Pooling Resources and Health Risks for UHC Advancement in...

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9Pooling Resources and Health Risks for UHC Advancement in Uganda: An Assessment of Current Mechanisms and Policy Options

Sebastian Olikira Baine, Aloysius Ssennyonjo, Remco van de Pas, Freddie Ssengooba

Key Messages

• PoolingoffinancialresourcesandhealthrisksiscriticaltotheUHCaspirationsinUganda.However,itisconstrainedbyfragmentationandhighlevelsofout-of-pocketpayments.

• There is need to improve prepayment mechanisms by leveragingthe already existing pools, such as government funding, donoraid, Community-Based Health Insurance (CBHI), private healthinsurance(PHI),socialsecuritymechanismssuchasNationalSocialSecurity Fund (NSSF) andmicrofinance schemes.This should bedoneinwaysthatallowtheconsolidationofthepoolsinthemediumtermandguaranteeaccesstohealthcareforallUgandans.

• The health insurance market in Uganda is underdeveloped,fragmentedandcharacterisedbylowcoverage,limitedrisk-sharingandinequities.Creatingseparatefinancialpoolsfortheformalsectorandtheinformalsectorislikelytoinstitutionaliseinequities.

Citation: F. Ssengooba, SN Kiwanuka, E. Rutebemberwa, E. Ekirapa-Kiracho (2017), Universal Health Coverage in Uganda: Looking Back and Forward to Speed up the Progress. Makerere University, Kampala Uganda.

185Chapter 9: Pooling Resources

• TheNHISarchitectsshouldensurethatthepoorandvulnerablearebroughtonboardrightfromthestart.NHISproposalstostartwiththe financial and risk pools for the formal sectorwould entrenchinequitiesintheproposedNHIS.

• Publiclyfinancedandprovidedhealthservicesarerelativelyequitableand sustainable. Therefore, the national health budget should beconsideredthepreferablepoolingmechanismintheshorttomediumterm.

• ProgressiverealisationofasinglepoolinUgandashouldconsiderthepoliticaleconomyfactorsthatmayconstrainorfacilitatethisprocess.Stakeholderinterestcouldbediverseandtheseneedtobemanagedcontinuously.

• Alongside improvements in financial and risk pooling, efforts toaddressillhealth,transportbarriersandsub-optimalfunctionalityofhealthfacilitiesshouldbeprioritised.

Introduction

ThejourneytowardsUHCrequirescountriestoensurethattheirpopulationsaccessasetofservicesofgoodqualityaccordingtoneedwithoutsufferingafinancialburden(1).Thecostsofhealthcareservicescanconstitutebarriersto access, especiallywhere people have to pay out of pocket at the pointofuse.Directpaymentforhealthcaremaybeinequitableandregressiveasaccessdependsontheabilitytopayandnotonneed(1).Asaresult,over100millionpeopleworldwidearefacedwiththedecisiontoeitherforegohealthcare access or become impoverished because of health care consumption,therebyundermining the advancementofUHCobjectives(2).The journeytowardsUHCentailsimportantpolicydecisionsandunavoidabletrade-offstoreduceout-of-pocketpaymentsthroughdirectandindirectprepaymentmechanismsthenationalhealthbudgets(3).

Resource pooling is based on the principle of risk-sharing. It ensuresthattheriskofillhealthisspreadout–suchthatnooneindividualsuffersthefullcostofhealthconsumption.Ideally,poolingensuresthat“thehealthysubsidisethesick,whichalsooftenmeansthattheyoungsubsidisetheold,andtherichsubsidisethepoor”(4).Ithasbeenperceivedasanactofmutualloveandcompassionthatstrengthenssocietiesbystrengtheningsocialprotectionandmutualsupportsystems(5).Resourcepoolinginthisrespectassumesa

186 Universal Health Coverage in Uganda- Part III

directorindirectprepaymentorfinancialcontributionstoprotectagainsttheriskofincurringunaffordablemedicalexpenses–thusprovidingasafetynetagainstunplannedhealthcostsbyspreadingrisksamongindividualsandathirdpartyorganisationsuchasagovernmentoraninsuranceagency(6).Pre-paidfundsforhealthservicescomefromseveralsources,suchasthegeneralgovernmentbudgets (taxes), voluntaryhousehold insurance contributions,employer contributions to insurance, mandatory insurance contributions(payroll taxes)andforeignaidfunds.Oncemobilisedandcollected,“suchfundsareaccumulatedorpooledonbehalfofsomeorallofthepopulationinseveralpools.Thesepoolsmayincludehealthinsurancefunds,(or)healthbudgetsatnationalorlocalgovernmentslevel”(4).

