Free and Public

The race to UHC – How Malawi has outperformed most in Africa but risks going off course by Robert Yates

In September 2015, all countries committed themselves to a new set of sustainable development goals (SDGs). One of the targets to achieve the health SDG is Universal Health Coverage (UHC), whereby everybody receives the health services they need without suffering financial hardship[i]. Across the world, countries are recognizing that achieving UHC requires a publicly financed health system to ensure risk pooling where healthy and wealthy members of society subsidize services for the sick and the poor[ii]. Conversely, a privately-financed, free market in health services has proven that it will never achieve UHC – a fact which has now been recognized by experts and agencies who previously promoted private health financing[iii].

Countries such as Thailand, Sri Lanka and Costa Rica have demonstrated that the key to achieving UHC is to replace private voluntary health financing (user fees and private insurance) with compulsory public financing (in particular tax financing). This not only improves people’s access to health services it also reduces the impoverishing burden of out-of-pocket (OOP) health expenditure[iv].

A country which learnt this lesson before many of its peers is Malawi. Despite only having a GDP per capita of around $350, Malawi was one of the few African countries to achieve MDG 4 in reducing child mortality. This achievement was celebrated in a Lancet Global Health paper[v] which highlighted Malawi’s success in increasing the utilization  of a number of effective health interventions  by children– for example immunizations and treatments for infectious diseases.

However, this analysis didn’t mention a key feature of Malawi’s health system which has made it unique within the continent of Africa: Malawi has been the only country in Sub-Saharan Africa to provide universal free health services throughout its public health system and never charge user fees – with the exception of some recent worrying user fee experiments I have written about here[1]. Having not put in place this demand side barrier, utilization of services has been higher in Malawi which has enabled the country to make faster progress towards the MDGs and UHC[vi].

This is illustrated vividly in the following graph, from WHO Afro Region. The graph illustrates that with a relatively high level of public financing of 5.8% GDP (which includes aid financing) and a no user-fees policy in place in public facilities, Malawi records only a 12% share of total health expenditure in the form of out-of-pocket financing. This is a good proxy measure for the level of financial protection offered by the Malawian health system and it is at a level significantly below the 20% maximum level recommended by WHO.

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Conversely in Nigeria, which only spends 0.9% of its GDP in the form of public health financing and where user fees are charged at all levels, private out-of-pocket health financing accounts for 72% of total health expenditure – one of the highest rates in the world. At these levels of OOP payments not only are millions of Nigerians being impoverished by health care costs or prevented from accessing vital healthcare altogether, considerable human rights violations are also resulting where many people are detained in health units because they can’t pay their hospital bills[vii]. This latter phenomenon is unheard of in Malawian public hospitals.

But perhaps the most stark illustration of the difference in performance between these two countries at the opposite ends of this curve, is that whereas Nigeria is 8 times richer than Malawi, Nigeria’s child mortality rate (109 deaths per 1000 live births) is 70% higher than Malawi ’s (64 deaths).

In reviewing these records, the obvious policy recommendation for Nigeria is that it too should increase its public health spending and abolish user fees in its public health system. And for Malawi, the lesson should be to build on this success and use further increases in public financing to improve the availability and quality of free services.

The Government of Malawi’s recent policy announcement to implement service level agreements which will fund selected CHAM[2] facilities to provide free services will be an excellent way to fulfill this objective. Needless to say, if Malawi wants to stay ahead of the pack, it should scrap the hospital bypass fees that have been introduced recently, and certainly ignore the siren calls to introduce user fees more broadly in the public health system. This would simply take the country up the curve to join those where poor people don’t access health services because they can’t afford them, and where more children die before their fifth birthday.

References

[1] And a very brief period in 1964, when a misguided expatriate advisor persuaded the government to introduce fees. However, following extensive public demonstrations President Banda soon reversed this policy to restore universal free services

[2] Christian Health Association of Malawi

[i] United Nations Sustainable Development Goal 3.8  Sustainable Development Knowledge Platform website available at: https://sustainabledevelopment.un.org/sdg3 accessed 28 July 2016

[ii] Yates R Universal Health Coverage: progressive taxes are key

The Lancet , Volume 386 , Issue 9990 , 227 – 229 Available at: http://www.thelancet.com/journals/lancet/article/PIIS0140-6736(15)60868-6/abstract accessed 28 July 2016

[iii] Lane R 2013 Dean Jamison – Putting economics at the heart of global health The Lancet Vol. 382, No. 9908 Available at: http://www.thelancet.com/journals/lancet/article/PIIS0140-6736(13)62613-6/fulltext?rss=yes Accesed 28 July 2016

[iv] Evans TG et al Thailand’s Universal Coverage Scheme: Achievements and Challenges. An independent assessment of the first 10 years (2001-2010). Nonthaburi, Thailand: Health Insurance System

[v] Kanyuka, Mercy et al. Malawi and Millennium Development Goal 4: a Countdown to 2015 country case study The Lancet Global Health , Volume 4 , Issue 3 , e201 – e214 Available at: http://www.thelancet.com/journals/langlo/article/PIIS2214-109X(15)00294-6/abstract Accessed 28 July 2016

[vi] Yates R, Child mortality in Malawi The Lancet Global Health , Volume 4 , Issue 7 , e444 Available at http://www.thelancet.com/journals/langlo/article/PIIS2214-109X(16)30083-3/abstract Accessed 28 July 2016

[vii] Agbonkhese J FG urged to end detention of women in hospitals nationwide Vanguard online 2 February 2015 Available at http://www.vanguardngr.com/2015/02/fg-urged-end-detention-women-hospitals-nationwide/ Accessed 28 July 2016

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Global Health Check is edited by Anna Marriott, Health Policy Advisor for Oxfam GB, and welcomes contributions from different authors. If you would like to write an article for this site or if you have any queries please contact: amarriott@oxfam.org.uk.