the rates of growth of the various headings of current expenditure (in
accordance with the "economic" classification) and of capital expenditure, in order to calculate
overall government expenditure.
(viii)
Government expenditure on health
As was explained in the description of MicroFin, the user has the option of importing the
estimates of financial needs requirements (related to the operational expenditure of the health
(ix)
43
system) into MacroFin. Obviously, the real meaning of the model becomes clear when the needs
expressed for the various levels of the health sector are analysed within the context of the
macroeconomic environment.
Nevertheless, there are cases where, due to shortage of data, the user is not yet in a
position to use MicroFin effectively. Also, in some circumstances, a rapid preliminary analysis
of is requested. In such cases, MacroFin can be directly used for predicting health expenditure.
The user must supply growth rates for the various headings of current expenditure and capital
expenditure in the health sector. The aim, of course, is to calculate overall Government
expenditure on health.
Health expenditure of other ministries
In some countries, ministries other than the health ministry also provide health services.
The ministry of defence, for example, may have a network of clinics for military personnel and
their dependents. There are also countries where the ministry of education or even the ministry
of transport might organize and finance health services. The user can input the rates of growth
of current and capital expenditure in those ministries, in order to calculate the total expenditure
over the period covered by the forecast.
(x)
Health expenditure in the private sector
The agents in the private sector are households, companies, nongovernmental
organizations and missions, and health insurance funds. The rates of growth of current and
capital expenditure for health by these agents may also be defined. The aim is to obtain a forecast
of the overall levels of health expenditure in the private sector.
(xi)
6.2.2
Results
The results include the following parts: the macroeconomic environment, health
expenditure at current prices, and health expenditure at constant prices, the structure of health
expenditure and the Government contribution to health financing (presented in the form of a
graph).
The results for the macroeconomic environment cover mainly GDP, the balance of trade,
net foreign exchange reserves, and the Government budget deficit. Regarding health expenditure
at current prices, the model also presents the share of health expenditure in total Government
spending, and external aid for health as a proportion of total external aid.
For health expenditure at constant prices, the model also shows real growth in per capita
health expenditure. The results for the structure of health spending by the MoH show current and
capital costs as part of total health expenditure, national health expenditure by source of finance
(financing by the MOH, other ministries and the private sector) and financing of health
expenditure by domestic and external sources.
44
6.2.3 The role of the user
The equations used in the model follow the basic principles of national accounting and public
finance. Such principles lead to the formulation of basic equations8, which the user must consider
as given. Nevertheless, the initial figures and the growth rates of the various variables, the use
of GDP and rates of taxation are all determined by the user. It follows that all the
macroeconomic forecasts are influenced by the hypotheses made by the user.
One example concerns the size of the public sector. The user may formulate hypotheses
concerning government expenditure, which therefore concern the role of the public sector. The
economy of a developing country where government revenue has traditionally represented 20%
of GDP is not suddenly likely to switch to 40%. The latter is likely to be possible over a certain
perido of time, which the user should then reflect in the hypotheses he formulates year per year.
In other words, a good dose of realism is therefore required.
An obvious question is whether the user in a Ministry of Health is conversant with
macroeconomic trends. Where direct information is lacking, we recommend that the user consult
colleagues in the ministry of finance and/or planning. It is worth discussing the "realism" of the
hypotheses with the ministries concerned.
Financial requirements are confronted with macroeconomic variables mainly through the
forecasted share of health expenditure in overall Government spending, and in the forecast share
of total international aid that is allocated to health. Initial hypotheses may produce shares that
are too high. For example, the proportion for health in 1997 might be of the order of 10%,
whereas in 1994 it was only 3%. Such a development can be regarded as unlikely, given the
other government projects outside health that would block such a rise in its share. Another
example would be that of a country in which the international aid desired for health amounts to
15% in the forecast period whereas it had not usually exceeded 7% before. Such an increase
might be regarded as unfeasible. In those cases, the use must revise the initial hypotheses. The
user would then go through the model once, twice or more, until acceptable results are obtained.
While the above examples refer to actual constraints on health expenditure, the model can
also be used to claim an increase in such expenditure. Suppose, for example, the rate of growth
of GDP in a given country is higher than in the past, leading to increased government revenue
and expenditure. In a first run of the model, a fall in the health sector's share in the government
budget is found. This is probably because the user has not taken into account the current
economic development and has formulated hypotheses that underestimate the budgetary capacity
of the government. In subsequent runs, the user could adjust the hypotheses in order to
recuperate a fair share for health in the government budget.
We repeat that MicroFin, like the financial needs sub-model does not automatically
calculate a "final" result. The model as a whole therefore calls for considerable input from the
user. This, however, has the great advantage of enabling users to increase their capacity for
8 There are several types of equations: (i) "behaviour" equations, which show the utilization of GDP;
(ii) "institutional" equations, such as those which represent taxation; (iii) equations presented as "identities", such
as the definition of GDP; and (iv) the equations showing patterns in "policy variables": an example is Government
expenditure for which the user must determine the rates of growth.
45
analysing health financing issues and formulating policy options. In this sense, users from health
ministries will be better able to present their case to colleagues from, for example, the Finance
and Planning Ministry.
Diagram of MacroFin
See Table 1.
TABLE 1 DIAGRAM OF THE SUB-MODEL
growth rates
of production
sector
Balance of
trade
Utilization
of Gross
Domestic Product
Change of
net reserves in
foreign currency
Government
revenue
constraints of
the international
macroeconomic
environment
Government
budget
constraints
Gross Domestic
Product
▼
general
macroeconomic
constraint
FINANCIAL NEEDS FOR THE FUNCTIONING OF THE HEALTH SYSTEM
Government
expenditure
Private health
expenditure
Government
health
expenditure
Health expenditure
of
Ministry of Health
Health expenditure
of
other Ministries
47
6.3.
Detailed structure of MacroFin
6.3.1
The base year
Use of MacroFin begins with definition of the base year. By adding the forecast period
of ten years to the selected year, we obtain the final year of the forecast. For example, if the base
year is 1994, the final forecast year will be 2004.
6.3.2
The population
The population (POP) in year t is obtained simply by taking the population level for the
previous year and multiplying it by the demographic growth rate9 (rpop):
POPt = POPt_x * (l+rpop()
(67)
This value is used in order to obtain values of variables expressed in per capita terms.
6.3.3
Value added by sector10
(i)
Value added (va) may be regarded as the net contribution of a sector to a nation's
production. We have four sectors: (a) agriculture; (b) manufacturing industry; (c) other
industry; (d) services. The value added in these sectors (j=l to 4) in time t is determined by
taking into account the value of the previous year (t-1) and the rate of growth (rva):
= VatU
* (l+rva(p
(68)
(ii)
The gross domestic product is a good measure of economic activity in a country. Gross
domestic product at factor cost11 (gdpf) is then the sum of added values from the various sectors:
SdPft = Z, va,
(69)
9 Henceforth, all growth rates are represented by symbols beginning with "r". The subscript ’’t" denotes
time, in this case, the years.
10 Henceforth, symbols for variables in lower case refer to variables (except growth rates) in constant
prices. The same symbols in upper case refer to variables in current prices.
11 Unlike GDP at market prices, GDP at factor cost does not include net indirect taxes.
48
Gross domestic product in current prices is obtained by multiplying gdp by the gdp
deflator (PRGDP):
GDPFt =gdpft * PRGDPt
(iii)
(70)
Net indirect taxes are defined as a fraction of gross domestic product:
TXINt
* GDPFt
(71)
Addition of net indirect taxes to the gross domestic product at factor cost gives the gross
domestic product at market prices (GDPM):
GDPM = GDPFt + TXINt
(72)
The gross domestic product at market prices is then used in calculation of the utilization
of resources.
(iv)
Table 2 shows the role of value added in the model.
TABLE 2
VALUE ADDDED BY SECTOR, GROSS DOMESTIC PRODUCT AND ITS UTILISATION
growth
rate
growth
rate
value added
agriculture
value added
manufacturing
growth
rate
growth
rate
value added
other
industry
value added
services
-------- 1----
T
T
gross domestic
product
deflator
gross domestic
product
(gdpf)
4^
PRIVATE
CONSUMPTION
GROSS DOMESTIC
PRODUCT
(GDPF)
GROSS DOMESTIC
PRODUCT AT MARKET
PRICES (GDPM)
GOVERNMENT
CONSUMPTION
GROSS FIXED
CAPITAL
FORMATION
NET INDIRECT
TAXES
EXPORTS OF
GOODS AND
SERVICES
IMPORTS OF
GOODS AND
SERVICES
50
6.3.4
Utilization ofresources
(i)
For the base year the values of the different utilizations of GDPM are given by the user.
These are private consumption (PC), public consumption (GC), gross fixed capital formation
(FC), imports of goods (MG) and of services (MS), as well as exports of goods (EG) and of
services (ES). The model then calculates what share of gross domestic product for the base year
these utilizations represent. Those shares take the form of coefficients in the following
equations:
PCt = at,2 * GDPM
(73)
* GDPMt
(74)
* GDPMt
(75)
EGt = dtC2 * GDPMt
(76)
b,2
Ct,2
EStt = e it,2 * GDPMt
MGt
•4,2 * GDPMt
(78)
* GDPMt
(79)
= ^,2
Note that the coefficients in the seven equations above can be modified for the
forecast period.
(ii)
Note that Table 2 shows the links between value added and utilization of resources.
51
6.3.5
International transactions
(i)
We already have all elements needed to calculate the balance of trade (BALT^):
BALTt
EGt + ESt - MGt - MS'
(80)
The other components of international transactions are net foreign income (NFI), net
(ii)
foreign transfers (NFT), and short- and long-term capital flows (CPF). The value of a transaction
in year t is obtained by applying the rate of growth to year t-1:
(iii)
NFI' = NFI'^ * (1+rnfi')
(81)
NFT' = NFT' * (1+rw/Q
(82)
CPF' = CPFt_x * (1+rcpf')
(83)
The change of net reserves in foreign currencies (RES) is defined as follows:
RES' = BALT' + NFI' + NFT( + CPF'
(84)
and in US dollars as:
RES$t =
RESt
RXCHt
(85)
where RXCH is the exchange rate.
The balance of trade and the change in net foreign currency reserves are presented among
the results of the model. These two variables show among other things the international position
of the economy in question. For example, a negative balance of trade continuing for several
years could explain a drop in net reserves. Such net reserves could hinder the desired purchase
of imported goods such as drugs by the health sector. Conversely, a positive balance of trade
may help to increase reserves, and this could allow the purchase of drugs to be stepped up.
(iv)
See Table 3 for the diagram of the equations concerning international transactions.
00
05154
(s(
ooc'
INTERNATIONAL TRANSACTIONS
TABLE 3
growth
rate
growth
rate
growth
rate
NET FOREIGN
TRANSFERS
SHORT AND
LONG TERM
CAPITAL FLOWS
T
------- 1-------
▼
EXPORTS OF
GOODS AND
SERVICES
IMPORTS OF
GOODS AND
SERVICES
T
T
NET FOREIGN
INCOME
CHANGE OF NET
RESERVES IN
FOREIGN CURRENCIES
EXCHANGE RATE
4
CHANGE OF NET
RESERVES IN
FOREIGN CURRENCIES
(IN US$)
to
53
6.3.6 Prices
(i)
All price indexes for the base year are fixed at 100. For the forecasting period, the
consumer price index (PRC), the expenditures deflator (PRE) and the GDP deflator (PRGDP)
are defined as follows:
PRC' = PRCt_x * (1 +rprct)
(86)
* (1 +rpret)
(87)
PREt = PRE'
PRGDP' = PRGDP'_X * <S+rprgdpt)
(88)
The consumer price index is used to convert current expenditure (such as that incurred
by the government or by the private sector) at constant prices to current expenditure at current
prices. We use the expenditure deflator to convert capital expenditure at constant prices into
capital expenditure at current prices. The GDP deflator is used to calculate the gross domestic
product at current prices.