Fragmentation of Pools Undermines Progress towards UHC

Themostcommonchallengetofinancialresourcepoolingisfragmentation.Fragmentationarisesfromdifferencesinthewaypooledfundsareorganised,utilised,allocatedanddistributed toadvancepolicy reforms suchas socialprotection and UHC (3). Fragmentation hinders redistribution andefficiencyintheuseoffunds.Consequently,fragmentationunderminesrisk-sharing and cross-subsidisation. It also leads to systemic inefficiencies duetotheduplicationofadministrativeandmanagementfunctions(4).HenceprogresstowardsUHCmusttakeintoaccountexpandingtheresourcepoolsandminimisingthefragmentation.

Fragmentation may occur in several forms:

a) Populationfragmentation:Thisiswherefundstoservicetheneedsof variouspopulation groups is kept in separate poolswithnoorrestrictedpossibilityforcross-subsidisation.Forexample,compulsoryinsurance contributions may be managed separately for thecontributors(usuallytheformalsectoremployees)whilegovernmentfundsservetherestofthepopulation.Internationalevidenceshowsthatdevelopingseparatepoolsforthepoorinstitutionalisesinequitiesintermsofdifferentialpercapitaspendingbetweenpoolsfortherichandthepoor(7).Italsoenhancesinefficienciesasseparateschemesoperatewithinthesamegeographicalarea.


b) Geographical fragmentation: This occurs where the resourcescollected with a distinct administrative zone can only be used inthat area with no mechanism for redistribution to other zones.Thisdisadvantages thepoorer and smaller regions; but alsowherepopulationsbeingservedaremobileacrosszones,theoverallaimofimprovingaccessisrestricted.

c) Risk-based fragmentation: Insurance for particular risks, such asthird-partyinsuranceformotorists,targetsaparticularriskorgroupofrisks.Thereisatendencytohavesomepoolscoveringriskierpeoplethan others.Without a complicated risk equalisationmechanism,poolfragmentationoccurs.

d) Disease-based funds: Funding streams for interventions targetingspecific diseases, whether from domestic or international sources,constitutefragmentedpoolswhichmayunderminetheintegrationorcross-cuttinguseoffinancialresourcestoaddresshealthcareneedsinaholisticmanner.

With the exceptionof thegeneral governmentbudget, cross subsidisation(resourcesharingbetweenhealthyandsickorwealthyandpoor)inhealthspendinginUgandaislimitedbecauseofpoorlydevelopedandfragmentedpooling systems(8).Resource poolingmechanisms inUganda include thenational budget, voluntary insurance schemes (private health insurance,healthmembershiporganisationsandcommunity-basedhealth insurance),householdpools,cooperativeandsavingsocietiesanddonorfunds(9).

The Out Of Pocket Expenditures (OOPs) are high but underminethebenefits of pooling resources as individuals pay at thepoint of use ofhealthservices.Donorsupportisequallyhighbutmostof it isoff-budgetandbenefitsonlythetargetedpopulation(9).Thisisfurtherconstraintonpooling asdonor support becomes increasingly channeled to autonomousnon-facility-basednot-for-profitorganisations(10).

Thischapterexamineseachofthetypesofpoolingmechanismsintermsoftheirstrengths,weaknesses,opportunitiesandthreats.Italsoassessestheproposedpathways toenhancepoolingand riskprotection inUganda. It,finally, proposes considerations regarding the achievement ofUHC in anequitable,sustainableandefficientmanner.


Leveraging the National Budget for UHC

Thenationalbudgetisauniversalpoolingarrangementinwhichtheentirepopulationhasaccesstopubliclyfinancedhealthservices.Theseservicesmaybeprovidedbypublicorprivatefacilities.Governmentrevenuesarethemainformofresourcepoolingformanycountries,includingUganda(11).

Uganda’s national health budget is provided through theMinistry ofHealth(MoH)andsemi-autonomoushealthorganisations(11).Budgetsforlineministries alsocontribute tohealth improvements throughaddressingother determinants of health. Generally, the MoH competes with othersectors and government agencies for a share of the national budget. Theamountoffundingavailabledependsonthetaxrevenuesandtheoutcomeofanegotiatedprocessforresourceallocationthatisvulnerabletochangesinpoliticalprioritiesorexternalshockssuchasconflictsordisastersthatrequireadditionalspending.Thepoliticalnatureofbudgetaryallocationscouldleadto irrational and inefficient decisions and prevent needed health reforms.Theserealitiespartlyexplaintheunderfundingofhealthprogrammesandpoorqualityservicesthatarecommonintax-basedsystems(12).ThisprobleminUgandaisamplifiedbythesmalltaxbaseandseeminglylowprioritisationofhealthspendingamongpolicy-makers(seeResourceMobilisationchapter).Withasmalltaxbase,theoverallshareofasmallnationalbudgettranslatesintoaninsufficientfinancialallocationpercapitathatmayremaininadequatetosupportambitiouscoverageandfinancialprotectionagendassuchasUHC.

