As world leaders prepare to gather for the 66th World Health Assembly on May 20, social movements are questioning the market-friendly version of universal health coverage (UHC) it is promoting.
One organization, Jan Swasthya Abhiyan (JSA), is denouncing India’s emulation of this UHC strategy, as contained in the country’s 12th Five Year Plan, which uncritically endorses the private medical sector and focuses on health insurance schemes. In a recent paper – JSA proposes an alternative UHC model.
Public financing for whom?
In the past five years there has been an impressive roll out of government-funded insurance schemes in India that are supposed to improve the country’s public health system. In theory, treatment covered under these schemes can be provided by any accredited facility. But in practice the majority of providers are found in the largely unregulated private sector which already accounts for 80% of outpatient and 60% of in-patient care according to the National Sample Survey Organisation (NSSO), making India one of the most privatized systems in the world. India’s healthcare system is increasingly dominated by big hospitals chains (e.g. Apollo Hospitals) with an infamous track record of expensive services and unethical practices. As it is, health insurance schemes mostly channel public monies for private profit. For example, from 2007 to 2013 the state of Andhra Pradesh allocated a total Rs.47.23 billion to facilities accredited under the Arogyasri scheme, of which Rs.36.52 billion went to private facilities.
Getting it right
Health is a right, and priorities should be based on citizens’ needs. What the majority of Indians lack is comprehensive primary care, but current health insurance “packages” only insure beneficiaries for ailments that require hospitalization. They cover a very small portion of the burden of disease, excluding out-patient treatments for tuberculosis, diabetes, hypertension, heart conditions, and cancer among others. Evidence from the first such scheme in India – Arogyasri – suggests that it consumed 25% of the state’s health budget but addressed only 2% of the burden of disease.
Who inverted the pyramid?
This situation ends up distorting the very structure of the health system by starving primary care facilities to the benefit of more profitable secondary and tertiary care. In 2009-2010, direct national government expenditure on tertiary care was slightly over 20% of total health expenditure, but if one adds spending on the insurance schemes the total would be closer to 37%. In Andhra Pradesh, following the implementation of Arogyasri, the proportion of funds allocated for primary care fell by 14%.
A good health system is like a pyramid: the largest numbers should be treated at the primary level where people live and work. We need to flip the inverted pyramid that has been created and offer a new roadmap predicated on public funding and provisioning of a public system that reprioritizes primary health care, and is comprehensive, integrated and accessible to all.
Bad medicine
The health insurance schemes in place fail to address another key issue: access to medicines. Paradoxically, India is the largest producer of drugs in the developing world and at the same time the country where the WHO estimates the greatest number can’t afford the medicines they need. Since the Patent Act was amended in 2005, domestic pharmaceutical companies can’t produce cheaper versions of new drugs, which are now sold by multinationals at prices well beyond the reach of most patients. Poor regulations also means more than 50% of the average family spending on medicines is on irrational or unnecessary drugs and diagnostic tests according to the NSSO. Clearly, the pharmaceutical sector must be reigned in, and all essential drugs should be made available, free of cost, at all public facilities.
Addressing public health gaps
The task of achieving health for all in India will not be easy. Current public health services are marked by poor access, low quality and limited choice. Besides rampant corruption, poor management results in mismatches between demand and supply of services: facilities aren’t distributed optimally; equipment and funds fall short of requirements and don’t flow efficiently. Labour shortages can be partly explained by disinvestment in medical education and flawed deployment mechanisms. Although programs such as the National Rural Health Mission have made some inroads to improve services, much remains to be done. The problem is largely one of unresponsiveness to citizens coupled with unreliable technical estimates of costs and disease burden, leading to ill-informed prioritization.
It is necessary to recast the UHC debate and propose alternatives to strengthen the public health systemto address these problems and to build integrated, comprehensive services with strong mechanisms of accountability. Key to these changes are the following:
Over the short term, we also need to explore alternate ways of harnessing private resources for public health goals. Given the sheer size of the private sector, it is not possible to entirely ignore it while planning for equitable access to public services. It’s not a monolithic entity either; some segments such as charitable, faith-based and other not-for-profit healthcare facilities that work in less developed parts of the country can fill certain critical gaps in the public system. Under clear terms and conditions, other private providers such as general practitioners or small and medium-sized hospitals could be in-sourced to complement available public health services. Importantly, there should be no transfer of assets and resources into private hands and kickback statutes should be put in place to ensure there are no referrals with conflict of interests.
