Executive summary Universal health coverage (UHC) is defined as all people receiving quality health services that meet their needs without being exposed to financial hardship in paying for the services. Given resource constraints, this does not entail all possible services, but a comprehensive range of key services that is well aligned with other social goals. UHC was firmly endorsed by the World Health Assembly in 2005 and further supported in the World Health Report 2010. Since then, more than seventy countries have requested policy support and technical advice for UHC reform from the World Health Organization (WHO). In response, WHO developed a plan of action that included providing guidance on how countries can manage the central issues of fairness and equity that arise on the path to UHC. The WHO Consultative Group on Equity and Universal Health Coverage was set up to develop this guidance. This document is the Consultative Group’s final report. The report addresses the key issues of fairness and equity by clarifying these issues and offering recommendations for how countries can manage them. The report is relevant for a wide range of actors and particularly for governments in charge of overseeing and guiding the progress toward UHC. To achieve UHC, countries must advance in at least three dimensions. Countries must expand priority services, include more people, and reduce out-of-pocket payments. However, in each of these dimensions, countries are faced with a critical choice: Which services to expand first, whom to include first, and how to shift from out-of-pocket payment toward prepayment? A commitment to fairness—and the overlapping concern for equity—and a commitment to respecting individuals’ rights to health care must guide countries in making these choices. For fair progressive realization of UHC, the three critical choices and the trade-offs between the dimensions must be carefully addressed. Expanding priority services When expanding services, the crucial question is which services to expand first. Services can be usefully categorized into three classes: high-priority, medium-priority, and low-priority services. Relevant criteria for ranking and categorizing services include those related to cost-effectiveness, priority to the worse off, and financial risk protection. When selecting which services to expand next, it is often useful to start with cost-effectiveness estimates and then integrate the concern for the worse off as well as other relevant criteria. The specification, balancing, and use of these criteria should take place in the context of robust public deliberation and participatory procedures. This will enable a wide range of groups to provide input to the priority-setting process and xi promote accountability for the decisions made. Countries will also benefit from having a standing national committee on priority setting to handle particularly difficult cases. Including more people When seeking to include more people, an inescapable question is whom to include first. To include more people fairly, countries should primarily first expand coverage for low-income groups, rural populations, and other groups disadvantaged in terms of service coverage, health, or both. This is especially important for high-priority services. Fair inclusion of more people may call for targeted approaches where these are effective. Reducing out-of-pocket payments Many countries rely heavily on out-of-pocket payments to finance health services. Such payments represent a barrier to access to health services, especially for the poor. In addition, for those who do use the services, out-of-pocket payments are often a substantial financial burden on them and their families and may even cause financial catastrophe. To improve access and financial risk protection, countries should therefore shift from out-of-pocket payment toward mandatory prepayment with pooling of funds. A critical issue is how to do so. Fairness suggests that out-of-pocket payments should first be reduced for highpriority services and for disadvantaged groups, including the poor. Regarding mandatory prepayments, fairness suggests that they should generally increase with ability to pay and that contributions to the system should be progressive. At the same time, the access to services should be based on need and not ability to pay. Overall strategy and pathways A three-part strategy can be useful for countries seeking fair progressive realization of UHC: Categorize services into priority classes. Relevant criteria include those related to cost-effectiveness, priority to the worse off, and financial risk protection. First expand coverage for high-priority services to everyone. This includes eliminating out-of-pocket payments while increasing mandatory, progressive prepayment with pooling of funds. While doing so, ensure that disadvantaged groups are not left behind. These will often include low-income groups and rural populations. As part of an overall strategy, countries must carefully make choices within as well as across the dimensions of progress. These choices will depend on context, and several different pathways can be appropriate. However, when pursuing fair progressive realization of UHC, some trade-offs are generally unacceptable: Unacceptable trade-off I: To expand coverage for low- or medium-priority services before there is near universal coverage for high-priority services. This includes reducing out-of-pocket payments for low- or medium-priority services before eliminating out-of-pocket payments for high-priority services. Unacceptable trade-off II: To give high priority to very costly services whose coverage will provide substantial financial protection when the health benefits are very small compared to alternative, less costly services. Making fair choices on the path to universal health coverage xii Executive summary Unacceptable trade-off III: To expand coverage for well-off groups before doing so for worse-off groups when the costs and benefits are not vastly different. This includes expanding coverage for those with already high coverage before groups with lower coverage. Unacceptable trade-off IV: To first include in the universal coverage scheme only those with the ability to pay and not include informal workers and the poor, even if such an approach would be easier. Unacceptable trade-off V: To shift from out-of-pocket payment toward mandatory prepayment in a way that makes the financing system less progressive. Mechanisms and institutions Fair progressive realization of UHC requires tough policy decisions. Reasonable decisions and their enforcement can be facilitated by robust public accountability and participation mechanisms. These mechanisms are essential in policy formulation and priority setting and specifically in addressing the three critical choices on the path to UHC and the trade-offs between dimensions of progress. These mechanisms are also crucial in tracking resources and results. To properly play these roles, public accountability and participation should be institutionalized, and the design of legitimate institutions can be informed by the Accountability for Reasonableness framework. A strong system for monitoring and evaluation is also needed to promote accountability and participation and is indispensable for effectively pursuing UHC in general. Countries must carefully select a set of indicators, invest in health information systems, and properly integrate the information into policy making. The selection of indicators should be closely aligned with the goal of UHC and in most settings include at least four types of indicators: indicators related to the priority-setting processes and indicators of coverage, financial risk protection, and health outcomes. The latter three types of indicators should reflect both average levels and equity in distribution.