Anationalbudgetisnon-contributoryasfundscomefromthenationaltreasury through largely tax revenue and donor aid that flows throughthe national budgetary systems (budget support). Pooling funds throughnationalbudgetsensures that thefinancialburdenofaccessinghealthcareis spread over the entire population. All citizens, including the informalsectorworkers, the vulnerable and the poor, are eligible to access serviceswithoutdirectpaymentsatthepointofconsumption.Inclusionofthewholepopulation in onepoolmakes it potentially effective in ensuring that theentirepopulationsiseligibleandincreasesthefinancialviabilityofthispool.Nationalhealthbudgetsbenefit fromeconomiesof scalebecauseofbeingasinglepoolandthecomprehensivenessofcoveragepreventsriskselectionproblems and reduces the inequitable access to services.National budgetsareinprinciplemoreabletocontrolthecostsofserviceprovisionbywayofcombiningtheauthoritytodeterminetheincentivesandtheservicepackage.However, national budgets are prone to inefficiencies because of limited


managerialauthoritytomonitorfundflowsandutilisation(13).Therefore,asevidenceshows,torealisethebenefitsofbudgets,theyneedtobecoupledwithotherpurchasingreformstoensuretheefficientandsustainableuseofresources(seethePurchasingchapter-10).

Although government budget systems should ensure the provision of“free”orsubsidisedhealthcaretothewholepopulation,therealityonthegroundisdifferent.Inmanylow-andmiddle-incomecountries,includingUganda,healthservicestendtobeusedmainlybyurbanhigh-andmiddle-income households. Benefit incidence analyses in seven African countriesthatrelymainlyonstate-financedmedicalcareshowedthispatternclearly.The poor use health services less than the rich – partly owing to limitedgeographical access, inadequate service quality, informal fees and therelativelyhighopportunitycostsof seekingcare(14).Thepoormainlyuselesscostlyoptionswhiletherichdisproportionatelyusecostlyoptionssuchashospital-levelservices.Thepeoplelivinginremoteareasoftenpaymoreintransportcosts inordertoaccessurbanhospitals(15).Thisobservationhasimplicationsforhowgovernmentbudgetscanbeleveragedtoimprovepro-poorbenefits.Policychoicesinthepurchasingandallocationfunctionincludefundingprimaryhealthcareservicesandfactoringinequityfundsforruralhealthservices.Insomecases,thegovernmentmayhavetocontractprivate providers to provide health services in areas where provision isinadequate.Forexample,governmentbudgetshavebeenusedinUgandatosubsidisehealthservicesintheprivatenot-for-profitsectorinUganda(16).

Uganda’s Experience with Voluntary Health Insurance Systems

Beyond the national budget, small voluntary prepayment risk pools existinUganda.TheseincludePrivateHealthInsuranceInstitutions(PHIs)andCommunity-BasedHealthInsuranceSchemes(CBHIs).Thereachoftheseschemesisgenerallylow–mostofthemprovidemedicalcoverforaboutonepercentofthepopulationinUganda(17).Voluntaryinsuranceschemesarelikelytoattractpeopleinthewealthiestquintilewithasecondaryorhigherlevelofeducationandlivinginurbansettings,especiallyKampala(17).Thefollowingsub-sectionsassessthepotentialofthesevariouspoolstoadvanceUHCinUganda.


Private health insurance

Private health insurance is a voluntary prepayment system in which theinsuredpaymarket-ratedpremiumsforadefinedhealthbenefitpackageoveraspecifiedperiodoftime.Ugandahadonly19licensedinsurancecompaniesin 2006 (18).Thenumber has gradually increased over time.By January2017, the Insurance Regulatory Authority of Uganda (IRA) had grantedlicences to 93 firms to transact insurance businesses.Of these, only ninefirms offered life insurance policies and the rest were for non-life/generalinsurance.By2015,theauthorityhadalsolicensed10healthmembershiporganisations,includingAfricaAirRescueHealthServices(Uganda)Limited,Case Med Care Limited, International Air Ambulance, InternationalMedicalLink(Uganda)Limited,KampalaInternationalMedicalCentreandSt.Catherine’sHospital(19).Hence,somePHIsarefacility-based,majorlytargetingemployeesofcorporateentities.Afew,however,havestrategiessuchastheprovisionmicro-creditservicesfortheenrolmentofboththeformalandtheinformalsectors(20).

