Healthcare Financing in LMICs and Achieving UHC

Running header: Healthcare financing in LMICs and Achieving UHC 1
Healthcare financing in Low and Middle-Income Countries and
Achieving Universal Health Coverage
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LMICs and UHC 2
Introduction
There is no doubt quality health, and affordable healthcare service is a fundamental
human right; thus, various governments are using multiple mechanisms and resources to ensure
the services are efficiently delivered. Consequently, the world health organization (WHO) has
adopted the universal health coverage program that seeks to ensure all persons and societies not
only access but also use the palliative, curative, and preventative healthcare services they need of
standard quality (WHO, 2019). Moreover, WHO advocates that the services should not impact
the user to any form financial stress. Notably, the UHC incorporates three objectives, which
include equity access to healthcare services, whereby everyone should access the service despite
the ability to pay (WHO, 2019). The second objective emphasizes on quality services that are
efficient to improve the general health of users, and the third seeks to protect the users from any
risks associated with finance. Notably, there are various components of UHC, which include
healthcare workforce, facilities, governance, communication networks, and financing.
Moreover, UHC not only advocates for individual treatment but also the general
population through various programs, such as public health campaigns (WHO, 2019). There are
two measures that aid in the evaluation and monitoring the progress towards UHC, which
include the proportion of a population that can access primary healthcare services and that
spends more than 10% of household income on healthcare services. Despite the UHC initiative,
at least half of the world population, especially in the low and middle-income countries (LMICs)
do not have full coverage of essential health services. Moreover, approximately 100 million
people are still subjected to poverty due to the increased cost of healthcare services (WHO,
2019). The WHO 2018 report exhibits that more than 800 million people, which accounts for

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12% of the continent’s population allocate more than 10% of their respective household budgets
to cater to healthcare services.
Notably, in the year 2005 all the 192 member countries of the United Nations have an
agreement in achieving the UHC under the vision 2030 program (Reeves, Gourtsoyannis, Basu,
McCoy, McKee & Stuckler, 2015). However, LMICs healthcare systems are faced with various
challenges, such as corruption thus inhibiting the adoption and implementations of UHC.
Notably, only 20 LMICs have adopted a verifiable UHC program (Reeves, Gourtsoyannis, Basu,
McCoy, McKee & Stuckler, 2015). 2010 WHO report outlines various financial strategies that
will aid in achieving UHC, which include improving efficiency in taxation, implementing
innovative financial techniques, appropriate allocations of government budgets towards
healthcare, and increasing development assistance for health (Friebel, Molloy, Leatherman,
Dixon, Bauhoff, & Chalkidou, 2018). Moreover, the Lancet commission recommended that
UHC is only achievable by raising revenues through taxation. The primary source of government
funds is tax revenues in many countries; consequently, LMICs taxes account for 65% of the total
government revenues. Therefore, the following paper seeks to exhibit the healthcare financing in
LMICs and achieving the UHC. Moreover, the paper will discuss health financing alternatives
using a comparative healthcare system analysis
Health Financing
The adoption and implementation of the UHC are dependent on the healthcare funding
techniques used by the government. One of the factors that have experienced significant
development is the mode of payment of healthcare services whereby most industrialized or
developed countries tend to use the health insurance rather than personal payment (Tulchinsky &
Varavikova, 2014). However, the LMICs still use the traditional mechanisms, such as the out-of-

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pocket (direct) payment, which hinders service delivery to the people due to increased rates of
corruption. Notably, every country tends to depend on government financial support for either
the general population or the marginalized groups, such as the elderly (Tulchinsky &
Varavikova, 2014). Moreover, government support is essential for healthcare services that
private insurance plans are unable or avoid to provide, such as special groups (infants, pregnant
women, and chronic conditions).
Health financing incorporates not only the techniques of raising money for healthcare but
also the allocation of funds thus there are various rules applicable in allocation funds in
healthcare known as laws of health economics, which include Sutton, Capone, and Roemer law,
among others (Tulchinsky & Varavikova, 2014). Sutton’s law advocates that healthcare services
are available based on the amount of financing; for instance, if more funds are directed towards
treatment services than preventative care, then treatments will be given more emphasis than
prevention. Capone’s law advocates that allocation of funds is based on the interest of providers
rather than the general public. Finally, the ability for incentives to control both hospital bed
supply and utilization tends influences Roemer's law of allocation.
Notably, despite the recommendations by the WHO it is evident that the LMICs are still
using the out-of-pocket payment method (OOP). For instance, a report by the WHO indicates
that OOP share has slightly improved since 2000 from 42% to 36% of the total healthcare
expenditure. The data set below exhibits the OOP of Burundi and Liberia (LMICs) from the year
2005 to 2016