All the possible mechanisms for harnessing the private sector should be seen as supplementary (and often interim) measures, and not as a substitute for very significant scaling up and strengthening of the public system both in terms of quality and accessibility.
There is a need to reclaim public systems, to strengthen and expand them. Moving toward health for all requires major transformations in health care, but also in a wide range of social determinants of health – food security and nutrition, water supply, sanitation, working conditions, housing, environment, education and more. We need to build broad-based alliances for social change to redefine the relationship between people and their public systems.
Amit Sengupta is a Research Associate with the Municipal Services Project and Associate Global Co-ordinator with the People’s Health Movement, a global network of 18 national chapters that includes India’s Jan Swasthya Abhiyanfor which he acts as National Co-convenor.
Madeleine Bélanger Dumontier is Communications Manager for the Municipal Services Project, a global research initiative that explores alternatives to the privatization and commercialization of service provision in the electricity, health, water and sanitation sectors.
Photo: Rajeev Chaudhury
The question of how to raise domestic revenue for health is something that policymakers across Africa continue to grapple with. In recent decades different options have been tried and tested –user fees, small-scale community based health insurance, private insurance schemes, and taxation. Today Kenya, like many countries in the region, is left with a complicated patchwork of different schemes offering different levels of coverage to different population groups. Merging these into a single national risk pool which uses public financing to provide for all citizens will improve access to healthcare and reduce administrative costs.
One way of raising more money for health would be to introduce an earmarked tax on diaspora remittances. “According to the Central Bank of Kenya, money remitted by the diaspora is growing monthly,” says Dr Jane Chuma, a health economist and senior research scientist at Kenya Medical Research Institute in Kilifi. “Last year, over $1 billion (Sh85 billion), higher than the revenue earned from coffee or tourism, was remitted to the country. Putting a little levy on foreign transactions could raise significant money for health. In 2009, Gabon raised $30 million (Sh2.6 billion) from diaspora remittance tax, which they put into health care.”
Another option is to merge existing funds to create a single National Social Health Insurance Fund which pools all the resources that are currently available for health into one pot and stop the duplication of effort. “Tax funds allocated to health, NHIF contributions, community health insurance schemes and donor money, if pooled together, can create a large enough single pool. This will ensure that both the rich and the poor are covered while reducing administration costs. As there will only be one organisation buying services, it will have bargaining power.”
During the NARC government when Charity Ngilu was the Minister for Health, there was some discussion about starting a National Social Health Insurance Fund in Kenya. It was passed by Parliament but the president did not sign it. ‘The big boys’ as Hon. Raila Odinga said in Kenya’s first presidential debate on February 11, ‘shot it down’. These ‘big boys’ included private health insurance schemes and private hospitals.
“What Kenya needs are leaders who are willing to put the private sector to task. That they either be part of these reforms or lose altogether by not working together with the public system under universal health care. There are many innovative ways of using private doctors to provide health care in public facilities. What we lack is political will and leadership,” says Dr Chuma.
Whatever the means of raising money, people need to be confident that the money will not be misused. The history of National Health Insurance Fund is plagued with corruption and there is little trust in the public that they will deliver should they take on the role of National Social Health Insurance Fund. “A new institution would need to be in place to swallow NHIF. It would require re-branding, with a new board and new staff. It shall require a lot of work to build trust in the public health care system where beneficiaries will be expected to seek services,” says Dr Chuma.
Public health facilities need to be closer to the people, be well equipped and charge no fees. In this way, each citizen in the country will be able to walk into any health facility, get whatever treatment is required and walk out without paying a shilling. However, removing charges alone will not be enough to keep patients coming. The public health facilities have to be fully staffed and well stocked with medicines. It is not enough, for example, to say that giving birth at a maternity ward is free and then expect mothers to buy gloves, cotton wool and drugs because there are none available at the facility.
