Implementation challenges of health
financing policy reforms: experiences
from Sub-Saharan Africa
Peter Kamuzora
Institute of Development Studies
University of Dar es Salaam
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
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
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
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
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:
–
–
–
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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
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)
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
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
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)
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
Take away messages
African governments should be empowered to
make their own decisions on appropriate ways
of financing health care in their specific context
2) There is a need for creating awareness of
health care financing issues to promote locally
relevant and equitable financing options
3) It is important to involve different stakeholders
(including the beneficiaries) in decision making
on the choice of financing options
1)