DESIGN ELEMENT 1. Feasibility of Insurance Design and Implementation

1. DESIGN ELEMENT 1. Feasibility of Insurance Design and Implementation Presented by: Chris Atim October 19, 2009

2. Objectives • Identify major political, financial, and socio-cultural prerequisites to set up or scale up health insurance in our countries • Assess gaps in and obstacles to health insurance development within the political, financial, and socio-cultural context • Plan for how to lay the groundwork to address these gaps and obstacles, and prepare for health insurance development or scale-up, including the political process, financing strategies, and sociocultural issues

3. Outline • Historical context for African HI reform • Assessing Feasibility • Building political consensus • Assessing Financial Capacity • Socio-cultural factors and acceptability • Provider capacity and service availability • Administration and management • Stakeholder analysis exercise

4. Historical context Formal sector focus and exclusion of rural and informal sectors Directly imported from and based on European models Legitimized and validated HI for rural /informal sectors Provided model, tools, skills, etc for renewed state interest and approach to SHI – decentralized, participatory, etc User fees Growth of private sector and civil society Economic crises threaten welfare state Collapse or deterioration of services

5. Assessing feasibility • Major changes in health financing arrangements such as health insurance are complex, affect many parties and usually involve • New legislation and accompanying regulations, • Securing funding, • Defining new institutional arrangements, • New management and other skills, as well as changing behaviors and ways of working, and • Making insurance design responsive to stakeholders • Hence the need for careful feasibility assessments in advance

6. Questions to ask at the outset • What national /health sector goals are driving reform? • How will insurance reforms contribute to goals? • Examining the health financing landscape • What are existing health financing arrangements?

7. Possible Health Financing Arrangements before universal coverage Rural & informal sector Formal Sector Social security Military, police Fee exemption Employer- based User fees Social security for civil servants CBHI, MHOs Private commercial insurance Vouchers, CTCs, etc

8. Questions to ask (2) • Major stakeholders, their interests and (likely) positions • Potential barriers to reform (political, social, institutional) • Potential strategies for addressing likely barriers • Identity any opportunities that may be available • Building a coalition in favor of reform • Political mapping exercise - who is for, against or neutral

9. Political mapping sample Clinton’s health reform 1993

10. Ghana’s insurance reform 2003

11. Those who wish to undertake reform face the determined, vigorous and active opposition of those who stand to lose from the reform, but at best only the passive or lukewarm support of those who stand to gain in future from those changes. – Anon.

12. Stakeholder Analysis Includes providers (public and private), patients, other political parties, existing health financing institutions incl private health insurers, trade unions, professional associations, local governments, donors/ devt partners, etc May have diverse interests and stakes in reform Need to analyse each carefully and listen to concerns Continuous engagement, consultation and meetings at each key step of the process

13. Building consensus

14. Political Leaders Leave a legacy Accountable to voters Fulfil an electoral mandate Enlarge electoral base Committed to providing coverage to critical social groups such as the poor and vulnerable Drive to achieve universal coverage Technocrats Raise more resources for health Make health care more affordable for population Achieve greater equity and efficiency in resource utilization Ensure a sustainable design Ensure that providers are on board Politicians and technocrats often do not “speak the same language”

15. Political Leaders Provide the vision and direction Push diverse stakeholders to compromise Task technocrats to design and implement Technocrats Evidence-based decisions Objective analysis Design must be attuned to political leaders’ objectives while offering best advice Together they can build consensus for health insurance

16. Balancing different interests • Good HI design balances the interests of different groups (winners/losers, providers, patients, payers, insurers, etc) so • No single group gets everything that it wants. • Good political leadership is necessary to achieve this balance and push each group to compromise. • However, reformers, esp when mostly politically driven, can make costly errors, eg • Greatly oversimplifying or minimizing difficulties of achieving universal coverage and how long it could take • Expand coverage to new services or population groups to win votes without any consideration of financial sustainability, risking deficits, bankruptcy, or inflation • Direct uncompetitive contracts to politically favored individuals or companies (fraud, waste)

17. Financing options Pop coverage Benefits package Providers Organiza- tional structure Opera-tions Financial feasibility Institutional structure and hence admin costs Which services are covered? How much funding is required? Accountants, economists, and acutuaries can help Who contributes and who is exempted? Marketing Enrolment Premium collection Claims Quality Assurance How are providers paid? Plan ahead for increased demand

18. Ghana case study • Financial Feasibility • 2.5% earmarked VAT levy widely praised • Provides over 70% of revenues of NHIF • But this source is not linked to enrolments • Hence revenue does not necessarily rise with increasing membership • Greatest source of concern regarding financial sustainability of NHIS • Essentially a political decision

19. Socio-cultural factors and acceptability of HI • Ethics, popular beliefs and behaviors may be crucial to success of insurance reform • Less obvious but equally vital: • Social traditions, previous experience with other forms of insurance, expectations of role of state vis-à-vis individual or non-state based initiatives • Compare mutuelle, MHO and CBHI experiences of WCA (Francophone, Anglophone) and ESA • Calls for creativity and innovation based on good knowledge of the society involved

20. Stakeholder analysis exercise at your tables Brainstorm on possible stakeholders and their potential interests in HI reform in African countries 10 mins

21. Thank you