The Asian Development Bank’ report titled “Supporting Health-Care Financing Reform in Mongolia: Experiences, Lessons Learned, and Future Directions“, written by Altantuya Jigjidsuren and Bayar Oyun, can be found here.
The authors thanked Dorjsuren Bayarsaikhan, senior health systems advisor, Department of Health Systems Governance and Financing, World Health Organization; and Claude Bodart, former principal health specialist, Asian Development Bank, for their peer review.
EXECUTIVE SUMMARY
Before the 1990s, the state took full responsibility for the funding and delivery of health-care services in Mongolia. There was no private sector, and the entire population was guaranteed free access to public health care. Exclusive tax-based financing—with resources coming from general taxation—funded health-care expenses. At the beginning of the 1990s, Mongolia started transitioning from a centrally planned to a market economy. Transition difficulties started when the withdrawal of Soviet assistance caused an economic collapse that significantly reduced the overall state budget and allocation of resources for public expenses. Under the new economic conditions, it became difficult to maintain free health care through state financing alone. The government needed additional funding resources for the state budget to keep the previously attained levels of health-care quality, access, and coverage. That necessitated the reform of the health system and its financing mechanisms. The Asian Development Bank (ADB) support for the reform of the health system in Mongolia started in 1994 when the Government of Mongolia requested ADB to assist in strengthening the newly introduced health insurance scheme. Since then, ADB-funded health sector development programs and technical assistance projects are continuously supporting the health system in Mongolia, including the health-care financing reform.
The reform of Mongolia’s health-care financing system transitioned from an exclusively input-oriented financing model to the output-oriented model in use in 2022 that is better suited to the realities of a market economy. The shift to an output-oriented model has delivered several significant results including (i) the establishment of the mandatory national health insurance scheme as a major source of health-care financing; (ii) the introduction of more efficient payment mechanisms, such as capitation for primary health care and case-based payments for hospital services; (iii) the pooling of the main sources of health-care funding, such as the state budget and the health insurance fund; and (iv) the establishment of the single-purchaser system for health services.
There are still challenges that need to be addressed by the government to improve the overall efficiency and effectiveness of the health-care financing system such as (i) continued underfunding of health care, (ii) high out-of-pocket expenditure that exacerbates financial risks of households, and (iii) insufficient funding allocated for primary health care compared with the funding allocated for oversized and excessive hospital care.
This paper describes the health-care financing system in Mongolia and associated reforms that started in the early 1990s. ADB’s assistance for the reform of health-care financing in Mongolia offers lessons that could be useful in providing support to other countries across the region. Particularly noteworthy are the needs to (i) ensure the allocation of time and resources, (ii) continuously strive to implement systemic changes, and (iii) factor in issues about the consistency of policies and plans and their timely implementation.
