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The Algerian authorities are fully aware of the challenges facing the health system, but their concerns and desire to carry on reforms are only slowly translating into concrete measures. Apart from the technical and budgetary issues that need to be addressed, the ministry has also suffered from severe leadership instability. There have been three successive health ministers since 2002, and each new minister needs time to become familiar with the ministry’s affairs before being able to decide on reforms, especially in the absence of a sector strategy. This is why, with the exception of implementation of the National Health Accounts, most recommendations in the 2002 Social Sector Public Expenditure Review (World Bank 2002a) have not been implemented (Box 8.4). These recommendations are valid.
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An increase in nonoptimally allocated resources will not resolve the sectors’ problems. The problems with Algeria’s health system are partially attributable to relatively inadequate resources. But shortcomings in the way the system is planned and managed play a major role. Therefore, it is essential to make progress on four fronts simultaneously.
On reinforcing the planning and management of the system
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The sector strategy is finished and it has to be strongly supported. Several efforts are being implemented on (a) reorganizing the organigramme of the central administration; (b) introducing management change in 4 hospitals; (c) developing a new information system (intranet) between the ministry and the health establishments; and (d) opening hospital activities to private operators under the framework of private sector integration to a new national health system. A concerted approach, led by the highest authorities, to prepare this strategy would be preferred since consensus among all the principal players in the system is needed. To this end, a committee could be set up to prepare the strategy, chaired by the Health Ministry. It would include representatives of the ministry’s main departments, as well as the other ministries involved (in particular Social Security, Finance, National Solidarity, Higher Education). The strategy should strengthen planning and management capabilities, and it should be used to update the forward-planning aspect of the health map and to prepare health care delivery plans in each region.
Box 8.4 Progress in Implementing Policy Recommendations from the 2002 Social Sector Public Expenditure Review
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Develop a health sector master plan that would determine the optimal size and function of the health care delivery system over the next decade — helping to rationalize the delivery system for the future needs of the Algerian population.
Status of the reform: not implemented
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Revise existing treatment norms for health facilities and personnel, as a function of a rational hierarchy of care based on the level of the facility.
Status of the reform: not implemented
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Develop and implement a contracting system between the Ministry of Health and CNAS that will allow the Ministry of Health to submit bills by medical act and by insured patient, instead of the current lump-sum transfer.
Status of the reform: ongoing effort
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Revise the reimbursement schedule for private health care — this schedule has not been updated since 1987 and is considerably below market prices.
Status of the reform: ongoing effort
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Maintain and reinforce access to a package of essential health care services — including preventive health care, contraception, and the most cost-effective curative services.
Status of the reform: ongoing effort
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Conduct an analysis of the pharmaceutical sector, rationalize drug consumption, and control expenditures for pharmaceuticals.
Status of the reform: ongoing effort
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Carry out a National Health Accounts (NHA) study. NHA provides information on the total (public and private) resources going into the health sector, their sources, and the types of services funded.
Status of the reform: completed
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The planning and management capacities should be strengthened.
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At the central level, strengthen the human resources needed for managing the system (information technology technicians, statisticians, actuaries, health economists). The Health Ministry needs to carry out its primary responsibilities for system planning and oversight, which implies designing a sectoral strategy, maintaining the overall financial sustainability of the system, and monitoring the performance of health institutions on the basis of agreed operational indicators.
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Improve training for system managers. Action is required on two fronts in particular. First the financial and managerial skills of institutional managers should be enhanced. This is essential if plans to increase the autonomy of health institutions are to be realized. Second, physicians’ training needs to include management and health economics to build awareness of controlling costs and preparing doctors to run the service.
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Develop information systems at all levels. Links intranet and internet among health establishments, health directorates and the MOHPR just were put into place. The health system suffers from major information gaps. The following tools must be developed: (a) insuree/indigent central databases; and (b) management systems with data on service providers, the demand for care and drugs, monitoring indicators measuring the quality of health care, the operational activity of health institutions, and medical supply costs.
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Introduce an external institution for evaluating the activity of health institutions and the quality of care. The creation of an independent agency to evaluate health facilities would be desirable to establish clear separation between evaluation and operational responsibilities. This agency could also be responsible for a system of accreditation for private hospitals.
