Capitation payment method as a policy tool, versus fee for services, for financial sustainability of the national health insurance in Sudan : Algadarif case study

Abstract

Moving away from Fee-For-Services payment method in the National Health Insurance fund- Algadarif State to capitation, is an important step towards averting the financial sustainability problem of the scheme associated with such payment. The objectives of this study are to analyze the cash flow and the financial status of the National Health Insurance –Algadarif State during the last five years (2008-2012) and to evaluate the financial status during the years 2013-2017 if the Fee for Services payment method changes into capitation payment method. The study tries to calculate the per capita rate by using top-down allocation method and then investigates the financial sustainability in three different scenarios; Scenario (A) Total revenues increase according to the trend in the past and the total health expenditures under FFS with the actual outpatient provider's expenditures adjusted to the expected inflation rate 30%, 35% and 40%. Scenario (B) the same as (A) but the outpatient paid under capitation payment method for both NHIF and providers adjusted to the same inflation rates. Scenario (C) revenues increase by 2% and the NHIF perspective under both FFS and capitation adjusted to inflation rate. All scenarios also adjusted to different utilization rate. The methods used by the study are based on cash flow analysis, trend analysis, growth ratio method and per capita calculation method. Data used for analyzing total revenues, total expenditures and calculating per capita rate are obtained from the financial and coverage records of the NHIF-Algadarif State during the year 2008-2012 and the actual outpatient expenditures data are obtained from the providers in the year 2012. The findings indicate that, the financial gap for the years 2008-2012 are negative except in the year 2008 and 2009, therefore the expected financial gap are negative in the three scenarios from NHIF perspective. If the NHIF continue on FFS for outpatient, will incur more loss especially at high inflation and utilization rate, in contrast the providers will gain more profit. Under capitated outpatient the NHIF will decrease the expenditures by 14% for the coming year 2013-2017, but the providers will get loss especially at high inflation and utilization rate so the providers may change their behavior to compensate the loss. For financial sustainability, the scheme should increase its revenues from non-government source such as expand the coverage, investments and increasing the contribution rate during the year 2013-2017.