Path to Universal Health Coverage in Nepal: Is it Achievabe?

Path to Universal Health Coverage in Nepal: Is it Achievable? (A Project Report Submitted to Professor Hoshida Junya for the Partial Fulfillment of the Course Requirement in Social Security System in Japan: PAD 7681E) Nirmal Kumar Raut National Graduate Institute for Policy Studies March, 2015 Contents 1. Health Coverage Status in Nepal 2. Universal Health Coverage: Issues and Strategies a. Population coverage b. Service Extension c. Financial Protection 3. Social Health Insurance 4. Is UHC achievable with the existing CBHI framework? Challenges to UHC and Way Forward 1. Health Coverage Status in Nepal Every country aims to achieve universal health coverage (UHC) irrespective of whether country is resource-constrained or lacks adequate support system. There are some countries with fairly a long history of UHC with well-established institutions such as France and Japan and some other countries like Nepal where achieving UHC is still a big challenge. Health Care in Nepal is provided both through public and private health facilities. There are three levels of Healthcare in public health delivery system: Primary, Secondary and Tertiary. Primary care is further divided into Sub-health posts (SHPs), Health Posts (Health Posts) and Primary Health Care Centres (PHCC); Secondary care is sub-divided into District Hospitals, Zonal Hospitals and Regional Hospitals; and Tertiary Care is subdivided into Central hospitals and Teaching hospitals. So far as the private health facilities are concerned, there are altogether 1110 facilities including NGOs and INGOs. Following Chart provides the rough sketch of existing Social Health Protection Coverage in Nepal. Source: Various Chart 1: Organizational Hierarchy of Public HealthCare System in Nepal1 Source: Annual Report 2012/13, MOHP True disparity or the severity is precisely measured by the proportion of population who shares these health facilities and professional in their respective areas of residence (herein referred to as Regions)2 as shown in Table 1. 1 Please note that the number of each facility is indicated wherever applicable. Nepal is administratively divided into five development regions. Central Region is the highly populous region with capital of the Country. 2 Each 1000 people in the Central region have only 1.13 health facility whereas the same for mid-west and far-west population is more than 1.40. However, health professional figure depicts contrasting evidence. More health professional are concentrated in central and western regions. This indicates a serious policy implication and answers to the question of understaffed health facilities in mid-west and far-west regions where people are largely poor and the difficult geographical terrain further adds to their woes. Health Professional chose to work in more developed areas such as in Central region, western and eastern primarily because of the availability of better quality of life vis-à-vis other regions. Another dimension to measure the disparity is by way of looking at people's access to these health facilities in terms of time and distance. Source: NLSS, CBS 2010 Source: NLSS, CBS 2010 It is evident from the tables above that the access to both public and private health facility is quite problematic in the rural set up. Furthermore, the poorest households bear the highest ‘accessibility-burden’ which decrease with the higher consumption quintiles. This also indicates that inequality persists so far as the access is concerned. So far as the figures discussed above indicate, the health service coverage must be quite low in Nepal. People cannot even afford to visit public hospital because of the accessibility, understaffing and out-of-stock medicine issues – private hospital is rather a distant dream which is not possible to access unless one is ready to bear high OOP. 2. Universal Health Coverage: Issues and Strategies It was actually in 2006 that the free health care program was introduced in Nepal providing free of cost primary health care services to everyone through primary health care centers such as PHCCs, HPs and SHPs. Furthermore, the political transition in the country with signing of Comprehensive Peace Agreement (CPA) between the Government and the Maoist strengthened the assurance of the program by mentioning free basic health care as a basic right of every citizen in the interim constitution drafted in 2007. Some listed medicines are also available for free at these facilities. District hospitals, in addition to inpatient and outpatient services, also provides emergency services for free to some targeted groups such as poor, ultra poor, helpless, disabled, senior citizen etc. (See Figure 2) Three dimensions of UHC are important to analyze to assess the country’s potential to achieve UHC i.e. 1) the percentage of population covered/entitled; 2) benefits or service covered; and the 3) financial protection covered i.e. the share of health costs covered. The first one, the second one and the third one are represented respectively by the length of the cube; the second one is by its breadth and the third one is by height. Figure 1: Where Nepal stands on UHC grounds? Source: Stoermer et al, 2012 The interesting thing of this three dimensional cube is that, given limited resources, there is always a trade- off among these, and it depends upon the individual country which one or some of these three dimensions they want to increase and to what extent. For example, in case of Nepal, it has been evident that an addition to the service has actually come at the cost of low population coverage however this has further improved the level of financial protection. The OOP has actually declined from 74% to 60% (Shrestha et al, 2012) after number of services of different types were added over time. Although the situation now has been improving, Nepal still has a long way to go so far as achieving UHC is concerned. I will discuss these three issues separately in the next sub-section and further elaborate on the efforts on the part of stakeholders to address these issues in the next section. a) Population Coverage b) Service Coverage c) Financial Protection Population Coverage: The ideal