(ii)
The foreign price index (PRF) is defined as:
PRF(
PRFt_x * ^+rprft)
(89)
This index is used to convert imports of drugs at constant foreign prices into imports at
current foreign prices.
6.3.7 Exchange rate
(i)
The user gives the exchange rate observed for the base year. There are then two different
ways of estimating the future rate of exchange. One is to put in one's own estimates, in which
case it might be worth consulting the Ministry of Finance or even the Central Bank in order to
arrive at an acceptable estimate. The other option is to instruct the model to calculate the
exchange rate following the theory of purchasing power parity (PPP). This theory maintains that
in the long term, the rates of exchange between the US dollar and a national currency should
fully reflect any difference between the rate of inflation of the country studied and the foreign
rate of inflation, in order to guarantee the equivalence of the purchasing power of the two
currencies. Using this theory, we find that for Guinea, for example, one US dollar is worth 1000
Guinean francs in 1995. This means, in terms of the PPP theory, that one dollar could finance
the same range of goods and services as 1000 Guinean francs.
The following equation determines the standard PPP rate of exchange:
RXCHt = RXCHt
* (1 ^rpre)
(^rprf')
(90)
54
One notices that inflation, in equation (90) is measured via the expenditure deflator
(PRE).
(ii)
The exchange rate is used to convert foreign currency values into values expressed in
local currency. We refer especially to the budgeting of Government health expenditure where
the exchange rate plays an important role. Forecasts about imports of drugs are first made in
US$, whereupon the exchange rate is used for the conversion into local currency.
(iii)
The exchange rate is used also to convert local currency values into values expressed in
foreign currencies, as for example in forecasting of international aid for health in US dollars. In
the current version of the model, such aid is first of all formulated as the difference between the
total desired budget (in local currency) and the amount financed by national resources. The aid
desired is then expressed in US dollars by using the exchange rate.
6.3.8
Government revenue
(i)
First of all, two types of indirect tax are defined: indirect taxation of private and public
consumption (TXCO) and taxation of foreign trade (TXFT). The levels of these taxes are given
for the base year. Estimates are then made for the forecasting period with the following
equations:
TXCOt
TXFTt
(PCz + GCr)
(91)
* {EG+ESt +MGt +MSt)
(92)
a f,3, *
For the base year, the coefficients above are calculated by the model. They can be
interpreted directly as taxation rates. The user may then enter his or her own hypotheses about
those rates for the forecasting period.
(ii)
Secondly, direct taxation on household income and company profits (TXIP) are
identified. The same approach is taken as for indirect taxation. For the forecasting period, those
taxes are linked to the gross domestic product:
TXIPt = ct3 * GDPFt
The coefficient in this last equation is thus interpreted as the income tax rate.
(93)
55
(iii)
Thirdly, we identify other government revenue: non-fiscal revenue (nff), grants (grt) and
other fiscal revenue (ofr). Once again the values for the base year are given. The following
equations are then proposed:
= °A-i * (1 +rofrr)
(94)
nfrt = nfr'^ * (1 +rnfrtt)
(95)
grt, = grt^ * (^+rgrtt)
(96)
(iv)
Multiplication of other government revenue, described above, by the GDP deflator,
produces the values of that revenue in current prices:
orf J t* PRGDP,t
(97)
NFR( = nfrt * PRGDPt
(98)
GRT( = grt * PRGDPt
(99)
OFR(
(V)
Total government revenue (GRV) can now be calculated:
GRVt = TXCOt+TXFTt + TXIPt + OFRt + NFRt + GRTt
(Vi)
Table 4 shows the set of equations related to government revenue.
(100)
TABLE 4
GOVERNMENT REVENUE
GOVERNMENT
CONSUMPTION
PRIVATE
CONSUMPTION
EXPORTS AND
IMPORTS OF
GOODS & SERVICES
GROSS
DOMESTIC PRODUCT
(GDPF)
INDIRECT TAXES
ON FOREIGN TRADE
DIRECT TAXES
ON INCOME AND
PROFITS
T
-------- 1--------
T
T
INDIRECT TAXES
ON CONSUMPTION
T
T
GOVERNMENT REVENUE
1
I
OTHER
FISCAL
REVENUE
1
NON-FISCAL
REVENUE
1
CH
O\
GRANTS
gross domestic
product
deflator
other
fiscal
revenue
I
growth
rate
i
non-fiscal
revenue
1
growth
rate
grants
I
growth
rate
f
57
6.3.9
Government expenditure
6.3.9.1 Expenditure at constant prices
Current expenditure includes salaries and remuneration (gsal), purchase of goods and
(i)
services (ggs), subsidies and transfers (gsub) and interest on debt (gint). The user gives the
values of such expenditure for the base year. Expenditure for the simulation period is then
calculated with the following equations:
gsalt = gsalt_x * (1 +rgsalt)
(101)
* (1 +rggst)
(102)
gsub^ * (Irgsub^
(103)
ggs, =
gsubt
gint' = gintl
* (l+rgint()
(104)
Recurrent costs at constant prices and financed from domestic resources (gdre) are
defined as follows:
gred' = gredl_l * (1 +rgredt)
(105)
(ii)
For the base year, observed expenditure is entered by the user. For the forecasting
period, capital expenditure at constant prices (gee) in year t is obtained by applying the rate of
growth of investment expenditure to expenditure in year t:
gcet = gcel_1 * (1 +rgce,)
(106)
Expenditure financed by domestic resources (gced) is determined as follows:
gcedl
geed'^ * (1 +rgcedt)
(107)
58
6.3.9.2 Expenditure at current prices
(i)
The general purpose of producing first of all forecasts in constant prices is explained in
Box 2.
(ii)
Current expenditure at current prices is obtained by multiplying expenditure at constant
prices by the consumer price index:
GSALt = gsalt * PRCt
(108)
GGSt = ggsl * PRCl
(109)
GSUBl
gsubt * PRCt
(HO)
GINTl
gint' * PRCt
(Hl)
Total government current expenditure (GRE) is then determined as follows:
GREt = GSAL+GGS+GSUB+GINTt
(112)
Current expenditure from domestic financing is defined as:
GREDt
(iii)
gred' * PRCl
(113)
Capital expenditure at current prices is calculated with the expenditure deflator:
GCE( = gce( * PREt
(114)
GCEDl = gcedt * PREt
(US)
59
Box 2
Budgeting
In this model, budgeting for all expenditure (by the Government, the Ministry of
Health, other ministries and the private sector) is done in two stages. Firstly, an
estimate is made of spending requirements at constant prices (or real
expenditure). Secondly, to obtain expenditure at current prices, the constant
price expenditure is adjusted with the appropriate inflation indicator. Recurrent
expenditure is obtained by using the consumer price index. Capital expenditure
is adjusted with the expenditure deflator.
The advantage of this procedure is that the user is able to plan for quantities
first. Indeed, the estimate of the value at constant prices takes account of the
volumes required. If a plan were based directly on current prices, there would
be a risk, especially in a period of inflation, of obtaining quantities smaller than
those that were really desired.
Two further points should be noted:
(i) In each of the budgets studied in this model, salaries and remuneration are
adjusted by the consumer price index. In countries where such an adjustment
is not automatic, the user should adjust the (real) growth rate of salaries and
remuneration in such a way as to obtain the planned wage bills in current
prices.
(ii) In the Ministry of Health budget, imports of drugs and vaccines are planned
first of all in constant US dollars. They are then adjusted with the external price
index and the exchange rate between local currency and the US dollar, so as
to obtain the value of imports at current prices in local currency.
60
6.3.9.3 Total government expenditure
Total government expenditure (GE):
GEt = GREt + GCEt
(116)
6.3.9.4 External financing of total government expenditure
The financing of total government expenditure with external funds (GEX) or
international aid, is calculated as the difference between total expenditure and domestically
financed expenditure:
GEXt = GEt - GREDt - GCEDt
(117)
International aid including both grants and development loans can then be defined in
USS:
GEX%t
GEXt
RXCHt
(118)
6.3.9.5 The government budget deficit
The government budget deficit (GBD) is defined as follows:
GBDt = GRVt -GE(
(119)
and as a percentage of GDP at factor cost:
PGBDt =
GBDt
GDPFt
(120)
This last indicator will appear among the results on the macroeconomic environment.
How is it used? Suppose that in a developing country, a structural adjustment programme aims
to reduce government deficits. An adjustment programme may well include gradual reduction
of a deficit of 10% of GDP to 4%, over a period of 5 to 10 years. The user of the model is then
confronted with the constraints on government expenditure. If the country in question cannot
enjoy a strong economic growth and/or a considerable increase in government income, then the
government must curtail its expenditure in order to achieve the new deficit targets. The results
of MacroFin will make it easier for the user to understand why the Ministry of Finance would
want to limit social spending, among other things, or why it should want to subject health
spending to a stricter control. Such a situation also gives the planner a chance to review health
programmes, and to possibly concentrate more on the efficient ones.
6.3.9.6 The set of equations relating to government expenditure :
See Table 5.
TABLE 5
GOVERNMENT EXPENDITURE
growth
rate
growth
rate
growth
rate
growth
rate
T
salaries
and
remunerations
purchase
of
goods/services
interest
on
debt
subsidies
and
transfers
▼
growth
rate
recurrent
expenditure
(domestic
financing)
consumer
price
index
RECURRENT
EXPENDITURE
growth
rate
capital
expenditure
(domestic
financing)
expenditure
deflator
CAPITAL
EXPENDITURE
O\
----- ►
__ I__
capital
expenditure
r
CAPITAL
EXPENDITURE
(DOMESTIC
FINANCING)
RECURRENT
EXPENDITURE
(DOMESTIC
FINANCING)
TOTAL
GOVERNMENT
EXPENDITURE
TOTAL GOVERNMENT
EXPENDITURE
(EXTERNAL
FINANCING)
growth
rate
62
6.3.10 Ministry ofHealth expenditure
We remind the user that he can either import the results MicroFin into MacroFin, or use
MacroFin "directly". Where a "link" is made between the two sub-models, only current
expenditure is transferred. In both cases (linked or direct use), however, the user must introduce
forecasts on capital expenditure in MacroFin.
6.3.10.1
«
Expenditure at constant prices
We shall adopt the economic classification of expenditure.
(i)
following categories for current expenditure :
We have chosen the
1. Salaries and remuneration
2. Training
3. Equipment and supplies
4. Medical supplies (other than drugs and vaccines)
5. Drug imports (in millions of US dollars)
6. Drug purchases (local market)
7. Maintenance of equipment and infrastructure
8. Utilization of equipment and infrastructure
9. Social mobilization
10. Miscellaneous.
(ii)
The values of the base year are given by the user. For the simulation period, the current
expenditure of the MoH (hremij) of category j (j = l,...,10) in year t is the result of multiplication
of the value of year t-1 by the rate of growth (rhremij):
hret,m,j = hret-X,miJ *
* ^+rhret,mi,j>
(121)
Total current expenditure therefore equals the sum of the values of 10 categories:
(122)
The domestic financing of this expenditure is determined as follows:
= hredrt-X.mi ** 0 +rhredmi.)
(123)
Capital expenditure (hoe) and capital expenditure financed by domestic resources, are
(iii)
determined, respectively, as follows:
hce,,mi = hcet -I,mi *
C1 +rhcet,m)
= hCed,-l.n,i * (1 +rhcedt J
hcedt,mi
t
(124)
(125)
*
63
Total expenditure (he) and total domestically financed expenditure (hed) are calculated,
(iv)
respectively, as follows :
hed. I.