On improving the institutional framework
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An enhanced institutional environment implies three main actions:
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Reorganize the central structure of the Health Ministry to promote greater policy consistency and improved coordination. One possibility is to merge the various departments into two separate main branches: a “public health” branch and a “health institutions” branch. This way, there will be a main responsible for the two main tasks of the ministry, which would improve policy consistency on each of them. In the meantime, authorities have already reorganized and restructured the organigramme of the central administration.
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Set up regional health agencies. Regional health agencies could be introduced to serve as local relay points for the central ministry in implementing health policies. The central ministry would then be in charge of the overall management of the system, leaving regional bodies to implement its policies. Regional agencies should include representatives of the Ministry of Health and the Ministry of Labor and Social Security. They would have the following tasks: (a) to define and implement regional health care delivery plans; (b) to coordinate the activities of public and private health care facilities (contracting hospitals); and (c) to determine their resources according to well-defined criteria and accountability.
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Make hospitals more autonomous. The new status of the hospitals in Oran and Ain Témouchent (as well as 2 other) represents a positive development (see the presidential decree of August 3, 2003, for Oran, and the executive decree of November 30, 2005, for Ain Témouchent), and should be extended elsewhere once its reform would have produced tangible efficiency gains in these four hospitals. The new regime combines greater management autonomy with the obligation to establish business plans and to accept contractual objectives with the relevant health authority. Technical assistance based on external expertise could be helpful. Consideration should also be given to the arrangements under which hospital staff is paid, so that a portion of salaries will depend on performance. Such an initiative would improve morale among the more competent health professionals and managers.
On rationalizing health system usage
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A rationalized use of the different levels of care would:
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Reinforce the primary and secondary levels. The local health centers and hospitals need to be revitalized to attract more patients. This includes assigning them more doctors, particularly specialists, and ensuring that facilities have the necessary medical equipment. Any solution will require new incentives (for example, higher bonuses paid to personnel willing to work in rural areas).
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Develop a “gatekeeper” system. This measure applies to two settings. First, when a patient is being treated in the private sector, the gatekeeper physician prevents needless referrals to specialists, reducing the financial burden placed on the social security system paying for such care. Second, to steer patients in the public sector to the most suitable level of care, a gatekeeper physician would examine patients at a health center or a polyclinic and handle relatively simple complaints before authorizing treatment at a higher level. This keeps patients from seeking routine care directly from general hospitals. Exceptions for direct care would be made for medical emergencies.
8.68 Consider a comprehensive approach to organizing and regulating health care, namely by taking into account the private sector. Private health care providers should respect minimum standards of safety, quality care, and patient follow-up, as well as financial and accounting standards (transparency and accuracy in their bookkeeping). A useful step toward this goal would be to introduce procedures for accrediting health care providers and for specifying their rights and duties in contracts. Furthermore, regular inspection and supervision are essential for guaranteeing that private care providers respect the rules established at the time of accreditation or contracting. To improve systemic efficiency, private care should also be integrated into health map projections and regional planning. However, new private professionals should not sign up for the new system unless some tangible compensation offsets the additional constraints being imposed: that is, a greater portion of their income must come from Social Security, which involves upward revision of the 1987 rates (see below).
On reforming the financing system
8.69 Better control over expenditure would prevent increasing both the government and social security’s contributions to financing the health system. This involves
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Issuing new rates for outpatient care. Revision of the 1987 rates should guarantee financial sustainability of the health system. Preparatory work should include actuarial studies to assess the financial impact of the reform. Moreover, raising rates will provide an opportunity to introduce contractual relations with the health professions and use this mechanism to achieve overall strategic ends. Finally, conditions should be examined for instituting mechanisms to pay service providers that allow for cost control, such as methods based on capitation.167 A revision of the 1987 base rates will provide an opportunity to revisit all these issues. It will be important not to miss this opportunity since experiences in other nations show that it is very difficult to secure health professionals’ agreement to reduce any advantages once they are in place.
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Outsourcing public health institutions. Quality of care and the cost-benefit ratio will not improve without significant reforms like those discussed above. Consideration should also be given to outsourcing services (food services, laundry, cleaning) that are not part of hospitals’ “core activities,” but only if doing so would generate significant savings and improve service quality. Initially, outsourcing of certain services might be tried on an experimental basis.
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Containing drug costs. It is very unlikely that outlays on drugs will decrease in future years. The low level of current expenditure, the arrival of new and more costly drugs, the generosity of social security coverage, and the epidemiological transition are factors bound to drive increased spending. Technical assistance based on external expertise could be helpful. However, the trend toward higher expenses could be slowed through active policies focused on the points raised below.
