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In Sri Lanka, 50% of total financing for health comes from
government, funded mainly by general revenue taxation. The
remaining 50% is mostly accounted for by out-of-pocket payments
by households. Applying the WHO methodology, the Fairness
in Financing score as defined by WHO is estimated to be
0.941 for Sri Lanka. The estimate is based on analysis of
the Census and Statistics Department’s Household Income
and Expenditure Survey 1995/96, a nationally representative
household consumption survey, in which responses were obtained
from 19,753 households. National health accounts data are
derived from Sri Lanka’s official National Health
Accounts, which are compiled in accordance with the OECD
System of Health Accounts. The analysis deviates from the
WHO methodology for sake of methodological improvement,
by using a larger number of scaling factors than proposed
in the original method. The estimate is shown to be robust
to the assumptions made during analysis. Simulation of alternative
financing scenarios shows that the Fairness in Financing
score would be improved substantially by greater reliance
on general revenue financing of health care, and that alternative
funding scenarios explored would be associated with worse
scores. However, even with complete reliance on tax financing,
the score would not reach 1.0, because of lack of substantial
progressivity in the tax system. Increasing the progressivity
of the tax system would be necessary for further improvement.
The Fairness in Financing approach is not without problems.
Its normative basis has certain deficiencies, and may not
be consistent with the social objectives that Sri Lanka
has pursued historically. It may also not address dimensions
of equity that are of concern to policy–makers in
Sri Lanka.
Table of Contents:
- Abstract
- Acknowledgements
- Description of Health Financing System
- Methodology
- Results
- Discussion Bibliography
- Attachments
- Annex
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