6.3.10.2
= hred,.n,i
+ hcedt.mi
(126)
Expenditure at current prices
(i)
To obtain expenditure at current prices, we multiply expenditure at constant prices by an
appropriate price index. To calculate the value of imports at current prices in national currency
(HRE5), we proceed as follows: we multiply imports at constant prices, and in US$, by the
external price index; and then multiply further by the exchange rate. The latter is expressed in
the following equation:
HRE, ,,
= hre,,mi.5
* PRFt * RXCHt
(127)
For other categories of current expenditure and domestically financed current
expenditure, the consumer price index is used to calculate expenditure at current prices:
HREt
= hret.miJ *
PRCt
(128)
for j=l to 4 and j=6 to 10
Total current expenditure is therefore defined by:
HREt
V HREtmi
.
t.mij
(129)
ii)
Capital expenditure at current prices (HCE) and domestically financed capital
expenditure at current prices (HCED) are obtained by using the expenditure deflator.12 This leads
to the following equations:
t * PREt
HCEti, mi = hcet,mi
(130)
HCED.t,mi = heed, . * PREt
(131)
and
t
9
V
12 Ideally, we should use the investment price index, but this datum is often absent from statistics for
developing countries. We have therefore opted for the expenditure deflator, which reflects at least in part, changes
in the cost of capital.
64
(iii)
The next stage is simply to define total expenditure by the Ministry of Health (HE) as
the sum of current and capital expenditure:
HEt
= HRE,
+ HCE,i, nt i.
(132)
6.3.10.3 External financing of Ministry of Health expenditure
I
Health expenditure to be financed by external donors (HEX) is calculated as the
difference between total health expenditure and domestically financed health expenditure:
HEXt
= HEt
- HREDt
. - HCED,[,mi.
i9 mi
i
(133)
Using the exchange rate, external aid for health in US$ can now be defined as follows:
HEX$' mi
I y fll I
HEXI,t tn i
RXCHt
(134)
It then becomes easy to express external aid for health as a proportion of total
international aid:
PHEXtni
i, nt i
HEX3ittfni.
GEXSt
(135)
The latter is an indicator that enables the MoH to monitor the importance accorded to
health in internal aid and if necessary to request a larger share of the total aid provided.
6.3.10.4. The set of equations related to Ministry of Health expenditure
See Table 6.
v
■»
MINISTRY OF HEALTH EXPENDITURE
TABLE 6
I II I I I I I
Il growth II
|| growth |
growth
growth
growth
rate
growth
rate
growth
rate
growth
rate
growth
rate
growth
rate
T
T
T
T
T
T
▼
SALARIES
AND
REMUNER.
TRAINING
j
EQUIPM.
AND
| SUPPLIES I
I
T
I
medical
supplies
drug
purch.
maint.
equip.
infr.
utilis.
equip,
infr.
social
mobil.
misc.
drugs
imports
MEDICAL
SUPPLIES
DRUG
PURCH.
MAINT.
EQUIP.
UTILIZ.
EQUIP.
SOCIAL
MOBIL.
MISC.
DRUGS
IMPORTS
j
T
j
|
1
|
[iNFR
| i
|
|INFR
|
i______ {___ i
|___
[
[
|
i--------- 1
I
growth
^ate
recurrent
expenditure
(domestic fin.)
consumer
price
index
RECURRENT
EXPENDITURE
capital
expenditure
(domestic fin.)
expenditure
deflator
CAPITAL
EXPENDITURE
Os
r
i
growth
rate
capital
expenditure
r
CAPITAL
EXPENDITURE
(DOMESTIC FIN.)
TOTAL
EXPENDITURE
MIN. OF HEALTH
RECURRENT
EXPENDITURE
(DOMESTIC FIN.)
MIN. OF HEALTH
EXPENDITURE
(EXTERNAL FIN.)
exchange
rate
growth
rate
foreign
price
index
66
6.3.11 Health expenditure by other ministries
The MoH is often not the only one to incur health expenses. Other ministries can also
engage in the health expenditure. The following set of equations can be used in analyzing (i) the
respective roles of the ministries in financing health services; (ii) how government interventions
can be better coordinated with a view to increasing the effectiveness of government funding.
i
6.3.11.1 Health expenditure at constant prices
We have chosen four categories:
1.
2.
3.
4.
The Ministry of Defence
The Ministry of Labour
The Ministry of Education
Other ministries.
Current expenditure (hre) and capital expenditure (hce) are defined, respectively, as
follows:
hre t,oth j
■
=
hre,t-,1,0th,j. * (1 +rhre
(136)
and
hcet
. = hcet
(1 +rhce
(137)
where j (j=l,...,4) refers to the category of ministry.
Total expenditure is therefore defined as:
het,oth =
t. . + Yihce
t
j
t,o,thj
t.othj
(138)
6.3.11.2 Health expenditure at current prices
For current expenditure at current prices (HRE) and capital expenditure at current prices
(HCE), we have the following equations:
*
HRE
hret,oth,j
t t. * PRCX
(139)
HCEft.othj
hCe<.o.kJ *
(140)
PREt
61
Total expenditure of all the other ministries equals:
t,oth
6.3.11.3
= Z.HRE
tt.othj. + Tt.HCE.
J
J
t.othj
Set of equations on expenditure of other ministries
See Table 7.
(141)
HEALTH EXPENDITURE OTHER MINISTRIES
TABLE 7
growth
rate
growth
rate
T
T
growth
rate
growth
.-rate
T
▼
recurrent
expenditure
Min. of Defence
-------- 1--------
RECURRENT
EXPENDITURE
MIN. OF DEFENCE
recurrent
expenditure
Min. of Labour
recurrent
expenditure
Min. of Education
-------- !-------
T
RECURRENT
EXPENDITURE
MIN. OF LABOUR
RECURRENT
EXPENDITURE
MIN. OF EDUCATION
recurrent
expenditure
other Ministries
--------- !--------
RECURRENT
EXPENDITURE
OTHER MINISTRIES
T
T
T
I
oo
expenditure
deflator
TOTAL HEALTH
EXPENDITURE
ALL OTHER MIN.
consumer price
index
I
CAPITAL
EXPENDITURE
MIN. OF DEFENCE
CAPITAL
EXPENDITURE
MIN. OF LABOUR
CAPITAL
EXPENDITURE
MIN. OF EDUCATION
CAPITAL
EXPENDITURE
OTHER MINISTRIES
________ I________
_________ I_________
_________ I________
capital
expenditure
Min. of Defence
_______l______
capital
expenditure
Min. of Labour
capital
expenditure
Min. of Education
capital
expenditure
other Ministries
1
1
1
1
growth
rate
growth
rate
growth
rate
growth
rate
69
6.3.12 Health expenditure in the private sector
In this module, the user is called upon to specify the expected degree of private sector
expenditure. In this way the volume of resources available for health apart from those allocated
by the government is estimated. How can this information be used? Obviously, each country
selects its appropriate health system, including optimal sharing of responsibilities between the
government and private sectors. This module will help us to reflect on the financing possibilites
of such a system. Take the example of a country wishing to establish a system of health services
regulated and guided by the government but co-fmanced by households. This co-fmancing could
be called into question by the presumed lack of capacity of households to pay for health. On the
other hand, the information could show that households already spend considerable sums on a
variety of services such as drugs from private pharmacies. Such information could help us to
dispel certain misconceptions about the actual situation.
Expenditure at constant prices
6.3.12.1
We have selected four headings to cover private expenditure on health:
1.
2.
3.
4.
households,
health insurance plans,
nongovernmental organizations,
enterprises.
Current expenditure (hre) and capital expenditure (hce) are defined as:
^.prj =
hre•
* (1 +rhre t,pr, j)
(142)
hCe'.pr.J
hcet
* (1 +rhce t.pr.)
(143)
and
where] (j=l,...4) refers to the source of private expenditure.
Total private expenditure is defined as follows:
he t,pr =
6.3.12.2
+ ^‘.Prj
(144)
Expenditure at current prices
Current expenditure at current prices (HRE) and capital expenditure at current prices
(HCE) are defined as follows:
HREt.prj
t
hre,t.prj * PRCt
(145)
70
and
HCEt,pr,J
t
= hce,t.pr.J * PREt
(146)
Total private expenditure is defined as follows:
+
HEt,pr
t = 'Z.HRE,
J
t.prj
6.3.12.3
J
HCE,t,pr,J
The set of equations related to private health expenditure
See Table 8.
(147)
TABLE 8
PRIVATE SECTOR HEALTH EXPENDITURE
growth
rate
growth
rate
growth
rate
growth
rate
T
T
T
T
recurrent
expenditure of
households
recurrent
expenditure
health insurance
T
--------- 1--------
RECURRENT
EXPENDITURE
OF HOUSEHOLDS
RECURRENT
EXPENDITURE
HEALTH INSURANCE
recurrent
expenditure
enterprises
recurrent
expenditure
NGOs
------ 1------
T
RECURRENT
EXPENDITURE
ENTERPRISES
RECURRENT
EXPENDITURE
NGOs
1
T
I
L.
consumer price
index
r
expenditure
deflator
PRIVATE SECTOR
HEALTH
EXPENDITURE
T
T
I
CAPITAL
EXPENDITURE
OF HOUSEHOLDS
CAPITAL
EXPENDITURE
HEALTH INSURANCE
CAPITAL
EXPENDITURE
NGOs
CAPITAL
EXPENDITURE
ENTERPRISES
_____ I_______
capital
expenditure
of households
_________ I________
I
capital
expenditure
NGOs
______ l______
growth
rate
growth
rate
i
growth
rate
capital
expenditure
health insurance
i
growth
rate
capital
expenditure
enterprises
i
72
6.4
DATA INPUT
6.4.1 List ofdata to be collectedfor the base year
VARIABLE
POP
Population
Value added by sector]
SYMBOL13
-4)
vaj
(j=agriculture, manufacturing industry, other industry, services,
agriculture) (sic)
Net indirect taxation
TXIN
Utilization of resources
Private consumption
Public consumption
Fixed capital gross formation
Imports of goods
Imports of services
Exports of goods
Exports of services
CP
GC
FC
MG
MS
EG
ES
International transactions
Net foreign income
Net foreign transfers
Short- and long-term capital flow
NFI
NFT
CPF
The exchange rate
RXCH
Government revenue
Indirect taxation of private and public consumption
Taxation of foreign trade
Taxation on income and profits
TXCO
TXFT
TXIP
Non-fiscal revenue
Grants
Other fiscal revenue
nfr
grt
ofr
*
13 To simplify, we omit the subscript "t" from the symbols in the following tables.
Tl
Government expenditure
Current expenditure:
Salaries and remuneration
Purchase of goods and services
Subsidies and transfers
Interest on debt
gsal
ggs
gsub
gint
Current expenditure (domestically financed)
gnfr
Capital expenditure
gee
Capital expenditure (domestically financed)
geed
Ministry of Health expenditure
Current expenditure by category) (j=l,...10):
hremiJ
(j=salaries and remuneration, training, equipment and supplies,
medical consumption, drug imports in USS, drug purchases,
maintenance of equipment and facilities, use of equipment and
facilities, social mobilization, other operating costs)
Current expenditure (domestic financing)
hredmi
Capital expenditure
hcemi
Capital expenditure (domestic financing)
hcedmi
Health expenditure by other ministries
Current expenditure by category) (j=l,...4)
j=Ministry of Defence, Ministry of Labour, Ministry of
Education, other ministries
hreothj
Capital expenditure by category) (j=l,...,4)
hc^othj
Health expenditure in the private sector
Current expenditure by source of finance) (j=l5...,4)
hreprJ
(jhouseholds, health and insurance plans, nongovernmental
organizations, enterprises...)
Capital expenditure by source of finance) (j=l,...4)
hcenT
74
6.4.2 Data input for exogenous and policy variables
VARIABLE
SYMBOL
Rate of growth of the population
rpop
Rate of growth of value added by sector j (j=l,...4)
rva.