Outpatient sales:
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Generic drugs. Adopt a generic drugs policy, preparing a list of generic drugs and their equivalent brand names as a guide to substitution; amend the system of pharmacy markups in order to encourage substitution; institute an outreach policy for communicating with physicians, pharmacists and, above all, patients; establish contractual substitution objectives with pharmacists, and rules for applying the fixed reimbursement rate.
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Prices. Review the mechanism for setting drug prices based on their therapeutic value added, rather than on the price in the country of origin; stabilize and publish drug prices.
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Information system. Equip the sickness funds with information systems that can facilitate detailed analysis of expenditure structures and trends.
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Controlling prescriptions. Raising physician fees and establishing contracts with the sickness funds will provide an opportunity for controlling prescription outlays by each doctor. International experience has shown that establishing individual prescription budgets for physicians is an excellent means of limiting expenditures.
Hospital dispensing:
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Purchasing. Procurement regulations should be enforced in hospitals to ensure that drugs are purchased at the best possible price. To this end, managers need to be trained in the new procedure.
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Drug management. The role of pharmacists as drug managers should be reinforced by enlisting them to work with oversight committees to establish a list of drugs for hospital dispensing based on medical and economic grounds. The procurement chain, from prescription to dispensing, should be computerized so that consumption can be understood and controlled.
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Provision of drugs to hospital patients. Hospital pharmacies should supply all drugs needed by hospital patients so that these costs will not flow through to the outpatient category. This would facilitate better management of drug procurement.
8.70 Combating “social evasion.” Reducing nonpayment of social contributions seems to be the best way of expanding the resources of the social security system since any increase in contribution rates would be politically difficult.
8.71 Consider establishing a benefits package. Current legislation sets no limits on services covered by Social Security or the state. However, the system’s generosity is somewhat theoretical. Because resources are limited, care is in effect rationed through a process uncontrolled by authorities, creating unpredictable consequences for the equity and effectiveness of expenditures and on the quality of care. A benefits package could be established to free up financial maneuvering room for using public funds to meet selected government priorities. The World Bank (2002a) recommended that a commission be set up to make proposals on this matter.
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Consider possibly increasing the household financial contribution. Free care poses several disadvantages. For one thing, there is the risk that users will abuse the system. For another thing, universal free care makes it impossible to target public funds toward government priorities, such as providing coverage for the poorest, overcoming regional inequalities, or modernizing hospitals. As illustrated by the aborted attempt to revise rates in 2002, users’ participation is a delicate political issue. Hence, it would be advisable to move forward cautiously, without penalizing most vulnerable population groups (indigents, children, the elderly, and chronically ill people).
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Reexamine financial sharing arrangements among the different funding sources. As noted earlier, a number of technical obstacles still hinder introduction of a system of contracting for medical services. Moreover, the various stakeholders may have differing views about both the current financial situation and the viable options. To overcome this deadlock, a quick and targeted audit could be undertaken, analyzing all the points involved in the reform. When more-specific questions arise about the remuneration mechanisms, the following considerations will have to be considered:
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Public health care facilities must have the human and technical resources to apply the payment method: the method selected should not be too complicated;
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Public health care facilities must not be financially destabilized by the payment method since they have specific public service responsibilities (presence in low density populations, permanent minimum level of health care, etc.);
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The method selected should encourage institutions to be more efficient, not merely record their standing costs, which implies moving toward “standards”;
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The method selected should fit public health priorities and promote disease prevention.
On the method and sequencing of reforms
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Experience in other countries provides many examples of reforms that, while inherently sound, failed because the method and sequencing were wrong. A key factor for success will rely in the capacity of the Algerian authorities to establish priorities, to determine which reforms can and should be undertaken immediately, and which ones should be postponed until later, if for example they demand significant input from experts. Overall, particular attention must be paid to the following broad guidelines:
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Establish a clear and binding timetable for preparation and implementation.
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Define a working approach. An interesting example is Morocco’s reform of its health system. It set up several thematic commissions representing all stakeholders (ministries, health professionals, and so forth). The work of these commissions was overseen by the office of the prime minister. They worked to a clearly defined schedule and were able to draw upon expert advisors.
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Provide public reports at all stages of the process and encourage maximum consensus building.
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Test reforms through pilot projects within a region, a wilaya, or one or more hospitals.
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Introduce devices for ongoing evaluation of reforms to identify needed improvements.
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