National Health Insurance to improve lives, productivity of Ugandans
May 31, 2009
THE Proposed National Health Insurance Scheme (NHIS) for Uganda has attracted a lot of interest and debate in the public. Ugandans appreciate the scheme in principle. There is, however, great need for the public to understand the principles of the scheme.
By Richard Nduhuura
THE Proposed National Health Insurance Scheme (NHIS) for Uganda has attracted a lot of interest and debate in the public. Ugandans appreciate the scheme in principle. There is, however, great need for the public to understand the principles of the scheme.
This will be achieved by the National Health Insurance taskforce through sensitisation of various sectors of society to appreciate and embrace the scheme. The taskforce shall soon embark on a nation-wide sensitisation programme.
Social Health Insurance (SHI) is a form of social security. It guarantees the provision of health care at any one time to an individual who regularly makes a nominal contribution.
What must be clearly understood is that SHI is based on the principle of social solidarity, whereby the wealthy and the healthy subsidise the less wealthy and less healthy. The young subsidise the old, while the single subsidise families.
The poor receive the same benefits as the rich and, therefore, they are the net beneficiaries of the scheme. The rich benefit from aggregate good health of the entire population, minimising the welfare losses from deaths, burials, sick days and caring for the sick.
A person, while healthy, contributes a predictable premium to cover his unpredictable (unforeseen) expenses while sick.
The principle of social solidarity should be clearly appreciated. As already demonstrated by communities organising themselves in burial and social groups. I have come across many people who say they rarely fall sick and, therefore, see no reason of paying for those who regularly fall sick.
The healthy have a duty to ensure that the rest of the community enjoys good health in order to remain productive and contribute to the growth and development of our country.
Only healthy Ugandans can take this country forward and out of poverty. If one has sick people around him, there are high chances of him being infected by them.
One would ask why the Government cannot adequately fund its health care systems to realise this objective. Of course, this would mean the Government heavily taxing its citizens.
An argument has been floated that, after all, social health insurance is a tax. It, therefore, becomes necessary to explain the difference between a tax and a premium paid in respect of health insurance.
Whereas the tax and insurance premium are mandatorily deducted at the source, hence the similarity, utilisation of tax revenue goes to priorities of the Government, determined from time to time and decisions are in the hands of Parliament and Cabinet.
On the other hand, the insurance premium goes to predetermined and contractual-bound services, where the beneficiary can have a say when things do not happen as promised.
The proposed scheme is private and does not follow the public business principles. Members are entitled to receive accountability at various levels. Services are assured and absence can call for court action by contributors and heavy fines on the scheme.
It should be clearly understood that in health insurance, the scheme is under obligation to provide a package of benefits to the contributor and his dependants. Even for health workers, the scheme will provide benefits outside the health units where they work.
For instance, a midwife in a clinic shall get a caesarean section in any hospital without paying a fee. The package will be specified clearly in the law.
Ugandans also need to know the health providers in the proposed scheme. This is important because the debate has always been around the inefficiencies in the public health facilities — chronic drug shortage, poor infrastructure, obsolete equipment and poorly-motivated human resource. This is the very reason for introducing the national health insurance scheme.
Whereas improvement of services in public health facilities is underway, private and public health facilities will be accredited by the scheme as long as they fulfill the requirements set by the accreditation committee.
Private pharmacies and drug shops will also be accredited to provide medicines to scheme members who will present prescriptions from health facilities that lack the prescribed medicines.
Scheme members will be free to go to any facility of their choice. Plans are in advanced stages to rehabilitate and re-equip all government hospitals, while rehabilitation of regional referral hospitals is ongoing. The performance of the National Medical Stores has improved and soon the problem of drug stock-outs will be a thing of the past.
The rest of the public, who are non-members of the scheme, will be served in general wings of government and faith-based facilities. The Government and donor budget to the Ministry of Health will be solely for this purpose. The scheme will decongest public facilities and provide system improvements.
Contrary to what the public has been made to believe, the scheme will be autonomous and not under the health ministry. The ministry is only spearheading its creation and legislation. Once the scheme is established, it will have a board and management that will operate and take decisions independent of the Government. The issue of the image of the ministry, which by the way, is steadily improving, should not be the reason for the public to reject the scheme.
The board members shall be nominated by stakeholders appointed to represent their institutions. The managing director shall be appointed by the board and not the minister. The minister will only have an honorary responsibility of appointing the nominees of stakeholders.
There has been a tendency to equate the proposed scheme with pension schemes like the National Social Security Fund, but this is wrong.
Whereas the pension scheme collects money from workers, which accumulates and the board has to plan on how to invest it; the health scheme shall collect premiums monthly and pay out to the accredited health service providers who submit claims.
The scheme, therefore, does not accumulate funds. In case of any surpluses, it will be advanced to health care providers to improve their services.