(j=agriculture, manufacturing industry, other industry, services,
agriculture)
Net indirect taxation as a proportion of gross domestic
product
ai
The following resources as proportions of gross domestic
product:
The contribution to gross domestic product of:
private consumption
public consumption
fixed capital gross formation
exports of goods
exports of services
imports of goods
imports of services
a2
b2
c2
^2
e2
f2
g2
Rates of growth of international transactions:
Net foreign income
Net foreign transfers
Short- and long-term capital flow
mfr
rnft
rcpf
Rates of growth of price indexes:
Consumer price index
Expenditure deflator
Deflator of gross domestic product
rprc
rpre
rprgdp
Exchange rate
Two options:
a. The user supplies the figures for the exchange rate
b. The user takes the parity of purchasing power (PPP) option
RXCH
Special parameter
in the software,
set equal to 1
75
Government revenue
Rate of taxation on:
public and private consumption
international trade
income
a3
b3
C3
Rates of growth of:
Other fiscal income (constant prices)
Non-fiscal income (constant prices)
Grants (constant prices)
rofr
mfr
rgrt
Rate of growth of government expenditure (constant prices):
Salaries and remuneration
Purchase of goods and services
Subsidies and transfers
Interest payments on debt
rgsal
rggs
rgsub
rgint
Current expenditure (domestic financing)
rgred
Capital expenditure (constant prices)
Capital expenditure (domestic financing)
rgce
rgced
Rate of growth of Ministry of Health expenditure (constant
prices)
Current expenditure by category j(j=l10):
rhremiJ
(j=salaries and remuneration, training, material and equipment,
medical consumption, imports of drugs in US dollars, drug
purchases, maintenance of equipment and facilities, utilization
of equipment and facilities, social mobilization, other operating
costs)
rhredmi
Current expenditure (domestic financing)
rhcemi
Capital expenditure
Capital expenditure domestic financing
rhcedmi
76
Rate of growth of health expenditure of other ministries (in
constant prices)
Current expenditure by category j (j=l,...,4)
rhreothj
(j=Ministry of Defence, Ministry of Labour, Ministry of
Education, other ministries)
Capital expenditure by category] (j=l,...4)
rhce01hJ
Rate of growth of health expenditure in the private sector
(at constant prices)
Current expenditure by source of finance] (j=l ,...,4)
rhreprj
(j=Households, health insurance companies and plans,
nongovernmental organizations, businesses)
Capital expenditure by source of finance] (j=l,...4)
6.4.3
rhcenri
Remarks about rates ofgrowth and coefficients
When asked to enter the rates of growth, the user has two options: (i) to change the rate
of growth for any year in the simulation period; (ii) to fix the rate of growth for the entire
simulation period. A special option enables the user to set the rate of growth of Government
expenditure and/or MoH expenditure equal to the real rate of growth of gross domestic product.
In introducing coefficients, the user has similar options : (i) changing coefficients for any
year in the simulation period; (ii) fixing the coefficients so that they are valid for the whole
period.
6.5
Results
There are three tables with results. The first presents mainly changes in health
expenditure at constant prices and changes in per capita expenditure. The second presents the
macroeconomic environment and changes in health expenditure at current prices. In the third
table, we show the structure of health expenditure or the classification of expenditure by
different criteria: by current and capital expenditure, and by domestic and external finance. The
third table also includes the economic classification of current MoH expenditure. Finally, a graph
shows the financial effort of the government for health. It shows real growth in government
health expenditure and the percentage of total government expenditure allocated to the MoH.
Some indicators such as rates of growth or per capita values are derived from the basic
output. Annex 1 shows the equations associated with these additional indicators.
77
Tables 9 to 11 are detailed summaries of the results displayed by the program. They can
stimulate thought and discussion about the volume and allocation of resources for health.
Examples of policy questions that might arise are presented. The question numbers feature in
the tables 9 to 11 where they are associated with the most appropriate results.
6.6
Sample questions on health system financing policy
z 6.6.1
Questions about the volume of resources for health
Qi
The MoH may ask itself: should the resources not increase at the same pace as gross
domestic product (gdpf)? Otherwise, the share of MoH expenditure in gdpf will decline.
Q2
What is health expenditure by all partners as a proportion of gross domestic product?
This information will help evaluate the efficiency of health spending, among other things.
Q3
How does health expenditure compare with that of other countries? A comparison must
be made in an international currency; a PPP-type exchange rate is recommended, to take account
of the purchasing power of the currency in the countries compared.
Q4
What is the trend in the percentage of MoH expenditure in total Government spending?
Are the percentages adequate? Should more resources for health be sought from the
Government?
Q5
Would it be possible for the MoH to increase its budget in real terms? Would such an
increase be justifiable given the current state of public finance? In other words, are there budget
deficit problems that would make a real increase difficult or impossible?
Q6
How has external aid for health changed as a proportion of total international aid? Does
aid for health deserve an increase?
78
6.6.2
Questions on allocation of resources for health
Q7
Would the MoH be in a position to considerably increase imports of drugs? Or might
there be objections from the Ministry of Finance if the balance of trade is too negative or if
foreign currency reserves are diminishing?
Q8
Is there a satisfactory balance between current and capital expenditure by the MoH?
Q9
Is current expenditure by the MoH on salaries and remuneration acceptable in view of
(i)
the other financial requirements for the functioning of government health care services?
(ii)
What are the implications for health expenditure on staff of an employment policy that
increases or reduces recruitment of health personnel and/or provides for regular increase in real
salaries?
Q10
Is the MoH's budget allocation for drugs sufficient to satisfy the objectives of a policy
whereby the Government covers the financing of essential drugs?
QII
Is the policy for external financing of health expenditure sustainable? Is external finance
increasing too fast? Is the share of external aid in total aid for health developing in a way that
is acceptable to donors and government?
Q12
(i)
Should the planned breakdown of national expenditure on health between partners (MoH,
other ministries, private sector) be maintained? Or could one redistribute resources among
ministries to improve the utilisation of resources?
(ii)
How large is the private sector? Would it be possible to use the current paying capacity
to pay for the improvement of the quality of government health services (e.g., by cost-sharing
with households)?
*
79
Table 9:
GOVERNMENT EXPENDITURE AT CONSTANT PRICES
SYMBOL
QUESTION
MoH expenditure
hemi
Q5
including current expenditure
and capital expenditure
hremi
hcemi
Q5
Q5
Rate of growth of total expenditure
Expenditure (domestic financing)
rhemi
hedmi
QI
RESULTS
*
MoH expenditure per capita
Per capita expenditure
Per capita expenditure (domestic financing)
Per capita expenditure in US$
Rate of growth of per capita health expenditure
hecnli
heed™
hec$mi
rhecmi
Q3
QI
nhe
he„th
hepr
rnhe
nhec
rnhec
Q2
Q2
Q2
National health expenditure
Total
Expenditure by other ministries
Expenditure by the private sector
Rate of growth of total expenditure
Total per capita expenditure
Rate of growth of total per capita
Reminder: growth of gross domestic product
Gross domestic product (gdp) at factor prices
Rate of growth of gdp
Per capita gdp
Rate of growth of per capita gdp
«
gdpf
rgdpf
gdpfc
rgdpfc
Q1,Q2
Q1,Q2
80
Table 10:
HEALTH EXPENDITURE AT CURRENT PRICES
RESULTS
SYMBOL
QUESTIO
N
BALT
RESS
GRV
GRE
GCE
GE
GEXS
GBD
GDPF
PGBD
POP
Q7
Q7
The macroeconomic context
Balance of trade
Net change in reserves, in USS
Total government revenue
Total government current expenditure
Total government capital expenditure
Total government expenditure
Total external aid in USS
Budget deficit
GDP at factor cost
Budget deficit as a % of GDP at factor cost
Population
Q5
Q5
MoH expenditure
Current expenditure
Capital expenditure
Total
External aid to the MoH in USS
HREmi
HCEmi
HEmi
HEX$mi
External aid for health as a proportion of total
international aid
Current expenditure on health as a proportion of total
Government current expenditure
Capital expenditure on health as a proportion of total
Government capital expenditure
Total MoH expenditure as a proportion of total
Government expenditure
PHEX$mi
Q6,QH
PHREmi
PHCEmi
PHEmi
Q4
National expenditure on health
Total
including expenditure by other Ministries
and expenditure by the private sector
Total per capita
Total per capita in USS
Total as a percentage of GDP (factor cost)
Total government health expenditure as percentage of
Total government expenditure
NHE
HEoth
HEpr
NHEC
NHECS
PNHE
PTGHE
Q4
81
Table 11:
STRUCTURE OF MoH EXPENDITURE
RESULTS
SYMBOL
QUESTION
PHREmi
PHCEmi
Q8
Q8
PHRE™.,
PHREDRmj
PHREmi,5
POTHEH,
Q9
Q10
Q7,Q10
Ministry of Health
Structure of expenditure (percentages)
Current expenditure
Capital expenditure
Structure of current expenditure (percentages)
Personnel expenditure
Pharmaceuticals expenditure
including imports
Other current health expenditure
Structure of financing
Current expenditure (percentages)
Domestic financing
External financing
PHREDmi
PHREXmi
Qll
Capital expenditure (percentages)
Domestic financing
External financing
PHCEDmi
PHCEXmi
QII
Of total expenditure (percentage)
Domestical financing
External financing
PHEDmi
PHEXmi
Qll
PHEmi
PHEoth
PHEpr
Q12
Q12
Q12
NATIONAL EXPENDITURE
Structure by sector (percentages)
Ministry of Health
Other ministries
Private sector
82
PART III: USING SimFin
7. AN EXAMPLE
An example has been developed in order to clarify how the model functions and to
demonstrate its potential.
Imagine a low income developing country with a population of 10 million. The public
facilities do not cover the entire territory, and health care is also provided by private non-profit
facilities. The government health sector has established a cost-recovery system, and donors also
contribute to its functioning.
7.1
Base year data for MicroFin
7.1.1 General data
- Population
- Annual population growth rate
- Number of working days per annum
- Number of holidays per annum
- Number of hours worked per day
- Salary scale (in local currency units u.m.)
10 million
2%
260d
20d
8hrs
(i) Health care personnel
• Surgeon
• Specialist
• Physician
• Midwife
• Nurse
• Other health care personnel
• Technician
• Clerical staff
450 000
400 000
300 000.
180 000
120 000
50 000
100 000
200 000
(ii) Non health care personnel
■ Senior manager
• Technician
• Clerical staff
300 000
100 000
50 000
7.1.2
Health centres
7.1.2.1 Number of health centres, population covered and activities
Although the model allows for 4 categories of health centre, we will only use two in this
example.
• Small health centres covering an average of 5 000 inhabitants;
83
• Large health centres covering an average of 20 000 inhabitants;
Large HC
Variables
Small HC
- Number of HCs in the country
200
400
- Average population covered
20,000
5,000
- Number of curative consultations per year
10,000
2,000
- Number of MCH activities per year
4,000
1,000
- Number of deliveries per annum
400
0
Note that:
(i)
All small health centres combined cover a population of 2 million while large health
centres cover a population of 4 million. Public health centres therefore cover a total population
of 6 million. The remaining 4 million either have no access to health facilities in their area or are
covered by private facilities.
The data for the various activities are the result of multiplying the population in the zone
(ii)
by a coefficient;
(iii)
It is assumed that in small health centres, deliveries are not possible;
7.1.2.2 Breakdown of staff activities
Small health centres:
Curative
services
MCH
Delivery
IEC
Administration
100%
Physicians
Nurses
40%
30%
%
10%
20%
100%
100%
Midwives
Health care
workers
Total
90%
10%
100%
84
Large health centres:
Curative
consultations
MCH
Delivery
Physicians
55%
0%
10%
Nurses
85%
10%
Midwives
0%
20%
Health care
workers
90%
IEC
Administration
Total
30%
100%
5%
100%
5%
60%
10%
10%
100%
100%
10%
7.1.2.3 Breakdown of staff by qualification and source of financing
Staff
Physicians
- MoH
- Community financing
- External aid
Large HC
Small HC
0.8
Nurses
-MoH
- Community financing
- External aid
Midwives
-MoH
- Community financing
- External aid
Health care workers
-MoH
- Community financing
- External aid
Health care workers
-MoH
- Community financing
- External aid
2.0
0.5
0.5
1.0
0.2
0.3
0.8
2.4
0.1
0.2
0.5
1.0
85
7.1.2.4 Pharmaceutical supplies
Large HC
Financial sources
Small HC
-MoH
800, 000
210,000
- Community financing
200,000
20,000
- External aid
200,000
20,000
Note that in this example we have set an average per capita expenditure on drugs of 50
for small health centres and 60 for large health centres. In addition, note that the share of
imported drugs in total drugs purchased is assumed to be 90 %, whether the drugs are financed
by the MoH of via external aid.