Only a small number of people in urban settings and a negligibleproportionof the ruralpopulationcanafford thehighpremiumschargedbyprivatehealthinsuranceschemesandhealthmembershiporganisations.AlargeproportionofthepopulationvoluntarilycoveredbyprivatehealthinsuranceorprepaymentmedicalschemesliveinKampalaandotherurbanareas.Theinsuredpeopleareusuallycoveredbytheiremployerswithvaryinghealthpackagesdependingonrankintheorganisation(18).

Private commercial health insurance is profit-oriented and prone tomarketfailuresandequitychallenges(12).Thereisnosubsidisationofthepoorandthesicklybytherichandhealthiergroups,andthisraisesequityconcerns(21).Itbenefitsonlythosewhocanaffordtopayhighpremiumsandthepoorareexcluded.Ifpremiumswerereducingasprivateschemes’savings increasedover time, the lawof largenumberswould apply in thelongtermandthelow-incomeearnerswouldincreasinglyaffordthelowerpremiums,hencemakingprivatehealth insurance equitable.This assumesthatthemarketforcesofdemandandsupplywouldnecessarilyapply.

Theoretically,privatehealthinsurancecouldhelpgovernmentssavefundsbyspendinglessonthoseprivatelyinsured.Thesesavingscouldbeinvestedintheprovisionofbetterqualityhealthservicesandincreasetheirquantityfortheuninsuredpopulation,includingthepoorandothervulnerablegroups,henceaddressingtheequityconcerns.However,asnotedalready,promoting


thisPHIenhancesthefragmentationofpoolsandcouldleadtodualsystemsthatareinherentlyinequitable(7).ThisunderscorestheminimalroleofPHIinsupportingprogresstowardsUHC.

Community-based health insurance

CBHIsinUgandastartedmainlyasaresultofeffortsbytheinternationaldevelopment partners. Communities were supported to come togetherto create resource pools.TheCBHIs leveraged existing traditional groupssuchasburialsocieties(22).ThesesocietiesstartedtoaddresscommonlocalproblemsandprovidedapotentialplatformfortheinitiationofCBHI,astheexampleinBox1elaborates.

Text Box 9.1: The birth and maturation of CBHI in Kigezi region, southwestern Uganda

Thehilly terrain, impassableroads,especiallyduringtherainyseasons,andcostlyandunaffordabletransporttomostlocalresidentsgavebirthtoalocalarrangement(useoflocallymadestretchers)toaddressthetransportproblemintheKigeziregionofUganda(33).Membersweremobilisedandinformedabouthealthinsuranceandrelatedbenefits.Currently,almostallfamiliesinthisregionbelongtosuchsocietiesandsubscribetoaCBHIschemeintheirarea.Membersaregivenidentitycardsthatincludenamesandphotographs,whichtheypresentatthehealthfamilywhenseekinghealthcareaswellasareceipttoprovideevidenceofpayingthepremium,andtheyarerequiredtopay appropriate co-payments.Chairs of the societies participate in the col-lectionanddeliveryofpremiumstotheschemeoffices.Managementofsuchschemes involves the technical staff and community representatives(25,52).Benefitpackagesincludeallservicesdeliveredbythefacilitiesparticipatingintheschemeanddonotcovermembersreferredtootherhealthfacilitiesforser-vicesnotlocallyavailable.Theaboveconstellationoffactorshascontributedtotheflourishingoftheschemesinthisregion.

Source: Authors’ analysis

CBHIoffersaplausiblepathtowardsuniversalhealthsystems(23,24).Suchsystemsenhanceaccesstohealthcareforlow-incomepeopleandthepoorwhowouldotherwisenothave adequate financial protection arising fromgovernmentfunds(23).ThereisevidencethatCBHIsprovidesomefinancialprotectionbyreducingout-of-pocketspendingandimprovescostrecoveryforthehealthproviders(especiallyhospitals)(24).Forexample,thefrequency


ofsellinghouseholdassetssuchas land,animalsandtools inordertopayhospital bills significantly reduced amongmembers of theKisiizi hospitalCBHI(25).

However, thepotential ofCBHI to advanceUHC isunderminedbytheir limitations(26).MostCBHI schemes are small and rural-based, andtheirabilitytoraisesignificantresourcesislimitedbythelowincomesofthemembers.Thefinancialprotectionofferedbytheseschemes isconstrainedby the small size of the pool and low premiums. They are vulnerable tofailureandtheirsustainabilityisdebatable.Onesinglelargehealthriskcanleadaschemetobankruptcy.Theyaresubjecttocovariantrisksbecauseinsomeareasanindividual’shealthisnotindependentfromthehealthofhisorherneighbours,especiallywhenanepidemicoranaturaldisasteroccurs(23,24).ThefinancialstabilityofCBHIschemesisalsoaffectedbyproblemsofadverseselectionthatareintrinsicinvoluntaryprepaymentschemes.Theyalmostalwaysneedsupplementationwithgovernmentsubsidiesanddonorassistance,especiallytocoverthepoorestmembersofsociety.

