Universal health coverage (UHC) – or fairer, more efficient health financing that pools risk and shares healthcare costs equitably across the population – is about improving access to health services and reducing poverty from catastrophic healthcare expenditure. UHC reforms can improve health and financial protection of people around the world, especially poor and vulnerable populations.
The concept is taking off in countries as varied as South Africa, India, Rwanda, Indonesia, and the United States, with governments around the world engaging in serious political and technical discussions on how to expand health coverage. Still others are considering such reforms, but are struggling to navigate the legal, financial, and political frameworks of their countries to determine the best path toward reform. While details vary from country to country, the key common goals are that the cost burden of health care is shared widely and evenly, patients and their families have increased coverage, resources are better utilized, and health outcomes are improved.
Common core principles of UHC
The words “universal health coverage” – sometimes referred to as universal coverage or social health protection -- can mean different things to different people. We define UHC according to the following core principles adapted from the 2010 World Health Report. Different countries may make different policy choices, but those that are pursuing UHC consider these three principles:
Reduced Out-of-Pocket Spending: Globally, over three billion people, many of them in the poorest half of the world’s population, pay out of pocket for health services, often forgoing necessary care due to their inability to pay. UHC reforms aim to reduce direct payments (or out-of-pocket spending), the monetary exchange that happens between a provider and an individual seeking medical care. Out-of-pocket payments can be charged by any provider – government, non-government, faith-based NGO, private, or other – and can take the form of copayments, deductibles, coinsurance, and even unofficial payments or “under the table” payments.
Prepayment: To facilitate a reduction in out-of-pocket spending, UHC reforms aim to facilitate prepayment for care by those who can afford to contribute. This means that people don’t have to pay for health care at the point of service. Health care services are prepaid by a mix of general taxes, payroll taxes, member contributions or premiums, and donor support. There is considerable variation in terms of how prepayment is organized by countries.
Risk Pooling: To facilitate prepayment, UHC reforms aim to pool together financial risk so that the financial cost incurred when an individual seeks health care services is spread across the entire pool of people who are part of the system. Some countries have one national pool while others utilize multiple pools for sub-populations. However, the larger and more integrated the pool can be, the more easily it can spread financial risk and limit unexpected or extreme fluctuations in payments.
Ultimately, health financing systems that are moving towards UHC seek to raise sufficient funds for health, provide financial risk protection in order to increase access to services, and use the funds in the most equitable and efficient way possible. These systems have very different starting points and country contexts. Thus, each country will need its own road map in order to achieve the core principles of UHC.