7.1.2.5 Other operating expenditure
Small HC
Large HC
Financial sources
-MoH
- Community financing
500,000
- External aid
100,000
Note that in this example we have set an average per capita operating expenditure of 20
for small health centres and 50 for large health centres.
7.1.3 Referral hospitals (levels II and III) and the National Referral Hospital
Variables
Number of hospitals in the country
Average population covered
Number of beds
Number of admissions
National
Regional
District
40
10
1
200,000
1,000,000
10,000,000
100
300
700
3,000
5,000
20,000
86
7.1.3.1 Data per department:
In-patient department I: Internal medicine
Remember the key criterion for in-patient departments is the number of beds.
Variables
Regional
District
National
40
120
100
Number of admissions
1,200
2,000
2,000
Average length of stay
8
8
8
Number of specialists
0
0
3
Number of doctors
1
3
2
Number of midwives
0
0
0
Number of nurses
15
45
40
Number of health care workers
10
30
30
Drug expenditure
2,000,000
7,200,000
7,500,000
Other operating expenditure
4,000,000
18,000,000
20,000,000
Number of beds
Notes :
(i)
(ii)
Drug expenditure per bed is 50 000 in district hospitals, 60 000 in regional hospitals and
75 000 in the National Hospital.
Other operating expenditure per bed is 100 000 in district hospitals, 150,000 in regional
hospitals and 200 000 in the National Hospital.
In-patient department II: "Paediatrics”
Variables
National
Regional
District
Number of beds
20
60
100
Number of admissions
600
1,000
3,000
Average length of stay
8
8
8
Number of specialists
1
3
2
Number of G.P.s
0
0
2
Number of midwives
1
3
5
Number of nurses
5
15
25
Number of health care workers
5
15
20
Drug expenditure
1,000,000
3,600,000
7,500,000
Operating expenditure
2,000,000
9,000,000
20,000,000
*
87
In-patient department III: "Gynaecology and obstetrics"
Variables
District
Regional
National
Number of beds
20
60
100
Number of admissions
600
1,000
3,000
Average length of stay
8
8
8
Number of specialists
1
3
4
Number of physicians
1
3
3
Number of midwives
6
18
25
Number of nurses
5
15
30
Number of health care workers
3
9
15
Drug expenditure
1,000,000
3,600,000
7,500,000
Other operating expenditure
2,000,0000
9,000,000
20,000,000
In-patient department IV
Variables
National
Regional
District
Number of beds
20
60
100
Number of admissions
600
1,000
3,000
Average length of stay
8
8
8
Number of specialists
0
0
3
Number of physicians
1
3
3
Number of midwives
0
0
0
Number of nurses
5
15
25
Number of health care workers
5
15
25
Drug expenditure
1,000,000
3,600,000
7,500,000
Other operating expenditure
2,000,0000
9,000,000
20,000,000
Note : In case of the national hospital, 3 more departments were considered; the latter are
assumed to be identical to in-patient department IV.
88
Surgical unit
Variables
Number of operations per year
District
Regional
National
900
1,500
6,000
Total number of surgeons
1
3
10
Total number of anaesthetists
0
1
3
Total number of physicians
0
0
0
Total number of nurses
1
6
20
Total number of health care workers
1
3
10
Drugs expenditure
9,000,000
22,500,000
120,000,000
Other operating expenditure
9,000,000
22,500,000
120,000,000
1
0
0
1
1
1
1
1
0
2
1
Composition of a surgical team
- Surgeons
- Anaesthetists
- Physicians
- Nurses
- Health care workers
1
0
1
1
Notes:
(i)
(ii)
The number of operations depends on the number of admissions: we have assumed that
30% of admitted patients undergo surgery;
Drugs expenditure and other operating expenditure is 10 000 per operation in district
hospitals, 15 000 in regional hospitals and 20 000 in the National Hospital.
Out-patient consultations
The number of out-patient consultations is expressed as a percentage of the population
in the reference zone : 2.5% for the district hospital, 1% for the regional hospital and 0.2% for
the National Hospital.
Variables
Regional
District
National
5,000
10,000
20,000
- Number of specialists
0
0.5
4
- Number of physicians
1
1
2
- Number of midwives
0.5
0.
1
0
0
0
- Drug expenditure
500,000
2,000,000
5,000,000
- Other operating expenditure
50,000
200,000
5,000,000
- Number of consultations per year
- Number of other health care workers
♦
89
Notes :
(i)
(ii)
Drug expenditure per consultation is 100 for district hospitals, 200 for regional hospitals
and 250 for the National Hospital.
Other operating expenditure is 10% of expenditure on drugs.
X-Ray department
The number of X-rays is equal to the number of admissions to the hospital multiplied by
a utilization ratio. In this example, this ratio is 20% for all levels of hospitals.
Variables
District
Regional
National
600
1,000
4,000
Number of specialists
0
0
0
Number of technicians
1
2
4
Number of health workers
0
0
0
Expenditure on medical supplies
600,000
1,000,000
4,000,000
Other operating expenditure
60,000
100,000
400,000
Number of X-rays per annum
Notes :
(i)
(ii)
Expenditure on medical supplies per X-ray is 1 000 for district and regional hospitals and
for the National Hospital.
Other operating expenditure is 10% of expenditure on supplies:
Laboratory service
The number of laboratory tests is equal to the number of admissions to the hospital
multiplied by a utilization ratio. In this example, this ratio is 50% for all levels of hospitals.
Variables
District
National
Regional
1,500
2,500
10,000
Number of specialists
0
0
0
Number of technicians
1
2
4
Number of health care workers
0
0
0
Expenditure on medical supplies
375,000
1,250,000
7,500,000
Recurrent expenditure
37,500
125,000
750,000
Number of test per year
90
Notes:
(i)
Expenditure on medical supplies per test is 250 for district hospitals, 500 for regional
hospitals and 750 for the National Hospital.
(ii)
Other operating expenditure is a mere 10% of expenditure on supplies.
Dentistry
This service is provided only at the level of the National Hospital
The number of dental interventions is equal to the number of inhabitants in the country
multiplied by a utilization ratio. The latter was set at 0.1%.
Variables
District
Regional
Number of interventions per year
National
10,000
Number of specialists
2
Number of technicians
2
Number of health care workers
0
Expenditure on medical supplies
30,000,000
Other operating expenditure
3,000,000
Notes:
(i)
(ii)
Expenditure on medical supplies is 3 000 per intervention.
Other operating expenditure is 10% of expenditure on supplies.
Emergency unit
Only the National Hospital has an emergency unit. The number of emergencies is equal
to a fraction of the number of admissions. This fraction is set at 50%.
Variables
Number of emergencies per year
District
Regional
National
10,000
Number of physicians
3
Number of nurses
4
Number of health care workers
2
Expenditure on drugs
Other operating expenditure
*
5,000,000
500,000
4
91
Notes:
(i)
(ii)
Drug expenditure is 500 per emergency.
Other operating expenditure is 10% of expenditure on supplies.
Ambulance service
It is assumed that this service is not provided by district hospitals. The number of
calls depends on the population of the area: It is assumed that 0.15% and 0.03% of the
population call upon the ambulance services of regional hospitals and the National Hospital,
respectively.
Variables
District
Regional
Number of calls per year
National
1,500
3,000
Number of drivers
1
2
Number of nurses
1
2
4,500,000
9,000,000
Other operating expenditure
It is assumed that each call-out costs 3000.
A dministration
Variables
Regional
District
National
Number of senior managers
0
1
2
Number of pharmacists
0
1
2
Number of clerical staff
1
4
3
Number of technicians
1
10
20
Expenditure on service personnel
3
20
50
250,000
1,000,000
10,000,000
Operating expenditure
Catering
We assume there is no catering service in district hospitals.
Variables
District
National
Regional
4
10
Expenditure on food
20,000,000
80,000,000
Other operating expenditure
2,000,000
8,000,000
Service personnel
We assume that the cost of hospitalization is 500 per person per day.
92
7.1.3.2 Breakdown of expenditure according to source of financing :
Expenditure/source of financing
District
Regional
National
Drug expenditure
. MoH
. Community financing
. External donors
80%
0%
20%
80%
10%
10%
50%
25%
25%
Operating expenditure . MoH
. Community financing
. External donors
100%
0%
0%
100%
0%
0%
100%
0%
0%
Regional
National
7.1.3.3 Breakdown of staff according to source of financing :
District
Surgeons
Total
MoH
1
0.5
3
2
10
5
Specialists
Total
MoH
2
2
7.5
7.5
31
15
Physicians
Total
MoH
4
4
11
8
26
20
Midwives
Total
MoH
7.5
21.5
18.0
31
25
Total
MoH
26
25
82
80
221
180
Technicians
Total
MoH
2
2
4
4
10
9
Health care
personnel
Total
MoH
24
20
72
60
177
150
Total
MoH
0
0
1
1
2
2
Intermediate-level admin.
Total
MoH
1
1
4
4
3
3
- Technicians
Total
MoH
1
1
11
11
22
13
- Service personnel
Total
MoH
3
24
24
60
Nurses
6.5
Senior managers
Note the “total” is calculated automatically by MicroFin.
3
40
93
7.1.3.4 Imported drugs as a percentage of drugs purchased:
District
Regional
National
By MoH
90%
90%
90%
Through external aid
90%
90%
90%
7.1.4 Administration
7.1.4.1 Data related to all of the districts
Total number of supervisory visits per year to government Hcs
(1 visit per month)
7,200
Total number of supervisory visits per year to private health
facilities (1 visit per month)
1,200
Total number of private health facilities
Total budget for supervision for all districts
Number of districts
100
168,000,000
50
It is assumed that one supervisory visit costs 20 000.
7.1.4.2 Collective data on regions
Total number of supervisory visits per year in the regions
(1 visit per month)
Total budget for supervision for all regions
Number of regions
It is assumed that one supervisory visit costs 50 000.
600
30,000,000
10
94
7.1.4.3 Data related to an average district, an average region and the central administration
Regional
District
National
Total number of physicians working in
administration
1
3
10
Number of senior managers other than the
district medical officer and Regional medical
director
0
2
40
Number of clerical staff
5
5
20
Number of service personnel
5
10
60
Operating budget excluding staff and
supervision
500,000
1,000,000
1,000,000
Budget allocated for senior managers
excluding district medical officers and
regional medical directors
0
8,400,000
210,000,000
Budget allocated for clerical staff
15,000,000
15,000,000
100,000,000
Budget allocated for service personnel
3,600,000
6,000,000
43,200,000
Monthly salary of District medical officer
and Regional medical director
4,000,000
500,000
60%
60%
30%
10%
30%
10%
Breakdown of working time of District
medical officer and Regional medical
director:
- supervision
- administration
- time devoted to medical activities
7.2
Base year data for MacroFin
7.2.1
Coherence of data between MacroFin and MicroFin
MacroFin can be used either separately or in conjunction with the MicroFin. Since
each of the sub-models can be used separately, the values for base variables, such as
population, annual demographic growth rate, etc are repeated here; if the sub-models are used
in parallel it is important to check that base data are the same in both.
7.2.2 Population
Variables
Value
10 million
Population
Annual population growth rate
2%
95
7.2.3
Value added by sector
Value added
Value
Agriculture
729,000
Manufacturing industry
194,400
Other industry
81,000
Services
615,600
Net indirect taxes are 81,000.
7.2.4
Utilization ofgross domestic product (GDP)
GDP utilization
Value
% of GDP
Private consumption
1,386,720
81.52
Public consumption
294,678
17.32
Gross fixed capital information
381,348
22.42
Exports of goods
121,338
7.13
Exports of services
69,336
4.08
Imports of goods
346,680
20.38
Imports of services
190,674
11.21
7.2.5 Balance ofpayments
The balance of trade can now be obtained but we still have to define three other
variables in order to calculate the balance of payments:
Variables
Value
Net factor income
-16,200
Net transfers
255,420
Net capital flows
82,620
7.2.6 Exchange rate
The exchange rate for 1995 has been fixed at 500.
