Ethiopia’s Strategy for UHC: Proposed Health Insurance Schemes

Presentation at 2018 AFREhealth Symposium

August 07, 2018Durban Hilton

Outline of Presentation1. Country Context2. Overview of Health

Care Financing3. Health Care Financing

Strategy4. Progress in CBHI5. Social Health Insurance6. Lessons Learnt

Country ContextLocated in Eastern horn of Africa:Surface area of 1.1 million Sq

KMs 9 regional states and 2 city

administrations About 700 Weredas (districts) About 15,000 Kebeles (villages)

Projected population of !05M About 82% living in rural areas)Young population (42% < age of

15 yrs) TFR = 4.6

Very low-income Per capita GNI of $794 (2015/2016) Largely dependent on the agriculture sector

l l b 2%

Country Context …Experienced changes in health status over the last

three decades Life expectancy at birth from 47 to 63/67IMR from 104 to 48MMR from about 900 to 412

Major health problems are:Of communicable natureDue to poor personal hygiene, improper garbage and waste disposal

practices, lack of adequate and safe water supply. Due to inappropriate nutritional practices, lack of health awareness, and

improper cultural taboos. Epidemiologic transition Double burden - NCDs becoming rampant in urban

Share of health from national budget (2017) 11.7%

Per capita public expenditure on health (2014) $28.7

Share of total health expenditure to GDP (2014) 4.7%

Health Financing Indicators

Chart1

1996

2000

2004

2008

2011

2014

Per capita health expenditure

Per capita health expenditure

4.5

5.6

7.1

16.1

20.8

28.7

Sheet1

YearPer capita health expenditureyear199620002004200820112014

1994.5Per capita health expenditure4.55.67.116.120.828.7

20005.6

20047.1

200816.1

201120.8

201428.7

Sheet1

Per capita health expenditure

Per capita health expenditure

Rest of the World (36%)Households (33%)Government (30%)Employers (1%)Changes between NHA5

(2011) and NHA 6 (2014)Households (176%

increment)Rest of the world (143%

increment)

Sources of Financing (NHA 6, 2014)

Chart1

Rest of the world

Households

Government

Employers

Contribution

Contribution

0.36

0.33

0.3

0.01

Sheet1

FinancierRest of the worldHouseholdsGovernmentEmployers

Contribution36%33%30%1%

Sheet1

Contribution

9

Background: Common problems…Too little money

…allocated poorly

…utilized inefficiently

…Mainly benefiting the better-off

Background: Allocation Curative care consumed most of

the national health expenditure (more than 40%) while prevention of communicable diseases and maternal and child health accounted for about 25%

Even though there was a significant shift from curative to preventive care during the past two decades

11

Background: Three Key Questions

$

Financing/ Mobilization

Allocation

Payment

12

Health Care Financing Strategy - BackgroundDeveloped in 1998 as one of the eight components of HSDPApproved for implementation in 2008Revised in 2018In the ParliamentFor 2017 - 2025 A renewed focus on Universal Health Coverage and achieving the SDGs Anticipated effects of expected Economic Growth on health/health sectorCoping with the local and international aid dynamics Meeting the financing demand of Epidemiological transition of diseases Technological Advancement

Health Care Financing Strategy - GoalIn line with Ethiopia`s ambition to attain universal health coverage

through primary health care, has set out ambitious goals for:Improving health status, Financial risk protection against catastrophic illness, and Public satisfaction

By investing on the health service delivery system to sustainably provide:Quality, Equitable and affordable essential (or basic) health services

For the realization of universal health coverage

HCF: Overall ObjectivesIncreasing funding for health by improving resource mobilization;Improving efficiency of resources utilization; Ensuring equitable resource allocation and financial protection of its citizens; andPromote sustainability of health financing.

15

HCF Strategy – Guiding PrinciplesResponsivenessSustainabilityFinancial risk protection EquityEfficiencyPublic SatisfactionHealth in all policies

HCF Strategy – Strategic Objectives1. Mobilize adequate resources, through traditional and

innovative approaches, from domestic and external sources for sustaining and increasing funds for health care services;

2. Reduce Out of Pocket (OOP) Spending at the point of use –through affordable fees, health insurance, exemption/waivers;

3. Enhancing equity, efficiency and effectiveness; 4. Strengthening public-private partnership;5. Capacity development for improved health care financing –

Enhancing health system governance.