A commonly-held fear of a ‘walk in, walk out’ health facility is that providers will be overwhelmed by people who may not need the service but take advantage of its availability because it is free. This is an unfounded fear because there are other costs related to seeking care like costs of transport or the cost of losing a day’s work to go to a health facility. Few therefore, will come to the facility when they really do not need services.
To reduce costs of payments for treatments, the government will need to invest heavily on preventative measures to reduce the heavy burden of infectious diseases. At the moment more money is going to curative rather than preventative health care. The greatest weapon against infectious communicable disease is good hygiene. This will require the government to provide safe water and improve waste disposal. The second greatest weapon is provision of essential vaccines followed by use of insecticide-treated bed nets. To reduce costs on the National Social Health Insurance Fund, the government will need to invest in these simple tools or face an unnecessary dent on the health fund.
As we usher in a new government in a few weeks, our hopes are high. The President-elect, Uhuru Kenyatta, through his coalition’s manifesto, has promised free primary health care for all Kenyans as well as raising government health financing from 6 percent to 15 percent. Politicians make appealing promises during the campaign period but we will have to wait to see if they will be brave enough to fight for this agenda. The situation is urgent, as annually, about 1.5 million Kenyans are pushed below the national poverty line due to health payments.
Tabitha Mwangi is a freelance science journalist based in Kenya. Her articles have appeared in The Daily Nation and The East African. She has a PhD in epidemiology and worked in the Kenya Medical Research Institute for 10 years before becoming a writer.
While reading the outcome statement and background document of the joint World Bank/WHO ministerial level meeting on Universal Health Coverage (UHC) held last week, two clear issues emerge: The first one is getting political commitment to UHC at the highest government level; the second one is that “fiscal realities (in poor countries in particular) greatly constrain the ability to rely predominantly on public funding. Still, countries do not need to be rich to make progress towards UHC, experience suggest that political commitment is essential.”
The papers seem to suggest that fiscal reality is cast in stone and that within this fiscal reality countries have the political space to move forward to UHC. This approach, in essence, tells us something about the sad situation we have come to live in. A reality in which the financial oligarchy have taken over country democracies, according to Simon Johnson’s The Quiet Coup. A reality in which economic inequalities have an enormous negative impact on health equity and social wellbeing. Untaxed private wealth hinders many countries to finance strong public systems to reach or maintain Universal Health Coverage.
It is not only a problem of poorer countries. We have the same within the European Union. For instance 23.400 “mailbox” companies are registered in the Netherlands, with its infamous tax heaven industry. It lead for instance to Portuguese and Spanish multinationals to avoid paying tax in their respective countries. Both Spain and Portugal have to severely cut their public spending on health expenditures and privatize part of their health services, as required by austerity measures set by the European Union. Even the G20 starts to recognize that the tax avoidance by big business is a big problem for the social development of societies.
These examples merely indicate that the issue of fiscal space and progress on UHC are closely interlinked. The Lancet Article ‘Political and economic aspects of the transition to universal health coverage’ explains it as follows: “UHC will only be achieved if public policies ensure that a large share of this increased spending is pooled through a mechanism that promotes equitable and efficient utilization of care. The exact mechanisms for pooling will depend on social processes and political action that establish the parameters for an acceptable public role in health care. In some cases, the result will be a government that primarily regulates the health-care sector, in other cases a government that finances or directly provides care.” In many emerging economies, such as South-Africa, Indonesia; but also in European countries with traditional generous social security systems, there is strong political pressure to remain attractive for international (financial) investors. In parallel there is similar pressure to reduce public spending on health care and create space for health insurance companies in the market of (mandatory) social insurance packages. Authors have coined this process of tax competition “a race to the bottom in slow motion”, with specific policies becoming less generous without disappearing, or creating a public debt that will eventually force their termination.
The authors also suggest a mechanism to mitigate this race to the bottom, the so called social protection floor. The idea underpinning this initiative is that all states would commit to agreed minimum levels of social protection tailored for their respective country. The UN General Assembly resolution concerning universal health coverage acknowledges the link between universal health coverage and social protection mechanism, and urges member states to give priority to these links within their national social programs and policies.