96
7.2.7
Taxes and taxation rates
Taxation rate (%)
Value
Tax
81,000
5.00
Income tax
38,134.8
2.35
Taxes on public and private
consumption
76,269.6
4.54
Taxes on international trade
80,000.0
10.99
Net indirect taxes
7.2.8 Other government revenue
Other revenue
Value
Other fiscal revenue
0
Non-fiscal revenue
0
46,980
Grants
7.2.9 Government expenditure
Expenditure
Value
Personnel
142,884
Purchase of goods and services
30,618
Subsidies and current transfers
10,206
Interest payments
11,000
Current expenditure
calculated by the model: 194,708
Current expenditure (domestic financing)
194,708
Capital expenditure
116,640
Capital expenditure (domestic financing)
1,944
«
97
7.2.10 Ministry ofHealth expenditure
4
If MicroFin is used in conjunction with MacroFin, we suggest to put in the following
data:
Expenditure
Value
Personnel
12,344.5
Training
0
Non medical supplies
0
Medical supplies (excl. drugs and vaccines)
0
Imports of pharmaceuticals (in US dollars)
2.164$
Purchases of domestic pharmaceuticals
120.21
Maintenance of equipment and infrastructure
0
Operation of equipment and infrastructure
0
Social mobilization
0
Other operating costs
2,575.3
Current expenditure
calculated by the model = 16,121.89
Current expenditure (domestic financing)
16,121.89
Capital expenditure
10,000
Capital expenditure (domestic financing)
1,000
“Miscellaneous” comprises the values of the following elements of MicroFin:
supervision, food and other day-to-day operating expenses.
If MacroFin is used separately, the user is of course free to choose the values for the
categories in the above table.
7.2.11 Health expenditure by other ministries and private health expenditure
All other expenditure on health has been ignored (the values are set at 0) in order to
simplify the example.
98
7.3
A simulation example
7.3.1
Base case simulation
A "base case" simulation was carried. The main hypotheses for the forecasting period
are :
(i)
there is no change in the health system, hence, for instance, the various parameters of
the production technology of health services remain constant;
(ii)
population growth is 2 %;
(iii)
GDP growth is 2 %;
(iv)
total government current and capital expenditure at constant prices grow by 1.5 % per
year;
(v)
current health expenditure in the forecasting period is taken from the results of
MicroFin.
4
In general, we can say that health expenditure at constant prices increases at a yearly
rate of less than 2 %; the growth rate is not exactly equal to population growth because health
care costs comprise some "fixed" expenditure. Current Ministry of Health expenditure
(excluding current Ministry ofHealth expenditure in constant prices increases by
approximately 19 % over the ten-year period.
(i)
(ii)
(iii)
(iv)
Note that in the base year, current health expenditure is broken down as follows:
Health centres
19.7%
Hospitals (levels II and III)
59.6 %
National Hospital
6.7 %
Administration
13.8%
We report on the base case values of selected variables below.
7.3.2 Health policy simulations using MicroFin
7.3.2.1 General salary increase
The annual (real) rate of salary increase is assumed to be 5% for all staff.
4
4
99
All services
*
30000
23000
20000 -
s3
E
K
~ 13000 -
i
I
10000 -
3000 -
0------
1995
1996
1997
1998
1999
Bait tctnario
2000
Year*
2001
2002
2003
2004
2005
3H incrtaf In lalariti
In the graph above, it is depicted that an annual increase of 5% in salaries results in an
overall increase of 76% by the end of the 10-year projection period. The latter compares with
the increase of 19 % in the base case simulation.
7.3.2.2 Policy regarding health centres
Three policy changes are analysed here :
(i)
an increase in the number of health centres,
It is assumed that the number of “small health centres” increases from 400 to 600 and
the number of “large health centres” from 200 to 250: This would raise national
coverage population from 60% to 80%.
(ii)
a change in the composition and tasks of health staff: A substantial increase in staff
productivity is assumed resulting in the following average time needed:
- 1 curative consultation: 30'
- 1 MCH intervention: 15'
- 1 delivery: 120'
The latter represents a substantial increase in productivity compared to the base
scenario;
iii)
improvement in quality, via :
. an increase in drugs expenditure: drugs expenditure per intervention increases to
200.
100
. an increase in other operating expenditure: the latter increases to 100 per
intervention.
Simulations are performed for each of the three policies. The following diagram gives
the results of each simulation.
Health centres
6000 -]
5000 ~
4000 -
§
5
i
j 3000 ~
2
I
5
2000 ~
1000
o—
2005
1995
Ttari
Bait ictnario
Incrtait tn number ofHet
Incrtait in productivity
Incrtait In drug expenditure
Incrtait in recurrent expenditure
5% increaie In lalarlei
Note that in the base scenario health centre expenditure grow by 16% over the
projection period. The simulations of the policy changes lead to the following results :
(i)
a 5% increase in salaries leads to a growth of 81% in expenditure by the end of 2005;
(ii)
an increase in the number of health centres leads to a growth in expenditure of 53%
by 2005;
(iii)
an improvement in the quality of care through increased expenditure on drugs per
intervention leads to a growth of 29 % by 2005;
(iv)
an improvement in quality through increased recurrent expenditure per intervention
leads to growth of 24% by 2005;
(v)
an increase in staff productivity leads to a 34% drop in expenditure, by 2005;
From a strictly financial point of view, these policies vary in their impact. Policies
can also be combined, however. A suitable way to proceed is to:
(i)
set the current budget for the period: this may be the budget of the base scenario or
any other budget (for example one could take account of the macro-economic
4
101
constraints in setting the overall health budget, and within this, the budget for health
centres;.
(ii)
try out various combinations to see which one respects the budget constraint.
Let us assume, for example, that the budget constraint is that of the base scenario,
with a total of 3 594 million at the end of the simulation period, and that the MoH is seeking
an increase in productivity which would allow for an annual (real) growth rate of 5% in
salaries. Suppose staff productivity improves along the lines of the scenario on increased
productivity (see above). In this case, it is possible indeed to remain within the budget limit
set for the end of the period 14 and allow for an annual 5% growth in salaries.
7.3.2.3 Policy regarding hospitals
In this example we will consider the effects of policy changes related to all three
hospital levels. The policy changes are the following :
(i)
an increase in admissions :the number of admissions to a hospital is set as a
percentage of the population in the reference zone. This percentage increases as
follows:
• District hospital: from 1.5% of the population in 1995 to 2% in 2005;
• Regional hospital: from 0.5% of the population in 1995 to 0.8% in 2005;
• National hospital: from 0.2% of the population in 1995 to 0.5% in 2005.
(ii)
a change in staff productivity (number of staff per bed). We will assume an increase
in staff productivity of 50% at all qualification levels by the end of the period.
(iii)
a change in the length of hospital stay. The average length of stay is assumed to be 8
days at the beginning of the period regardless of the type of hospital. We will assume
that this length gradually shortens to 6 days by the end of the period.
(iv)
an annual increase in salaries. Again, we will assume an annual increase of 5% in
salaries.
The following diagram presents the results of the simulation :
4
14 Additional trial-and-error operations and hypotheses would be required to make the adjustment comply
with the budget for each of the simulation period.
V 'O
TyZ-■
05152
)F)
i
o000 u**'5
Ay
102
All hospitals
20000 q
1500Q
§
E
«10000 -
I
i
5000
0
1995
2005
Ytari
Bate tcenario
Increate in no of admlttionr
5K increate tn talariet
Increated productivity
Shortening of hotpltal itayi
Note that in the base scenario hospital expenditure grew by 23% in expenditure over the
simulation period. The simulations give the following results :
(i)
a 5% increase in salaries leads to a growth of 80% by 2005;
(ii)
an increase in the number of admissions leads to growth of 90 % in expenditure by
2005;
(iii)
shorter hospital stays lead to reduction of 23% by 2005;
(iv)
an increase of 50% in staff productivity leads to a 12% drop in expenditure by 2005.
Policies can also be combined, of course. For example, we could combine greater
productivity with an increase in the number of admissions. Total expenditure at the end of the
simulation period would be 14 337 million, compared to a ’’base case" value of 12 907
million. The latter demonstrates that the effects of the different variables do not automatically
compensate for each other. As outlined in the previous section, one could set the current
budgets for the simulation period and then try out various policy combinations that respect
the budget constraint. For instance, if one were to respect a budget constraint of 12 907
million at the end of the simulation period, one would allow for an annual (real) growth rate
of 5% in salaries provided staff productivity rises by 50 % by the year 200515.
15
Additional trial-and-error operations and hypotheses would be required in order to make the
adjustment comply with the budget limit for each of the simulation period.
103
7.3.2.4 Policy regarding administration
In the base case scenario, expenditure on administration is 2180 million and remains
unchanged throughout the simulation period.
We have simulated a policy change regarding supervision at district and regional
level. Supervisory checks increase from 12 per year to 24. According to this hypothesis,
administrative expenditure reaches 2378 million at the end of the simulation period, i.e., an
increase of 9% with respect to the base case scenario.
7.3.2.5 Policies regarding the structure of health expenditure
The base case simulation produced the following results:
1995
Value
2005
Share
Value
Share
Health centres
3 105
19.7%
3 594
19.2%
Hospitals of level II and III
9 384
59.6%
11 573
61.9%
National hospital
1 085
6.9%
1 334
7.1%
Administration
2 180
13.8%
2 180
11.7%
Total
15 754
100%
18 681
100%
It can be seen that there is little change in the structure of expenditure at the different
levels. In previous simulations, we also reasoned within a given structure of the health
system. Obviously, the decision-maker may wish to change the structure of health
expenditure. Let us assume for example that he or she adopts a health policy favouring
primary health care. Such a policy would result in a greater share of the health budget being
allocated to health centres and a decrease in allocations to other levels. We perform a
simulation, taking account of the following hypotheses :
(i)
the current health budget develops as in the base scenario, i.e., the budget increases
from 15 754 million in 1995 to 18 681 million in 2005;
(ii)
the new allocation to the different levels is as follows:
Health centres
Hospitals of levels II and III
National Hospital
Administration
30%
55%
5%
10%
104
According to these two hypotheses, budgetary constraints for the final year of the
simulation period are as follows:
Health centres
Hospitals of levels II and III
National Hospitals
Administration
5 604
10 274
934
1 868
million
million
million
million
We can now examine which policy scenarios would respect each of the above
constraints. Obviously, there are quite a number of solutions. For expository's sake, we have
selected onlyoneper category of health facility and for the administration : the following table
presents those combinations of hypotheses which allow each constraint to be respected. Of
course, the user is free to choose the alternative combinations of policies which at the same
time respect the predetermined constraints.
Combinations of
changes in policy
Health centres
Hospitals
Level II and
National
Hospitals
Administration
Increase in salaries
1%
1%
1%
1%
Staff productivity
decrease in time
spent on each
intervention:
- curative care: 30’
-MCH: 15’
- delivery 120'
increase in
productivity
of 20%
(measured via
the number of
staff per bed)
Rate of admission
no change
Length of hospital
stay
Number of facilities
7.5 days
0,00015
7.5 days
800 small health
centres and 250
large health
centres
Drug expenditure
per intervention
200
Other operating
expenditure per
intervention
100
Number of jobs
increase in
no change
productivity
of 20%
(measured as
the number of
staff per bed)
- Central: decrease
of 50%
- District and
regional: decrease
of 20% for
intennediate and
lower categories
105
On the whole this scenario demonstrates that is possible to increase salaries if there is
a simultaneous increase in staff productivity. Similarly, devoting a greater proportion of the
budget to health centres makes it possible to increase the number of health centres and to
improve quality as measured by drug and recurrent expenditure per intervention.
7.3.3 Health policy simulations linking MacroFin and MieroFin
7.3.3.1 Taking account of the macro-economic environment: impact of a currency devaluation
We will consider an example in which we simulate the impact of a currency
devaluation. The exchange rate, which was 500 to the US dollar in the base case scenario
changes to 1000 per US dollar, representing a devaluation of 50% of the monetary unit
against the dollar. The simulation results obtained are presented in the following diagram.