HCF Strategy - Components Improving efficiency of available resources Revenue retention and utilization, facility governance Revising user feesImproving the fee waiver and exemption systemContracting and privatization including hospital reform (private wing to

autonomy)Cost sharing/recovery – including RDFs

Public-private partnershipHealth insuranceSocial insurance (for the formal sector) – will be operational Community based health insurance (for the rural and urban informal

sectors) – being piloted

Social Health Insurance (SHS)Compulsory membership and contributionEmployers,Employees as well as Government

Worker’s salary is base for workers’ and employers’ contributionsጰጰ

8/11/2018 6:49 PM HealthEconomics

SHS: AdvantagesMembers pay predictable premiums when

healthy to cover unpredictable costs when sickNo adverse selectionNo fear of fund diversion (since ear-marked)EquityCross subsidy between rich/poor, sick/healthyPremiums are income related but Those unable may be subsidized by government

8/11/2018 6:49 PM HealthEconomics

SHS - EstablishmentSocial health insurance was established in accordance

with:Article 55 (1) of the Constitution of the FDRE Under proclamation number 690/2010.

Curative inpatient and outpatient services delivered through accredited public and private health facilities. Coverage is mandatory for everyone in the formal

sector. Financed through payroll/pension contributions made

by employers and employees.

SHS - ReimbursementThe government will contribute to start-up costs. The

scheme will use a fee for service payment mechanism.The Departmental Based Grouping (DBG) A form of case-based payment mechanisms- was chosen

as a mechanism to reimburse providers 16 DBG has been identified. Different rates for different DGB and for public/private

facilities

SHS - EnrollmentA member is eligible to enrollWith his or her spouse, and children under the age of 18 years

A member having more than four children or more than one spouse can register his or her dependents as beneficiaries:With additional monthly premium per other family members

Even though the average number of children per family in rural families of Ethiopia is more than four:Coverage is only for four children and one spouse.

Community Based Health Insurance (CBHI)

Common Features: Targets households in informal sector(in contrary to social insurance);

Voluntary enrollment;Not-for-profit (solidarity oriented);Some level of involvement of local

leadership/influential groups.8/11/2018 6:49 PM HealthEconomics

CBHI: P ilotingIn 2010 in 13 woredas in five populous regionsEvaluated after two yearsIndigent’s contributions paid through targeted

subsidies from regional and woreda subsidiesWith minimum threshold membership levels for

initiating schemesInitially 30% of eligible householdsThen raised to 60% (10% for indigents with subsidies)

8/11/2018 6:49 PM HealthEconomics

CBHI – Scale UpWith target of 80% of woredas (80%

population) by 2020Implemented in 512 woredas (about

70%) by 2017About 4 million households and 18

million beneficiary population enrolledPremium contributions increased from

41.42 million in 2013 to 518.8 million in 2017Premiums amounted to 84% of total CBHI

revenues (rest being subsidies

Chart1

2012

2013

2014

2015

2016

2016

2017

Number of Woredas

Scale Up by Woreda

13

173

203

318

365

487

512

Sheet1

Year2012201320142015201620162017

Number of Woredas13173203318365487512

Y

Sheet1

Number of Woredas

CBHI – Reported ImpactIncreased health care utilization0.67 visits per year among beneficiaries as compared to 0.39 for

non-beneficiariesPremium revenues amounting to about 1.5% of total

health care spending (for 2014)Other (potential) impact:Social protection of households from iatrogenic poverty;Financial stability for those with seasonal income;Means/entry point for empowerment in exercising socio-political

power.

CBHI – ChallengesLimited effectiveness in closing

financial gaps at macro-levelsServices covered by social and

CBHI not very appealing at present (in terms of quality)Only to public hospitals and health centersPossibility of shortages of drugs, investigations,

and other crucial resourcesTransaction costs covered through

partnership8/11/2018 6:49 PM HealthEconomics

Way ForwardIncremental approach with

awareness enhancement among beneficiariesNeed for addressing the quality

and availability of servicesNeed for forging public-private

partnershipImportance of capacity building in

governance and monitoring & evaluation

Ethiopia’s Strategy for UHC: �Proposed Health Insurance SchemesOutline of PresentationCountry ContextCountry Context …Slide Number 5Slide Number 6Slide Number 7Slide Number 8Background: Common problemsBackground: Allocation Background: Three Key QuestionsHealth Care Financing Strategy - BackgroundHealth Care Financing Strategy - GoalHCF: Overall ObjectivesHCF Strategy – Guiding PrinciplesHCF Strategy – Strategic ObjectivesHCF Strategy - Components Social Health Insurance (SHS)SHS: AdvantagesSHS - EstablishmentSHS - ReimbursementSHS - EnrollmentCommunity Based Health Insurance (CBHI)CBHI: PilotingCBHI – Scale UpSlide Number 26CBHI – Reported ImpactCBHI – ChallengesWay ForwardSlide Number 30