Publication: Risk Pooling in Health Care Financing : The Implications for Health System Performance
Date
2004-09
ISSN
Published
2004-09
Author(s)
Smith, Peter C.
Witter, Sopie N.
Abstract
Pooling is the health system function
whereby collected health revenues are transferred to
purchasing organizations. Pooling ensures that the risk
related to financing health interventions is borne by all
the members of the pool and not by each contributor
individually. Its main purpose is to share the financial
risk associated with health interventions for which there is
uncertain need. The arguments in favor of risk pooling in
health care embody equity and efficiency considerations. The
equity arguments reflect the view that society does not
consider it to be fair that individuals should assume all
the risk associated with their health care expenditure
needs. The efficiency arguments arise because pooling can
lead to major improvements in population health, can
increase productivity, and reduces uncertainty associated
with health care expenditure. The report considers four
classes of risk pooling: no risk pool, under which all
expenditure liability lies with the individual; unitary risk
pool, under which all expenditure liability is transferred
to a single national pool; fragmented risk pools, under
which a series of independent risk pools (such as local
governments or employer-based pools) are used; and
integrated risk pools, under which fragmented risk pools are
compensated for the variations in risk to which they are
exposed. It notes that small, fragmented risk pools, which
are the norm in developing countries, contribute to
seriously adverse outcomes for health system performance.
Citation
“Smith, Peter C.; Witter, Sopie N.. 2004. Risk Pooling in Health Care Financing : The Implications for Health System Performance. Health, Nutrition and Population (HNP)
discussion paper;. © World Bank, Washington, DC. http://openknowledge.worldbank.org/entities/publication/fd0b995b-c9af-5bb3-b78f-abf966e83a2d License: CC BY 3.0 IGO.”