Mongolia : Improving Health Care Financing for Universal Health Coverage

Health / Health care finance

The purchasing capacity of HIOs has improved over the last decade with support from ADB. However, key operational systems needed for effective purchasing of health services, such as the capacity to (i) provide quality of cost services; (ii) monitor the quality of service provision through an effective information technology-based system; (iii) review claims efficiently; and (iv) contract providers, are not optimal resulting in limited purchasing capacity. The lack of autonomy of the HIOs, combined with insufficient quantity and quality of staff (e.g., to review claim and ensure proper quality monitoring) and deficient purchasing procedures need improvements.

State funds budgeting, allocation, and control are entirely budget line item-based leading to complete passive purchasing of health services. This is mostly based on historical budgets poorly linked to actual cost and volume of services and inefficient resources allocation. The lack of coherence between Ministry of Health (MOH) policies and state funds budgeting and allocation reinforces the passive nature of services purchased with state funds and does not provide incentives for health providers to deliver more rational care (e.g., penalizing the excess use of antibiotics by withholding payments). The performance assessment system for budget managers and providers established for over a decade is not effective, i.e., results of assessments have no real effect on resource allocation.

Out-of-pocket expenses in the health sector are very high caused by weak purchasing practices; excessive admissions; over prescription of drugs (cost of drugs is poorly reimbursed except for in patients); unregulated setting of tariffs (fees) leading to abuse; ceilings imposed by health insurance on reimbursement of diagnostic tests; and gaps in benefit packages (e.g., high cost services). State budget and health insurance funding have increased substantially and nominally over the last decade but government health spending as a proportion of total public spending and as a proportion of gross domestic product have dropped. Overall, high out-of-pocket expenses coupled with inefficient resource allocations in the sector result in limited financial protection for Mongolians against ill-health despite very high health insurance coverage (95%).

Health status of Mongolians improved

Strategic purchaser model approved and initiated

Strategic purchasing model defined

Government and health care provider capacity and capability for strategic purchasing implementation strengthened

Institutionalization of the strategic purchaser initiated