Cordaid support to CHI (Community Health Insurance) in Uganda
Period : 2007 - 2009 (3 years)
Health providers involved : Nyakibale, Mutolere, Kitovu & Kisiizi hospitals + lower level units
Estimated target population : 500,000
Estimated Cordaid contribution : USD 0.60 per capita / year
Current # of insured (2006) : app. 25,000
Target # of insured (2009) : 75,000
Project Background
Most private not for profit (PNFP) health facilities in Uganda are charging user fees to cover the "financing gap" left by government and external donors. As a consequence, many of the poor are excluded from essential health care in the PNFP sector. Even people who do pay cannot always afford it and run into health related debts. Studies in several countries show that catastrophic health expenditure is one of the major causes of poverty.
Prepaid arrangements based on risk pooling (i.e. health insurance) are preferable to user fees but not easy to implement in poor rural areas and the informal sector. In Uganda, plans are underway to introduce a national Social Health Insurance scheme. Initially, the focus will be on the formal sector where contributions can be deducted from the payroll. How and when the inclusion of the informal sector will take place is not clear, and possibly not before 2015.
Most of the current schemes are hospital based (owned and managed by the hospitals) and were established in the late 1990's but remain small in terms of population coverage. Moreover, they suffer from adverse selection (e.g. high number of chronic conditions) and increasing pressure on costs and premiums. Since the withdrawal of DFID financial support to the schemes by 2002, most CHI schemes have not been able to break even and run at a loss, leaving the financial burden to the hospitals.
Since 2000, Cordaid has been involved with two hospital based schemes (Mutolere and Nyakibale hospitals) and with MicroCare as a third party payer (Kisiizi hospital), as well as experiments with prepayment schemes in lower level units. Based on this experience and lessons learnt, Cordaid started to support CHI in four hospitals plus lower level units in the South West of Uganda.
Objectives
The program aims to create viable CHI schemes and to improve the design of existing schemes, to achieve a better insurance coverage including more of the poor and disadvantaged groups and in particular the informal sector
The specific objectives are to improve:
1) (Timely) access to health care
2) Protection against catastrophic health expenditure among the population
3) Inclusion of poor and vulnerable groups
4) Strengthening the demand side of the health system
5) Integration of first line health care and referral systems
Approach
In the first 3 months of 2007, a baseline study has been carried out by UMU (Uganda Martyrs University) in collaboration with ITM Antwerp including a household survey. In addition, a training component was included so that the baseline information can be used to improve the scheme design. It is expected that by January 2008 they can offer an improved benefit package to the population, in line with people's willingness and ability to pay.
Within the new scheme design, issues like functional separation of the CHI schemes from the hospitals and provider payment methods are taken into account as well, to avoid perverse effects on provider behavior and cost escalation. The schemes are advised to agree with the hospitals and other health units on a case based or flat fee payment system.
Initially, the focus is on hospital level where most CHI schemes are currently operating. It is projected that each year a lower level unit (LLU) will be included into each of the hospital schemes to gradually expand the geographical coverage. Inclusion of LLUs is also seen as an important strategy to reach financial sustainability by treating an increasing number of patients at the first line.
Cordaid support
Cordaid has made available funding for different components of CHI development. First of all, basic operational cost (including outreach activities) will be covered for the first 3 years. In addition, a per capita subsidy will be provided based on the number of insured. This allows the scheme to promote the health insurance at a more affordable premium level.
It is expected that this will lead to increase in coverage and improved risk pooling. Consequently, the premium should increasingly cover the cost of treatments and running cost. Based on performance of the schemes, in a second 3-year phase the subsidies should decrease from currently 70% to 30-40% as a share of total income. Depending on a range of (internal and external) factors, after 6 years a high level of financial self sustainability should be reached.
In addition to the above mentioned support, specific subsidies are available for:
- Prevention activities. This is a subsidy based on the number of insured, for instance to include a subsidized insecticide treated net (ITN) in the benefit package. In theory, preventive activities can improve financial sustainability, if they reduce the need for curative care.
- Inclusion of poorest groups. The schemes can link up to a mechanism to identify those unable to pay the premium, for which Cordaid is willing to pay the full premium. This component is still under development as there is little experience with targeted subsidies for health in Uganda.
- External Technical Assistance. Additional technical support can be hired based on specific needs, such as database development, scheme management etc.
Subsidies for the very poor can of course not be phased out within a 5 year time frame, and remain necessary even in high income countries. However, alternative pro-poor funding methods can be explored, preferably involving government subsidies.
Monitoring and evaluation
The baseline study by UMU/ITM together with the overall (PNFP/MoH) health sector performance reports, should make it possible to measure progress on a number of key indicators, and to evaluate the impact and effects of the intervention, including:
- utilization of health services,
- protection against catastrophic health expenditure
- financial performance and sustainability of the schemes
- effects on health provision (provider behaviour, quality of care)
- inclusion of poor and vulnerable groups.
In addition, the UMU/ITM study includes qualitative questions related to the process of scaling up community health insurance, empowerment of the demand side, quality of care, and replicability.
Linking and learning
Practical experience with effective coverage of the informal sector and in rural areas is still very limited in Uganda. Therefore, beyond the results at project level, the intervention in combination with operational research may influence policy making at the national level as well. This relates specifically to the foreseen ‘rolling out' of Social Health Insurance country wide. Cordaid is in dialogue with the Ugandan Ministry of Health, directly, through the UCMB umbrella organization, and through the national association of community health financing (UCBHFA). Cordaid also supports national coordination of CHI, monitoring and capacity building efforts by UCBHFA, and regional exchange and information sharing through the East African network for community health financing (CHeFA-EA)
Cordaid, The Hague
September 2007