health system should cover all the citizens of the country irrespective of their economic status, caste, creed, religion etc. As already discussed, in principle, all citizens are covered with basic health care services and that the targeted groups and the one with specific diseases are provided additional services/treatment free of cost. The question of efficiency and effectiveness is important the answer to which basically depends upon whether the large number of quality services are provided at the lowest cost possible to the large number of people. It is really a challenging task to strike an optimal balance along these three important dimensions. The self-reported status of adequacy of health services by the people themselves may be taken as a rough guide to reflect on the coverage of health services. This is because it provides their subjective judgment on the issues that has a direct bearing on their health status (See also Table 2 &3 above). Most people feels that the health service is just adequate however we can see that people in the far- west and mid –west, from rural areas , and the poorest report that the adequacy is just not enough to meet their health requirements relative to their counterparts. Strategy: The first and the foremost strategy required to increase the coverage is to address the financial and accessibility issues. Physical infrastructure such as roads, transportation, water and electricity primarily in the far-west and mid-west rural areas may resolve the accessibility problem to a larger extent. Furthermore, more health facilities within the reasonable distance can add to solve the accessibility problem. Increasing staffs at Primary Level Care and monitoring their work as well as the logistics especially the stock of listed medicines may also help improve the access. Mobile outreach clinic and home based care with subsidy on transportation can be other strategies. However, this requires a step-bystep approach to expand the health coverage to all population groups since this takes time to develop the institutional and technical capacities in order to sustain efforts and further garner political support from diverse interest groups (Maeda et al, 2014). Service Coverage: Ideally, the health services that are included should be cost effective, address major disease burden, have wider population coverage, and subject to the resource availability. Figure 2: Existing Free Health Care Services Source: Stoermer et al, 2012 We can see below in Box 2 that there have been some additions to the number of health services provided over time. This shows that the Government of Nepal is serious about increasing the health services which in itself a laudatory initiative. However, it is also important to assess the utilization rate of the extended health service in order to ensure their effectiveness. Let us look at the utilization rate of some basic health care services in Table 5. Box 2: Types of Health Service Covered 3 3 Note: NHSP: National Health Sector Program; CD: Communicable Disease; NCD: Non-Communicable Disease; CB-IMCI: Community Based; IMCI: Integrated Management of Childhood Illness. The National Health Sector Program I (2004-2009) was first introduced by the Government of Nepal in 2004 to strengthen the existing program of Essential Health Care Services (EHCS) and thereby increase its coverage and quality. Strategies: It is important to design different service package for different levels of care which respectively are aligned to the local burden of disease. The access to these service packages and related services should be well defined. Provision of adequate number of trained staffs may also help provide more specialized services to a large number of people. As Maeda et al, (2014) pointed out; Nepal also faces the problem of manpower shortage, poor performance and inequitable distribution. Financial Protection: This is the most important part of the three dimensional cube mentioned earlier. Nepal has one of the highest OOP health expenditure in the world. Recent statistics show that private OOP health expenditure accounts for more than 50 percent of the total health expenditure in Nepal (See Figures below). Besides, poor economic growth rate of less than 5 percent in the last several years restrains it to be liberal in health expenditure allocation. Source: Shrestha et al, 2012 Strategies: The financing mechanisms should be an integrated approach that also takes into account the current coverage and financing mechanism and further can be adjusted to meet the social and economic context of the country in question. Given these ideals, the social health insurance may be the only feasible way to reduce the high private OOP as well to manage public health funds in more efficient and effective way. Besides, improvement in the efficiency in the health system itself for e.g. by way of improving procurement and administrative efficiencies may help further ensure financial protection. 3. Social Health Insurance Most Health Insurance Services in Nepal is basically private and covers a very small segment of population with higher ability to pay. Nepal had some history of Community Based Health Insurance (CBHI) initiated by an INGO called United Mission to Nepal (UMN) but its coverage was limited only within the area of their operation. Later from the year 2000 onwards, some tangible initiatives towards CBHI were taken primarily in private sector. For e.g. BP Koirala Institute of Health Sciences (BPKIHS), a teaching hospital in the eastern region of the country started health insurance in 2000 but now it has been closed due to the problem of adverse selection and moral hazard- claims ratio become quite higher and the premium rates were pretty lower. Government of Nepal has initiated six pilot schemes in 2003 in six different PHCCs (public health facilities) across the nation as a subsidized insurance scheme with the intention to gradually expand it to other districts however the latter never happened. The same public health facility is also entrusted with the administration of the scheme i.e. the service provider and the insurer are basically the same institution. Later, the introduction of Free Health Care Program which covered