How was the figure of 4% of one’s salary as contribution by an employee and 4% contribution by the employer arrived at? A study was conducted in 2001 by Makerere University Institute of Public Health and Harvard School of Public Health; and repeated in 2008 by health and finance ministries and the Uganda Bureau of Statistics with technical assistance from the consortium composed of the World Health Organisation. The World Bank, International Labour Organisation, France and the German Technical Cooperation-GTZ.
Autonomy requiring freeing resources from the private wings supported by the scheme and quality improvement plan to a tune of 50% for public facilities and 30% for private facilities was built in this actuarial model. Both actuarial studies came up with the same figure. It is, therefore, not guesswork. The figures were scientifically determined.
Health insurance protects people against catastrophic health expenses. Many people have had to sell their hard-won assets to settle medical bills and end up impoverished. Others do not get quality care because they find it expensive. With health insurance, however, people will seek medical care in time. They will also access quality health facilities which they are unable to go to today for fear of the expenses.
The scheme will not stop anyone who is currently insured with the private commercial schemes. Private commercial schemes and NHIS will complement one another. There are supplementary benefits outside the health insurance package to be provided by private commercial insurance schemes.
The plan is to start with public servants in the first three years, cover employees in the private sector in six years time, informal sector in nine years and every Ugandan in 15 years.
The scheme will cover a contributor and four of his dependants.
Lastly, I would like to assure Ugandans that we are not in a hurry to introduce the scheme. We have made and shall continue making consultations with all stakeholders so that we establish a scheme in the interest of all.
In public health facilities, the scheme will operate in the private wings, leaving the general wings open for non-members. The Government will continue offering free service in the general wings and will not reduce the health budget after introducing the scheme.
The law establishing the scheme will limit expenditure on administration, leaving the bulk for health care provision. The scheme will also have a small reserve fund actuarially arrived at 3%. Health facilities will benefit in the form of advances to enable them procure diagnostic equipment, medicines and other health supplies.
Conclusion
Health insurance is not a tax. Both public and private health facilities will be accredited to provide health care. The amounts to be deducted are minimal compared to the current health care expenses. Any member of the scheme is free to access any accredited facility for service.
Uganda, being the only country in the East African Community with no social health insurance scheme, should welcome the scheme. The scheme will work out receipt of health benefits across boundaries, which is a reality given the coming East African Union.
The challenges and problems of the scheme will be addressed as the implementation goes on, until a perfect scheme for all Ugandans is created.
I urge all Ugandans to support the establishment of the scheme.
The writer is the Minister of state for health in charge of general duties
THE Proposed National Health Insurance Scheme (NHIS) for Uganda has attracted a lot of interest and debate in the public. Ugandans appreciate the scheme in principle. There is, however, great need for the public to understand the principles of the scheme.
This will be achieved by the National Health Insurance taskforce through sensitisation of various sectors of society to appreciate and embrace the scheme. The taskforce shall soon embark on a nation-wide sensitisation programme.
Social Health Insurance (SHI) is a form of social security. It guarantees the provision of health care at any one time to an individual who regularly makes a nominal contribution.
What must be clearly understood is that SHI is based on the principle of social solidarity, whereby the wealthy and the healthy subsidise the less wealthy and less healthy. The young subsidise the old, while the single subsidise families.
The poor receive the same benefits as the rich and, therefore, they are the net beneficiaries of the scheme. The rich benefit from aggregate good health of the entire population, minimising the welfare losses from deaths, burials, sick days and caring for the sick.
A person, while healthy, contributes a predictable premium to cover his unpredictable (unforeseen) expenses while sick.
The principle of social solidarity should be clearly appreciated. As already demonstrated by communities organising themselves in burial and social groups. I have come across many people who say they rarely fall sick and, therefore, see no reason of paying for those who regularly fall sick.
The healthy have a duty to ensure that the rest of the community enjoys good health in order to remain productive and contribute to the growth and development of our country.
Only healthy Ugandans can take this country forward and out of poverty. If one has sick people around him, there are high chances of him being infected by them.
One would ask why the Government cannot adequately fund its health care systems to realise this objective. Of course, this would mean the Government heavily taxing its citizens.
An argument has been floated that, after all, social health insurance is a tax. It, therefore, becomes necessary to explain the difference between a tax and a premium paid in respect of health insurance.
Whereas the tax and insurance premium are mandatorily deducted at the source, hence the similarity, utilisation of tax revenue goes to priorities of the Government, determined from time to time and decisions are in the hands of Parliament and Cabinet.
On the other hand, the insurance premium goes to predetermined and contractual-bound services, where the beneficiary can have a say when things do not happen as promised.
The proposed scheme is private and does not follow the public business principles. Members are entitled to receive accountability at various levels. Services are assured and absence can call for court action by contributors and heavy fines on the scheme.
