Allow Public Debate on National Health Insurance

NATIONAL HEALTH INSURANCE

Until the advent of structural adjustment, the Ugandan government provided quality and equitable universal health care and tertiary education. Under the liberal market milieu, both sectors are on a steady decline.

Health care and education are critical aspects of the economy because they shape the human capital for economic development. A healthy and educated population is the engine of economic growth, and determines whether Uganda will become a middle-income country.

However, under the liberal market environment, the government has retracted from its core obligation to universal health provision. Its budgetary allocation is less than half the 2001 Abuja declaration where Uganda committed to allocate 15% of its budget towards improving the health sector.

Recent increase in budget allocation for the health sector from UGX 1.270 Trillion in the FY2015/16 to UGX 1.853 trillion in FY2016/17 still leaves a glaring gap in healthcare financing. The 2016/17 health budget is far below the amount needed for Uganda to sustain high quality human resource and meet its health sector obligations. The Civil Society Budgetary Advocacy Group ascertained that the current budget still leaves 72% of the health sector-financing budget in the hands of the donors, given the slow private sector investment in healthcare.

Although several proposals to bridge the health sector financing gap by introducing health insurance, it has attracted limited public debate.  The proposal by Dr. Francis Runumi, the Commissioner and Director in the Health Ministry need further public debate. Dr Runumi has single handedly shaped the debate on health insurance that will shift the obligation for health financing from public to private - in the murky market economy.

Dr Runumi proposed the Social Health Insurance (SHI) common in low and middle-income countries. The assumptions underlying SHI are that the affluent would subsidise healthcare costs for the poor; the single wealthy subsidises for families, and the young subsidies for the old, etc.

From the onset, this proposal is problematic, because of the intricate complexities of health insurance buying in an “open-palm” society like Uganda. A 2010 peer reviewed study by Juliet Nabyonga Orem and Charlotte Muheki Zikusooka questioned the equity factor in the proposed NHI. They concluded that in the short term, the NHI would achieve the important equity characteristics of pooling, cross-subsidisation, and financial protection. However, they cautioned that success of NHI would be limited by a fragile liberalised market place that would influence accredited Insurers. The study was quick to observe that the current method of disbursement would in the long term, escalate the disparities in healthcare access among the population.

The characteristic of the labour market and human resources determines the success of any health insurance. Uganda, with an estimated population of over 39 million, with 19.5% living below the poverty line, and 72% of unbanked Ugandans (FINCA Observation). The workforce estimated to be 15% of its population has less than 2 million people with formal employment. health Insurance requires buy-in or renewals that requires reliable income. Many Ugandans are employed in small private enterprises, while majority are in subsistence farming. Given that health insurance is better serviced within an economy that emphasises full employment, the challenge of adopting the most appropriate National Health Insurance is daunting.

Debate should focus on the Private Health Insurance (PHI) for the affluent segment of society and the Community Based Health Insurance (CBHI), popular among the poor. A 2012 Systematic review of health insurance in Africa and Asia published in WHO Bulletin, highly appraised CBHI as favourable for improving resource mobilisation, encouraging health utilisation, reducing out-of-pocket expenditures, and increasing community empowerment. However, by Ernst Spaan and colleagues, noted that CBHIs tended to exhibit weak financial sustainability due to low renewal rates, high claim-to-revenue ratio, and high operational costs.

In sum, with 90% youth unemployment in Uganda, widespread economic inequality, and low financial inclusion within an inelastic market economy. Any NHI modeled after any  industrial countries’ will create more disparity in healthcare access. At least, Uganda should avoid the USA’s highly inequitable and predatory health insurance model. Next, we examine CBHI and policy implications.

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