Is Uganda Ready for a National Health Insurance Scheme?

The Ministry of Health (MoH) in Uganda is proposing to put in place a National Health Insurance Scheme. On April 15, 2009 Action Group for Health, Human Rights and HIV/AIDS (AGHA) Uganda in concert with the Uganda Coalition for Social Security and Pension Reform Organised a Public Dialogue on the proposed scheme in Uganda.

This scheme is being introduced against the background that the 1999 National Health Policy requires the Government to promote sustainable alternative health financing mechanism and the 1995 Constitution obliges the Government to take all practical measures to ensure the provision of basic medical services to the population. According to the MoH, the purpose of the scheme is to:
a) To diversify and strengthen health care financing and make a contribution to bridging the financing gap in the sector;
b) To stimulate providers to avail good quality, accessible and affordable healthcare and
c) To increase welfare gain in healthcare through financial risk protection

The scheme will be designed in such a way that initially, it will target the public sector, then the formal private sector, organized informal sector and subsequently national coverage. The proposed scheme is to be administered by a parastatal body: The Uganda Health Insurance Corporation with a mandate to collect the compulsory contributions from the employer and employees. The contribution proposed is at 8% with 4% from the employee and 4% from employer. The scheme will be run by a body corporate, independent of the Ministry of Health, perpetual succession with power to sue and be sued just like the National Social Security Fund (NSSF). According to Dr. Francis Runumi, Commissioner Health Services/Planning, the Scheme will also be financed from member and employer contributions, but also supplemented by gifts, grants, donations, loans and possibly other credible sources. The funds would be subject to all rules applicable to public funds, audited by the Auditor General and reported to Parliament. The Board of Directors will submit the audited accounts to the Ministry of Health, and the reports and accounts will be presented to the Cabinet. The introduction of the scheme has had mixed reactions from the public most of whom think it will be disastrous after the NSSF funds’ mismanagement commonly known as Temangalo.

The endeavor to raise domestic finance for the health sector is very welcome and overdue. Since 2003, there has been a funding gap that is widening because of little funding for the health sector from tax revenue. The current financial crisis has not made things any better. Consequences of this funding gap are Human Resources for Health (HRH) attrition, low stocks of Essential Medicines and Health Supplies (EMHS), failing infrastructure, and increased use of traditional medicine. Tax revenue currently accounts for only 13% and Donor aid 40% of Uganda’s GDP. In 2001, African heads of state made a commitment to spend at least 15% of their national budget on health. Currently, Uganda spends 9.6% of its national budget on health way off target from the Health Sector Strategic Plan (HSSP) target of 13%, and the Abuja Commitment of 15%. The trend is down from two years ago when the percentage was at 11%. Uganda spends US $ 7.84 per capita on health, yet to meet the Uganda National Minimum Health Care Package, (UNMHCP), at least US$ 28, and 40 are needed when ARVs are included. The health sector needs US $ 6.5-8 per capita to cover Essential Medicines and Health Supplies (EMHS). In 2006/2007, only US $ 0.72 was availed by GOU: donors topped up to US $ 4.06. The health sector has largely been left for donor support, which is not sustainable especially when donors fail to honor commitments. Innovative ways of domestic financing are therefore welcome and much needed in Uganda.

The Question that Ugandans are asking is: Is the proposed health insurance scheme a worthwhile endeavor? Is it the Right time for Uganda to impose an additional tax on the population?

The Ministry of Health argues that the scheme is aimed at stimulating providers to avail good quality, accessible and affordable healthcare. However, the reality is that at the moment, health services in the country do not meet the required standards of accessibility, affordability, acceptability and quality. If Ugandans have to pay for services they must have value for money. Many health facilities are still ill equipped and having frequent drug stock-outs. There are still issues of health worker shortages. At the Local Government, the staffing levels are at 38.4%. Why should the population pay an additional tax for services yet the 30% tax they pay as P.A. Y.E cannot provide them even with the most basic services such as essential drugs?

The MoH has argued that services under the scheme for members will be available at any facility that has been accredited by the parastatal whether it is Private or Private Not for Profit (PNFP) or public facility. The purpose of accreditation in all sectors is to promote competition which will in turn motivate manager to improve their quality of service in order to gain accreditation. However, if issues of motivating health workers in public facilities are not addressed, how will health workers be committed enough to serving the population? Besides raising resources, how will the MoH promote good governance, and leadership in facilities? How will the body ensure that money is being put to optimal use in public facilities?

