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HEALTH: Global South leads the way towards universal healthcare coverage

JOHANNESBURG, 11 September 2012 (IRIN) - An increasing number of developing countries are introducing universal healthcare coverage - and creating new models to do it - according to research published in The Lancet. Lessons learned from countries like Ghana, India and Rwanda are already shaping the way countries like South Africa are beginning to pilot their own bids for universal coverage.

In the early 20th century, two models of universal healthcare coverage emerged in the United Kingdom and Germany. The UK uses general taxes to fund publicly provided healthcare in its one risk pool model, while Germany’s multiple risk pool model relies on household premiums and payroll taxes, and relies on private healthcare providers. Industrialized countries like Japan, Canada and France have all implemented variations of these two models.

But countries from the global South are creating their own models, according to research by the Results for Development Institute and others, published in The Lancet as part of its universal healthcare coverage series.

The research, which surveyed nine developing countries in Africa and Asia (which are now part of a joint learning network on the issue) found that the new models vary considerably but have several common characteristics, including increased revenue and health budgets, larger risk pools and use of the private sector.

The rationale for moving to universal healthcare is also largely the same, according to lead author Gina Lagomarsino, a managing director at the Results for Development Institute. “In most cases, the move to universal coverage is a response to people feeling like they’re paying too much out of pocket for healthcare that they can’t afford or can’t even get because it’s too expensive,” she told IRIN/PlusNews.

Finding the funds

Nigeria used revenue freed up by debt relief to fund pilot universal coverage programmes for expecting mothers and children, while Ghana increased value-added taxes by about 3 percent in 2003 to fund its programme. Ghanaian policy makers noted that earmarking the increase for health expenditures made it an easier sell to voters.

“For Ghana, it became a major issue in the [2004] elections,” Lagomarsino said. “People were tired of what, in Ghana, had come to be known as the ‘cash and carry’ system of healthcare where people had to pay a lot out of pocket, so it became very political to create a system where everyone could have access.”

On average, countries had to increase government spending on health by as much as 11 percent to fund universal coverage efforts. Only in the Philippines did the government decrease spending, according to the research.

International aid accounted for more than a quarter of funding in only three countries - Mali, Kenya and Rwanda - where almost half of universal healthcare coverage was donor-funded, according to the research.

However, authors in an accompanying paper caution that increases in revenue have to be accompanied by better governance and population targeting to make a real difference.

Bigger pools and the public-private mix

While two-thirds of countries surveyed had multiple risk pools, which some argue foster inequality and increase administration costs, researchers found many countries were consolidating these pools into larger ones.

“Successful countries have been moving towards broader, larger risk pools where you have more of the population under one system rather than a fragmented one that, for instance, has separated pools for civil servants, the formal sector, the poor,” Lagomarsino said.

“Bringing everyone into one pool can make healthcare more equitable because everyone is entitled to the same set of benefits.” 

''For Ghana it became a major issue in the [2004] elections. People were tired of what, in Ghana, had come to be known as the 'cash and carry' system of healthcare where people had to pay a lot out of pocket, so it became very political to create a system where everyone could have access''
Most countries are also choosing to include the private sector. Of the nine countries surveyed, only Rwanda and Vietnam rely solely on public health providers. The majority of countries surveyed purchase health services from public and private service providers, allowing for varying degrees of patient choice in providers. Most reliant on the private sector is federalist India, where private health insurers bid to implement state health coverage. These companies are then tasked with enrolling people in healthcare plans, receiving state money based on the number of people enrolled.

According to Lagomarsino, advocates of the controversial system argue that because companies are paid per enrolled member, they are motivated to reach out to the previously uninsured in poor and rural communities. Detractors argue that it may also create a perverse incentive to poorly educate people on the package of services they are entitled to, ensuring that services remain underutilized and that companies’ payments to healthcare providers are limited.

Lagomarsino and her co-authors warn against the total exclusion of the private sector insurance in universal healthcare coverage, arguing that this can lead to two-tiered systems, in which poor people go to public facilities perceived to be of lower quality and those who can pay use private care. A mixed public-private system, by contrast, can use subsidies or other mechanisms to extend private care to the poor.

Although not included in the study, South Africa provides one of the world’s best examples of such a two-tiered system, Lagomarsino told IRIN/PlusNews. According to the Democratic Nursing Organisation of South Africa, 8.1 million South Africans pay to utilize the better resourced private sector while about 41 million rely solely on the public healthcare system in which some treatments, like renal dialysis, are rationed.

Brian Ruff, CEO of South Africa's largest private health insurance, Discovery Health, co-authored a commentary on inequalities in South Africa's health system in 2011. In it, he and his co-authors characterized the health system as deeply divided, with stark and growing differences in access and quality between public and private care - mirroring the inequalities between rich and poor in almost every aspect of South African life.

South Africa latest to join expanding club

But measures are underway to change this. Shortly after his 2009 inauguration as South African Health Minister, Aaron Motsoaledi began to move the country toward universal healthcare coverage through a national health insurance (NHI), convening a ministerial advisory committee of health experts on the matter. In 2011, the country issued its first draft policy document on the NHI, and in April 2012 launched the initiative in ten pilot districts nationally. While these pilot sites have been funded through a conditional grant, the NHI will eventually be funded through a dedicated fund.

South Africa’s Treasury Department had promised to release a policy paper in April of this year, outlining how the NHI would be funded, but it has yet to do so. In this paper’s absence, speculation remains rife as to how the government will fund its move to universal coverage.

llg/kn/rz

Theme (s): Health & Nutrition,

[This report does not necessarily reflect the views of the United Nations]

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