The contradiction is obvious: There is a strong drive to have Universal Health Coverage included in the post 2015 development agenda and for countries to advance UHC at national level. At the same time these countries are dealing with (global) tax competition, tax evasion and a deregulated financial sector that is playing with casino capital at a global level. It is a good first step that WHO and World Bank work with member states to increase capacity and undertake steps towards universal health coverage. Actors working on advancing UHC inevitably will come to the issue of claiming national policy and fiscal space as a basic macro-economic condition for a country to advance its coverage of social protection and health services. Good examples in these include Brazil and Thailand.
The question is whether all the countries that are now supporting the cause of UHC are willing to make progress on further regulation of the financial sector and reform of their fiscal policies. Are these countries able to agree on global redistribution mechanisms and regulatory mechanism to curb the massive amount of untaxed wealth and casino capital, and hence free considerable resources to fund the national social protection floors? Will countries be able to develop true “progressive” taxation schemes, not merely income or VAT based, but rather on wealth and CO2 emission? Or do we want rather global philanthropy to provide the complimentary funds for advances in UHC and social security?
Bottom line: Universal Health coverage is in essence linked to political demands, choices and inherent power relations, both at the national and global level. If we all agree to have UHC included in the post 2015 agenda, then we should be willing to be truly involved in the political and ideological battle that will enfold over the coming period.
Remco van de Pas is a Senior Health Policy Advocate at Wemos
This post was first published as an editorial in MMI Network news, 26 February 2013. Reposted here with permission.
Over the past two decades, health sector reforms in Ghana have transformed how health care is financed and delivered in the country. The most significant of these reforms was the introduction of health sector cost recovery and liberalisation in 1980s and, more recently, the National Health Insurance (NHI), which was introduced in 2004. A key objective of the NHI is to ensure equitable access to healthcare services for all Ghanaians. I was recently involved in a study which considered the issue of equity in relation to the financing and delivery of health services in Ghana.
The study examined the current range of health financing mechanisms in Ghana including general tax revenue, national health insurance contributions and out-of-pocket payments (OOP), as well as the distribution of healthcare benefits among various socio-economic groups in the country. We found that while general tax revenue is a progressive source of financing, insurance contributions by informal sector workers and out-of-pocket payments are regressive. We also found that the benefit incidence from using services in Ghana is largely pro-rich.
General tax revenue is the second major source of healthcare financing in Ghana, contributing around 40% of total healthcare financing. There are five main streams of general tax revenue (personal income tax, corporate tax, VAT, import duty, and fuel levy) and our study findings showed these to be mainly progressive, with the exception of a levy on fuel to which poor people contribute relatively more than the rich.
We found that while the National Health Insurance contributions are mildly progressive overall, this is only true when these are considered collectively. Contributions made by informal sector workers alone were very regressive. This was partly because while contributions by formal sector workers were graduated according to their income level, informal sector workers paid a flat-rate premium. Though the NHI premiums paid by informal sector workers are highly subsidised, a substantial number of people (about 40% of the population) can still not enrol due to poverty. This is not surprising given that around one-quarter of the population of Ghana still lives below the poverty line and 18.5% in extreme poverty. The informal economy employs over 80% of the working population in Ghana, but only around 35% of those registered for the NHIS belong to this group. There have also been numerous practical challenges, just as in many other low income countries, at targeting the poor for premium exemptions, including errors of inclusion and exclusion and high transaction costs.
Although the National Health Insurance (NHI) was introduced to reduce reliance on out-pocket payments (OOPs) for health services, our research found that OOPs are still very substantial, and constitute almost half (45%) of the total healthcare financing in Ghana. The high incidence of OOPs was mainly due to the inability of informal sector workers to afford NHI premiums, as well as the continuous reliance of NHI members on private providers for services not provided under the NHI.
Out-of-pocket spending was found to be the most regressive because the majority of the burden of payment fell on the poor. If Ghana is to achieve Universal Health Coverage it is essential to reduce out-of-pocket payments. Evidence from other countries has shown repeatedly that not only do direct payments for health care deny poor people access to essential services, they also push them into deeper levels of poverty. A 2008 ILO Briefing paper reported that in countries such as Kenya, Senegal and South Africa, between 1.5 and 5.4 per cent of households fall below the poverty line as a direct result of paying for health services. For 2005 alone this amounted to over 100,000 households in Kenya and Senegal, and about 290,000 households in South Africa.