It should be clearly understood that in health insurance, the scheme is under obligation to provide a package of benefits to the contributor and his dependants. Even for health workers, the scheme will provide benefits outside the health units where they work.
For instance, a midwife in a clinic shall get a caesarean section in any hospital without paying a fee. The package will be specified clearly in the law.
Ugandans also need to know the health providers in the proposed scheme. This is important because the debate has always been around the inefficiencies in the public health facilities — chronic drug shortage, poor infrastructure, obsolete equipment and poorly-motivated human resource. This is the very reason for introducing the national health insurance scheme.
Whereas improvement of services in public health facilities is underway, private and public health facilities will be accredited by the scheme as long as they fulfill the requirements set by the accreditation committee.
Private pharmacies and drug shops will also be accredited to provide medicines to scheme members who will present prescriptions from health facilities that lack the prescribed medicines.
Scheme members will be free to go to any facility of their choice. Plans are in advanced stages to rehabilitate and re-equip all government hospitals, while rehabilitation of regional referral hospitals is ongoing. The performance of the National Medical Stores has improved and soon the problem of drug stock-outs will be a thing of the past.
The rest of the public, who are non-members of the scheme, will be served in general wings of government and faith-based facilities. The Government and donor budget to the Ministry of Health will be solely for this purpose. The scheme will decongest public facilities and provide system improvements.
Contrary to what the public has been made to believe, the scheme will be autonomous and not under the health ministry. The ministry is only spearheading its creation and legislation. Once the scheme is established, it will have a board and management that will operate and take decisions independent of the Government. The issue of the image of the ministry, which by the way, is steadily improving, should not be the reason for the public to reject the scheme.
The board members shall be nominated by stakeholders appointed to represent their institutions. The managing director shall be appointed by the board and not the minister. The minister will only have an honorary responsibility of appointing the nominees of stakeholders.
There has been a tendency to equate the proposed scheme with pension schemes like the National Social Security Fund, but this is wrong.
Whereas the pension scheme collects money from workers, which accumulates and the board has to plan on how to invest it; the health scheme shall collect premiums monthly and pay out to the accredited health service providers who submit claims.
The scheme, therefore, does not accumulate funds. In case of any surpluses, it will be advanced to health care providers to improve their services.
How was the figure of 4% of one’s salary as contribution by an employee and 4% contribution by the employer arrived at? A study was conducted in 2001 by Makerere University Institute of Public Health and Harvard School of Public Health; and repeated in 2008 by health and finance ministries and the Uganda Bureau of Statistics with technical assistance from the consortium composed of the World Health Organisation. The World Bank, International Labour Organisation, France and the German Technical Cooperation-GTZ.
Autonomy requiring freeing resources from the private wings supported by the scheme and quality improvement plan to a tune of 50% for public facilities and 30% for private facilities was built in this actuarial model. Both actuarial studies came up with the same figure. It is, therefore, not guesswork. The figures were scientifically determined.
Health insurance protects people against catastrophic health expenses. Many people have had to sell their hard-won assets to settle medical bills and end up impoverished. Others do not get quality care because they find it expensive. With health insurance, however, people will seek medical care in time. They will also access quality health facilities which they are unable to go to today for fear of the expenses.
The scheme will not stop anyone who is currently insured with the private commercial schemes. Private commercial schemes and NHIS will complement one another. There are supplementary benefits outside the health insurance package to be provided by private commercial insurance schemes.
The plan is to start with public servants in the first three years, cover employees in the private sector in six years time, informal sector in nine years and every Ugandan in 15 years.
The scheme will cover a contributor and four of his dependants.
Lastly, I would like to assure Ugandans that we are not in a hurry to introduce the scheme. We have made and shall continue making consultations with all stakeholders so that we establish a scheme in the interest of all.
In public health facilities, the scheme will operate in the private wings, leaving the general wings open for non-members. The Government will continue offering free service in the general wings and will not reduce the health budget after introducing the scheme.
The law establishing the scheme will limit expenditure on administration, leaving the bulk for health care provision. The scheme will also have a small reserve fund actuarially arrived at 3%. Health facilities will benefit in the form of advances to enable them procure diagnostic equipment, medicines and other health supplies.
Conclusion
Health insurance is not a tax. Both public and private health facilities will be accredited to provide health care. The amounts to be deducted are minimal compared to the current health care expenses. Any member of the scheme is free to access any accredited facility for service.
Uganda, being the only country in the East African Community with no social health insurance scheme, should welcome the scheme. The scheme will work out receipt of health benefits across boundaries, which is a reality given the coming East African Union.
The challenges and problems of the scheme will be addressed as the implementation goes on, until a perfect scheme for all Ugandans is created.
I urge all Ugandans to support the establishment of the scheme.
The writer is the Minister of state for health in charge of general duties