Effects of a 50% devaluation
72%
30000
25000 -
-11%
a 20000 -
I
10%
g* 15000
Ig
10000 - 9%
— > T"** - T"'. .
■ •
5000 -
o—
----- 8%
2005
1995
Years
Base scenario (Y1)
Devaluation (Y1)
% allocated to Health-base scenario (Y2)
% allocated to Health-devaluation only (Y2)
% allocated to Health-devaluation and economic hypotheses (Y2)
The diagram shows how devaluation affects expenditure (in local currency) on
imported drugs. We assume that no other element of current expenditure involves imports.
This simulation can also be used to examine the effect of devaluation on external aid (in US
dollars). The amount of external aid (in local currency) planned in the budget will have to be
adjusted in order to maintain the real quantity of aid.16
The simulation model does not consider the effects of a devaluation on the economy
and its structure, however. One might argue that a devaluation could result in an improved
balance of trade and an increase in government revenue. The user could study the
implications of the latter effects, by modifying the appropriate coefficients, especially the
ones related to the shares of international trade in GDP.
16 For more information on this point see J. Perrot, L’aide exterieure pour les secteurs sociaux au iendemain
de la devaluation du franc CFA, WHO/ICO, Geneva, 21-24 February 1995.
106
7.3.3.2 Needs versus budgetary constraints
With the above simulations, we have linked the results of the two sub-models. But we
have not yet analyzed financial requirements versus constraints of public finance as set out in
the macro-economic sub-model.
The question is how to use the sub-models most productively? Of course, we should
be as close to reality as possible. For example, one sequence of simulations could be as
follows :
(i)
the Ministry of Health makes an initial estimate (using MicroFin);
(ii)
the Ministry of Finance then examines the estimate. It could reply that the figure
requested is too high and suggests a health budget which is feasible taking account of
macroeconomic and political considerations;
(iii)
the Ministry of Health accepts this budget as a constraint and, using MicroFin, the
policy package that respects this constraint and best corresponds to a previously
adopted health policy.
Let us take an example to illustrate this:
We assume that the procedure begins with the Ministry of Finance requesting that the
Ministry of Health draw up a budget plan over the next 10 years, based on the requirements
of the health system as identified by the MoH. For the sake of simplicity, we will consider
only one measure here, i.e. a substantial real increase of 5% per annum in the salaries of staff.
MicroFin can be used to assess the impact of such a measure at each level (health centres,
hospitals, administration) and thus on the entire system. Whereas in the base scenario total
expenditure is 18 682 in the year 2005, it is 27 752 if there is to be a 5% increase in salaries.
We now import these results via the MacroFin "LINK" option17. We see that the
proportion of the government budget allocated to health increases from 9% in 1995 to 12.9%
in the year 2005.
Assuming the same procedure has been repeated for all ministries, the Ministry of
Finance now has the necessary information to mediate between various ministerial requests.
Les us assume that it informs the MoH that 12.9% is much too high a figure and imposes a
limit of 9%. Now, MacroFin could be used to calculate the total sum available to the MoH
for each of the following 10 years. This estimate then becomes the Ministry’s budgetary
constraint.
Once the MoH knows its overall budgetary constraint, it can use MicroFin again to :
(i)
(ii)
share out the total budget among the different levels, and
find the policy package which respects this new financial constraint, (thereby
allowing for a different functioning of the health system).
17
See Annex II : ’’User’s Guide to SimFin software".
107
7.3.4
Rapid estimates with MacroFin
It is also possible to use MacroFin ("DIRECT” option)18 to make certain rapid
estimates regarding health expenditure based on simple hypotheses.
For instance, one could start from baseline data for the MoH budget (based on
published budget data). The user does not necessarily have to link with MicroFin, should he
be pressed to compute some future budget estimates rapidly. Different growth rates can be
given for the different budget items.
Note that there is also a feature whereby the user can make all MoH expenditure grow
like GDP (he does this by simply using a specially designed parameter19.
18
Op. cit.
19
See Annex II, p 129
*
109
ANNEX I
ADDITIONAL INDICATORS
1.
Table of results:
HEALTH EXPENDITURE AT CONSTANT PRICES
Ministry of Health expenditure
Rate of growth of total expenditure
het,mi
(het
L-!
(143)
Ministry ofHealth expenditure per capita
Per capita expenditure
hect
heC,,mi
POPt
(144)
Per capita expenditure (domestically financed)
hed<\mi
^edt n,
t,mi
POPt
(145)
Per capita expenditure in USS
hec$
.
TXCHt * POPt
(146)
Rate of growth of per capita health expenditure
heC.,mi
(147)
rheCt.n.i
heCt-\,n,i
National health expenditure
Total
nhet
het.mi + he,,oth + het,Pr
(148)
110
Rate of growth of total national health expenditure
nhe(
rnhet
(149)
nhet-\
Total per capita expenditure
hne(
hnec =
(150)
POPt
Rate of growth of total per capita expenditure
rnhect =
nhect
nhect_x
-1
(151)
Reminder: growth ofgross domestic product
Rate of growth of GDP
rgdpf,
sdpf, }
gdpf,^
(152)
gdpf
POPt
(153)
Per capita gdp
g<yp/c( =
Rate of growth of per capita gdp
rgdpfct
gdpfc,
gdpfc r-i
-1
(154)
Ill
2.
Table of results:
HEALTH EXPENDITURE AT CURRENT PRICES
Ministry of Health expenditure
Current expenditure on health as a proportion of total Government recurrent
expenditure
HREt,mi
t
PHRE'
GREt
(155)
Capital expenditure on health as a proportion of total Government capital expenditure
HCEt,mi
t
PHCE't,mi
mi
GCEt
(156)
Total Ministry of Health expenditure as a proportion of total Government expenditure
PHEtt 9tni
(157)
GE,
National expenditure on health
Total
NHEt =
ftni
+ HE,t,pr
+
(158)
Total per capita
NHECt
NHEt
POPt
(159)
Total per capita in USS
NHEC'
NHECS = -------- RXCH
(160)
112
Total as a percentage of GDP (factor cost)
PNHEt =
NHEt
(161)
GDPFt
Total government expenditure on health as a percentage of total government
expenditure
(HEit,mi + HE,
PTGHEt = ----- ^GEt
3.
Table of results:
(162)
STRUCTURE OF HEALTH EXPENDITURE
Ministry of Health
Structure of expenditure (percentages)
Current expenditure
HREt,mi,
f
PHREt
HEt,mi
t
(163)
Capital expenditure
PHCE.
=
HCEtmi
(164)
Structure of current expenditure (percentages)
Personnel
PHREt, tni9.1
HREt
HRE(Ml
t
.
(165)
113
Drug expenditures
PHREDR,
{HREi
+ HRE
(166)
HRE,t,mi
of which imports
PHRE,
s
HRE,
,
(167)
HRE,
Other expenditure
^^jml.....4
POTHHEt =
HRE,t,mij + V
HRE,t,mi
HREt,m ij'
(168)
Structure offinancing
Current expenditure (percentages)
DOMESTIC FINANCING
PHRED,i, mi
HRED,
HRE,t,mt
(169)
EXTERNAL FINANCING
PHREXt,mt
1 -PHRED,
(170)
Capital expenditure (percentages)
DOMESTIC FINANCING
PHCED,i9mi
HCED,t,mi
HCE,t,mi
(171)
114
EXTERNAL FINANCING
l-PHCEDt
PHCEXt
(172)
total expenditure (percentages)
DOMESTIC FINANCING
HRED' t,mi +HCED.t,mi
PHED,t,mi
HEt
(173)
EXTERNAL FINANCING
= \~PHED
PHEX.
(174)
NATIONAL EXPENDITURE
Structure by sector (percentages)
Ministry of Health
PHE
HEt
NHEt
(175)
Other ministries
t, oth
HEt,Oth
NHEt
(176)
Private sector
HE.Pr
PHEt,pr
t
NHEt
(177)
115
ANNEX II
user's guide to SimFin
1. HOW TO INSTALL SimFill
1.1
Create a sub-directory in the directory where you installed Lotus 12320 before. You
could call this sub-directory SIMUL, for instance.
1.2
Copy the files from the SimFin diskette in this sub-directory with the following
instruction:
A:> COPY *.* C:\LOTUS\SIMUL
20
We suppose that Lotus (versions 3.1 or 4) is installed in a directory called LOTUS.
116
2. how to start MicroFin
2.1
*
Go to the LOTUS directory:
C:\LOTUS
2.2
Start Lotus
C:\LOTUS\123
then hit the ENTER key
2.3
Once you are in Lotus, call the Menu by typing
/or <
2.4
When you get the Lotus menu on the screen, select
DIRECTORY
2.5
Enter the name of the sub-directory where you copied the SimFin diskette by typing :
C:\LOTUS\SIMUL
2.6
Start first MicroFin. To do so, go back to the Lotus menu, then choose :
FILE then RETRIEVE
and select
MODELE.WK3
You will see the WHO logo while the simulation programme is downloaded.
2.7. From MicroFin's main menu, you may then choose between :
a) INPUTS
to enter, modify or consult data,
*
b)
RESULTS
to consult results,
117
c) SAVE
to save your work or
d)
EXIT
to exit the programme.
To choose one instruction from the menu, it is sufficient to type the initial of the
selected instruction only. For instance, one can simply type I if one wants to go to the
INPUTS section.
118
3. how to use MicroFin
The programme allows the user to analyze the functioning of health services at different
levels including their administration. Different menus lead the user to these different
components.
3.1
General principles ofMicroFin
a) The model allows the user to make projections over a 10-year period.
b) A first step is to enter the base year data. Select a baseline year for which there is a
sufficient amount of information available.
c) Secondly, objectives to be reached by the end of the 10-year period have to be set by the
user.
3.2
Data input
3.2.1 Health services categories and administration
a)
MicroFin distinguishes four main components: health services at health centres, at
district and/or regional hospitals21, at national hospitals22 and the administration. In
turn, the latter is composed of administrative services at the level of the district, the
region, and the centre.
For each of these categories, base year data and the objectives to be reached at the end
of the period have to be entered.
REMINDER
Base year information includes data applicable at the national level, as well as data specifically
related to various categories of health facilities. For each of these categories, we consider only
the ’’average” facility.
5
21
In MicroFin, we call these "Hospitals of level II and III".
22
In MicroFin, these are also referred to as "Hospitals of level IV".
119
3.2.2 Order of data entry
a)
As far as baseline data are concerned, the user may choose to start working on any
component.
»
REMINDER
Objectives need to be entered as the last step of the user's input (i.e. after having entered national
data and "average” data related to health facilities.
b)
Depending on the configuration of the Lotus software you are using, decimal numbers
must be separated by either :
(i) a full stop, for instance : 0.10 or 123.5
or
(ii) a coma, for instance : 0,10 or 123,5
To enter a percentage, only type the number followed by the % sign.
For instance, 15 percent is typed in as : 15 %
c)
All monetary values must be entered in national currency units.
3.2.3 How to return to the main menu of MicroFin ?
When you are in a submenu of a health facility category or of administration, press
EXIT
then press RETURN to return to the main menu of MicroFin menu.
REMINDER
Wait until you see the main menu on the screen before inputting data or giving new instructions
to MicroFin.
120
3.3. Results
a)
The command
5
RESULTS
from the main menu will trigger the execution of the calculations in MicroFin. The user
is requested to wait for a few moments during the calculation procedure.
REMINDER
Only launch the RESULTS command when all the baseline data and objectives have been well
entered. The results are shown in a table form. You should in no way try to enter data into these
tables.
b)
You may go through the table with the arrows displayed on the keyboard, as well as with
the HOME and END keys.
To leave the results tables, hit the ENTER key twice.
c)
When you work with a RESULTS table, you may display the corresponding graph by
pressing INS.