TheCBHIsoften suffer from lowenrolmentand limitedretentionofmembers.Thereasonsforlowenrolmentinclude:lackofunderstandingoftheneedforhealthinsurance;lackoftrustinthemanagersoftheschemes;expectationofhigherbenefits than the costs; and lackofhigh-level socialcohesion in the communities (22).Community awareness aswell asmasscampaignsaboutCBHIanditsbenefitsarerequiredrepeatedly,especiallyinruralareas,inordertoincreasemembershipandtoensurethesuccessandsustainabilityofCBHIschemes.

CBHI schemes also face difficult issues that affect their equity,effectivenessandsustainability.Theseincludeadverseselection,moralhazardsandunsatisfactorymanagementpractices.Communityinvolvementvariesalot,andtheflowofdonorandgovernmentsupportisirregularandunstabletoguaranteeeffectiveaccess,especiallyforthepoorgroupsinCBHI(26,27).The reportof theCommissiononMacroeconomics andHealthcalled forincreased support forCBHIs and for the establishment of a co-financingscheme that complement the premiumspaid by individuals towards theirhealthinsurancewithgovernmentordonorfunding(29).Thishasreceivedanegligibleresponsebutappropriategovernmentinterventionisnecessarytoensurethesuccessoftheseschemesthroughsubsidisingpremiumsforthepoorerpartsofthecommunityorcontractingproviders fortheschemetoservepoorgroupsthatareunabletoaffordthepremiums.


Unlike PHIs, the Uganda Community-Based Health-FinancingAssociation(UCBHFA)wascreatedastheumbrellaorganisationforCBHIin Uganda. The UCBHFA provides coordination, technical support andadvocacy for all CBHIs inUganda (30). In 2011, there were 24CBHIsunder the UCBHFA, with overall membership of 120,000 people (31).Two basic designs exist, namely: a) facility-based CBHIs; and b) non-facility-basedCBHIs.Inthefacility-basedset-up,thehealthfacilityactsasthe fund-holder, schememanagerandserviceprovider.Themembersonlyaccess services from that facility or its subsidiary.The non-facility CBHIschemes have fund holding and management structures independent ofserviceproviders.Schemememberscanaccessservicesfromabroaderrangeoffacilitieswithinanetworkofprequalifiedproviders(32).Theyareofferedmorechoiceacrosssuchnetworks.TheCBHIsinUgandaarediverseindesignandimplementationandthereisnonationalmodelforscale-up.AgenciesliketheUCBHFAandSaveforHealthareleadingeffortstofederatevariousCBHInetworkstoexpandtheriskandresourcepoolsaswellasfacilitatetheharmonisationofthemodelsinthecountry.Theseexperiencesareelaboratedintextbox9.2.

Text Box 9.2: Federating community health financing schemes into unions in Uganda

Initially, the community health financing (CHF) schemeswere either pureinsurance or pure credit ormixed. From2006, under the auspices of SaveforHealthUganda,theCHFsstartedfederatingintounions.ByDecember2016,threeunions/networksofschemeshadbeenformed,bringingtogetheratotalof91CHFschemescovering31,502individuals.Consequently,severalchangeshaveoccurred:

a) Theemergenceofnewstructuressuchasaunionparliament,unionboardandunionsecretariattoenhancethemanagementandgover-nanceofthenetwork.

b) Rolesdifferentiationwithi)SaveforHealthundertakingeducation,promotionandsupport;ii)individualschemesperformingmobilisa-tion,premiumcollectionandbillsapproval;andc) theunioncon-ductingfundmanagementandadvocacy.

c) Shifts inpools atunion level.Relatively largepools forhealth carefunds,followedbysmallmanagementfundsandsmallerreservefunds.

d) Expandedprotectionofschemesandschememembersfromfinancialcatastrophe.

Source: Mukaire, 2017 (53)


Additionally,theCBHIexperiencesarenotsharedthroughoutthecountry.Mostschemeshavebeenimplementedinthecentralandwesternpartsofthecountry(33).Nationalroll-outofCBHIrequiresfeasibilitystudiesinregionslikethenorthandeastwhereCBHIimplementationhasbeenverylimited.