What about the issue of equity? The scheme is premised on the presumption that people have money to pay for health. What about the poor? A rights based approach requires a focus on the poor and vulnerable. Resources should be directed to those with the greatest need. According to the Uganda Bureau of statistics, 31% of the populations live on less than a dollar a day. They cannot fend for themselves and therefore the Government is obliged to provide for them. However the proposed scheme does not address the issue of equity in access. What assurance does the Ministry of Health have for those with no income? Will they be able to access services? In Ghana, the national health insurance scheme has increased national coverage as of 2008 to 55%; access to health services has increased almost three-fold. However, challenges include undue delays in re-imbursements; the poor still suffer – no clear definition of the poor in the law, and children whose parents do not register are denied their right to access. Uganda must learn from this.

Moreover, the Ugandan public has not had ample opportunity to participate in the development of the law that is supposed to govern the scheme. A rights based approach (RBA) to decision making promotes participation so as to enhance transparency and accountability. The committee on the Economic, Social and Cultural rights, under Comment No.14 has reiterated that an important requirement for fulfillment of the right to health is participation of the population in decision making in matters of heath concerning them. Not much consultation has been done nationally on the proposed law as illustrated by the lack of basic awareness among the public about some key issues in the proposal law. Such a crucial decision to introduce a national health insurance scheme must be designed in consultation with the population that will be affected by this undertaking.

The April 15th 2009 Public Dialogue with over 200 members of Civil Society, the media and other stakeholders clearly revealed that the MoH has not regained credibility in the public eye. Many of the questions showed that the public worried about corruption and mismanagement of the funds. Cases cited included the mismanagement of the money from the Global Fund for TB, HIV/AIDS and Malaria in 2005 where over US $ 367 was regrettably not put to purposeful use as revealed by the audit of the PricewaterhouseCoopers confirmed by the 2006 Commission of Inquiry led by Justice Ogoola that found evidence of inflated figures. Three years down the road, only 2 persons of lower ranks have been prosecuted. Subsequently, any attempt by the Ministry of Health to raise public sources of finance will be suspect in the public health. There is therefore need for the Ministry of Health to build credibility before any form of public financing for the health sector is solicited.

From the Private Sector, Dr. Ian Clarke, of the International Hospital Kampala (IHK) argued that we need to look at what the expectations of this Scheme are and the probability that they will be met. He also argued that this is the wrong time to enact this Scheme because of the global recession that affects both Uganda and all of East Africa. The tax base is decreasing, while the population is increasing, and this will increase taxes. Uganda has about 31 million people, but only about 500,000 pay taxes directly and 85% of the population is rural. Employees currently pay 30% PAYE and 5% NSSF, and employers have many extra costs, including maternity and vacation leave, sick days, public holidays etc.
The proposed Scheme leaves many questions unanswered. Namely, a) how will medical personnel be paid for there services, either as fee for service or capitation? B) How will the government ensure the funds are not embezzled or used corruptly? C) How will this Scheme affect liberalization and the free market economy? Dr. Clarke argued that the Ugandan economy has grown the last 20 years due to the private sector, but this Scheme would take money away from the private sector, give it to the government, only to return it to the private sector.

Mr. Alfred Nuwamanya from the Non Governmental Organizations Forum (NGO) Forum who made a presentation on behalf of civil society recommended that
a) the management structure of the Scheme should reflect modern corporate governance practices so that it is transparent, accountable, independent and liberal regulatory body;
b) review the relevance of the scheme to the current socioeconomic situation in Uganda, including factors like the extended family and HIV/AIDS;
c) cooperate with the NSSF scheme by creating a comprehensive social protection law, instead of a separate health sector law
d) carry out an actuarial study to ensure this Scheme is sustainable, and
e) improve the public image of current social insurance schemes through a comprehensive sensitization programme.

Whereas domestic financing is welcome effort to bridge the funding gap, there still remains a lot to be done before the scheme can be introduced. Moreover, the introduction of the scheme must not be a means by which government will avoid commitments already made such as spending 15% of the national budget on the health sector. The Ministry of Health must therefore:

1. Address the issue of equity in access to healthcare within the Proposed National Health Insurance Scheme
2. Promote public participation in the development of the law on the scheme by holding nationwide consultations
3. Take practical measures to build its credibility and image so as to promote public confidence in the proposed scheme
4. Take measures to strengthen the health system in public facilities before the scheme is introduced
5. Explore the possibility and feasibility of having a single scheme for social protection