The Lancet Global Health Commission on financing primary health care: putting people at the centre

Focus on financing

Health systems are fuelled by their financing arrangements. These arrangements include the amount of funding the system receives, the ways funds are moved through the system to frontline providers, and the incentives created by the mechanisms used to pay providers. Establishing the right financing arrangements is one crucially important way to support the development of people-centred PHC. Improving financing arrangements can drive improvements in how PHC is delivered and equip the system to respond effectively to evolving population health needs. Thus attention should be paid simultaneously to both financing and service delivery arrangements.

In this report, the Lancet Global Health Commission on financing PHC argues that all countries need to both invest more and invest better in PHC by designing their health financing arrangements—mobilising additional pooled public funding, allocating and protecting sufficient funds for PHC, and incentivising providers to maintain the health of the populations they serve—in ways that place people at the centre and by addressing inequities first.

Financing is political

Answering the question of how to make these changes goes far beyond technical considerations. Fundamentally shifting a health system's priorities—away from specialist-based and hospital-based services and towards PHC—involves political choices and creates numerous political challenges. Successfully reorienting a system towards PHC requires savvy political leadership and long-term commitment, as well as proactive, adaptable strategies to engage with stakeholders at all levels that account for the social and economic contexts. Therefore, this report addresses both technical and political economy considerations involved in strengthening financing for PHC.

Spending more and spending better on PHC

Despite broad recognition of the importance of PHC, there is no global consensus on what exactly constitutes PHC. This makes it challenging to measure and report on levels of expenditure on PHC. In this Commission we define PHC as a service delivery system or platform, together with the human and other resources needed for it to function effectively. We found that LMICs spend far too little on PHC to provide equitable access to essential services and that much of the (significant) variation in PHC spending levels across countries is explained by national income levels, although there is variation in the amount of government resources allocated to PHC at any given level of economic development. Furthermore, at every level of PHC spending, there is substantial variation in performance, suggesting that we need to spend better as well as spending more.

In this Commission, we analysed provider payment methods and found that the sources of PHC expenditure remain fragmented and overly reliant on out-of-pocket payments. Population-based provider payment mechanisms, such as capitation, should be the cornerstone of financing for people-centred PHC. However, these mechanisms are rare in LMICs, where input-based budgets are standard practice. Furthermore, many features of primary health-care organisation that are necessary for population-based payment strategies (such as empanelment, registration, and gatekeeping) are absent in LMICs.

Redressing these limitations to improving financing PHC is urgent, as new challenges continue to arise. As in other parts of the health sector, PHC will continue to become more integrated, digitally-driven, and pluralistic; therefore, PHC financing arrangements also need to evolve to support, drive, and guide these changes to better meet human needs.

The Commission takes the position that progressive universalism should drive every aspect of PHC. That means putting the rights and needs of the poorest and most vulnerable segments of a population first. This requires unwavering ethical, political, and technical commitment and focus. Together with this overarching principle, we identified four key attributes of people-centred financing arrangements that support PHC.

1. Public resources should provide the core of primary health-care funding. Revenue-raising mechanisms should be defined based on the ability to pay and be progressive. Out-of-pocket payments must be reduced to levels where they are no longer a financial barrier to accessing needed care, impoverish households, or push households deeper into poverty. In most LMICs, this level of public funding for PHC can only be generated through increased allocations to PHC from general tax revenue, and therefore requires an expansion of countries' taxation capacities. In low-income countries, more development assistance will be needed to expand the resource envelope for PHC.
2. Pooled funds should be used to allow all people to receive PHC that is provided free at the point of use. Only once universal coverage with PHC is achieved should pooled resources be extended to cover other entitlements. In this way, PHC can help fulfil the promise of universal health coverage.
3. Resources for PHC should be allocated equitably (across levels of service delivery and geographic areas) and protected as they flow through the system to frontline providers. Countries should deploy a set of strategic resource allocation tools (including a needs-based per-capita resource allocation formula and effective public financial management tools) to match primary health-care funding with population needs and ensure these resources reach the frontline, and prioritise the poorest and most vulnerable people.
4. Payment mechanisms for primary health-care providers should support allocation of resources based on people's health needs, create incentive environments that promote PHC that is people-centred, and foster continuity and quality of care. To achieve these goals, a so-called blended provider payment mechanism with capitation at its core is the best approach to paying for PHC. Capitation should form the core of the primary health-care financing system because it directly links the population with services. Combining capitation with other payment mechanisms, such as performance-based payments for specific activities, enables additional objectives to be achieved.

Each country is at a different point along its path towards the goal of effective financing for PHC. The four attributes outlined both represent goals and present a guide for working towards those goals. This Commission recognises that, depending on the context, the evolution of an effective primary health-care financing system in some countries might occur through incremental changes, whereas others can implement comprehensive reforms. Improving PHC financing can occur in response to bottom-up advocacy, top-down policy or, most likely, through a combination of grassroots and technocratic approaches. Political, social, and economic factors are therefore as important as technical design elements when it comes to enacting efficient and equitable primary health-care financing reform. Changing the ways in which PHC is financed requires support from a wide range of stakeholders, and deliberate political strategies, to determine and then stay the course. The change also requires good information about PHC resource levels and flows so that this reorientation can be effectively managed and monitored.

In this Commission, we provide five recommendations.

1. People-centred financing arrangements for PHC should have public resources provide the bulk of primary health-care funding; pooled funds cover primary-health care, enabling all people to receive PHC that is provided free at the point of service use; resources for PHC are allocated equitably across levels of service delivery and geographic areas, and are protected so that sufficient resources reach frontline primary health-care service providers and patients; and primary health-care provider payment mechanisms support the allocation of resources based on people's health needs, create incentive environments that promote PHC that is people centred, foster continuity and quality of care, and remain flexible enough to support rapidly changing service delivery models.
2. Spending more and spending better on PHC requires a whole-of-government approach involving all ministries whose remit interacts with health and requires the support of civil society. Key actors and stakeholders should be involved in designing and implementing financing arrangements for PHC that are people-centred. Although the specifics will vary depending on the national context, there are important roles and responsibilities for ministries of health, ministries of finance, local government authorities, communities and civil society groups, health-care providers and organisations, donors, and technical agencies.
3. Each country should plot out a strategic pathway towards people-centred financing for PHC that reflects the attributes outlined above, including investments in supporting basic health system functions. Technical strategies should be underpinned from the outset by analysis of the political economy.
4. Global technical agencies should reform the way primary health-care expenditure data are collected, classified, and reported to enable longitudinal and cross-country analyses of achievement of key primary health-care financing goals.
5. Academic researchers, technical experts, and policy makers, among others, should pursue a robust research agenda on financing arrangements for PHC that place people at the centre to support achievement of key primary health-care financing goals.