The quest for National Health Insurance (NHI) in Uganda

Overthelastcoupleofdecades,therehavebeeneffortstoestablishaNationalHealthInsuranceScheme(NHIS)inUganda(34).The2014NHISBill(35)proposes the establishment of theNHIS for the formal sector employeescomplementedbyCBHIfortheinformalsectorandPHI.TheNHISBillproposesmandatorycontributionsfromtheemployeesandtheiremployersintotheNHISfundtoprovideinsurancecoverforthesubscribersandafewfamilymembers.TheUgandanNHISmodelisbasedontheSocialHealthInsurance(SHI)systemsthatbeganinGermanyattheendoftheSecondWorldWar.ChancellorBismarckofGermanyinitiatedtheworld’sfirstsocialhealthprotectionsystemwiththepassageoftheNationalHealthInsuranceAct in 1883(12,36). Since then, some countries have achieved universalcoveragebasedonSHIsystems(37).Bydefinition,SHIisbasedonpayrollcontributionsmadeby employers and employees. It is often viewed as aneasy and effectiveway to raise resources to improve health partly becausetheemployerdeductscontributionsdirectlyfromsalaries,andpartlybecauseemployersmaybewillingtopaytheircontributions(12).Thismodelismorefeasiblewherealargeproportionofthepopulationisinformalemployment,asituationthatisafarcryfromtherealityincountrieslikeUganda.

Despite thesebenefits,SHIs face severalchallenges thatwillconstrainthepotentialoftheNHISmodeltobeproposedinUgandaasameansofadvancing UHC aspirations(38–40). First, SHI contributions cover onlythose in employment and cannot generate sufficient resources to covermorepeoplethanthosewhocontributed.Governmentsubsidiesareneededtosupplementpayrollcontributionsifmorepeoplearetobecovered.ThepotentialforSHItoraiseadditionalresourcesforhealthdependspartlyontheexistingpoliticalenvironmentandpartlythesocio-economiccharacteristicsofacountry.Itisoftennotpossibletoraiseadditionalresourcesinstagnanteconomiesandthosewithgrowingproportionsofworkersintheinformalsector.Toassessandlevytaxesontheincomeofself-employedworkersbringabouthighadministrativecostsandpotentialinefficienciestotheNHS.Theincomesofinformalsectorsareunevenandfluctuateovertime(12,41).


Uganda has a large informal sector (about 80 per cent) and highunemployment,withabout19.3percent livingonlessthanadollaraday(33). The payroll-based contributions to SHI is, therefore, likely to besmall.A lookat theNSSFcontributions shows thatabout10percentofthepopulationisformallyemployed.Thegovernmentisthemainemployer,whichmaymake it easy for the government to deduct the contributionsfromcivilservants’salaries.However,makinghealthinsurancecontributionsmandatory is likely to increase the costof labour inUganda– aproblemsimilar to theonethat informedtheUgandangovernment’sunwillingnesstosetaminimumwage(49).Theselabourmarketdynamicscanmakethecountrylessattractiveforforeigndirectinvestments.

TheinitialstageofSHIdevelopmentusuallydivertsresourcesfromthepoorersegmentsofthepopulationtotheformalsectoremployeeswhoareusuallybetter-off(41).Thesystemwillmostlikelyinstitutionaliseinequities.Forinstance,governmentcontributionsaregeneratedfromtaxes,whicharealsopaidbythepoor;yet,thepoorareexcludedintheinitialstages,whichraiseequityconcerns.Mechanismstoprotectthepooroughttobeincludedin the planning or early stages of social health insurance development.However,discussionsinUgandaareyettoexplicitlyclarifyhowthiswillbeimplemented.Questionsonhowtodecidepremiums,benefitpackagesandotherinstitutionalarrangementstosustainNHIinUgandastillexist(42).ExperiencewithgraduatedtaxinUgandashowedthatthecostofcollectingcontributions was higher than the actual revenues. Uganda could drawlessons fromGhanawhich gradually eliminated premiums in favour of apurelytax-fundedNHIS.

Thequality of the health services available to the insured populationiscriticaltothesuccessofSHIsystems(43).Theremustbeanappropriateinfrastructure to provide the benefit package and good quality services toattractandretainespeciallythewealthiersegmentsofthepopulationintheschemes.NHImanagementandgovernancealsorequireskilledadministrativestaff,particularlytomanagethehealthinsurancefunds,reinsurers,assetsandinvestmentsandtoregulateandsupervisehealthproviders.Thiscapacityisstill limited in the case ofUgandawhile thepropensity for corruption intheseprocesses–perceivedorreal–remainshigh(42).Theinsuredgroupsgetwellorganisedandquicklygrowtheirpoliticalcapitaltovoiceconcernsandtolobbyformorebenefits.Thisusuallyleadstoencroachmentonthebudgets of employers, providers and the government – a situation that isknown to institutionalise inequalities and regressive resource allocation


decisionsthatfavourthepowerfulgroups.ThisunderscoresinvestmentinthecapacityofsystemstodeliverqualityservicesasapreconditionforsuccessfulNHI.ReducinggovernmentexpenditureonthewealthierpopulationsisanoutcomethatneedstobemanagedifNHIistoleadtogovernmentsavingsthatcouldbereallocatedtowardsprimarycareandimprovingthequalityofthelower-levelhealthservices.Thiswouldpartlyensureequalaccesstohealthcareandaddressequityconcerns.

