For universal healthcare


The writer works at a multilateral development bank advising on social and economic infrastructure.
The writer works at a multilateral development bank advising on social and economic infrastructure.

PROVIDING as many medical services, as equitably as possible and for the greatest number, defines universal healthcare (UHC). The idea evolved in Germany and the UK that navigated social movements through industrialisation, dep­ression and wars. Much political economy debate and policy evolution shaped the UHC that we now see.

The rise of multilateralism in health has in­­creased expectations everywhere. Many economists now argue that healthcare is a public good. The UN ranks ‘good health and well-being’ third on its list of 17 SDGs for 2030. One target is “to achieve universal health coverage, including financial risk protection, access to quality essential healthcare services and access to safe, effective, quality and affordable essential medicines and vaccines for all.”

Sounds idealistic; even laughable. Financial risk protection and access for all means funding commitments and insurance protection, which requires huge government spending. Rising medical costs globally due to advancing technology, disease prevalence and demographics are already leading to worsening health inequalities. In Pakistan, nearly three quarters of all health services come from the private sector, against out-of-pocket payments. This excludes the overwhelming majority. Besieged with pitiful budgets spread thin, a depreciating currency, eroding affordability, doctors’ protests and a crumbling infrastructure, it’s all about finance. Or so it seems.

Some nations have delivered basic healthcare for all at low cost through effective public policies.

Developing nations use the excuse of lack of resources for failures in healthcare. This is not unfounded, but evidence points more to the lack of political will, coherent policy and implementation capacity. A clear understanding of the path to progress has not matched the rise of UHC as a development goal.

And yet, some nations have delivered decent basic healthcare for all, at low cost, through effective public policies. Thailand’s political determination led to cheap, reliable healthcare for all, advancing health achievements and reducing inequalities. It went from insurance coverage for a quarter of the population (through the state or employment, with the rest making out-of-pocket payments) to universal coverage where the patient pays a nominal amount.

Sri Lanka, China, and the state of Kerala in India are worth mentioning. Rwanda, rebuilding from its 1994 genocide, established inclusive health systems with equity-focused policies stimulating shared economic growth. The experience of Mexico and Brazil having implemented UHC also offers good lessons. None are perfect, but coverage has expanded with limited means.

If funding is a barrier, how do low- and middle-income countries fund UHC? Ultimately, there are only two options: state funding from tax revenue, or some form of insurance. Fundamental models are outlays from general tax revenue (the UK, Canada) or statutory national social health insurance (Germany, France, Japan). Other models mix state funding and private insurance (Singapore, Australia). In the US, people purchase private insurance (at times paid by employers), while government support is limited to partial coverage for seniors, the disabled and the poor.

Sole reliance on tax revenue in Pakistan would be naïve. Public spending on healthcare in its current form is set up for failure. In the hands of the provincial governments with their vastly divergent means and capacities, it is a clear case of moral hazard. As elsewhere, Pakistan must urgently consider its policy alternatives. Other ways of financing healthcare need to be found, and current expenditures raised and redirected.

First, a social health insurance (SHI) programme can be designed. Define who pays into the programme, how much, and covering which services. Identify population segments and income levels for mandatory contributions and coverage, while subsidies fund contributions of the poor. User support and feedback for such an initiative must be carefully cultivated to allow design improvements. It must therefore be rolled out as a pilot plan and gradually scaled up nationwide. Many forms of national SHIs exist which can be studied but caution is urged against viewing these merely as financial products, and leaving them to the financial sector to make hay. Where SHIs have worked well, it has taken extremely meticulous work and tough and transparent negotiations from governments to lay out the terms and conditions. First, SHIs only work if they are designed, implemented and perceived as a mechanism under a well-crafted UHC strategy.

Second, existing public outlays need to be spent wisely. Public-health experts can devise value-based priorities. Some facilities may be consolidated for more cost-effective delivery. Minimum user-payments, not uncommon elsewhere, combined with public funds, can make a difference. Basic level healthcare is labour-intensive, generally inexpensive in the developing world, and can be an advantage if deployed efficiently. As UHC also focuses on primary medical attention and on inexpensive outpatient care, facilities can be reconfigured to remove inefficiencies and inequalities in the distribution of resources.

Third, private-sector participation must weigh in. With restricted budgets, governments are looking to the private sector for better service quality at equal or lower costs, for the number of people served. Long-term contracts with performance targets have shown to improve health outcomes and achieve health policy objectives. Governments can contract with operators to run existing public health facilities (providing both clinical and non-clinical services, or specialised clinical services only) for availability-based or performance-based payments. Where possible, operators may be incentivised to also treat private patients and reduce the burden on subsidies. The private sector may also be given concessions to build, own and operate health facilities. This is more capital-intensive hence expensive, but necessary where new and critical infrastructure is to be added.

Other innovative mechanisms can be conceived to fund UHC. Given Pakistan’s affinity for charity and philanthropy, I propose a dedicated fund to route voluntary zakat donations for UHC needs. This will require an independent board of trustees and strong oversight. Examples of Indus Hospital, SKMH, SIUT and others show that donation and dedication are an angelic mix. As is routing corporate social responsibility funds for UHC and offering tax incentives.

The case for UHC will remain incomplete until governments accept that financing is not a problem, but a solution for unforgivable health inequalities.

The writer works at a multilateral development bank advising on social and economic infrastructure.

Published in Dawn, October 22nd, 2018