East Africa Healthcare Federation Conference 2012

Towards Universal Healthcare

Dr. Peter Kamunyo, Divisional Director – Healthcare, Aon

Kenya

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Contents

• Overview & Setting the context– The case for Universal Health care– Universal Health Care in Africa

• Healthcare Financing in Kenya• The Role of NHIF towards

Universal Healthcare

Universal Health Care

• AKA universal health coverage, universal coverage, universal care or social health protection

• Describes health care systems organized around providing a specified package of benefits to ALL members of a society.

• Aim – providing financial risk protection,– improved access to health services, and– improved health outcomes.

• The ultimate objective of any healthcare financing system- “effective access to affordable healthcare services of adequate quality and financial protection in case of sickness” (International Labor organization)

• Universal health care is not a one-size-fits-all concept; nor does it imply coverage for all people for everything.

• Determined by three critical dimensions: – who is covered, – what services are covered, and – how much of the cost is covered

Universal coverage

Total health expenditure

Breadth: who is covered?

Depth: which benefits are covered?

Height: what proportion of the costs are covered?

Coverage mechanism

Total health expenditure

Breadth: who is covered?

Depth: which benefits are covered?

Height: what proportion of the costs are covered?

Extend to non-

covered

Reduce cost sharing

Include other

services

Funding models• Universal health care in most countries has been achieved by a mixed

model of funding. • General taxation revenue is the primary source of funding• European systems - financed through a mix of public and private

contributions.• The majority of universal health care systems are funded primarily by

tax revenue (e.g. Portugal, Spain, Denmark and Sweden). • Some nations, such as Germany, France and Japan employ a multi-

payer system in which health care is funded by private and public contributions.

• These contributions are compulsory and defined according to law.• Universal health care systems are modestly redistributive. • Progressivity of health care financing has limited implications for

overall income inequality.

Forms of healthcare financing1. Compulsory insurance: This is usually enforced via legislation requiring

residents to purchase insurance, though sometimes, in effect, the government provides the insurance.

2. Tax-based financing: In tax-based financing, individuals contribute to the provision of health services through various taxes.

3. Social Health Insurance: In social health insurance, contributions from workers, the self-employed, enterprises and government are pooled into a single or multiple funds on a compulsory basis.

4. Private insurance: In private health insurance, premiums are paid directly from employers, associations, individuals and families to insurance companies, which pool risks across their membership base.

5. Single payer: used to describe a funding mechanism meeting the costs of medical care from a single fund.

6. Community-based Health Insurance: A particular form of private health insurance that has often emerged in environments where financial risk protection mechanisms only have a limited impact is community-based health insurance. Contributions are not risk-related, and there is generally a high level of community involvement in the running of such schemes.

Healthcare Financing in Sub Saharan Africa

Private

Public Private Partnerships

Public

User charges / out-of-pocket costs

Social Health Insurance (SHI)

Community Based Health Insurance

(CBHI)

Taxation (direct, indirect, general,

earmarked)Private Health Insurance (PHI)Medical Savings Accounts (MSAs)

Informal payments

Healthcare Financing Triangle

Patient

ProviderPayer Insurance companies

NGO fundingPublic health schemes

Government

Medical Service ProvidersDoctors etc.

End userSynergy between the

stakeholders

Other considerations• Extent of government involvement in providing care

and/or health insurance varies • The common denominator for all such programs is

some form of government action aimed at extending access to health care as widely as possible and setting minimum standards.

• Most implement universal health care through legislation, regulation and taxation.

• Legislation and regulation direct what care must be provided, to whom, and on what basis.

• Usually some costs are borne by the patient at the time of consumption but the bulk of costs come from a combination of compulsory insurance and tax revenues.

• Some programs are paid for entirely out of tax revenues.

Universal Health Care GloballyGERMANY• Germany has the world's oldest universal health care system, with

origins dating back to Otto von Bismarck's social legislation, which included the Health Insurance Bill of 1883, Accident Insurance Bill of 1884, and Old Age and Disability Insurance Bill of 1889.

BRITAIN• In Britain, the National Insurance Act 1911 marked the first steps there

towards universal health care, covering most employed persons and their financial dependents and all persons who had been continuous contributors to the scheme for at least five years whether they were working or not.

• This system of health insurance continued in force until the creation of the National Health Service in 1948 which extended health care security to all legal residents.

UNITED STATES OF AMERICA• Most current universal health care systems were implemented in the

period following the Second World War as a process of deliberate health care reform, intended to make health care available to all, in the spirit of Article 25 of the Universal Declaration of Human Rights of 1948, signed by every country doing so. The US did not ratify the social and economic rights sections, including Article 25's right to health.

Universal Health Care in Africa

• At least 50 percent of Sub-Saharan Africa’s total health expenditure is financed by out-of-pocket payments from its largely impoverished population.

• In 2001, the heads of state of the African Union countries met in Abuja, Nigeria, and pledged to allocate at least 15 percent of their national budgets to the health sector in the Abuja Declaration.

• A decade later, only two African countries, South Africa and Rwanda, have managed to reach this goal, according to the World Health Organization, WHO.

• Twenty-seven African countries have increased their expenditure on health care, but 12 countries – including Kenya – have kept theirs the same and seven African countries have reduced theirs.

Sustainable Universal Healthcare Financing• Healthcare financing options that have the capacity to endure

over long periods of time

Medicines & Services

Infrastructure

Education & Outreach

Social Advocacy

Treat

Build

Teach

Serve

The sustainability of Africa's healthcare sector will depend on the availability of robust and diverse insurance options for patients.