Thepoliticalandsocio-economiccontextsofacountryplayafundamentalroleinthesuccessfulimplementationofNHIS(34).Ahighlevelofpoliticalsupportandboomingsocio-economicgrowtharevitalprerequisitesforthefeasibilityandsustainabilityoftheseschemes.Itisarguedthattheabilityofacountrytoexpandpopulationcoveragecanbeenhancedbyagoodlevelofincomepercapita,awell-educatedworkforce,lowincomeinequalitiesandahighlevelofpoliticalsupport(44).Itiseasytoabsorbnewcontributionsinaprosperouseconomybecauseadditionalresourcescanbemobilised.Ugandastill has low income per capita, high unemployment with an inadequatenumberof technical experts inhealth insurance and ahighperceptionofcorruption.TheexpectedcontributionofNHItoUHCisentangledinmanyassumptions related to capacity development, institutional trust, formalemployment,thecostsofadministeringNHIandthepoliticaleconomyofthoseinvolved.VitalresourcesandinvestmentswillberequiredtosupportNHIimplementation.ContinuedgovernmentbudgetallocationsforhealthwouldberequiredatleastintheshorttomediumtermbeforeNHIisabletobringinadequateresourcestosustainbenefits.

Future Aspirations

TheUgandaNationalHealth Financing Strategy provides suggestions forhealth financing policy reforms towards UHC(9). These include: a) thedevelopmentofaninstitutionalenvironmentforsustainablehealthfinancing;b)advocacyforincreasedgovernmentresourcestothehealthsector;andc)maximisingefficiencygainsinexistingresources.Othersuggestionsare:d)increased external resourceswith improved predictability of their flow; e)theestablishmentofprepaymentschemes,includingNHIandcommunity-basedinsuranceschemes;andf )considerationofinnovativehealthfinancingoptions, including the establishment of an AIDS trust fund, which is amultiple-revenuetrustfundforAIDS-relatedspending.Regardingexternalfinancing, the government would be well served by securingmemoranda


of understanding (MOUs) with development partners on financingcommitments over the medium term. The financing strategy proposes aprogressiveexpansionofpoolingfinancialresources–domesticandexternal–intoacommonbasketovertime(seeFigure9.1).Thestrategyproposesarangeof institutionalarrangementsforits implementation, includingrolesandresponsibilitiesforthehealthdevelopmentpartnersandvitalgovernmentministries and agencies. ‘Given their central role in financing the sector,HDPswillhave a very critical role in the implementationof someof thefinancingreforms,particularlythosethatrelatetocoordinating,harmonisingandaligningDAH’(9).

Figure 9.1: Illustration of pooling arrangements

Risk pooling/fund management (after 5 years)

Risk pooling/fund management (after 10 years)

One Health Fund

Revenue Collection(funding sources)

Household prepayment

Development assistance for health + subsidy for indigents

Other innovative financing instruments

Efficiency gains/savings

Gov’t tax + subsidy for indigents

Risk pooling/fund management(Initially)

Basket Fund

Community based Insurance

Voluntary private Insurance

Social Health Insurance

Earmarked Partnership Fund Joint Action

Fund

National Health Insurance Fund

Source: MoH, 2016 (9)

TheHealthFinancingStrategyexpectedthedevelopmentandgovernmentpartnerstofollowtheinternalhealthpartnership(IHP+)principlesconcerninggood governance and effective development cooperation. In 2016 theIHP+monitoringcountryreportonUgandareportedoncoordinationandcooperationpracticesbetweenthedifferenthealthactorsinvolved,includingthedevelopmentpartners.Onegeneralobservationinthemonitoringreportwastheexistenceofageneralcommitmenttoworktogethertosupportthe


joint action funds, but this was constrained by the weakness of genuinesystemcapabilities aswell asmistrust among the stakeholders.The reportrecommendedimproveddocumentation,information-sharingandleadershipbytheMoHandtheMinistryofFinance(45)iftheresourcepooling(jointactionfunds)weretobeexpanded.

