PHM-Exch> Health Insurance schemes are leaving the poor behind OXFAM

[Claudio Schuftan]

In a new report<http://policy-practice.oxfam.org.uk/publications/universal-health-coverage-why-health-insurance-schemes-are-leaving-the-poor-beh-302973>published
today, Oxfam is warning that health insurance schemes introduced
in the name of universal health coverage (UHC) are excluding the majority
of people and leaving the poor behind.

While the new growing momentum for UHC is welcome there is a concern that
the mistakes of history could be repeated. The optimism in 1978 following
the Alma Ata ‘Health for All’ declaration was quickly replaced by
disillusionment as influential donors failed to act on the shared vision of
comprehensive universal primary health care.  They financed low cost
selective interventions instead. Today, a similar danger exists as we
witness a wide range of ‘business as usual’ interventions being rebranded
as ‘UHC’ despite them bearing little resemblance to the World Health
Organisation’s UHC principles. <http://www.who.int/whr/2010/whr10_en.pdf>

This is certainly the case for health financing. Our new report takes a
critical look at the almost exclusive focus of some donors and low and
middle income countries on contributory insurance schemes as *the way* to
achieve UHC. Such schemes fail to provide coverage for the majority of
citizens and serve to divert attention away from needed reforms to national
and international tax systems that could raise significant additional
revenues for health.

Voluntary insurance – private and community-based – has never worked to
achieve UHC yet is still being widely promoted. India’s voluntary RSBY
insurance scheme for people below the poverty line is widely praised as a
success but offers limited financial protection and has skewed public
resources to curative rather than preventative care.

For those who recognise the pitfalls of voluntary schemes, social health
insurance (SHI) has emerged as the model of choice. SHI has worked to
achieve UHC in a number of high-income countries, but attempts to replicate
in poorer countries have proved unsuccessful. In practice SHI schemes
usually start with the small number of easy-to-reach formally employed and
then struggle to scale up beyond. Premiums are too expensive for most and
schemes become *de facto* voluntary, leading to large scale exclusion. Ten
year old national insurance schemes in Tanzania and Ghana cover only 17%
and 36% of citizens respectively. Kenya’s National Hospital Insurance Fund
– established nearly 50 years ago – today insures just 18 per cent of
Kenyans.

Hopes that insurance contributions from those outside of formal employment
would raise significant additional revenue have also not been realised. In
Ghana, premiums paid by the informal sector contribute just five per cent
towards the cost of the national scheme. Governments also face huge bills
to cover the SHI contributions of their workers. The Government of Tanzania
spent $33m on employer contributions in 2009/10; this equated to $83 per
employee – six times more than it spent per person, per year on health for
the general population.

Instead of importing inappropriate health financing models from high-income
countries, our paper recommends that developing country governments look to
learn from the increasing number of home-grown UHC success stories in
other, more comparable countries.

The countries making most progress towards UHC agree that entitlement to
health care should be based on citizenship and/or residency (not employment
status or financial contribution) and while specific journeys differ, these
countries fall into two broad camps. First there are examples of countries
at all income levels, including Sri Lanka, Malaysia, and Brazil, which use
tax revenues to fund UHC. A second option increasingly being adopted by
another set of successful UHC countries, including Thailand, Mexico, and
Kyrgyzstan, is to collect insurance premiums only* *from those in formal
salaried employment, and to pool these where possible with tax revenues to
finance health coverage for the entire population. According to WHO, only
eight of 49 low-income countries will be in a position to fully finance UHC
from domestic resources in 2015 so international aid will continue to play
a crucial role.

The focus on health insurance seems to have served as a distraction for the
international health community from the key ingredient for all UHC success
stories – public financing. Rather than focus efforts on collecting
contributions from people who are too poor to pay, governments and donors
should look to reform national and international tax systems in order to
generate significant and urgently needed revenue for health. Oxfam
estimates that strengthening tax administration alone could raise an
additional 31 per cent of tax revenue across 52 developing countries,
amounting to $269bn in increased domestic resources. Enough to double
health budgets in these countries.

The growing momentum for UHC is welcome, exciting, and challenging.
However, if we are to heed World Bank President Jim Kim’s warning that UHC
could easily become a ‘toothless slogan’, then UHC advocates must stand
true to the WHO UHC principles to reduce out of pocket payments, introduce
mandatory pre-payment, create large risk pools and scale up public
financing to cover those who cannot afford to contribute. To these we add
that entitlement to health coverage should be based on citizenship and/or
residence, and that progress can only be considered progress if women and
men living in poverty benefit at least as much as the better off at every
step of the way towards UHC.
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