Sustainable Healthcare Financing• Sustainable healthcare (Sustainable health

financing, universal coverage and social health insurance) is a joint effort between public and private stakeholders

Social Health Insurance

Private Health

Insurance

Community Based health

insurance

Healthcare Challenges in Kenya

• High burden of disease, including HIV/AIDS , Malaria, TB• Healthcare infrastructure is insufficient and in some

cases old and dilapidated• Acute shortage of health human resources• Insufficient funding and inefficient use of resources is one

of the major underlying factor of the challenges• Only about 40% of Kenyans live within 4 kms of a

functioning facility, mostly in rural areas; 70% access in urban areas

• Public health facilities are overcrowded, while there is still some underutilized capacity in private and Faith Based facilities (exact figures not known) – issue of cost of care and quality

• Whereas the policy and the plans emphasize preventive, demand for curative services continue to increase

• Households bear the highest cost of care – direct costs, taxes and premiums

• About 40% of sick Kenyans do not seek care when sick due to cost• Removal of user fees in primary health facilities led to shortages in

health commodities due to lack of compensation for loss of revenue

• About 1 million Kenyans drop below poverty line yearly as a result of a sickness in the family

• Evidence from other countries show loss of productivity as a result of illness, especially malaria and HIV/AIDS

• To achieve Vision 2030, we have to break the vicious cycle of Disease – Poverty – Disease.

• 23% of Kenyans derives their earnings and support from Formal sector of whom over 94% are insured.

• Approx. 80% of Kenyans are uninsured. • 45% of Kenyans live below 1$ a day 17% of Kenyans are living in

abject poverty

Healthcare Challenges in Kenya

The Funding of Healthcare Delivery in Kenya

Not specified, 0.4%

Donors, 29.4%

Public, 30.0%

Households, 36.7%

Private Companies,

3.4%

Local Foundations,

0.1%

Kenya current coverage: NHIF

Breadth: who is covered?

Depth: which benefits are covered?

Height: what proportion of the costs are covered?

NHIFPoor and most of informal

sector not covered

User fees for outpatient services+ residual fees for inpatient services

Outpatient services not

coveredNHIF

Tax-funded services

Private

Health

Insurance

Kenya current coverage landscape

Current Coverage Landscape

Vision 2030• Kenya will restructure the health delivery system and also shift

the emphasis to “promotive” care in order to lower the nations’ disease burden.

• Provision of affordable and quality health care services is enshrined in the bill of rights chapter of the new constitution.

• According the National Health Sector Strategic Plan (2005-10); the Health Ministries Strategic Plans (2008-12) and Vision 2030, the key objectives can be summarized as follows: – Increase equitable access to health services– Improve quality and responsiveness of services– Improve efficiency and effectiveness of service delivery– Enhance the regulatory capacity– Foster partnerships in the delivery of services– Improve the financing of the sector

What we need to ask?

1. How can poor people access health services?

2. Which services are essential?

3. How much would this services cost?

4. How should contributions for the financing of the sector be collected?

5. How are Providers paid for services?

6. Inclusion of all service providers into the national planning and financing process

Universal Health Coverage in Kenya• Since independence, universal coverage in health

has been a major objective. However the it has eluded the policy makers and implementers alike.

• The delivery system has been dogged by several weaknesses and threats that include the following : -– The perceived failure of the system to cater for the

indigents. – Inequitable distribution of health resources leading to

the collapse of the referral system– High cost of medication due to low coverage of medical

insurance

• A number of interventions have been tried and some have achieved high success rate.

A step towards Universal Healthcare in Kenya

• National Hospital Insurance Fund (NHIF) in Kenya has recently taken on the challenge of providing medical cover at low cost for a large population of government workers.

• Part of their solution is to use capitation schemes to deliver primary care.

• Currently, about 2 million of Kenya’s 40 million residents have public health insurance under the National Hospital Insurance Fund, which relies on contributions from high-earning Kenyans to cover hospital benefits for members and their dependents

Snapshot of the National Hospital Insurance Fund (NHIF)

• National Hospital Insurance Fund is a State Parastatal that was established in 1966 as a department under the Ministry of Health.

• The original Act of Parliament that set up this Fund in 1966 has over the years been reviewed to accommodate the changing healthcare needs of the Kenyan population, employment and restructuring in the health sector.

• Currently an NHIF Act No 9 of 1998 governs the Fund.• The transformation of NHIF from a department of the Ministry of

Health to a state of corporation was aimed at improving effectiveness and efficiency.

• The Fund's core mandate is to provide medical insurance cover to all its members and their declared dependants (spouse and children).

• The NHIF membership is open to all Kenyans who have attained the age of 18 years and years and have a monthly income of more than Ksh 1,000.

Breadth: who is covered?

Depth: which benefits are covered?

Height: what proportion of the costs are covered?

Proposed NHIF Scheme

Total health expenditure

NHIFTax-funded

Increase NHIF

coverage

Include outpatient

services

Pay higher reimbursement and in return lower residual

user fees

Way Forward

• Universal health care is the only way to guarantee Kenyans medical care.

• Universal Health care has worked for many other countries and we need to borrow from their successes and learn from their failures.

What we need to do– Bridge equity gaps in access to quality health care and

nutrition services: Including developing health infrastructure in favour of deprived communities;

– Ensuring that public health system remains backbone of health system care: Including accelerating the implementation of the National Health insurance, Strengthening the exemption policy to enhance access of poor and vulnerable groups to healthcare;

– Strengthening Efficiency in Service Delivery: Including providing incentive schemes to support the retention and redistribution of trained health personnel;

– Develop low-cost market – address high private hospital costs

Thank You

Thank you…

Q & A