almost the similar package of benefits as the insurance actually made the effectiveness of these schemes weaker. The insurance program basically intends to provide basic health services to the poor and disadvantaged groups by enhancing the community participation and contribution. The Community Health Insurance Operational Guideline 2006 set standards to be followed to operate an insurance scheme and also mention the broad range of services in the benefit package. However, there is no proper legal framework to regulate the operation of these schemes. The Chart below gives an idea of the type of health Insurance schemes in operation in Nepal. Source: Ghimire (2013) Generally both the public and private schemes cover medicines, diagnostic services, and hospitalization and transportation expenses. The premium rate, co-payment, benefit packages and the conditions, however, varies with the individual institution. There are also referral services in some schemes. Non-communicable diseases that require long term treatment, plastic surgery and major surgery are not included in the benefit package. The Coverage of the CBHIs, both government run and NGO/Private sector run, are quite lower. They hardly cover 5 percent of the total population in the catchments area (See Table 4) Table 6: Coverage status of the Government Run CBHI Schemes Source: Stoermer et al (2012) Are these Schemes Feasible? The legal status of private schemes is not clear. There are no proper operational guidelines (administrative, financial, monitoring, supervision etc) as to how the CBHI activities are to be carried out. However, management committees are actively involved in CBHI activities in both types of schemes. These schemes are also not financially viable. For example, the claims ratio in both the public and private schemes is usually above 100 percent and 189 percent respectively. It is therefore important to scale up the organizational structure which in itself is a challenging task. A sub-district or a district level scheme that works as a central monitoring agency for the various schemes decentralized at the local level may be an appropriate model to begin with. It is also important to build up on the capacity of such a structure to efficiently support the big system. Meanwhile, existing local government structures can be exploited to create awareness and thereby to increase the enrolment. Likewise, it also becomes important to develop a fair mechanism to identify and enroll the targeted groups and design them a fair funding mechanism to pay insurance premiums. Similarly, to encourage people’s participation in the schemes, it is important to split up the tasks of health insurance and health service provider. This is because a separate institution will appropriately represent the interests of the insured members and the health care providers. Practicing good governance and building government capacities at different levels may be initial but big steps towards achieving UHC. 4. Is UHC achievable with the existing CBHI framework? Challenges to UHC and Way Forward The Government of Nepal is now serious towards the objective of achieving UHC and therefore has geared its machinery towards accomplishing this objective. The introduction of the free health care program in 2006, subsequent addition of the health services in NHSP I & II, and the formulation of National health Insurance Policy 2013 are some of the good examples to support this fact. However, the Government needs to take into account the following challenges while preparing a framework to achieve UHC in Nepal:      Geographical Complexity to access the health facilities further confounded with the problems of understaffing and Out of Stock Medicines in such facilities. Complex bureaucratic process to utilize free and extended health service by targeted groups. Poor mechanisms to identify the beneficiaries of the targeted program (for e.g. who are ultra- poor, definition differs in different govt. docs) Limited Financial protection (for e.g. it does not cover catastrophic illness) Unregulated private sector causing high OOP It is therefore difficult to achieve the UHC with the current model of CBHI schemes particularly due to the poor population coverage and the weak financial viability. They are too localized and work in isolation. It is important to assess the overall health service needs of the society while taking a detailed account of the health risk of different strata of population and thereby seek the possibilities to share these risks reasonably among the stakeholders with the Government bearing the major overall responsibility. It has to be noted that Japanese heath care system also follows a developing country type model that also started with a "community insurance" system based on individual rural communities .As such, we need to weigh the relative merits and demerits of the Japanese Health system to come up with the approach that largely suits our local context JICA (2004). Today, with a solid organizational structure, Japan's health system has been recognized as one of the best in the world. The Government of Nepal should consider using some of the best practices worldwide as well as within its own existing system to redesign its health framework that largely covers the wider range of population with varied heath services of high quality which is cost-effective. References: Annual Report 2012/13. Ministry of Health and Population, Kathmandu, Nepal Ghimire, R. (2013). Community Based Health Insurance Practices in Nepal . International Research and Reviews, 2(4). Available at SSRN: http://ssrn.com/abstract=2374082 JICA (2004). Development of Japan's Social Security System: An Evaluation of Implications for Developing Countries, Japan Maeda, A., E. Araujo., C. Cashin., J. Harris., N. Ikegami., and M.R. Reich (2014). Universal Health Coverage for Inclusive and Sustainable Development. World Bank, Washington D.C. Shrestha BR, Gauchan Y, Gautam GS, Baral P (2012). Nepal National Health Accounts, 2006/07 – 2008/09, Health Economics and Financing Unit, Ministry of Health and Population, Government of Nepal, Kathmandu. Stoermer et al (2012). Review of Community Based Health Insurance in Nepal. GIZ. Kathmandu, Nepal