Implementation challenges of health financing policy reforms: experiences from Sub-Saharan Africa

1. Implementation challenges of health financing policy reforms: experiences from Sub-Saharan Africa Peter Kamuzora Institute of Development Studies University of Dar es Salaam

2. Health reforms themes • Health reforms have been summarized under four major themes: (Mills 1998) • Identifying and responding to major health problems • Reducing the role of the state in providing and financing health services • Increasing the number and yield of sources of health finances • Organizational and management changes in the public sector

3. Health financing policy objectives • Clear objectives grounded in core values • Could be applicable to all countries • Objectives provide the direction in which reforms should try to push the health system (achieve fairness) • Objectives that have received international support: • To provide financial protection (from catastrophic costs of using health services when needed) • To distribute the burden of contributing to health financing according ability to pay (those with greater ability to pay to make greater contributions) • To distribute the benefits of health care according to need for health services (inability to pay should not become a barrier to accessing & benefiting from needed health care) • Reforms were expected to achieve these objectives

4. Reforms implementation experience • Tax funding • A core foundation of SSA health systems (countries financed health care through this mechanism) • Countries found it difficult to finance care through tax funding: • Economic crisis (debt crisis – interest payment & debt repayment) • Unable to increase tax revenue – due to limited tax base • As part of SAPs countries were required (WB & IMF) to: • reduce their funding of health care • introduce alternative health financing options • Tax funding is most equitable • Key source for equitable infrastructure development • Only funding source that can be actively redistributed between geographic areas to promote equity

5. Reforms implementation experience • User fees • SSA countries were required to increasingly rely on user fees • The arguments for user fees • They prevent unnecessary services utilization • Alternative source of raising additional finance • User fees became a barrier to access health care • e.g. South Africa – decline in attendance (non-communicable disease) after a 50% increase in user fees • User fees (other OOP payments) are most inequitable • They place financial burden on patients at times of using services • Burden of payment fall on those with worst health status

6. Reforms implementation experience • Voluntary health insurance • Private voluntary insurance (formal sector workers) • Mainly in South Africa, Zimbabwe & Namibia • Experience shows – have become unaffordable (membership has declined) • Community-based prepayment schemes (rural pop.) • In West Africa and East Africa • Advocated as a solution to health financing gap in SSA countries • However, evidence shows that: • Population coverage remained low • Most vulnerable households were not covered • They have small risk pools & limited cross-subsidies • They are subject to rapidly increasing health expenditure

7. Reforms implementation experience • Mandatory insurance (Social Health Insurance) • Has been introduced in a number of SSA countries • Argument for mandatory insurance: • Govt. will focus its limited resources to those unable to pay for health care • Such redistribution of govt. resources does not occur • Contributions may be tax deductible (subsidized by the state) • In African context govt. is largest single employer • Govt. pays employer SHI contributions from general tax revenue • High cost of insuring civil servants is experienced (e.g. in SA govt. spends $ 150 per civil servant per month for their insurance & $ 150 per uninsured person per year)

8. Challenges related to user fees • How to deal with inability to pay for health care • Introduced exemption systems • Exemption systems are difficult to implement • Identification of the poor, • Those unable to pay for services discriminated at H/Facilities • removal of user fees • Due to regressive nature & other problems (exemption) some countries (SA, Uganda, Kenya, Zambia) decided to remove user fees • Utilization of health services increased • How to improve resource availability if fees are removed • To offset any fee revenue lost • To continue providing adequate quality services

9. Challenges related to insurance • How to promote equity • a two tier health system may arise if insurance coverage is not universal • One system for higher income groups (accessing quality services) • Another system funded through tax revenue for low income groups (minimalist package of services) • A key challenge here is how to cover those outside formal sectors

10. Policy change implementation challenges • Implementing policy change may generate unintended outcomes • Experience of user fee removal in SA • ‘free care policy’ was not communicated to FLHW before announcing it publicly & introduced with immediate effect • Outcomes: • Drug supplies were quickly exhausted (utilization increased) • Many workers resented the policy (it increased their workload & FLHW felt they were not consulted or involved in implementation plan)

11. Policy change implementation challenges • Experience of Community Health Funds (CHF) in Tanzania • CHF schemes were introduced without involving district managers in their design and without educating the communities • The district were pressurized by the govt. & ruling party for immediate implementation • Outcomes: District manager covertly resisted the policy • No funds to defray administrative costs (no meetings) • Failed to educate the beneficiaries about rationale of pooling risks & resources • Failed to assess the magnitude of ‘inability to pay’ problem - this generated conflict between community leaders & district managers • This contributed to low enrolment in the CHF schemes

12. Take away messages • African governments should be empowered to make their own decisions on appropriate ways of financing health care in their specific context • There is a need for creating awareness of health care financing issues to promote locally relevant and equitable financing options • It is important to involve different stakeholders (including the beneficiaries) in decision making on the choice of financing options