To leave the graph, press INS again. You can exit the table by hitting the ENTER key
twice.
d)
All the results are displayed in millions of national currency units and in constant prices.
You may print selected results with the PRINT command.
e)
In the case of consolidated results23, you may consult specific graphs by selecting
OPTION.
To leave these graphs, press the INS key again.
REMINDER
Before launching the PRINT commands, make sure that the printer's name and characteristics
were properly selected when installing Lotus. Also make sure your printer is switched on.
23
These can be found in the submenu "For all health services"
121
3.4
Save and exit commands in the main menu
You have to use the
SAVE
command every time you wish to keep the changes or the data you have just entered.
If you do not wish to save them, then leave your work with the command
EXIT
3.5
Switching between men us
Switching from lower-level menus (submenus) to highler-level menus can be done by pressing
EXIT
or
RETURN
depending upon the level of menu the user is currently using.
3.6 Specific elements to take into account while working with the MicroFin components
3.6.1 HEALTH CENTRES
3.6.1.1 Information for the base year
The model enables the user to consider up to four different categories of health centres.
REMINDER
The use of the first category of health centre is compulsory; the use of the other categories is
optional.
When the user does not wish to use the optional categories, he/she may only have to type 0 as
entry in each type of health service and 0 for the population covered. Data for each category of
health service is entered into one line. Within that line, all the information has to be filled in.
122
Some inputs are optional, and therefore 0 could be entered as a value. In particular,
(i)
related to health services', deliveries and IEC activities may be nil; however, values for the
other activities need to be different from zero.
(ii)
related to health personnel', the numbers of doctors, midwives, nurses and non-medical
may be nil; for all other personnel, data different from zero need to be entered.
3.6.1.2 Objectives
If levels 2, 3 and 4 are not utilized, the values of the columns in the corresponding objectives
show ERR, but the user should not worry about that as it has no effect on final results.
3.6.2 DISTRICT AND REGIONAL HOSPITALS
a)
Two categories of hospitals may be considered. However, MicroFin accepts that only one
category is effectively used.
b)
The second category is considered inexistent if the number of admissions or covered
population is nil.
c)
There are four in-patient departments .
REMINDER
The user needs to input data for all four in-patient departments.
Apart from the four in-patient departments, other departments are defined. However, the user
does not have to put in data for those necessarily. It is the case for the radiology department and
ambulance service, and for the catering department.
Except for the radiology department, the ambulance service and the catering department,
there must always be at least one health service item, i.e.:
. a surgical operation (in the operating theatre)
. a consultation (in the outpatient department)
. a laboratory examination (in the laboratory).
there must always be at least one bed in each of the four in-patient departments.
Note also that within any hospital department, it is possible that the total of personnel, in any of
the qualification categories, is nil.
w
123
3.6.3 NATIONAL HOSPITALS
a)
Up until 10 in-patient departments can be taken into account. The user should enter the
data for each department one after the other.
REMINDER
Data input is required for the first 7 in-patient departments.
b)
If an in-patient department does not exist, please :
- put a zero in the number of admissions and of beds for the base year;
- give 0 % as objective for the admissions if you do not want this department to exist at
the end of the period.
c)
Ambulance and catering services are optional: all related information can be set at zero.
d)
All other hospitals departments are supposed to exist. Therefore, there must be at least one
health service, in other words at least one surgical intervention, one external consultation,
one laboratory test, one radiology act, one urgency intervention, and one dental exam per
year.
3.6.4 ADMINISTRATION
In principle, all data need to be entered. However, in the case of district and regional
administrations, one does not have to enter necessarily data for:
- senior administrative staff (except for District Medical Officer or Regional Medical Director)
- clerical staff and service personnel.
124
4. how to start MacroFin
4.1
Go to the LOTUS directory :
C:\LOTUS
4.2
Start the Lotus programme:
C:\LOTUS\123
then hit the ENTER key
4.3
Once you are in Lotus, call the Menu by typing
/or <
4.4
Enter the name of the sub-directory where you have copied the SimFin diskette by typing:
C:\LOTUS\SIMUL
4.5
Call back the Lotus Menu, and choose :
FILE then RETRIEVE
and select:
EN MACRO.WK3
to start the model.
4.6
A screen is displayed, informing the user that he has two options. Either the user presses
DIRECT
if he does not wish to establish a link with the results produced by MicroFin. In this case,
he needs to enter all budget data related to the Ministry of Health himself.
Or he chooses
LINK
125
in which case he establishes a link with MicroFin: budgeted expenditure by the Ministry
of Health (except for training, maintenance and investment) will be entered into MacroFin
automatically.
REMINDER
1)
Before choosing the LINK option, the user should make sure that:
first, MicroFin files are kept in the same suh-directory as the file he is currently using;
second, the data necessary for MicroFin have been entered before and that a simulation
run has been performed.
2)
Should the user wish to use again MacroFin in its DIRECT way, he will have to exit the
current work and start a new session.
126
5.
how to use MacroFin
4
5.7 The main menu
The menu commands can be invoked by typing simultaneously the ALT key and the
appropriate letter. For instance, to start entering the data about population, type :
ALTA
5.2 General principles on how to use the model
a)
It can be used over a ten-year period.
b)
A certain number of baseline data have to be entered, as well as growth rates and
parameters for the simulation period, in order for the model to produce results.
c)
Select a baseline year for which there is a sufficient amount of information available.
REMINDER
If the user chooses the option LINK, he should be careful to use data concerning the same base
year as the one used in MicroFin.
5.3 Data input
5.3.1 Entering the data
REMINDER
1.
2.
3.
Follow all the indications displayed in the command panels or on the screens (coloured
boxes).
Carefully read all the menus and contents of information boxes on top of the screens.
Wait until the main menu comes back after exiting a screen.
127
5.3.2
Order of entering the data
The base year (ALT Y) ought to be entered at the beginning of your work.
Moreover, it is necessary to enter the data concerning the utilization of GDP (ALT R) and the
values added (ALT V) before working on the utilization of GDP in percentage (ALT G). In
addition, it is necessary to enter the data concerning the values added (ALT V), utilization of
GDP (ALT R) and taxations (ALT T) before proceeding to the taxation rates (ALT U).
5.3.3 Units
Baseline values are generally in form of amounts, rates or percentages.
The baseline population size is entered in millions of inhabitants.
All the monetary values must be entered in millions of units of the national currency, and at
current prices of the base year. There is only one exception, namely : imports of drugs in the
Ministry of Health expenditure (ALT H) have to be entered in million US$, and at current
prices.
5.3.4 Entering percentages and decimal numbers
To enter a percentage (or a rate), the user only has to type the number followed by the % sign,
for instance :
fifteen percent is typed :
15%
Depending on the configuration of Lotus, decimal numbers have to be separated by:
- (i) either a full stop, for instance : 0.10 or 123.5
- (ii) or a coma, for instance : 0,10 or 123,5
5.3.5 How to return to the main menu of MacroFin
To quit entering, you have to hit the ENTER key twice, which enables you to leave the screen
on which you are working and to return to the main menu.
REMINDER
Wait until the screen with the main menu is shown before you launch a new operation.
V
128
5.4 Display and consultation of results
a)
Commands in the "Results" section of the Main Menu allow you to display the various
results.
b)
The results are displayed in tables and graphs. Results are usually expressed in millions,
in currency units per capita, in rates or percentages.
REMINDER
Do not try by any means to enter data in the results tables or in the graph.
c)
Move into the tables with the arrow-keys as well as with HOME and END.
To exit the results, in the tables or in the graph, hit the ENTER key twice.
5.5
How to print
In the results section of the Main Menu, you may ask for a printout of the tables or graph by
selecting the corresponding keys, i.e. : ALT simultaneously with one of the letters F, J, K or
N.
WARNING
Before launching the print commands, make sure that the printer’s name and characteristics were
properly selected when installing Lotus. Also make sure your printer is switched on.
5.6 How to save results and exit the main menu
You have to use command
ALTS
every time you wish to save the data and results obtained, or
command
ALTQ
129
every time you wish to exit without saving changes.
5.7
Specific elements to take into account while working with the MacroFin components
5.7.1 Information for the base year
Generally, the information is to be entered in the first column in millions of units, except for the
exchange rates (ALT X).
You may not enter baseline data in the following cases :
(i)
UTILIZATION OF GDP (in %) (ALT G)
because the baseline data are calculated automatically by the model via data entered
before.
(ii)
TAXATION RATE (ALT U)
because the baseline taxation rates are calculated automatically as well, via data on
taxation revenues entered before.
(hi) PRICE INDEX (ALT P)
because, by default, for the base year, these indexes are equal to 100.
5.7.2.
Growth rates
a) Growth rates are:
(i) either variable over the simulation period: in this case you enter them year by year;
(ii) or are fixed throughout the whole period: in this case you only enter one rate.
You may select these options by entering the parameters 1 or 0 in the appropriate column.
b) Moreover, in two cases it is possible to perform a simulation run, assuming that the future
growth rates are equal to the real growth rates of GDP. They are :
(i)
(ii)
GOVERNMENT EXPENDITURE
(ALT E)
MINISTRY OF HEALTH EXPENDITURE (ALT H)
The parameter 1 must be entered in the appropriate cell to activate this feature. In this case
therefore, the user no longer has to enter variable or fixed growth rates.
c) Only baseline data may be entered in the following cases:
(i)
(ii)
UTILIZATION OF GDP (ALT R)
TAXATION (ALT T)
130
5.7.3 Cases where no data should be entered
You may not enter data for the base year or the subsequent years in the following cases:
(i)
in EXCHANGE RATES
(ALT X)
When the Purchasing Power Parity (PPP) feature is activated, the resulting exchange rates are
displayed on the top of the screen in a special information box. To activated this particular
feature, the value 1 needs to be entered in the appropriate cell.
(ii)
in GOVERNMENT EXPENDITURE (ALT E)
Total operating expenses are calculated automatically by the model and displayed.
(iii) in MINISTRY OF HEALTH EXPENDITURE (ALT H)
Total operating expenses are calculated automatically by the model and displayed.
5.8
Link between MicroFin and MacroFin
a)
If you choose the LINK option, you do not need to enter the majority of current Ministry
of Health expenditure, since these are imported from MicroFin.
The MacroFin user gets access to the Ministry of Health expenditure projected via
b)
MicroFin by pressing
ALT W
The imported data are displayed in red. The user can not modify them.
131
6.
OTHER QUESTIONS
■
1
■
'
■
■
■.
'
•
■
■
6.1 How to get a print-out ?
When you wish to print results, you only have to check that your printer is ready. The
programme automatically proceeds to the necessary print configurations in Wysiwyg. By default
it selects the printer placed in first position set by the Lotus 123 configuration during installation.
If you wish to use a different printer, you will then have to launch the Lotus 123
Installation procedure and modify the configuration so that that particular printer is put in first
position.
Whatever printer you choose for your print-out, it will remain valid for all the other print
outs of the model.
Using the Wysiwyg menu, you may decide which option you want to select for :
- paper size
- paper orientation (portrait or landscape)
- compression (nil, automatic or manual).
- print definition (draft or final).
Of course, you have to select these options before launching SimFin.
6.2 How can Lotus 123 recognize your computer equipment ?
Launch Lotus 123 by typing LOTUS.
The Lotus 123 access menu is displayed, choose INSTALL.
Choose CHANGE SELECTED EQUIPMENT from the main menu, then,
MODIFY CURRENT DCF, then
CHANGE SELECTED PRINTER.
Once you have selected the printer you want to rank first, choose :
RETURN TO MENU
then
SAVE CHANGES
132
6,3 How to use the special keys ?
a) To quit a particular screen or results :
»
hit the ENTER key twice.
b) To move within a particular screen and within the results tables,
(i) use arrows
up, down
j
If you are in the results tables, the arrows will allow you to move from one cell to the other only.
Generally speaking, if you want to return to the beginning of your table when you are on the last
entry, press the -> arrow
(ii) use HOME and END
In all cases, keys HOME and END will respectively position the cursor to the first and the last
data.
c) To modify data without having to re-enter them completely, you may use the function key F2.
*
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