Thereisneedtoleveragethealreadyexistingsocialsecuritymechanisms,suchastheNationalSocialSecurityFund(NSSF)andmicrofinanceschemes,asinnovativemechanismstopoolresourcesandguaranteeaccesstohealthcare for itsmembers.For example, the formal sector employees and theiremployersmakemandatorycontributionstotheNSSF(46).AsincountrieslikeGhana, a proportion of these deductions could be committed to theNHI fund instead of additional deductions from employees and theiremployers(47).Therearealsoseveralsavingschemesinthecountrythatdonotnecessarytargethealth(48).IntegratingtheNHIdevelopmentwithinthenationalsocialsecurityfundsisanoptionthatcanreducetheadministrativecosts. In the medium term, CBHI schemes can be coalesced into biggerresourcepools,butthiswillneedleadershipandtrust-buildingprogrammesacrossthenetworkofagenciesandstakeholderstosupportfinancialresourcemobilisation,poolingandpurchasingarrangements.

Other considerations

Removing financial barriers at the point of use through prepayment andpoolingmechanismsmaynotachievetheintendedobjectivesifotheraccessbarriers are not addressed(1). Service users may still encounter financialbarrierstoaccessbecauseofhightransportcostsandthecostofsubsistenceatthehealthfacilitywhileattendingtothesick.Mechanismsliketransportvouchers and conditional cash transfers have been tried in Uganda andotherdeveloping-countrysettingsandconcomitantimprovementsinserviceutilisationhaveoccurred.Thefeasibilityandsustainabilityofthesestrategiesshouldbeassessed.

Conclusions

InboththeGlobalNorthandGlobalSouth,countriesarereformingexistingsystemsandaremovingawayfromsolidarity-basedhealthcaretomarket-based provision of health services. The dominant UHC approach that isbeing promoted worldwide – based on ‘universal’ insurance – offers less


provenadvantage(14).Thispresentsmanydisadvantagesoverasinglepublichealthsystem,fundedbytaxrevenue,andofferinguniversalandaffordableaccesstohealthcare.Thesinglepublicsystempromisesmoreequitablehealthoutcomes and affordability for LMICs as it keeps investments and socialcontrolinpublichandsandlimitsadministrativeexpenses(49).TosupportUHCefforts,thegovernmentshouldbeconsideredthemajorplayerintheshorttermtomediumterm.

ThecoverageofthevoluntaryinsuranceschemesinUgandaisstillverypoor.Thesepoolsaresmallanddonotpermitadequatecross-subsidisationoftheriskamongthesickandthehealthy,theyoungandtheold,andtherichandthepoor.Privatehealthinsuranceschemesareprofit-orientedandrequirehighannualsubscriptions.Thesepremiumsremainunaffordableforthemajority of the citizens.Also, premiums forCBHIs sideline the poorwhocannotpay.Contrarytothecurrentapproach,theseinsuranceschemesshould operate like cooperatives, in which members would periodicallycontributefundsinadecreasingmannerasthesavingsincrease.Equilibriumwould be attained where the poor are able to pay premiums and receivebenefitsasshareholders,henceachievingequity,quality,efficiencyandUHC.A legal framework shouldbe constituted to avoid the tendencyofhavingriskierpopulationssubscribingmorebyencouraginggroup-levelenrolmenttoincreasetheproportionofmemberswithalowerriskofsicknessandthewealthy.

For pooling mechanisms to be equitable and sustainable requirescomplementary reforms in the way resources are mobilised and used topurchaseservices(1,50).Trade-offsbetweentheobjectivesofequity,ownership,effectiveness,efficiencyandsustainabilitywillbeinevitable.Attentionshouldbepaidtotheaspectsoftrust,expectationsandentitlements, institutionalarrangementsandasupportinglegalandpolicyenvironment.Theprogressiverealisationofa singlepool inUgandawouldrequireconsiderationof thepoliticaleconomyissues(51).Forinstance,separatepoolsmaybedifficulttomergeowingtoentrenchedstakeholderinterests.TheCBHIscouldbeusedtoengendertheconceptofsolidarityandrisk-sharingbutfragmentationwillundermine their cross-subsidisationobjectives.Also, startingwith separatepoolsfortheformalsectorandtheinformalsectorinstitutionalisesinequities.Therefore,itisimperativethattheNHISdesignbringsonboardtheinformalsectorandthepoorrightfromthebeginning.Thiswouldrequiresubsidiesforthepoorfromthegovernmentanditsdevelopmentpartners.


In addition tomaking improvements in prepayments and reductionsin out-of-pocket expenditures, other barriers to accessmust be addressed.Theseincludetransportcostsandthecostsofattendingtothesickadmittedathealthfacilities.Investmentstoboostthefunctionalityofhealthfacilities,especially lower-level ones, are a prerequisite for reaping the benefits ofinsurancesystems.

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