Sunday, 16 March 2014


Dr. Lawrence Kaggwa on the National Health Insurance

Dr. Lawrence Kaggwa

Today medical expenses for elucidative procedures, sophisticated surgeries, cancer and other treatment protocols are extremely high, and to pay for them entirely out- of- pocket has been found to be catastrophic to the families and individuals. Many families have lost plots of land, houses and other important assets to fund medical treatment, and benefactors have equally suffered in the process. The MRI costs SHS 850,000 per area visualized; medium surgery SHS 4.000,000 and cancer treatment is in the region of SHS 40,000,000-80,000,000. Admission for a week in a Private Hospital may cost SHS 7,000,000 for medical treatment.
Those on kidney dialysis may incur SHS 1,000,000 weekly during the period they are looking for kidney transplants (what if this is to be 5 years?).
In Britain, the National Insurance Act 1911, marked the first steps towards national health insurance, covering most employed persons and their financial dependents and all persons who had been continuous contributors to the scheme for at least five years whether they were working or not.
Elsewhere it did not become important for most people until advances in modern technology produced many expensive procedures and drugs required for efficient and effective cure of injury and disease.
Health insurance is a type of insurance that covers costs incurred for unexpected medical expenses. By estimating the overall risk of health care expenses among a targeted group, an insurer develops a routine finance structure, such as a monthly premium, to ensure that money is available whenever need arises to pay for the health care benefits specified in the insurance agreement. While the benefit is administered by a central organization such as a government agency, private business, or not-for-profit entity, the insurance health providers have to be accredited after complying with the documented quality standards.
Historical background of Health Insurance in Uganda:
In Uganda, health insurance was traditionally seen in the non-monetary scheme of Engozi of Kabale, Munno mu Kabi of Buganda (but which required consideration of backward/upstream integration) and other forms of social support extended to the sick relatives and neighbours as deemed most suitable for each tribe and region.
These approaches are still encouraged to grow and partly convert into monetary systems to meet the hospital expenses.
For over 15 years, the Ministry of Health started exploring possibilities of alternative funding mechanisms as the national budget remained small in the midst of a sea of competing national priorities. So the tax base then and now has failed to fully fund health care. There has been consistent failure, for it is only 8.5-9.5% of the National budget instead of the 15% of the Abuja declaration many years ago.
Ten years ago Harvard University was contracted to design the Social Health Insurance scheme, around which further consultations were made with other Academic Institutions in Belgium and elsewhere. Key partners like WHO, World Bank, ILO and GTZ were consulted.
Countries with the young health insurance schemes (about 10 years), such as Tanzania, Rwanda, Ghana, Nigeria, Kenya, Burundi; those with about 50 years like Thailand, South Korea and India and those with over 100 years like Germany and Belgium were visited to compare experiences. At the moment the Draft Bill, prepared by the National Task Force and Inter ministerial Committee, is ready for enactment by Parliament.
Nature of the Uganda National Health Insurance:
The National Health Insurance Scheme will be an umbrella organization accommodating all sectors in Uganda- the public, private and communities in the form of: 1. Social Health Insurance, 2. Community Health Insurance (like Kisiizi, Kitovu, Bushenyi), 3. Private Health Insurance (like ICEA and SANLAM) and 4. Third Party Health Administrators (to link up individuals and organizations to health services). Thus the doors are open for the private sector to freely join the social scheme and the Private Insurance for products such as evacuation that may not easily be provided by the National Scheme.
Preparation has taken into account the economic and actuarial analysis; provider accreditation and quality (public, private and PNFP); quantity, complexity and scope of health services to be provided at the beginning and nascent phase; the legal and regulatory aspects by the Insurance Regulatory Authority of Uganda (IRAU); and the administrative structure of NHIS. This has been largely supported by the wide plethora of consultations with key stakeholders and technical experts.
i Management of the scheme:
The scheme is to be a body corporate with perpetual succession, with powers to sue or be sued, governed by a Board of Directors and responsible for the development, management and coordination of health insurance activities in the country, now and in the future. The Managing Director and the NHIS team will be carrying out planning and managerial functions through a widely spread out National and Sub-National Coordinating Mechanism, which will be charged, inter alia, with collecting, depositing and investing premiums. They will also negotiate and enter into contracts with the accredited health care providers about the scope of health services and payment mechanisms- capitation or after-service payment. Some of the departments will include the financial, legal, accreditation and quality, health care packages and verification.
The Board of Directors is to be made up of 11 members - from Government, workers’ organizations, employers, accredited health providers, community insurance scheme, the Private health insurance scheme and the Chairperson. They will be responsible for overall governance, direction, development and growth of NHIS.
ii. Health care package:
The package has inclusions and exclusions, the relationship of which will change as the scheme matures with more reserves and better control of moral hazard. Initially the inclusions will be all outpatient services, most inpatient services, drugs (generic rather than brands), maternal deliveries and neonatal care, preventive services, referrals and moderate surgeries and early cancers. Exclusions are plastic surgery for beauty and not reconstruction; dentures, eye glasses, accidents following high risk sports like motor rallying, organ transplant etc.
Health service will be provided by accredited providers (public, private and PNFPs), selected on the basis of quality, nature of service, clinic or hospital and showing compliance with the agreed rates per medical condition and intervention. The selection of theses providers will be jointly done by the policy holder, the employer and the Insurance. Identification of the policy holders and their beneficiaries at the time of accessing the service at the clinic or hospital will be done by special identity cards and later on electronic SMART cards, to be utilized in all parts of the country where the policy holder happens to be at the time of the illness episode.
iii .Financing and financial management:
Actuarial analysis recommended the formal public employee to contribute 4% of the salary on which the employer adds 4% to make it 8% per month. The risk is pooled together irrespective of the pre-recruitment health status; and the fact that not everyone falls sick at the same time, this fund will be able to provide health care to 4 other members of the family of the policy holder. The formal private sector will be persuaded to join but those who prefer the Private Insurance will be free to do so. With time, the informal sector, after developing some reliable and predictable fund management structure and books of accounts, will be recruited to increase the volumes of subscribers who will then share and support each other for the health risks.
Out-of-pocket payment for health services is catastrophic to the individuals and families in asset and financial loss, and is responsible for high morbidity and mortality. This is borne out by stories of transactions at the critical moment of illness which resulted in grisly complications and untimely death especially due to cancers. A robust and transparent health insurance scheme with water tight controls will improve health financing, provide more efficacious and accessible health care and ensure financial stability for households.

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