In addition to equity issues relating to how health care is paid for, our study pointed to huge inequities in the distribution of benefits of health services in Ghana. The rich enjoyed double the health benefits of the poor, although the latter had greater healthcare needs. These inequities were found to have been driven largely by unaffordability, inaccessibility and unavailability of healthcare services for poor people and rural populations. However, lower level public health facilities (and services) such as community health centres and district hospitals were found to promote equity and benefited poor people more than higher level facilities.
The inequities in the distribution of healthcare benefits suggest the need to increase investment to improve the availability of healthcare services, especially at the grassroots level. More specifically, efforts ought to be directed at removing geographical barriers, increasing staff and equipment capacity, and addressing operational inefficiencies in health facilities. In doing this, the government can leverage the NHI provider payment system to ensure equitable distribution of healthcare services and personnel across the country.
Our study demonstrates that while financing from general taxation is progressive, OOP spending on health and insurance contributions from the informal sector are regressive. Policy makers, thus, need to direct more attention at general tax financing if they are to make real progress at achieving equitable and universal health coverage. The ultimate aim for policy makers should be to create a health system that guarantees equitable access to adequate essential health services for everybody in Ghana.
James Akazili (PhD) is a Health Economist at the Navrongo Health Research Centre in Ghana. This blog is drawn from the article, “Progressivity of health care financing and incidence of service benefits in Ghana”, which was published in the Journal of Health Policy and Planning.
South Africa has long faced considerable health system equity challenges. In particular, 43% of total health care expenditure is attributable to private health insurance schemes, which only cover 16% of the population. General tax funding allocated to the health sector also accounts for about 43% of expenditure, and is used to provide services for most of the rest of the population. Out-of-pocket payments account for the remainder of expenditure, most of which relates to co-payments by private insurance scheme members but also includes direct payments to private primary care providers by some of those not covered by private insurance.
The Minister of Health recently released a Green Paper on introducing a National Health Insurance (NHI). It indicates that the NHI will be guided by the principles of the right to health service access, social solidarity, equity, affordability and the provision of appropriate and effective health services. It also states that the objective is to achieve universal coverage, where everyone has financial protection from the potentially impoverishing costs of health care and access to needed health care. Core elements of the proposed NHI include:
The Green Paper recommends that the NHI be phased in over a period of about 15 years, divided into three five-year phases. The first phase will be devoted to rebuilding the public health system. The capacity and quality of public health services declined dramatically during the late 1990s and early 2000s, when a neo-liberal fiscal policy restricted government spending at precisely the time that the HIV epidemic was exploding, increasing the burden on public sector services. Specific interventions planned are: ‘re-engineering’ primary care services, including the deployment of teams of community health workers in every ward; an audit of all public sector facilities and improvements in physical infrastructure and ensuring all facilities have a full complement of functioning equipment; increased training of the full range of health care workers; service quality improvement measures; and measures to improve management in hospitals and health districts. Other preparatory activities such as establishing the NHI fund/independent public purchasing entity will also occur during this phase.
The second phase will focus on changing the way of paying health care providers. It is proposed that primary care services will be paid for on a capitation basis while diagnosis-related groups (DRGs) will be used to pay hospital services. Strategic purchasing of services from both public and private health sectors will also be initiated during this phase. The final phase will be devoted to further expanding health service capacity to achieve universal access.
While there has been a relatively muted response to the release of the Green Paper, with many stakeholders adopting a ‘wait-and-see’ approach, there has been sufficient public commentary to identify key areas of support and concern. The proposals have been praised for:
The major concerns expressed include:
There are clearly some contradictions within this policy document that need to be resolved. It is also apparent that key stakeholders will use the period before the finalisation of the policy to influence the NHI design to best meet their personal objectives. While the release of the Green Paper is a positive development in efforts to move towards universal coverage in South Africa, unwavering commitment to the core principles outlined in this policy document is required if the final NHI design is to be compatible with achieving these principles.
Di McIntyre is the South African Research Chair in ‘Health and Wealth’ and a Professor in the School of Public Health and Family Medicine at the University of Cape Town
