Pooling financial resources for universal health coverage: options for reform

Overview

Pooling is the accumulation and management of prepaid financial resources and, together with the two other health financing functions – revenue raising and purchasing of health services – is vital for universal health coverage. Pooling creates opportunities for redistribution of resources to support equitable access to needed services and greater financial protection even if additional revenues for universal health coverage cannot be raised. However, many countries have very fragmented pooling arrangements that create barriers to redistribution.

This article provides an overview of pooling reform options to support countries who are exploring ways to enhance redistribution of funds. Four broad types of pooling reform are outlined and their potential and challenges in addressing fragmentation of health financing are discussed:

1. shifting to compulsory or automatic coverage for everybody;
2. merging different pools to increase the number of pool members and the diversity of pool members’ health needs and risks;
3. cross-subsidization of pools that have members with lower revenues and higher health risks; and
4. harmonization across pools, such as benefits, payment methods and rates.

Whether the potential for redistribution is actually realized through a pooling reform also depends on the alignment of the pooling structure with revenue raising and purchasing arrangements. However, institutional and political feasibility can constrain the scope for reform, and the political economy around pooling reform needs to be anticipated and managed.