Free and Public

Malawi’s difficult choices on the road to UHC by Robert Yates

In its seminal World Health Report of 2010, WHO argued that all countries can make progress towards Universal Health Coverage (UHC) by expanding the number of people covered by effective health services and giving them financial protection from the costs of these services. The report also highlighted the pivotal role of equitable health financing reforms in achieving this objective.  These processes ought to be easier in wealthy countries, but even in the world’s biggest economy, due to an inequitable financing system, tens of millions of people still lack effective health coverage[1].

In Malawi (with a GDP per capita 1/226 of the United States[2]) the health financing situation is particularly challenging. This is especially the case following the suspension of considerable sums of aid financing after the “Cashgate” corruption scandal that brought down the former government[3]. So, faced with a high burden of unmet health needs, a heavily constrained government budget and uncertain levels of external funding, how should Malawi take its next steps towards UHC?

With the public financing situation looking bleak, a knee-jerk reaction might be to look for alternative financing sources and in particular to raise health funds directly from the population – in the form of user fees. But evidence from across the continent over the last thirty years shows that this would be a mistake[4]. Charging patient fees would raise very little revenue, would incur high administration costs and most worryingly would exclude millions of poor Malawians from receiving healthcare. Also with the world looking to build resilient health systems in the aftermath of the Ebola epidemic it would be extremely unwise to suddenly create new access barriers to essential health services.[5]

While concerns around fee-paying wards and bypass fees remain, fortunately, the government recently made clear statements to the effect that the majority of services will remain free at the point of delivery.[6]. Not only is this good news for the health and welfare of the population, it is a smart political move by the Government, who may have remembered the last time they introduced health fees following advice from ex-pat advisers[7]. This was soon after independence when new health charges were met with extensive hostility from the population. This triggered a political crisis and resulted in some ministers losing their jobs. Following this lesson of people power, Malawi was one of the few African countries not to bow to donor pressure to introduce fees in the 1980s, when it continued to provide universal free health care. This undoubtedly contributed to Malawi outperforming some of its neighbours in making progress towards the health-related MDGs[8]. With many other African countries now learning that they too should remove user fees, it would be a tragedy for Malawi to move in the opposite direction.

But if user fees aren’t the answer and with private voluntary insurance also proving an ineffective route to UHC[9], what steps could the Government of Malawi (GoM) take towards reforming its health financing system?  As the 2010 World Health Report[10] and subsequent influential reports have shown, the key to achieving UHC lies in public financing reforms. In particular, it requires increasing levels of pooled public financing and in maximizing the efficiency and equitable allocation of these funds. In terms of raising higher amounts of domestic funding, broader public financing reforms could increase the size of the overall government’  budget and a political choice could be made to increase the health share from 8.6 %[11] towards the Abuja target of 15%. Also, it is to be hoped that aid financing will increase again in the near future because external assistance will be essential for Malawi for at least the medium term if it is to reach adequate levels of public health financing.

But to secure this additional funding, perhaps the best strategy for the health sector will to demonstrate to its domestic and external financing sources that it can deliver rapid results with incremental allocations in funding. This will involve investing additional funds in cost-effective interventions that extend health coverage to more people in Malawi – and especially to the poor and vulnerable.

One immediate “quick-win” along these lines, could be to ensure that people relying on NGO facilities in remote areas also receive free services. This would require increasing government grants to these facilities. In fact this is already a policy priority for the new Government. Fast-tracking this reform would bring health and economic benefits to the communities concerned and political benefits to the government. Looking at UHC success stories in other countries, the government of Malawi and donor partners could also achieve rapid progress by implementing extensive supply-side reforms. For example Rwanda and Ethiopia have made spectacular progress in extending coverage through scaling up services provided through publicly-funded community health workers[12]. Also implementing extensive reforms of medicines supply systems to ensure the provision of free generic medicines and health commodities has proved a very effective way to increase coverage of essential services[13]. Furthermore these types of pro-poor initiatives could prove an attractive proposition for donors wanting to re-engage in Malawi’s health system.

Therefore even though the health financing situation may appear daunting in Malawi, this doesn’t mean that a completely new strategy based on private financing will be the solution. International evidence shows that this would probably result in a deterioration in health coverage – particularly for the poor. Instead Malawi would be better advised to learn from its own history and re-invigorate its publicly financed health system, which as the world has learnt is the proven route to achieve universal health coverage.

References

[1]Levy J 2015 In U.S., Uninsured Rate Dips to 11.9% in First Quarter Gallup 13 April 2015 Available at http://www.gallup.com/poll/182348/uninsured-rate-dips-first-quarter.aspx Accessed 23 June 2015

[2]List of countries by GDP (nominal) per capita Wikipedia Available at: https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)_per_capita Accessed 23 June 2015

[3]Tran M 2014 Malawi aid freeze could hit health and education sectors The Guardian 14 January 2014 Available at http://www.theguardian.com/global-development/2014/jan/14/malawi-aid-freeze-health-education Accessed 23 June 2015

[4]Yates R 2009 Universal health care and the removal of user fees The Lancet Volume 373, No 9680 pages 2078 to 2081 available at http://www.thelancet.com/journals/lancet/article/PIIS0140-6736(09)60258-0/abstract Accessed 23 June 2015

[5]Heymann  D L et al 2015 Global health security: the wider lessons from the west African Ebola virus disease epidemic The Lancet, Volume 385 , Issue 9980 , 1884 – 1901 available at http://www.thelancet.com/journals/lancet/article/PIIS0140-6736(15)60858-3/fulltext Accessed 23 June 2015

[6]Chauwa A 2015 Malawi govt backtracks on hospital user fees Nyasa Times April 5 2015  Available at http://www.nyasatimes.com/2015/04/06/malawi-govt-backtracks-on-hospital-user-fees/ Accessed 23 June 2015

[7]Messac L 2014  Moral hazards and Moral Economies: The Combustible Politics of Healthcare User Fees in Malawian History South African Historical Journal Volume 66 Issue 2 Available at http://www.tandfonline.com/doi/abs/10.1080/02582473.2014.903292?journalCode=rshj20#.VYmGt1xa_ww Accessed 23 June 2015

[8]Cortez R et al 2014 Achieving MDGs 4 & 5: Malawi’s progress on maternal and child health The World Bank Knowledge Brief 92548 Available at http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2014/11/11/000406484_20141111141118/Rendered/PDF/925480BRI0Box30August0201400PUBLIC0.pdf Accessed 23 June 2015

[9]Chuma J, Mulupi S, McIntyre D Providing Financial Protection and Funding Health Service Benefits for the Informal Sector Evidence from Sub-Saharan Africa RESYST Working paper 2 April 2013

[10]Evans DB et al 2010 The World Health Report Health Systems Financing – The Path to Universal Coverage The World Health Organization

[11]Mogombo K 2015 Gondwe unveils MK901.6 billion 2015/2016 Budget Mana online 25 May 2015 Available at http://www.manaonline.gov.mw/index.php/business/item/3011-gondwe-unveils-mk9016-billion-20152016-budget Accessed 23 June 2015

[12]Crowe S 2013 In Ethiopia, a far-reaching health worker programme has helped reduce child mortality across the country UNICEF Available at http://www.unicef.org/infobycountry/ethiopia_70372.html Accessed 23 June 2015

[13]Joychen P J 2013 Free medicine scheme makes a big splash in Rajasthan Deccan Herald 8 February 2013 Available at http://www.deccanherald.com/content/310818/free-medicine-scheme-makes-big.html Accessed 23 June 2015

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Global Health Check was created by Anna Marriott and is currently edited by Mohga Kamal-Yanni