Absence of Health Insurance Markets will impede Universal Health Coverage

Irrespective of the scale of operation or model adopted, unless a market for health insurance is well established – it would be very difficult for health insurance to take proper root in Sub-Saharan Africa (SSA) as a viable financing mechanism for healthcare. A health insurance market occurs when individuals and insurance companies communicate with each other to buy and sell health insurance. On the demand side – individuals who wish to buy health insurance do so in order to maximize their ‘utility’; while on the supply side – insurance companies who wish to sell health insurance do so to maximize their ‘profits’ (or ‘surplus’). And both sides communicate with each other through the medium of health insurance premiums.

The failure to allow this basic arrangement to happen in SSA has given rise to all sorts of programmes and projects that have never left their pilot stages. Meanwhile, as countries continue to explore the promise of health insurance as a significant alternative source of funds for health care, many have been led to undertake schemes that do not take this very perception into account.

Contrary to common knowledge, health insurance is ‘not a health intervention’, rather it is a ‘financial instrument’ that allows easy access to health care. Part of this misunderstanding stems from the influence of donor agencies that are largely averse to using ‘market-based solutions’ in resolving critical development problems; but the main reason for not encouraging countries in SSA to develop health insurance markets is because of the notion of wide spread poverty in the sub region. Nevertheless, we know that even for poor people, market-based solutions have proved to be delivering much better value to them than traditional approaches. Manufacturers of fast moving consumer goods and Mobile Telephone companies in SSA who are already profiting from this knowledge have managed to turn this group into effective consumers for their products and services ◊◊◊

Universal Health Coverage: more of a managerial challenge than policy reform


Managerial Challenge - managing the pateint experience

International health development has had its fair share of fads and slogans that in most instances tend to divert attention from what is really important. As the post-2015 debate and consultations on the replacement Millennium Development Goals continue; there appears to be a common understanding that irrespective of the goals that emerge, the targets should aim towards achieving universal health coverage rather than assumed proportions of the population.  

But universal health coverage (UHC) is not a new concept or development. Previously, the WHO has massively promoted this idea in the 1980s through the ‘Health for All’ by the year 2000 agenda that came to be popularly known as the Alma Ata Declaration. And the era of health sector reforms that followed this campaign in the 1990s consequent upon the macro-economic adjustment programmes of the IMF and World Bank in many developing countries; also aimed at achieving better healthcare for all. While the debate on how to reach this goal globally has largely focused on further reforms of health systems, especially funding healthcare; little attention is paid to what really matters – outcomes.

No doubt policies on improving financial access to healthcare for everyone that could contribute to improved health status are essential; they are not sufficient on their own to achieve better physical and mental health outcomes across all demographic and socio-economic groups. Experience elsewhere (and even in Nigeria) has shown that to get to this level of change within the health sector, managerial capacity, which provides the link between defined policies and their implementation is crucial.

In the particular context of Nigeria, other than concerns about the ability of individuals and agencies responsible for leadership, planning and evaluation, decision-making and regulation of the health sector; the prevailing political-economy of Nigeria being a federal country (even just in concept), and other factors outside the health sector such as macro-economic performance, infrastructural development, educational levels and cultural norms impose added managerial challenges. Therefore, as the summits, conferences, workshops and seminars in support of universal health coverage rage on, it is important that significant attention is paid to this point. And may be, it is also time to make the complex very simple ◊◊◊


Universal Health Coverage: how health insurance may help

In as much as health insurance shows great promise in improving financial access to healthcare, its ability to promote fairness (equity) is limited by the economic capacity of the population. For this reason, national health insurance programmes in many sub-Saharan African counties have only succeeded in reaching a relatively small formal sector, while community-based pre-payment schemes targeting rural and urban low-income households are yet to be scaled-up for impact.

Theoretically, there is an assumption that it is possible to attain universal health coverage (UHC) by making health insurance coverage mandatory. While this is yet to be fully tested even with the ongoing experiments in the United States of America with ‘Obamacare’, and several tiers of coverage in Indonesia – there is great anticipation for such a policy to be true and thus a high demand for it even in Nigeria. But as health insurance systems involve a highly complex combination of incentives to providers, consumers and third-party fund holders; mandatory health insurance coverage will necessarily require a ‘market for health insurance with some regulation’. This is to ensure that while the beneficial effects of universal access to care are being extracted, the unintended detrimental consequences of lack of equity and inefficiency are modulated.

And critical to success, is to ensure that access to health insurance is not dependent on income, by identifying those for whom premiums need to be fully paid for or subsidised. Apart from having local government agencies or community-based organisations to be well organised and have the skills to implement prospective means tests of the population, there needs to be a proper role re-definition of public sector (government) away from direct implementation to oversight of the system. While guarding against corruption and rent-seeking for example in Nigeria, this role could entail: defining a cost-effective package of standard minimum benefits that must be covered in all insurance plans; supplying information to consumers regarding their choices; subsidising (or fully paying) the premiums of low-income groups; and regulating the activities of health insurance companies or agencies which may be for-profit or non-profit. The market for mobile telephoning that is accessible to all socio-economic and demographic groups, where the Nigerian Communications Commission plays this public sector role effectively provides a good model for practice ◊◊◊