Proposed health insurance scheme: Some myths

Dr Augustine Mazvuru Correspondent
The resistance against the proposed National Health Insurance Scheme (NHIS) could be based on a myth from inappropriate branding of the scheme where stakeholders, especially labour, are made to believe that the NHIS is synonymous with salary deductions. This is not so.

While pay-roll deductions may not be disregarded, the Government still has a number of options from which to base a sustainable revenue raising matrix for the NHIS.

In Thailand’s highly successful universal health coverage (UHC) story, payroll contributions cater for only 12 percent of the population while the rest of the funding comes from central treasury.

Ghana meets 70-75 percent of funding needs for its NHIS from general tax funding, notably through a 2.5 percent national health insurance levy on VAT, which stands at 12.5 percent. The rest comes from other public funds and development partners, while pay-roll contributions account for only 3 percent.

Countries that have made significant progress towards universal healthcare (UHC) have done so largely through public financing to cover the majority of citizens.

The high levels of unemployment and the dominance of the informal sector in Zimbabwe diminish the prospects of pay-roll deductions as a viable funding mechanism. By default, the success of the NHIS in Zimbabwe shall depend more on government general revenue than payroll.

In the same manner, the government’s commitment to the NHIS shall be gauged by the extent to which it is prepared to allocate resources beyond whatever can be a contributed by those in employment. If this commitment may falter, the NHIS will be treading on slippery ground.

Airing her views on the NHIS to the Parliamentary Portfolio Committee, the Civil Service Apex Chairperson Ceclia Alexander mourned, “it should be brought to the attention of the government that the milking cow has no milk any more. Civil servants are now overtaxed…”.

The limited capacity of pay-roll taxes, especially in view of the already existing high levels of deductions should spur policy-makers to consider other possible sources of funding. Below are some health funding strategies that can be domesticated for the Zimbabwean NHIS:

Significant funds can be raised by simply increasing the efficiency of revenue collection and ensuring effective use of what has been gathered. WHO reports that typically between 20-40 percent of healthcare funding is wasted through fraud and inefficiency. The Zimbabwe 2017 Auditor General’s report reveals rampant pilferage at state-owned hospitals. Significant capacity can be redeemed by curbing corruption along the healthcare delivery value chain. As it is in all facets of economic endeavour, there is no better substitute for good corporate governance even in healthcare.
Funds for the NHIS can be mobilised through reprioritisation of the national budget. The 2001 African Union Abuja Declaration recommends that states set aside at least 15 percent of their national budgets for health. The 2016 Zimbabwean national budget accorded the health sector only 8.3 percent. Amidst competing needs and priorities, hard choices can still be made by the government to commit more resources towards healthcare.
More than 10 percent of funding for the Rwandan NHIS comes from external cooperating partners. The Zimbabwean NHIS can also benefit from international aid as more than 50 percent of health expenditure in Zimbabwe has been financed through external support over the recent past. However, only a robust and transparent governance system for the NHIS has the potential to attract benefactors.
The NHIS can also receive support from innovative financing. In the 2008 – 2009 budget, the UK raised about USD100 million for the NHS from parking charges alone. Zimbabwe is richly endowed with natural resources whose extraction or exploitation could be levied and proceeds channelled towards healthcare. Equally so, more funding can be sourced from sin taxes on commodities such as tobacco and alcohol. Though central treasury may object to policies that intrude on its traditional sources of revenue, it is the duty of health economists and all interested stakeholders to present a case about the centrality of health to all dimensions of national socio-economic progress. After all, a healthy nation, they say is a wealthy nation.

Another myth that needs to be dispelled is the belief that national prosperity is a prerequisite for progress towards UHC, vis-a’-vis adoption of the NHIS.

While an economic boom would make resource mobilisation much easier, abounding evidence suggests that the key issue is policy and political commitment. Countries spending the same amount of money on health would still have different health outcomes.

A low-income country can still make that bold decision to pursue UHC. Thailand, for example, achieved immense health coverage despite spending much less than richer countries. The size of Rwanda’s economy is less than half that of Zimbabwe but more than 92 percent of Rwandese are covered.

Other comparable African countries like Gabon and Mali have also realised milestones towards UHC. Expressed in different words, there is neither a best nor bad time for a country to embark on the journey towards UHC, but a good legislative and policy framework can make a huge difference.

Recommendations

A pre-payment based health financing model should be adopted so that healthcare services are accessed for free at the point of use.

Whatever funding mechanism may be chosen for the NHIS; the scheme should not leave out those without the capacity to contribute. Access to healthcare services should be purely based on need and not the ability to pay. Taxes and insurance contributions can be consolidated into one pool to cover all citizens.
Instead of a voluntary NHIS, a population-based pool where all capable citizens contribute towards common good should be pursued.
The government national budget should allocate more resources to healthcare. The Abuja Declaration guide of 15 percent of the annual budget should be the minimum.
Other than identifying new sources of funding for healthcare, focus should also be on ensuring effective and efficient utilisation of the available resources.
Despite the current economic challenges, the implementation of the NHIS should not be delayed. The attainment of UHC is more of a policy chartered journey than a destination. Even if full UHC may never be achieved during the days of our living, every little gain on health goals is worth the trouble.
Given the gigantic nature of the NHIS, a phased approach to the implementation may be helpful in the assimilation of requisite changes and adjustments.
The NHIS policy framework document should be inspired by domestic context and success stories from around the world.
Policy-makers should ensure that the proposed NHIS shall not fall victim to the scourge of corruption so endemic in our society.
To enhance the participation of prospective investors and benefactors, a robust corporate governance system should be established to provide a solid stewardship for the NHIS.
To dispel misconceptions and ensure critical stakeholder buy-in, there should be a public awareness exercise to inform citizens about the purpose of the NHIS and how it shall be implemented.
The health insurance sector in Zimbabwe should be accorded adequate regulation to unlock its potential contribution towards UHC.

Conclusion

WHO reports that every year, nearly 100 million people are driven into poverty as a result of paying user fees at healthcare facilities.

Given Zimbabwe’s dire poverty profile, and that existing health insurance covers less than 10 percent of the population, there is no doubt that the majority of citizens are faced with tough financial hurdles when in need of healthcare services.

A preponderance of citizens cannot remain on the fringes of healthcare without dreadful consequences for the nation.

The grim statistical indices describing the healthcare status of our nation should jostle us into action. More financial resources need to be urgently mobilised for the healthcare system.

Promoting the health of citizens and giving them a chance to live longer pays a dividend on poverty reduction and economic development.

Other than fulfilling a fundamental and constitutional right, according all citizens unfettered access to healthcare is probably the greatest empowerment ventures our policy-makers could ever dream of.

On the political, moral and ethical frontiers, a successful NHIS in Zimbabwe shall validate our claims to the virtues of national unity, ubuntu and social cohesion.

Though tough decisions may have to be made regarding its implementation, the proposed NHIS presents the nation with a golden opportunity to progress towards universal health coverage.

This article is the third and final instalment in a series of articles by Dr Augustine Mazvuru under the title “The Proposed National Health Insurance Scheme in Zimbabwe: A Golden Opportunity Amidst Stakeholder Resistance and Myths”. Dr Mazvuru is doctoral candidate focussing on universal health coverage. For feedback – email address: [email protected], cell : +263 7122 34300