Pooling arrangements in health financing systems: a proposed classification

Overview

Risk pooling is the spreading of the financial risk associated with the need to use and pay for health services, rather than to be fully borne by the individual who falls ill. Large size in terms of the number of people covered by the pool and diversity of health risks within the pool are decisive for the redistributive capacity and have positive implications for UHC goals.

The function of pooling and the ways that countries organize this is critical for countries’ progress towards universal health coverage, but its potential as a policy instrument has not received much attention.

The paper provides a simple classification of country pooling arrangements and discuss the specific ways that fragmentation manifests in each and the typical challenges with respect to universal health coverage objectives.  We propose eight broad types of pooling arrangements based on their key design features: single versus multiple pools, competing versus non-competing pools, territorial distinct versus territorial overlapping; and whether there is population segmentation or not.  The classification can help countries assess their pooling setup and contribute to identifying policy options to address fragmentation or mitigate its consequences. 

It is important to recognize that pooling arrangements set the potential for redistributive health spending.  The extent to which the potential redistributive and efficiency gains established by a particular pooling arrangement are realized in practice depends on its interaction and alignment with the other health financing functions of revenue raising and purchasing, including the links between pools and the service benefits and populations they cover.