Health Insurance Coverage Debated in Africa

Posted on Nov 17, 2011 by Sergio Ulloa (G+)

Government health ministers, academics and healthcare industry consultants from over 20 African countries are attending the first annual Pan-African Health Congress on Universal Coverage in Accra, Ghana this week to discuss the best ways to implement and sustain successful long term social insurance systems across the continent, and improve on the overall healthcare standards for their citizens. The Congress, now underway between the 15th and 17th November 2011, is hosted by Ghana's Centre for Health & Social Services with principal support by the Rockefeller Foundation and World Health Organization (WHO). The three day event has been planned to foster a recurring dialogue between healthcare industry analysts, company stakeholders and government officials, to address the current state of national health insurance schemes across Africa and to help craft policies which could expand and improve the service quality of these coverage networks. The keynote speaker is WHO Deputy Director General Dr Anarfi Asamoa-Baah. Representatives from each country and organization will present papers that analyze the effectiveness and feasibility of their respective social health insurance system, both pro universal coverage and con, and these insights in turn will be reviewed by Congress attendees to provide additional prospective on what to do going forward. In the commencement address, Dr. James Nyoro, Africa Managing Director for the Rockefeller Foundation, outlined the necessity of building and maintaining a strong political will in order to achieve greater health coverage results in Africa. "A great deal of work has already been done in health insurance, but there is a need to draw available material together, focus on the neglected issues and integrate insights on these areas into the overall health insurance policy framework," he said. It is hoped that by the end of the event a consensus framework for action will be drawn up that includes a platform for intra-party support and a sustainable economic plan addressing the issue of universal coverage in both sub-Saharan Africa and the developing world at large. Over the past twenty years, health insurance has been promoted as a valuable development tool across Africa, one which can improve access to vital healthcare services because it avoids direct payment of expensive medical fees by low-income patients and pools the financial risk among all those insured. Many mutual health insurance organizations have sprung up in sub-Saharan Africa since then and, most recently, the national governments themselves are getting involved, experimenting with state-backed social insurance systems to reduce barriers to medical care and hopefully limit the contagion of communicable diseases. Because of the lack of adequate healthcare infrastructure and coverage options, developing countries have suffered disproportionately from diseases and other public health problems in the past. Different African governments have instituted different national health insurance mechanisms, including those based on donor contributions, tax-based systems, and pension funds, all to varying effect. In several countries like Senegal, Namibia and Rwanda, local authorities, public sector employers, and third party mutuals are supposed to provide third party support for low-income constituents, resources permitting. The two countries that have made the most progress in universal healthcare coverage so far have been the United Republic of Tanzania and Ghana, which is why they are hosting the conference. Both countries offer quite comprehensive outpatient and inpatient services to policyholders, and they are eligible for treatment in both public sector and accredited non-government facilities. Tanzania was the first to introduce a compulsory coverage plan in 1999, with the National Health Insurance fund for civil servants and now covers about 10 percent of the population. Ghana's NHI system, introduced in 2003, has proven the most successful thus far with 38 percent of the populace covered. More prominent nations are now looking to develop their own health insurance systems. Looking at the progress made in neighbouring West African countries, the Nigerian government recently approved a compulsory national health insurance scheme for their public sector workers, to be run through private employers, with the ambitious goal of eventually covering their entire population; Africa's largest. In Kenya, the government has also started rolling out a similar scheme to engage with lower income clientele. The most pertinent recent development though is perhaps occurring in South Africa, the continent's largest private insurance market. In April, the South African government began testing their compulsory medical insurance scheme in 10 districts, and will expand the program out across the rest of the country over the next 14 years. South Africa have estimated that the scheme will cost R255 billion (US$31.3 billion) once completed in 2025, and could in fact be much more due to the shortage of skilled staff, limited tax-returns and failing infrastructure. Indeed, it has been these persistent infrastructure and funding shortfalls that continue to hamper insurance sector development in most sub-Saharan African countries. A considerable majority of the region's populace still resides in rural and largely informal economies that remain difficult to tax, monitor and fund a robust health network with effectively. When these citizens do need medical care they are forced to pay out of pocket, and this, according to the World Bank, is the number two cause of impoverishment in region, behind job losses. This lack of resources thus creates problems both when it comes time for a consumer to pay a premium, and when the insured need to use decent quality health care services. Thus, because the taxable base in Africa is low, various methods have been used by government to mobilize resources for healthcare, including now the international insurance industry. Luckily, these multinational insurers are gladly shifting their focus to up-and-coming insurance industries in emerging markets anyway. According to The International Finance Corporation (IFC), public insurance schemes are expected to represent a US$1.4-US$2.5 billion investment opportunity in Sub-Saharan Africa over the next ten years. These low-penetration markets offer better opportunities for growth in premium returns, and could work to offset the more static performance in mature European and North American markets. While much of the international focus has thus far been on the lucrative Asia Pacific and Gulf regions, Africa should present a reasonably attractive business opportunity for multinational insurers as well. Overall market penetration for insurance products in the region is low and many standard coverage services remain untapped on the market, including most life, health, property and savings-related insurance options. The insurance premiums collected in Africa currently represent only two percent of total world premiums, and the contribution of the domestic insurance sector towards the GDP of the region remains small by international standards. This demonstrates that insurance policies are not yet being used effectively as a vehicle for protection and savings these countries. As Africa's economies grow, urbanize, develop and further open their markets, demand for healthcare and insurance services will increase in tow. As Ghanaian Minister of Health, Joseph Yieleh Chireh, explained at the conference, the government and insurance industry must be there and work together to meet these mounting needs. "Universal health insurance is very important to Africa's development. It is crucial to offer all, regardless of economic standing, quality health care at an affordable cost. It is important to engage in the dialogue on ways to make universal health care work in Africa."